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LAKEHEAD PIPE LINE PARTNERS L.P. SECOND QUARTER 1993 FINANCIAL RESULTS

 SUPERIOR, July 19 /PRNewswire/ -- Lakehead Pipe Line Partners L.P. today announced net income of $25.9 million, or $1.18 per unit, for the six months ended June 30, 1993, compared with $22.5 million, or $1.02 per unit, for the same period last year. For the three-month period ended June 30, 1993, net income was $14.2 million, or $0.65 per unit, compared with net income of $10.7 million, or $0.48 per unit in the second quarter of 1992. These increases are attributable to higher operating revenue because of tariff increases.
 Tariffs which came into effect on the Lakehead System on May 3, 1992 represented an average increase of 18 percent over the rates charged during the previous 10 years. The new tariffs were challenged by shippers and are being reviewed by the Federal Energy Regulatory Commission. During the second quarter of 1993, an agreement was reached with FERC staff under which tariffs would increase approximately 9 percent for the period May 3 to Dec. 31, 1992, and an additional 4 percent effective Jan. 1, 1993. The rate review process is continuing and the agreement reached with FERC staff will be either confirmed or altered when an initial decision is issued by the FERC Administrative Law Judge assigned to hear the rate case. The financial results reflect the impact of these agreed upon rates.
 Operating revenue for the first six months of 1993 increased to $116.0 million, compared with $106.5 million in 1992, because of higher tariffs. Total operating expenses increased by $2.8 million to $33.8 million due primarily to higher oil loss costs and expenses related to the rate case, partially offset by reduced expenditures on repairs and maintenance.
 Pipeline deliveries of crude oil and other liquid hydrocarbons averaged 1,245,000 barrels per day, marginally higher than in the corresponding period last year. The increase in throughput resulted from higher volumes of medium and heavy crude oils and natural gas liquids. System utilization was 173 billion barrel miles, unchanged from 1992.
 Cash provided from operating activities amounted to $46.5 million which was sufficient to fund capital expenditures and the quarterly distributions to unitholders. Capital expenditures during the first six months of 1993 amounted to $10.4 million, with $7.3 million related to system enhancements and the balance to core maintenance. To date in 1993, the partnership has paid two quarterly distributions of $0.59 per unit totaling $26.0 million.
 A cash distribution of $0.59 per unit was declared today for the fiscal quarter ended June 30, 1993. This distribution will be paid Aug. 13, 1993 to unitholders of record July 30, 1993.
 The Preference Units of the Partnership are traded on the New York Stock Exchange under the symbol "LHP."
 LAKEHEAD PIPE LINE PARTNERS, L.P.
 CONSOLIDATED STATEMENT OF INCOME
 (Unaudited; dollars in millions, except per unit amounts)
 Three months ended Six months ended
 June 30, June 30,
 1993 1992 1993 1992
 Operating Revenue(a) $59.7 $52.7 $116.0 $106.5
 Expenses
 Power 13.3 12.4 27.9 26.3
 Operating and
 administrative 18.1 16.3 33.8 31.0
 Depreciation 7.1 6.7 14.3 13.4
 Total 38.5 35.4 76.0 70.7
 Operating Income 21.2 17.3 40.0 35.8
 Investment and Other
 Income 0.8 0.9 1.5 1.8
 Interest Expense (7.6) (7.3) (15.3) (14.8)
 Minority Interest (0.2) (0.2) (0.3) (0.3)
 Net Income $14.2 $10.7 $25.9 $22.5
 Net Income Per Unit $0.65 $0.48 $1.18 $1.02
 (a) On April 1, 1992, the partnership filed new tariffs with the Federal Energy Regulatory Commission reflecting an average rate increase of 18 percent, effective May 3, 1992. The full amount of incremental operating revenue is subject to investigation by FERC and potential refund with interest. Given the materiality of the incremental operating revenue subject to refund and the uncertainty of the outcome, the general partner believes it is prudent financial reporting to provide for a contingent rate refund. Initially, the general partner provided for a contingent rate refund equal to one-half of the incremental operating revenue.
 On May 11, 1993, a hearing before the FERC Administrative Law Judge commenced. On May 14, 1993 an agreement was reached with FERC staff under which tariffs would increase 9.1 percent for the period May 3 to Dec. 31, 1992, and an additional 4 percent effective Jan. 1, 1993. The rate review process is continuing and the agreement will be either confirmed or altered when an initial decision is issued by the FERC Administrative Law Judge. Accordingly, in the second quarter of 1993, the general partner has made an adjustment to the contingent rate refund to reflect the rates stipulated in the agreement. Operating revenue for the six months ended June 30, 1993 has been reduced by $5.7 million (three months ended June 30, 1993 -- $1.2 million) which, along with $11.2 million for the year ended Dec. 31, 1992, and accrued interest of $0.5 million, is reflected as a contingent rate refund in the statement of financial position at June 30, 1993.
 OTHER FINANCIAL AND OPERATING HIGHLIGHTS
 (Unaudited; dollars in millions)
 Six months ended June 30, 1993 1992
 Cash Provided from Operating Activities $46.5 $20.5
 Capital Expenditures $10.4 $12.2
 Cash Distributions to Partners $26.0 $13.6
 Deliveries (thousands of barrels per day) 1,245 1,241
 Barrel Miles (billions) 173 173
 -0- 7/19/93
 /CONTACT: Jon Staudohar of Lakehead Pipe Line Partners, 715-394-1404/
 (LHP)


CO: Lakehead Pipe Line Partners L.P. ST: Wisconsin IN: OIL SU: ERN

EH-xx -- LA028 -- 3177 07/19/93 15:14 EDT
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Date:Jul 19, 1993
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