KANEB Reports Excellent First Quarter Results.DALLAS Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. -- KANEB today reported results for the quarter ended March 31, 2005. The KANEB Companies are Kaneb Services LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control (NYSE NYSE See: New York Stock Exchange : KSL KSL - Knowledge Systems Laboratory ) and Kaneb Pipe Line Partners, L.P. (NYSE: KPP KPP Key Performance Parameter KPP K-Profile Parameterization KPP Kepler Packing Problem (mathematics) KPP Kinoform Phase Plate KPP Kodak Premium Processing KPP Knowledge Processing Subsystem , "the Partnership"). Kaneb Services LLC's wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , Kaneb Pipe Line Company LLC, is the Partnership's General Partner. "KANEB delivered an outstanding first quarter. Our results, exclusive of merger costs, delivered a 15 percent increase in the Partnership's income and a 16 percent increase in KSL's income compared to the first quarter last year," said John R. Barnes Barnes, former municipal borough, SE England. See Richmond upon Thames. , chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of KANEB. "We are very pleased with this performance. The KANEB companies continue to build value and deliver growth for our unitholders and shareholders." On November November: see month. 1, 2004, Valero L.P. (NYSE: VLI VLI Virtual LAN Internetwork (Cisco) VLI Port Vila, Vanuatu - Bauerfield (Airport Code) VLI Variable Life Insurance VLI Visible Light Illuminator (special flashlight mounted on weapons) ) and the KANEB companies (NYSE: KPP and NYSE: KSL) announced that they had executed executed 1) adj. to have been completed. (Example: "it is an executed contract") 2) v. to have completed or fully performed. (Example: "he executed all the promises made in the contract") 3) v. definitive agreements to merge See mail merge and concatenate. Valero L.P. and Kaneb Pipe Line Partners, L.P., and that Valero L.P. will purchase all of Kaneb Services' shares for cash. The agreements were approved by the unitholders of Valero L.P. and Kaneb Pipe Line Partners, L.P. and the shareholders of Kaneb Services LLC at special meetings held March 11, 2005. The transaction is anticipated to close in the second quarter 2005. Further information about the transaction is provided on the Valero L.P. website at www.valerolp.com, and a link to the management presentation regarding the transaction is available on the KANEB website at www.kaneb.com. 1Q 2005 RESULTS FOR KANEB SERVICES LLC For the quarter ended March 31, 2005, Kaneb Services LLC's distributions received from KPP (see Supplemental Information in the attached table) increased to $7.1 million, compared with $6.8 million for the first quarter 2004. KSL reported first quarter net income of $6.6 million, or $0.55 per share, compared with $6.0 million, or $0.50 per share, for the same period last year. First quarter income before merger costs (see Supplemental Information in the attached table) was $6.9 million, or $0.57 per share, compared with $6.0 million, or $0.50 per share, for first quarter 2004. KSL is a unique limited liability company, the only publicly traded, cash distributing entity taxed as a partnership that owns the general partner interest of another publicly traded master limited partnership. Its assets include the KPP general partner interest and incentive as well as 5.1 million Partnership units, a wholesale petroleum product marketing company, and a wholly owned subsidiary that manages and operates the pipeline and terminaling assets of KPP. 1Q 2005 RESULTS FOR KANEB PIPE LINE PARTNERS, L.P. Kaneb Pipe Line Partners, L.P. reported revenues of $183.0 million for the quarter ended March 31, 2005, compared with $146.4 million for the first quarter 2004. Net income for the quarter was $21.8 million (after merger costs), compared with $20.8 million for the same period last year. Net income per unit for the quarter was $0.68, compared with $0.65 for the first quarter 2004. First quarter income before merger costs (see Supplemental Information in the attached table) was $23.9 million, or $0.76 per unit, compared with $20.8 million, or $0.65 per unit, for first quarter 2004. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become increased (see Supplemental Information in the attached table) to $49.3 million for the quarter, compared with $46.5 million for the first quarter 2004. "The Partnership recently completed another strategic acquisition of a 1.1 million barrel barrel: see English units of measurement. capacity terminal through our newly formed Dutch subsidiary. This acquisition gives KANEB a substantial initial terminal in the growing Amsterdam Amsterdam, city, Netherlands Amsterdam (ăm`stərdăm', Dutch ämstərdäm`), city (1994 pop. 724,096), constitutional capital and largest city of the Kingdom of the Netherlands, North Holland prov. harbor area The Harbor Area is the area along the Port of Los Angeles. It contains neighborhoods of Los Angeles (including Wilmington & San Pedro). Los Angeles City neighborhoods in the Harbor Area
killed his father at his mother’s instigation. [Br. Balladry: Edward in Benét, 302] See : Patricide D. Doherty
"The Partnership operations had an outstanding quarter. We increased revenues overall by $36.6 million, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. by $1.9 million and net income by $1.0 million," said Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. L. Rose, chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. of Kaneb Pipe Line Company LLC. "We're we're Contraction of we are. we're we are extremely proud of the Kaneb operating team operating team Surgery The participants–surgeons, nurses, etc–in a sterile surgical procedure performed under general–less commonly, local anesthesia . Even with the additional requirements associated with the merger, the team still outperformed last year's results by a great margin. That's dedication." Pipeline revenues for the first quarter 2005 (see Supplemental Information in the attached table) were $30.1 million, compared with $27.9 million for the first quarter last year. Pipeline operating income for the quarter was $11.7 million, compared with $11.2 million for the same period last year. Petroleum pipeline barrel miles shipped in the first quarter were 5.2 billion, compared with 5.1 billion in the first quarter 2004. Terminaling revenues for the first quarter 2005 (see Supplemental Information in the attached table) were $69.1 million, compared with $62.8 million for the first quarter last year. Terminaling operating income was $18.7 million, compared with $18.5 million for the same period last year. Terminaling average annual barrels of tankage tankage made from heat-digested animal abattoir residues without gut contents, hide, horn, hoof. Concentrated and dried and possessing a high biological value protein content of 60%. See also meat meal. utilized in the first quarter were 50.5 million, compared with 48.2 million in the first quarter 2004, and the average annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. revenues per barrel of tankage utilized for the quarter were $5.55, compared with $5.24 for the first quarter last year. Product sales revenues for the first quarter 2005 (see Supplemental Information in the attached table) were $83.8 million, compared with $55.7 million for the first quarter last year. Product sales operating income for the quarter was $4.0 million, compared with $2.9 million for the first quarter 2004. ABOUT KANEB KANEB is a single business represented by two separate publicly traded entities on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. . KANEB's business is focused on mid-stream energy assets -- refined petroleum product pipelines, and petroleum and specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. liquids storage and terminaling facilities. KANEB is a major transporter of refined petroleum products in the Midwest Midwest or Middle West, region of the United States centered on the western Great Lakes and the upper-middle Mississippi valley. It is a somewhat imprecise term that has been applied to the northern section of the land between the Appalachians and is the third largest independent liquids terminaling company in the world. Worldwide operations include facilities in 29 states, Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , the Netherlands Antilles Netherlands Antilles, island group, an autonomous part of the Netherlands (2005 est. pop. 220,000), 371 sq mi (961 sq km), West Indies. Formerly known as the Dutch West Indies and Netherlands West Indies, they are divided into two groups. , Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. , New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. , the United Kingdom and The Netherlands Netherlands (nĕth`ərləndz), Du. Nederland or Koninkrijk der Nederlanden, officially Kingdom of the Netherlands, constitutional monarchy (2005 est. pop. 16,407,000), 15,963 sq mi (41,344 sq km), NW Europe. . Its publicly traded entities are Kaneb Services LLC (NYSE: KSL) and Kaneb Pipe Line Partners, L.P., (NYSE: KPP, "the Partnership"). For more information, visit www.kaneb.com. Kaneb Services LLC was formed as a limited liability company in 2001 from assets previously held by Kaneb Services, Inc. (now Xanser Corporation). Those assets include the KPP general partner interest and incentive as well as 5.1 million Partnership units, a wholesale petroleum product marketing company, and a wholly owned subsidiary, Kaneb Pipe Line Company LLC, that manages and operates the pipeline and terminaling assets of KPP. KSL is a unique limited liability company, the only publicly traded, cash distributing entity taxed as a partnership that owns the general partner interest of another publicly traded master limited partnership. Kaneb Pipe Line Partners, L.P., a master limited partnership, was formed in 1989 to own a 2,075 mile common carrier pipeline system from Kansas Kansas, state, United States Kansas (kăn`zəs), midwestern state occupying the center of the coterminous United States. It is bordered by Missouri (E), Oklahoma (S), Colorado (W), and Nebraska (N). to North Dakota North Dakota, state in the N central United States. It is bordered by Minnesota, across the Red River of the North (E), South Dakota (S), Montana (W), and the Canadian provinces of Saskatchewan and Manitoba (N). that has been managed by Kaneb Pipe Line Company LLC since 1953. Pipeline acquisitions in 1995 and 1998 added 725 miles of pipeline in Colorado Colorado, state, United States Colorado (kŏlərăd`ə, –răd`ō, –rä`dō), state, W central United States, one of the Rocky Mt. states. , Iowa, South Dakota South Dakota (dəkō`tə), state in the N central United States. It is bordered by North Dakota (N), Minnesota and Iowa (E), Nebraska (S), and Wyoming and Montana (W). and Wyoming Wyoming, city, United States Wyoming, city (1990 pop. 63,891), Kent co., W Mich., in the greater Grand Rapids metropolitan area, on the Grand River; settled 1832, inc. 1959. . In 2002, the Partnership acquired the largest fertilizer fertilizer, organic or inorganic material containing one or more of the nutrients—mainly nitrogen, phosphorus, and potassium, and other essential elements required for plant growth. pipeline in the country, a 2,000-mile pipeline system that runs from the Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. Gulf Coast to
the upper Midwest The Upper Midwest is a region of the United States with no universally agreed-upon boundary, but it almost always lies within the US Census Bureau's definition of the Midwest and includes the states of Minnesota and Wisconsin, as well as at least the Upper Peninsula of Michigan. states. In December December: see month. 2002, the Partnership acquired a
400 mile products pipeline and four terminals in North Dakota and
Minnesota Minnesota, state, United StatesMinnesota (mĭn'ĭsō`tə), upper midwestern state of the United States. It is bordered by Lake Superior and Wisconsin (E), Iowa (S), South Dakota and North Dakota (W), and the Canadian provinces . The Partnership entered the liquids terminaling business with a large acquisition in 1993, and has more than tripled the size of this operation through subsequent acquisitions. In 2001, the Partnership completed a $165 million acquisition of seven West Coast, U.S. terminals. In 2002, the Partnership completed a $300 million acquisition of two world-class world-class adj. 1. Ranking among the foremost in the world; of an international standard of excellence; of the highest order: a world-class figure skater. 2. terminaling facilities located in Point Tupper, Nova Scotia Point Tupper is a small rural community located in western Cape Breton Island, Nova Scotia on the Strait of Canso. , Canada and on the island of St. Eustatius Noun 1. St. Eustatius - an island in the Netherlands Antilles Saint Eustatius Netherlands Antilles - a group of islands in the Lesser Antilles just to the north of Venezuela that are administered by The Netherlands in the Netherlands Antilles and the acquisition of eight bulk liquid storage terminals in Australia and New Zealand. Certain of the Company's statements in this press release are not purely historical, and as such are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These include statements regarding management's intentions, plans, beliefs, expectations or projections of the future. Forward-looking statements involve risks and uncertainties, including without limitation, the various risks inherent in the Company's business, and other risks and uncertainties detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission. One or more of these factors have affected, and could in the future affect the Company's business and financial results in future periods, and could cause actual results to differ materially from plans and projections. There can be no assurance that the forward-looking statements made in this document will prove to be accurate, and issuance of such forward-looking statements should not be regarded as a representation by the Company, or any other person, that the objectives and plans of the Company will be achieved. All forward-looking statements made in this press release are based on information presently available to management, and the Company assumes no obligation to update any forward-looking statements.
KANEB SERVICES LLC
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months
Ended March 31,
--------------------
2005 2004
--------- ---------
Consolidated revenues:
Services $ 99,222 $ 90,698
Products 191,804 142,481
--------- ---------
Total consolidated revenues 291,026 233,179
--------- ---------
Consolidated costs and expenses:
Cost of products sold 182,997 136,431
Operating costs 46,622 43,424
Depreciation and amortization 14,838 13,907
General and administrative 8,976 6,502
Valero merger costs 2,422 -
--------- ---------
Total consolidated costs and expenses 255,855 200,264
--------- ---------
Consolidated operating income 35,171 32,915
Consolidated interest and other income 206 32
Consolidated interest expense (11,348) (10,629)
--------- ---------
Consolidated income before income taxes and
interest of outside non-controlling partners
in KPP's net income 24,029 22,318
Income tax expense (1,526) (1,163)
Interest of outside non-controlling partners
in KPP's net income (15,854) (15,160)
--------- ---------
Net income $ 6,649 $ 5,995
========= =========
Earnings per share:
Basic $ 0.56 $ 0.51
========= =========
Diluted $ 0.55 $ 0.50
========= =========
KANEB SERVICES LLC
SUPPLEMENTAL INFORMATION
(In thousands, except per share amounts)
(Unaudited)
Three Months
Ended March 31,
---------------------
2005 2004
---------- ---------
Net Income $ 6,649 $ 5,995
Parent Company Valero merger costs (a) 293 -
--------- ---------
Income before Parent Company Valero merger costs $ 6,942 $ 5,995
========= =========
Diluted earnings per share before Parent
Company Valero merger costs $ 0.57 $ 0.50
========= =========
Weighted average diluted shares outstanding 12,123 11,921
========= =========
Consolidated revenues (including KPP):
Pipeline $ 30,092 $ 27,903
Terminaling 69,130 62,795
Product Marketing 191,804 142,481
--------- ---------
$ 291,026 $ 233,179
========= =========
Consolidated operating income (including KPP):
Pipeline $ 11,737 $ 11,210
Terminaling 18,727 18,484
Product Marketing 5,567 3,754
General and administrative (567) (533)
Parent Company Valero merger costs (293) -
--------- ---------
$ 35,171 $ 32,915
========= =========
Supplemental cash flow information:
Distributions received from KPP $ 7,097 $ 6,838
General and administrative (303) (533)
Parent Company Valero merger costs (293) -
Parent Company interest expense (179) (137)
--------- ---------
$ 6,322 $ 6,168
========= =========
(a) Does not include the Company's allocated portion of KPP's Valero
merger costs.
KANEB PIPE LINE PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per unit amounts)
(Unaudited)
Three Months
Ended March 31,
---------------------
2005 2004
---------- ---------
Revenues:
Services $ 99,222 $ 90,698
Products 83,796 55,715
--------- ---------
Total revenues 183,018 146,413
--------- ---------
Costs and expenses:
Cost of products sold 77,085 51,039
Operating costs 46,402 43,210
Depreciation and amortization 14,834 13,898
General and administrative 8,136 5,704
Valero merger costs 2,129 -
--------- ---------
Total costs and expenses 148,586 113,851
--------- ---------
Operating income 34,432 32,562
Interest and other income 204 5
Interest expense (11,105) (10,436)
--------- ---------
Income before minority interest and income taxes 23,531 22,131
Minority interest in net income (220) (210)
Income tax expense (1,514) (1,152)
--------- ---------
Net income 21,797 20,769
General partner's interest in net income (2,466) (2,282)
--------- ---------
Limited partners' interest in net income $ 19,331 $ 18,487
========= =========
Allocation of net income per unit $ 0.68 $ 0.65
========= =========
Weighted average number of Partnership units
outstanding 28,328 28,318
========= =========
KANEB PIPE LINE PARTNERS, L.P.
SUPPLEMENTAL INFORMATION
(Unaudited)
Three Months
Ended March 31,
---------------------
2005 2004
---------- ---------
Net Income $ 21,797 $ 20,769
Valero merger costs, net of minority interest 2,108 -
--------- ---------
Income before Valero merger costs $ 23,905 $ 20,769
========= =========
Allocation of income per unit before Valero
merger costs $ 0.76 $ 0.65
========= =========
Revenues (in 000s):
Pipeline $ 30,092 $ 27,903
Terminaling 69,130 62,795
Product sales 83,796 55,715
--------- ---------
$ 183,018 $ 146,413
========= =========
Operating income (in 000s):
Pipeline $ 11,737 $ 11,210
Terminaling 18,727 18,484
Product sales 3,968 2,868
--------- ---------
$ 34,432 $ 32,562
========= =========
Depreciation and amortization (in 000s):
Pipeline $ 3,792 $ 3,599
Terminaling 10,824 10,084
Product sales 218 215
--------- ---------
$ 14,834 $ 13,898
========= =========
Capital expenditures (in 000s):
Maintenance and environmental $ 7,368 $ 5,721
Expansion 1,375 1,626
--------- ---------
$ 8,743 $ 7,347
========= =========
EBITDA (in 000s):
Net income $ 21,797 $ 20,769
Interest expense 11,105 10,436
Income tax expense 1,514 1,152
Depreciation and amortization 14,834 13,898
Interest and other income (204) (5)
Minority interest in net income 220 210
--------- ---------
$ 49,266 $ 46,460
========= =========
Pipeline operating statistics:
Barrel miles shipped on petroleum pipelines
(in billions) 5.2 5.1
========= =========
Volumes shipped on anhydrous ammonia pipeline
(in thousands of tons) 297 297
========= =========
Terminaling operating statistics:
Average barrels of tankage utilized (in
millions) 50.5 48.2
========= =========
Average annualized revenues per barrel of
tankage utilized $ 5.55 $ 5.24
========= =========
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