TEPPCO Partners, L.P. Reports Record Results; to Restate for Amortization of Intangible Assets Related to Investments in Centennial and Seaway.HOUSTON Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; -- TEPPCO Partners TEPPCO Partners LP (NYSE: TPP) is a Fortune 300 company based in Houston, Texas. This company operates petroleum pipelines. History During the second quarter of 2007, it was acquired by another Fortune 500 company, Houston-based Enterprise GP Holdings , L.P. (NYSE NYSE See: New York Stock Exchange :TPP TPP thiamine pyrophosphate. Thiamine pyrophosphate (TPP) The coenzyme containing thiamine that is essential in converting glucose to energy. Mentioned in: Beriberi TPP 1. total plasma protein. 2. ) today reported record net income for 2005 of $162.5 million, a 17 percent increase, compared with net income of $138.5 million for the year ended Dec. 31, 2004. Net income per unit amounts were $1.71 and $1.56 for the years ended Dec. 31, 2005 and 2004, respectively. Net income for the years 2005 and 2004 includes non-cash asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges of $2.6 million, or $0.03 per unit, and $4.4 million, or $0.05 per unit, respectively. Net income for the fourth quarter of 2005 increased by 19 percent to $44.6 million, compared to $37.4 million for the fourth quarter of 2004. Net income per unit amounts were $0.45 and $0.42 for fourth quarters 2005 and 2004, respectively. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
v. rec·on·ciled, rec·on·cil·ing, rec·on·ciles v.tr. 1. To reestablish a close relationship between. 2. To settle or resolve. 3. to its nearest GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). financial measure later in this news release. "TEPPCO's businesses delivered a solid fourth quarter for 2005, to complete a record year for our Partnership," said Lee W. Marshall Marshall. 1 City (1990 pop. 12,711), seat of Saline co., N central Mo.; inc. 1839. In a large farm area, it is a processing center for grain, eggs, meat, and dairy products. Marshall is the seat of Missouri Valley College. , Sr., acting chief executive officer of the general partner of TEPPCO. "Quarterly crude oil volumes handled increased by 17 percent, natural gas volumes gathered increased by 19 percent, and both natural gas liquid and liquefied petroleum gas liquefied petroleum gas or LPG, mixture of gases, chiefly propane and butane, produced commercially from petroleum and stored under pressure to keep it in a liquid state. transportation volumes increased by 7 percent, compared with fourth quarter 2004. "Our downstream From the provider to the customer. Downloading files and Web pages from the Internet is the downstream side. The upstream is from the customer to the provider (requesting a Web page, sending e-mail, etc.). segment delivered a 25 percent increase in EBITDA as a result of an increase in propane propane, CH3CH2CH3, colorless, gaseous alkane. It is readily liquefied by compression and cooling. It melts at −189.9°C; and boils at −42.2°C;. and refined products volumes, despite the impact of Hurricane Rita Hurricane Rita was the fourth-most intense Atlantic hurricane ever recorded and the most intense tropical cyclone ever observed in the Gulf of Mexico. Rita caused $11.3 billion in damage on the U.S. Gulf Coast in September 2005. in the fourth quarter of 2005. Our upstream From the consumer to the provider. See downstream. (networking) upstream - Fewer network hops away from a backbone or hub. For example, a small ISP that connects to the Internet through a larger ISP that has their own connection to the backbone is downstream from the larger segment reported a 6 percent increase in EBITDA on increased margins and transportation volumes, while our midstream mid·stream n. 1. The middle part of a stream. 2. The part of a course that is neither at the beginning nor at the end: the midstream of life. Noun 1. segment reported another solid quarter with natural gas volumes averaging over 1.7 billion cubic feet per day. This reflects the ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale of volumes associated with our Phase 3 expansion of the Jonah Jonah (jō`nə), prophetic book of the Bible. It tells the story of a prophet called by God to preach repentance to the city of Nineveh. According to the Second Book of Kings, Jonah lived during the reign (c.786 B.C.–c.746 B.C. Gas Gathering system and additional volumes on the Val Verde Val Verde may mean:
Colorado (kŏlərăd`ə, –răd`ō, –rä`dō), state, W central United States, one of the Rocky Mt. states. , both of which were completed during the fourth quarter of 2004," continued Marshall. "Overall, we estimate that Hurricane Rita reduced EBITDA for the fourth quarter of 2005 by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $3 million, due to an increase in insurance premiums and costs to repair facilities affected by the storm. In addition, we estimate that transition costs associated with the change in ownership of our general partner totaled $2.8 million in the fourth quarter of 2005 and $8.5 million for all of 2005," stated Marshall. OPERATING RESULTS BY BUSINESS SEGMENT Upstream Segment The upstream segment includes crude oil transportation, storage, gathering and marketing activities, and distribution of lubrication lubrication, introduction of a substance between the contact surfaces of moving parts to reduce friction and to dissipate heat. A lubricant may be oil, grease, graphite, or any substance—gas, liquid, semisolid, or solid—that permits free action of oils and specialty chemicals A Specialty chemical is a chemical produced for a specialized use. They are produced in lower volume than bulk chemicals, of which petrochemicals, made from oil feedstocks, are the most common. However, both are produced in a chemical plant. . 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 upstream segment was $11 million for the fourth quarter of 2005, compared with $9 million for the fourth quarter of 2004. The increase in operating income resulted primarily from increased marketing and transportation margins and contributions from assets acquired in April 2005. This was partially offset by increased operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. of acquired assets, increased insurance expense attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the hurricanes in 2005 and a $1 million settlement of an indemnity Recompense for loss, damage, or injuries; restitution or reimbursement. An indemnity contract arises when one individual takes on the obligation to pay for any loss or damage that has been or might be incurred by another individual. related to an acquisition in 2000. Total crude oil volumes marketed and handled during the fourth quarter of 2005 averaged 1.2 million barrels per day Barrels per day (abbreviated BPD, bbl/d, bpd, bd or b/d) is a measurement used to describe the amount of crude oil (measured in barrels) produced or consumed by an entity in one day. (bpd), compared with 1.03 million bpd for the fourth quarter of 2004, an increase of 17 percent. Equity earnings in the Seaway Crude Pipeline were $3.8 million for the fourth quarter of 2005, compared with $4.2 million for the fourth quarter of 2004. The decrease in equity earnings was primarily due to higher inventory sales and a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. inventory settlement during 2004, and higher operating costs operating costs npl → gastos mpl operacionales following a pipeline release in May 2005. Long-haul long haul n. 1. A long distance: It is a long haul from New York to Los Angeles. 2. A long period of time: Over the long haul the candidates performed well. volumes on Seaway averaged a record 334,000 bpd for the fourth quarter of 2005, compared with 262,000 bpd for the fourth quarter of 2004. Midstream Segment The midstream segment includes natural gas gathering services, and storage, transportation and fractionation fractionation /frac·tion·a·tion/ (frak?shun-a´shun) 1. in radiology, division of the total dose of radiation into small doses administered at intervals. 2. of natural gas liquids (NGLs). Operating income for the midstream segment was $24.1 million for the fourth quarter of 2005, compared with $26.6 million for the fourth quarter of 2004. An increase in revenue attributable primarily to higher natural gas gathering and NGL NGL - A dialect of IGL. volumes was more than offset by an increase in operating, general and administrative expenses, increased insurance expense attributable to the hurricanes in 2005, power costs, and depreciation and amortization expense. The increase in depreciation and amortization expense was primarily due to lower estimates of future production, which resulted in changes to the estimated useful lives of certain of the intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. associated with the Val Verde system. Total natural gas gathering volumes increased by approximately 19 percent, to approximately 1.73 billion cubic feet per day (Bcf/d) in the fourth quarter of 2005, compared with approximately 1.45 Bcf/d in the fourth quarter of 2004. Downstream Segment The downstream segment includes the transportation and storage of refined products, liquefied petroleum gases (LPGs) and petrochemicals. Downstream operating income was $27 million for the fourth quarter of 2005, compared with $18.2 million for the fourth quarter of 2004. The increase in operating income resulted from an increase in revenues, primarily due to increased deliveries of propane as a result of system expansion projects completed in 2004 and colder weather in the Northeast “Northeastern” redirects here. For the Boston college, see Northeastern University, Boston. Northeast or north east is the ordinal direction halfway between north and east. It is the opposite of southwest. See boxing the compass. during the fourth quarter of 2005, partially offset by lower margins on the sale of excess product inventory. This increase was partially offset by increases in insurance expense attributable to the hurricanes in 2005 and depreciation expense. LPG LPG: see liquefied petroleum gas. 1. LPG - Linguaggio Procedure Grafiche (Italian for "Graphical Procedures Language"). dott. Gabriele Selmi. Roughly a cross between Fortran and APL, with graphical-oriented extensions and several peculiarities. transportation volumes increased by 7 percent to 150,000 bpd in the fourth quarter of 2005, compared with 140,000 bpd in the fourth quarter of the prior year. Equity losses from unconsolidated investments totaled $0.3 million for the fourth quarter of 2005, compared with an equity loss of $2 million for the fourth quarter of 2004. Equity earnings from Mont Belvieu Storage Partners, L.P. totaled $2 million and $1.9 million for the fourth quarters of 2005 and 2004, respectively. Equity losses from the Centennial Pipeline totaled $2.3 million and $4 million during the fourth quarters of 2005 and 2004, respectively. CAPITALIZATION capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. AND LIQUIDITY Total debt outstanding at Dec. 31, 2005, was approximately $1.5 billion. At the end of 2005, we had total liquidity of approximately $300 million, which included availability under the Partnership's $700 million credit facility and cash. In January January: see month. 2006, we 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. $200 million notional amount The notional amount (or notional principal amount or notional value) on a financial instrument is the nominal or face amount that is used to calculate payments made on that instrument. This amount generally does not change hands and is thus referred to as notional. of interest rate swaps Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. , which reduced our exposure to floating interest rates from 41 percent to 28 percent based on total debt outstanding at the end of 2005. RESTATEMENT Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. OF FINANCIAL STATEMENTS In conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with a year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. review of our accounting policies, the Partnership management and the Audit and Conflicts Committee of the board of directors of our general partner reassessed our accounting for the intangible assets with respect to our investments in Centennial Pipeline and Seaway Crude Pipeline. As a result of this assessment, TEPPCO will restate re·state tr.v. re·stat·ed, re·stat·ing, re·states To state again or in a new form. See Synonyms at repeat. re·state its financial statements for the first three quarters of 2005, and the quarterly and annual periods of 2004 and 2003 for certain changes in the accounting for intangible assets related to its equity investments in its 50 percent ownership interests in both Centennial and Seaway. TEPPCO has intangible assets related to its investments in Centennial and Seaway initially recorded on its balance sheet at $33.4 million and $27.1 million, respectively, which were not being amortized as we were accounting for these intangible assets as having indefinite INDEFINITE. That which is undefined; uncertain. INDEFINITE, NUMBER. A number which may be increased or diminished at pleasure. 2. When a corporation is composed of an indefinite number of persons, any number of them consisting of a majority of those lives. Based on our reassessment Reassessment The process of re-determining the value of property or land for tax purposes. Notes: Property is usually reassessed on an annual basis. You may request a "reassessment" if you disagree with your assessment. , we will now amortize amortize To write off gradually and systematically a given amount of money within a specific number of time periods. For example, an accountant amortizes the cost of a long-term asset by deducting a portion of that cost against income in each period. these intangible assets over lives of generally 10 years and 39 years for Centennial and Seaway, respectively. The effect of the restatement is to reduce the intangible assets related to our investments in Centennial and Seaway, which decreases net income by $3.8 million, or $0.05 per unit, and $4 million, or $0.05 per unit, for the fiscal years ended Dec. 31, 2004 and 2003, respectively. Net income for the fourth quarter and full year of 2005 includes non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $1 million, or $0.01 per unit, and $4.8 million, or $0.04 per unit, respectively, relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the amortization of these intangible assets. Net income for the fourth quarter of 2004 includes non-cash charges of $0.9 million, or $0.01 per unit. In addition, we will record a $2.5 million reduction to partners' capital, which represents the cumulative effect of this restatement from 2000 through 2002. Financial information presented in this news release with respect to 2005 and 2004 reflects the changes associated with this restatement. These are non-cash adjustments that do not affect TEPPCO's cash flow or debt balances for these periods. "Given the cumulative effect of this change on reported non-cash amortization expense, we have determined that the most appropriate action is to restate the affected periods. We have discussed this with our auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together , who are in the process of completing their audit," said Marshall. We expect to file the restated audited financial statements and related auditor's report Auditor's Report Recorded in the annual report, the auditor's report tests to see that a corporation's financial statements comply with GAAP. This is sometimes referred to as the clean opinion. Notes: Most auditor's reports consist of three paragraphs. in connection with our Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for 2005 by the filing deadline. All of our 2005 unaudited quarterly financial statements for the first three quarters are expected to be restated in connection with our quarterly filings in 2006. 2006 OUTLOOK The Phase 4 expansion of the Jonah Gas Gathering system is expected to be completed in February February: see month. 2006. We expect increased volumes on this system with the continuation continuation - continuation passing style of strong drilling activity in the Jonah and Pinedale Pinedale refers to several places in the United States:
We currently anticipate that total capital expenditures for 2006 will be approximately $210 million, which will include approximately $147 million for organic growth projects and $38 million for maintenance capital expenditures, which includes $19 million for pipeline integrity. Additionally, we estimate $19 million in expenditures for system upgrades. NON-GAAP FINANCIAL MEASURES The Financial Highlights table accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. this earnings release and other disclosures herein include references to EBITDA, which may be viewed as a non-GAAP (Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ) measure under the rules of the Securities and Exchange Commission (SEC). We define EBITDA as net income plus interest expense - net, depreciation and amortization, and a pro rata [Latin, Proportionately.] A phrase that describes a division made according to a certain rate, percentage, or share. In a Bankruptcy case, when the debtor is insolvent, creditors generally agree to accept a pro rata share of what is owed to them. portion, based on our equity ownership, of the interest expense and depreciation and amortization of each of our joint ventures. We have included EBITDA as a supplemental disclosure because we believe EBITDA is used by our investors as a supplemental financial measure in the evaluation of our business. A reconciliation of EBITDA to net income is provided in the Financial Highlights table. We believe EBITDA provides useful information regarding the performance of our assets without regard to financing methods, capital structures or historical costs basis. EBITDA should not be considered as an alternative to net income, as an indicator Indicator Anything used to predict future financial or economic trends. Notes: In the context of technical analysis, an indicator is a mathematical calculation based on a securities price and/or volume. The result is used to predict future prices. of our operating performance or as a measure of liquidity, including as an alternative to cash flows from operating activities or other cash flow data calculated in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP. Our EBITDA may not be comparable to EBITDA of other entities because other entities may not calculate EBITDA in the same manner as we do. Information in the accompanying Operating Data table includes margin of the upstream segment, which may be viewed as a non-GAAP financial measure under the rules of the SEC. Margin 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. We believe margin is a more meaningful measure of financial performance than operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. and operating expenses due to the significant fluctuations in revenues and expenses caused by variations in the level of marketing activity and prices for products marketed. A reconciliation of margin to operating revenues and operating expenses is provided in the Operating Data table accompanying this earnings release. TEPPCO will host a conference call related to earnings performance at 8 a.m. CT on Wednesday Wednesday: see week. , Feb. 8, 2006. Interested parties may listen live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the or via telephone by dialing 800-967-7134, confirmation code 2353714. Please call in five to 10 minutes prior to the scheduled start time. To participate live over the Internet, log on to the company's Web site at www.teppco.com. An audio replay of the conference call will also be available for seven days by dialing 888-203-1112, confirmation code 2353714. A replay and transcript A generic term for any kind of copy, particularly an official or certified representation of the record of what took place in a court during a trial or other legal proceeding. A transcript of record will also be available by accessing the company's Web site at www.teppco.com. TEPPCO Partners, L.P. is a publicly traded partnership Publicly Traded Partnership A limited partnership that also has interests traded in the equity securities market. Notes: This is also known as a master limited partnership. See also: Master Limited Partnership, Partnership, Public Company with an enterprise value of over $4 billion, which conducts business through various subsidiary operating companies operating company A business that engages in transactions with outsiders. . TEPPCO owns and operates one of the largest common carrier pipelines of refined petroleum products and liquefied petroleum gases 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. ; owns and operates petrochemical petrochemical, any one of a large group of chemicals derived from a component of petroleum or natural gas. The cracking processes for manufacturing gasoline produce vast quantities of gaseous hydrocarbons. and natural gas liquid pipelines; is engaged in crude oil transportation, storage, gathering and marketing; owns and operates natural gas gathering systems; and owns 50-percent interests in Seaway Crude Pipeline Company, Centennial Pipeline LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control and Mont Belvieu Storage Partners, L.P., and an undivided UNDIVIDED. That which is held by the same title by two or more persons, whether their rights are equal, as to value or quantity, or unequal. 2. Tenants in common, joint-tenants, and partners, hold an undivided right in their respective properties, until ownership interest in the Basin BASIN Boulder Area Sustainability Information Network (Boulder, Colorado) BASIN Brothers And Sisters In Need Pipeline. Texas Eastern Products Pipeline Company, LLC, a 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. of DFI See Direct foreign investment. GP Holdings L.P. (a privately owned partnership indirectly controlled by Dan L. Duncan Duncan, city (1990 pop. 21,732), seat of Stephens co., SW Okla., in an oil, farm, and cattle area; inc. 1892. There is an oil industry, and electronics, concrete, and apparel are manufactured. During the late 19th cent. ), is the general partner of TEPPCO Partners, L.P. For more information, visit TEPPCO's Web site at www.teppco.com. This news release includes 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 Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from our expectations reflected in the forward-looking statements. These risks and uncertainties include, among other things, market conditions, governmental regulations and factors discussed in TEPPCO Partners, L.P. filings with the Securities and Exchange Commission.
TEPPCO Partners, L.P.
FINANCIAL HIGHLIGHTS
(Unaudited - In Millions, Except Per Unit Amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------- --------------------
2005 2004(1) 2005 2004(1)
--------- ---------- --------- ----------
(Restated) (Restated)
Operating Revenues:
Sales of petroleum
products $2,350.8 $1,659.3 $8,072.3 $5,434.1
Transportation - Refined
Products 33.5 34.9 144.6 148.2
Transportation - LPGs 33.1 28.5 96.3 87.1
Transportation - Crude oil 9.4 9.0 37.6 37.2
Transportation - NGLs 10.5 10.2 43.9 41.2
Gathering - Natural Gas 40.4 35.7 152.8 140.1
Other 20.0 18.0 71.0 70.3
--------- ---------- --------- ----------
Total Operating Revenues 2,497.7 1,795.6 8,618.5 5,958.2
--------- ---------- --------- ----------
Costs and Expenses:
Purchases of petroleum
products 2,326.8 1,642.7 7,995.4 5,373.0
Operating expenses -
general and
administrative 66.8 59.1 240.2 238.2
Operating fuel and power 13.8 11.7 49.0 48.1
Depreciation and
amortization 28.3 28.4 111.4 112.9
Gains on sales of assets (0.1) (0.1) (0.7) (1.1)
--------- ---------- --------- ----------
Total Costs and Expenses 2,435.6 1,741.8 8,395.3 5,771.1
--------- ---------- --------- ----------
Operating Income 62.1 53.8 223.2 187.1
--------- ---------- --------- ----------
Interest expense - net (21.2) (18.9) (81.9) (72.0)
Equity earnings (2) 3.5 2.2 20.1 22.1
Other income - net 0.2 0.3 1.1 1.3
--------- ---------- --------- ----------
Net Income $44.6 $37.4 $162.5 $138.5
========= ========== ========= ==========
Net Income Allocation:
Limited Partner
Unitholders $31.5 $26.6 $114.9 $98.5
General Partner 13.1 10.8 47.6 40.0
--------- ---------- --------- ----------
Total Net Income
Allocated $44.6 $37.4 $162.5 $138.5
========= ========== ========= ==========
Basic Net Income Per
Limited Partner Unit $0.45 $0.42 $1.71 $1.56
========= ========== ========= ==========
Weighted Average Number of
Limited Partner Units 70.0 63.0 67.4 63.0
========= ========== ========= ==========
(1) Certain 2004 amounts have been reclassified to conform to current
2005 presentation.
(2) EBITDA
Net Income $44.6 $37.4 $162.5 $138.5
Interest expense - net 21.2 18.9 81.9 72.0
Depreciation and
amortization (D&A) 28.3 28.4 111.4 112.9
Amortization of Excess
Investment in joint
ventures 1.0 0.9 4.8 3.9
TEPPCO's pro-rata
percentage of joint
venture interest
expense and D&A 5.7 5.9 23.1 22.1
--------- ---------- --------- ----------
Total EBITDA $100.8 $91.5 $383.7 $349.4
========= ========== ========= ==========
TEPPCO Partners, L.P.
BUSINESS SEGMENT DATA
(Unaudited - In Millions)
Three
Months
Ended
December 31, Down- Mid- Intersegment
2005 stream stream Upstream Eliminations Consolidated
------------- ------------------ ---------- ------------ ------------
Operating
revenues $79.5 $59.7 $2,359.7 $(1.2) $2,497.7
Purchases of
petroleum
products - 3.2 2,324.6 (1.0) 2,326.8
Operating
expenses 42.5 17.6 20.7 (0.2) 80.6
Depreciation
and
amortization
(D&A) 10.0 14.8 3.5 - 28.3
Gains on
sales of
assets - - (0.1) - (0.1)
---------- ------- ---------- ------------ ------------
Operating
Income 27.0 24.1 11.0 - 62.1
Equity
(losses)
earnings (0.3) - 3.8 - 3.5
Other - net 0.2 - - - 0.2
---------- ------- ---------- ------------ ------------
Income
before
interest $26.9 $24.1 $14.8 $- $65.8
---------- ------- ---------- ------------ ------------
Depreciation
and
amortization 10.0 14.8 3.5 - 28.3
Amortization
of excess
investment
in joint
ventures 0.8 - 0.2 - 1.0
TEPPCO's pro-
rata
percentage
of joint
venture
interest
expense and
D&A 4.0 - 1.7 - 5.7
---------- ------- ---------- ------------ ------------
Total
EBITDA $41.7 $38.9 $20.2 $- $100.8
========== ======= ========== ============ ============
Depreciation
and
amortization (28.3)
Interest
expense -
net (21.2)
Amortization
of excess
investment
in joint
ventures (1.0)
TEPPCO's pro-
rata
percentage
of joint
venture
interest
expense and
D&A (5.7)
------------
Net Income $44.6
============
Three
Months
Ended
December 31, Down- Mid- Intersegment
2004 stream stream Upstream Eliminations Consolidated
------------- ------------------ ---------- ------------ ------------
(Restated) (Restated) (Restated)
Operating
revenues $73.7 $54.1 $1,668.6 $(0.8) $1,795.6
Purchases of
petroleum
products - 1.6 1,641.9 (0.8) 1,642.7
Operating
expenses 43.5 13.3 14.0 - 70.8
Depreciation
and
amortization 12.0 12.6 3.8 - 28.4
Gains on
sales of
assets - - (0.1) - (0.1)
---------- ------- ---------- ------------ ------------
Operating
Income 18.2 26.6 9.0 - 53.8
Equity
(losses)
earnings (2.0) - 4.2 - 2.2
Other - net 0.1 - 0.2 - 0.3
---------- ------- ---------- ------------ ------------
Income
before
interest $16.3 $26.6 $13.4 $- $56.3
---------- ------- ---------- ------------ ------------
Depreciation
and
amortization 12.0 12.6 3.8 - 28.4
Amortization
of excess
investment
in joint
ventures 0.7 - 0.2 - 0.9
TEPPCO's pro-
rata
percentage
of joint
venture
interest
expense and
D&A 4.3 - 1.6 - 5.9
---------- ------- ---------- ------------ ------------
Total
EBITDA $33.3 $39.2 $19.0 $- $91.5
========== ======= ========== ============ ============
Depreciation
and
amortization (28.4)
Interest
expense -
net (18.9)
Amortization
of excess
investment
in joint
ventures (0.9)
TEPPCO's pro-
rata
percentage
of joint
venture
interest
expense and
D&A (5.9)
------------
Net Income $37.4
============
TEPPCO Partners, L.P.
BUSINESS SEGMENT DATA
(Unaudited - In Millions)
Twelve
Months
Ended
December 31, Down- Mid- Intersegment
2005 stream stream Upstream Eliminations Consolidated
------------- ------------------ ---------- ------------ ------------
Operating
revenues $287.1 $224.6 $8,110.3 $(3.5) $8,618.5
Purchases of
petroleum
products - 9.0 7,989.6 (3.2) 7,995.4
Operating
expenses 159.8 59.3 70.4 (0.3) 289.2
Depreciation
and
amortization
(D&A) 39.4 54.8 17.2 - 111.4
Gains on
sales of
assets (0.2) (0.4) (0.1) - (0.7)
---------- ------- ---------- ------------ ------------
Operating
Income 88.1 101.9 33.2 - 223.2
Equity
(losses)
earnings (3.0) - 23.1 - 20.1
Other - net 0.8 0.2 0.1 - 1.1
---------- ------- ---------- ------------ ------------
Income
before
interest $85.9 $102.1 $56.4 $- $244.4
---------- ------- ---------- ------------ ------------
Depreciation
and
amortization 39.4 54.8 17.2 - 111.4
Amortization
of excess
investment
in joint
ventures 4.1 - 0.7 - 4.8
TEPPCO's pro-
rata
percentage
of joint
venture
interest
expense and
D&A 16.2 - 6.9 - 23.1
---------- ------- ---------- ------------ ------------
Total
EBITDA $145.6 $156.9 $81.2 $- $383.7
========== ======= ========== ============ ============
Depreciation
and
amortization (111.4)
Interest
expense -
net (81.9)
Amortization
of excess
investment
in joint
ventures (4.8)
TEPPCO's pro-
rata
percentage
of joint
venture
interest
expense and
D&A (23.1)
------------
Net Income $162.5
============
Twelve
Months
Ended
December 31, Down- Mid- Intersegment
2004 stream stream Upstream Eliminations Consolidated
------------- ------------------ ---------- ------------ ------------
(Restated) (Restated) (Restated)
Operating
revenues $279.4 $206.0 $5,476.0 $(3.2) $5,958.2
Purchases of
petroleum
products - 5.9 5,370.3 (3.2) 5,373.0
Operating
expenses 165.5 59.9 60.9 - 286.3
Depreciation
and
amortization 43.2 56.6 13.1 - 112.9
Gains on
sales of
assets (0.5) - (0.6) - (1.1)
---------- ------- ---------- ------------ ------------
Operating
Income 71.2 83.6 32.3 - 187.1
Equity
(losses)
earnings (6.6) - 28.7 - 22.1
Other - net 0.8 0.1 0.4 - 1.3
---------- ------- ---------- ------------ ------------
Income
before
interest $65.4 $83.7 $61.4 $- $210.5
---------- ------- ---------- ------------ ------------
Depreciation
and
amortization 43.2 56.6 13.1 - 112.9
Amortization
of excess
investment
in joint
ventures 3.2 - 0.7 - 3.9
TEPPCO's pro-
rata
percentage
of joint
venture
interest
expense and
D&A 15.5 - 6.6 - 22.1
---------- ------- ---------- ------------ ------------
Total
EBITDA $127.3 $140.3 $81.8 $- $349.4
========== ======= ========== ============ ============
Depreciation
and
amortization (112.9)
Interest
expense -
net (72.0)
Amortization
of excess
investment
in joint
ventures (3.9)
TEPPCO's pro-
rata
percentage
of joint
venture
interest
expense and
D&A (22.1)
------------
Net Income $138.5
============
TEPPCO Partners, L.P.
Condensed Statements of Cash Flows (Unaudited) (In Millions)
Twelve Months Ended
December 31,
---------------------
2005 2004
----------------------------------------------------------------------
(Restated)
Cash Flows from Operating Activities
Net income $162.5 $138.5
Gains on sales of assets (0.7) (1.1)
Depreciation, working capital and other 77.8 128.8
----------------------------------------------------------------------
Net Cash Provided by Operating Activities 239.6 266.2
----------------------------------------------------------------------
Cash Flows from Investing Activities:
Proceeds from asset sales 0.5 1.2
Acquisition of assets (112.2) (3.4)
Investments in Centennial Pipeline LLC - (1.5)
Investments in Mont Belvieu Storage Partners,
L.P. (4.2) (21.4)
Capital expenditures (1) (220.6) (164.1)
----------------------------------------------------------------------
Net Cash Used in Investing Activities (336.5) (189.2)
----------------------------------------------------------------------
Cash Flows from Financing Activities:
Proceeds from revolving credit facility 657.8 324.2
Repayments on revolving credit facility (604.9) (181.2)
Proceeds from issuance of LP units, net 278.8 -
Distributions paid (251.1) (233.1)
----------------------------------------------------------------------
Net Cash Provided by (Used in) Financing
Activities 80.6 (90.1)
----------------------------------------------------------------------
Decrease in Cash and Cash Equivalents (16.3) (13.1)
Cash and Cash Equivalents -- beginning of period 16.4 29.5
----------------------------------------------------------------------
Cash and Cash Equivalents -- end of period $0.1 $16.4
======================================================================
Supplemental Information:
Non-cash investing activities:
Net assets transferred to Mont Belvieu
Storage Partners, L.P. $1.5 $-
Interest paid (net of capitalized interest) $82.3 $77.5
======================================================================
(1) Includes capital expenditures for maintaining existing operations
of $40.8 million in 2005, and $41.8 million in 2004.
TEPPCO Partners, L.P.
Condensed Balance Sheets (Unaudited)
(In Millions)
December 31, December 31,
2005 2004 (4)
----------------------------------------------------------------------
(Restated)
Assets
Current assets
Cash and cash equivalents $0.1 $16.4
Other 899.0 627.2
----------------------------------------------------------------------
Total current assets 899.1 643.6
Property, plant and equipment - net 1,960.1 1,703.7
Intangible assets (1) 376.9 407.4
Equity investments 359.6 363.3
Other assets 84.8 68.3
----------------------------------------------------------------------
Total assets $3,680.5 $3,186.3
======================================================================
Liabilities and Partners' Capital
Total current liabilities $937.2 $681.3
----------------------------------------------------------------------
Senior Notes (2) 1,119.1 1,127.2
Other long-term debt 405.9 353.0
Other non-current liabilities 16.9 13.7
Partners' capital
General partner's interest (3) (61.5) (35.9)
Limited partners' interests 1,262.9 1,047.0
----------------------------------------------------------------------
Total partners' capital 1,201.4 1,011.1
----------------------------------------------------------------------
Total liabilities and partners' capital $3,680.5 $3,186.3
======================================================================
(1) Includes the value of long-term service agreements between TEPPCO
and its customers.
(2) Includes $31.5 million and $40 million at December 31, 2005 and
2004, respectively related to fair value hedges.
(3) Amount does not represent a commitment by the General Partner to
make a contribution to TEPPCO.
(4) Certain 2004 amounts have been reclassified to conform to current
2005 presentation.
TEPPCO Partners, L.P.
OPERATING DATA
(Unaudited - In Millions, Except as Noted)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Downstream Segment:
Barrels Delivered
Refined Products 36.9 36.3 160.7 152.4
LPGs 13.8 12.9 45.1 44.0
--------- --------- --------- ---------
Total 50.7 49.2 205.8 196.4
========= ========= ========= =========
Average Tariff Per Barrel
Refined Products $0.90 $0.96 $0.90 $0.97
LPGs 2.43 2.21 2.14 1.98
Average System Tariff Per
Barrel $1.32 $1.29 $1.17 $1.20
Upstream Segment:
Margins:
Crude oil transportation $17.1 $14.6 $61.6 $55.4
Crude oil marketing 10.3 5.5 30.6 22.4
Crude oil terminaling 3.1 2.0 10.4 9.4
LSI 2.1 1.8 7.5 6.5
--------- --------- --------- ---------
Total Margin $32.6 $23.9 $110.1 $93.7
========= ========= ========= =========
Reconciliation of Margin
to Operating Revenue and
Operating Expenses:
Sales of petroleum
products $2,347.8 $1,656.8 $8,062.1 $5,426.8
Transportation - Crude
oil 9.4 9.0 37.6 37.2
Purchases of petroleum
products (2,324.6) (1,641.9) (7,989.6) (5,370.3)
--------- --------- --------- ---------
Total Margin $32.6 $23.9 $110.1 $93.7
========= ========= ========= =========
Total barrels
Crude oil transportation 23.6 25.5 94.7 101.5
Crude oil marketing 55.4 46.1 203.3 177.3
Crude oil terminaling 33.3 23.4 110.3 113.2
Lubrication oil volume
(total gallons): 3.9 4.2 14.8 14.0
Margin per barrel:
Crude oil transportation $0.725 $0.571 $0.650 $0.546
Crude oil marketing 0.186 0.120 0.150 0.127
Crude oil terminaling 0.095 0.085 0.094 0.083
Lubrication oil margin
(per gallon): $0.525 $0.438 $0.502 $0.465
Midstream Segment:
Gathering - Natural Gas -
Jonah
Bcf 112.8 97.1 415.2 354.5
Btu (in trillions) 124.3 107.3 458.2 392.2
Average fee per MMBtu $0.190 $0.189 $0.188 $0.194
Gathering - Natural Gas -
Val Verde
Bcf 46.2 36.3 177.9 144.5
Btu (in trillions) 40.8 31.2 156.5 122.7
Average fee per MMBtu $0.413 $0.493 $0.426 $0.523
Transportation - NGLs
Total barrels 15.3 14.3 61.1 59.5
Margin per barrel $0.683 $0.710 $0.719 $0.692
Fractionation - NGLs
Total barrels 1.1 1.1 4.4 4.1
Margin per barrel $1.758 $1.784 $1.747 $1.797
Sales - Condensate
Total barrels
(thousands) 17.6 17.5 62.1 84.4
Margin per barrel $57.29 $47.23 $52.21 $37.99
TEPPCO Partners, L.P.
Earnings Estimate 2006
Net Income $170 million - $190 million
Basic Net Income Per Limited
Partner Unit $1.70 - $1.90
Interest Expense, net $93 million
Depreciation and Amortization
Expense (D&A) $109 million
TEPPCO's Pro-rata Percentage of
Joint Venture Interest Expense and
D&A $23 million
Amortization of Excess Investment
in Joint Ventures $5 million
EBITDA $400 million - $420 million
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