KANEB Reports Third Quarter Results.Business Editors DALLAS--(BUSINESS WIRE)--Oct. 21, 2002 KANEB today reported results for the quarter ended September September: see month. 30, 2002. 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. John R. Barnes Barnes, former municipal borough, SE England. See Richmond upon Thames. , Chairman and Chief Executive Officer of Kaneb Services LLC, said, "The third quarter continued a very busy year for KANEB. We recently announced the Partnership's acquisition of eight bulk liquid storage terminals in 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. and 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. and a definitive agreement for the Partnership to acquire 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 system in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Earlier this year, we made the largest terminal acquisition in the Partnership's history. While a couple of our terminals had a difficult quarter, our overall operations are performing well." On September 18, 2002, KANEB announced that the Partnership had closed an acquisition of eight port-side bulk liquid storage terminals in Australia and New Zealand for approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. U.S. $44 million, subject to adjustment based on a closing date balance sheet. The acquired terminals provide storage and handling services to the chemicals, plastics and food ingredient
An ingredient is something that forms part of a mixture (in a general sense). industries. KANEB also announced that the Partnership had signed a definitive agreement to acquire an anhydrous an·hy·drous adj. Without water, especially water of crystallization. anhydrous (anhī´drus), adj without water. anhydrous containing no water. ammonia ammonia, chemical compound, NH3, colorless gas that is about one half as dense as air at ordinary temperatures and pressures. It has a characteristic pungent, penetrating odor. pipeline 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 from Koch Koch , Robert 1843-1910.German bacteriologist who discovered the cholera bacillus and the bacterial cause of anthrax. He won a 1905 Nobel Prize for developing tuberculin. Koch named after Robert Koch, a German bacteriologist. Pipeline Company, L.P. The approximately 2,000 mile pipeline has connections to multiple third party owned deep-water deep-wa·ter adj. Of, relating to, or carried on in waters of a relatively great depth: a deep-water port; deep-water drilling for oil. Adj. 1. import terminals, production and fertilizer upgrade facilities and other delivery terminals and an interconnect (1) To attach one device to another. (2) A physical port (plug, socket) or wireless port (transmitter, receiver) used to attach one device to another. 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 with another fertilizer pipeline. "Our ST Services terminaling group had an exceptional quarter while the Statia Terminals' operation continued to underperform Underperform An analyst recommendation that means a stock is expected to do slightly worse than the market return. Also known as market underperform, moderate sell, or weak hold. our expectations," said Edward Edward killed his father at his mother’s instigation. [Br. Balladry: Edward in Benét, 302] See : Patricide D. Doherty
large storage bin. bunk forage forage, usually ensilage stored in a large storage bunk and made available to cattle or other livestock along a face of the storage. business adversely affected Statia's quarter. While we are actively working to improve Statia's situation, it might be next year before significant results from such efforts become apparent." 3Q 2002 RESULTS FOR KANEB PIPE LINE PARTNERS, L.P. Net income for the quarter was $19.3 million, compared to $18.3 million for the third quarter of 2001. For the nine months ended September 30, 2002, net income before extraordinary item and gain on settlement of treasury lock (see Supplemental Information in the attached table) increased to $55.6 million, compared with $49.4 million for the prior year period. Reported net income for the nine months ended September 30, 2002 was $53.5 million, up from $47.5 million for the same prior year period. 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. for the third quarter increased to $27.9 million, up from $22.1 million in the same prior year quarter, and for the nine months ended September 30, 2002 was $78.9 million, compared to $62.3 for the same period last year. 3Q 2002 RESULTS FOR KANEB SERVICES LLC Kaneb Services LLC, the General Partner of Kaneb Pipe Line Partners, L.P., reported net income for the quarter of $6.7 million, compared to $6.0 million for the third quarter of 2001. For the nine months ended September 30, 2002, net income before extraordinary item, gain on settlement of treasury lock and gain on issuance of units by KPP (see Supplemental Information in the attached table) increased to $17.6 million, compared with $15.1 million for the prior year period. Reported net income for the nine months ended September 30, 2002 was $34.4 million, up from $25.1 million for the same prior year period. Operating income for the quarter was $28.5 million, compared to $22.7 million for the third quarter of 2001 and for the nine months ended September 30, 2002 was $80.0 million, up from $62.2 million in same prior year period. KSL was formed as a limited liability company in 2001 from certain assets previously held by Kaneb Services, Inc. (now Xanser Corporation). These assets include the KPP general partner interest, including incentive distributions, 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. 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 and is the third largest independent liquids terminaling company in the world. Worldwide operations include 78 facilities in 26 states, the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United 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, New Zealand and the United Kingdom. Its publicly traded entities are Kaneb Services LLC (NYSE: KSL) and Kaneb Pipe Line Partners, L.P., (NYSE: KPP, "the Partnership"). Kaneb Services LLC 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. KSL's assets are the KPP general partner interest and 5.1 million KPP partnership units. Through a wholly owned subsidiary, Kaneb Pipe Line Company LLC, KSL manages and operates the KPP pipeline and terminaling assets. Another KSL subsidiary provides wholesale fuel marketing services. 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. . 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 statements in this press release are not purely historical, and as such are ``forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. statements'' 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 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. 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 companies' 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 Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
2002 2001 2002 2001
-------- -------- -------- --------
Consolidated revenues:
Services $ 75,184 $ 53,403 $207,946 $154,424
Products 108,935 77,260 277,828 264,491
-------- -------- -------- --------
Total consolidated
revenues 184,119 130,663 485,774 418,915
-------- -------- -------- --------
Consolidated costs and
expenses:
Cost of products sold 105,059 75,773 268,727 262,296
Operating costs 34,303 23,647 92,555 68,139
Depreciation and
amortization 10,313 5,643 27,440 17,382
General and administrative 5,938 2,874 17,034 8,929
-------- -------- -------- --------
Total consolidated costs
and expenses 155,613 107,937 405,756 356,746
-------- -------- -------- --------
Consolidated operating income 28,506 22,726 80,018 62,169
Consolidated interest and
other income 259 123 482 4,230
Consolidated interest expense (7,478) (3,560) (20,944) (12,726)
-------- -------- -------- --------
Consolidated income before
gain on issuance of units
by KPP, income taxes,
interest of outside non-
controlling partners in
KPP's net income and
extraordinary item 21,287 19,289 59,556 53,673
Gain on issuance of units by
KPP - - 17,332 9,859
Income tax benefit (expense) (673) (296) (2,113) 800
Interest of outside non-
controlling partners in
KPP's net income (13,941) (13,037) (39,852) (38,404)
-------- -------- -------- --------
Income before extraordinary
item 6,673 5,956 34,923 25,928
Extraordinary item - loss on
extinguishment of debt by
KPP, net of income taxes
and interest of outside
non-controlling partners in
KPP's net income - - (502) (859)
-------- -------- -------- --------
Net income $ 6,673 $ 5,956 $ 34,421 $ 25,069
======== ======== ======== ========
Earnings per share:
Basic:
Before extraordinary item $ 0.58 $ 0.55 $ 3.05 $ 2.42
Extraordinary item - - (0.04) (0.08)
-------- -------- -------- --------
$ 0.58 $ 0.55 $ 3.01 $ 2.34
======== ======== ======== ========
Diluted:
Before extraordinary item $ 0.57 $ 0.52 $ 2.97 $ 2.29
Extraordinary item - - (0.04) (0.08)
-------- -------- -------- --------
$ 0.57 $ 0.52 $ 2.93 $ 2.21
======== ======== ======== ========
KANEB SERVICES LLC
SUPPLEMENTAL INFORMATION
(In thousands, except per share amounts)
(Unaudited)
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- ------------------
2002 2001 2002 2001
-------- -------- -------- --------
Income before
extraordinary item $ 6,673 $ 5,956 $ 34,923 $ 25,928
Gain on settlement of
treasury lock, net of
interest of outside
non-controlling partners
in KPP's net income - - - (1,016)
Gain on issuance of
units by KPP - - (17,332) (9,859)
-------- -------- -------- --------
Income before
extraordinary item,
as adjusted $ 6,673 $ 5,956 $ 17,591 $ 15,053
======== ======== ======== ========
Diluted earnings per
share before gain on
issuance of units by
KPP, income taxes and
extraordinary item $ 0.57 $ 0.52 $ 1.50 $ 1.33
======== ======== ======== ========
Weighted average diluted
shares outstanding 11,751 11,350 11,756 11,348
======== ======== ======== ========
Consolidated revenues
(including KPP):
Pipeline $ 20,998 $ 20,195 $ 57,946 $ 55,155
Terminaling 54,186 33,208 150,000 99,269
Product Marketing 108,935 77,260 277,828 264,491
-------- -------- -------- --------
$184,119 $130,663 $485,774 $418,915
======== ======== ======== ========
Consolidated operating
income (including KPP):
Pipeline $9,487 $9,827 $27,421 $26,640
Terminaling 18,478 12,249 50,962 35,642
Product Marketing 803 1,013 2,937 749
General and
administrative
expenses (262) (363)(1) (1,302) (862)(1)
-------- -------- -------- --------
$ 28,506 $ 22,726 $ 80,018 $ 62,169
======== ======== ======== ========
Cash flow information:
Distributions received
from KPP $ 5,616 $ 15,996
Parent Company general
and administrative
expenses (262) (1,302)
Parent Company interest
expense (195) (533)
-------- --------
$ 5,159 $ 14,161
======== ========
Cash distributed to
shareholders $ 4,749 $ 13,602
======== ========
(1) Does not include incremental general and administrative expenses
as a result of the Company becoming a separate public entity.
KANEB PIPE LINE PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per unit amounts)
(Unaudited)
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
2002 2001 2002 2001
-------- -------- -------- --------
Revenues:
Services $ 75,184 $ 53,403 $207,946 $154,424
Products 28,120 - 63,702 -
-------- -------- -------- --------
Total revenues 103,304 53,403 271,648 154,424
-------- -------- -------- --------
Costs and expenses:
Cost of products sold 26,501 - 59,433 -
Operating costs 34,082 23,396 91,845 67,333
Depreciation and
amortization 10,302 5,624 27,408 17,326
General and administrative 4,549 2,307 14,111 7,483
-------- -------- -------- --------
Total costs and expenses 75,434 31,327 192,797 92,142
-------- -------- -------- --------
Operating income 27,870 22,076 78,851 62,282
Interest and other income 233 122 414 4,218
Interest expense (7,202) (3,380) (20,132) (12,144)
-------- -------- -------- --------
Income before minority
interest, income taxes and
extraordinary item 20,901 18,818 59,133 54,356
Minority interest in net income (195) (185) (562) (537)
Income tax provision (1,410) (295) (2,981) (602)
-------- -------- -------- --------
Income before extraordinary
item 19,296 18,338 55,590 53,217
Extraordinary item - loss on
debt extinguishment, net of
minority interest and income
taxes - - (2,090) (5,757)
-------- -------- -------- --------
Net income 19,296 18,338 53,500 47,460
General partner's interest in
net income (1,414) (924) (4,112) (1,868)
-------- -------- -------- --------
Limited partners' interest in
net income $ 17,882 $ 17,414 $ 49,388 $ 45,592
======== ======== ======== ========
Allocation of net income per
unit:
Before extraordinary item $ 0.77 $ 0.86 $ 2.31 $ 2.54
Extraordinary item - - (0.09) (0.29)
-------- -------- -------- --------
$ 0.77 $ 0.86 $ 2.22 $ 2.25
======== ======== ======== ========
Weighted average number of
Partnership units
outstanding 23,100 20,285 22,237 20,285
======== ======== ======== ========
KANEB PIPE LINE PARTNERS, L.P.
SUPPLEMENTAL INFORMATION
(Unaudited)
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
2002 2001 2002 2001
-------- -------- -------- --------
Income before extraordinary item
(in 000s) $ 19,296 $ 18,338 $ 55,590 $ 53,217
Gain on settlement of treasury
lock (in 000s) - - - (3,782)
-------- -------- -------- --------
Income before extraordinary
item and settlement of
treasury lock (in 000s) $ 19,296 $ 18,338 $ 55,590 $ 49,435
======== ======== ======== ========
Income per unit before
extraordinary item and
settlement of treasury lock $ 0.77 $ 0.86 $ 2.31 $ 2.36
======== ======== ======== ========
Revenues (in 000s):
Pipeline $ 20,998 $ 20,195 $ 57,946 $ 55,155
Terminaling 54,186 33,208 150,000 99,269
Product marketing 28,120 - 63,702 -
-------- -------- -------- --------
$103,304 $ 53,403 $271,648 $154,424
======== ======== ======== ========
Operating income (in 000s):
Pipeline $ 9,487 $ 9,827 $ 27,421 $ 26,640
Terminaling 18,478 12,249 50,962 35,642
Product marketing (95) - 468 -
-------- -------- -------- --------
$ 27,870 $ 22,076 $ 78,851 $ 62,282
======== ======== ======== ========
Income before interest,
income taxes, depreciation
and amortization and
extraordinary item
(in 000s) $ 37,977 $ 27,515 $105,697 $ 79,071
======== ======== ======== ========
Depreciation and amortization
(in 000s):
Pipeline $ 1,385 $ 1,324 $ 4,132 $ 3,937
Terminaling 8,728 4,300 22,813 13,389
Product marketing 189 - 463 -
-------- -------- -------- --------
$ 10,302 $ 5,624 $ 27,408 $ 17,326
======== ======== ======== ========
Capital expenditures (in 000s):
Pipeline $ 2,348 $ 1,216 $ 7,148 $ 2,125
Terminaling 5,353 2,177 14,661 7,464
Product marketing 10 - 120 -
-------- -------- -------- --------
$ 7,711 $ 3,393 $ 21,929 $ 9,589
======== ======== ======== ========
Pipeline operating statistics
- Barrel miles shipped (in
billions) 5.0 5.0 13.7 13.9
======== ======== ======== ========
Terminaling operating
statistics:
Average annual barrels of
tankage utilized (in
millions) 47.8 30.0 45.3 30.1
======== ======== ======== ========
Average annual revenues per
barrel of tankage utilized $4.50 $ 4.40 $ 4.43 $ 4.42
======== ======== ======== ========
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