April 17, 1998
L.P. REPORTS FIRST-QUARTER RESULTS
TEPPCO PARTNERS, L.P. REPORTS FIRST-QUARTER RESULTS
HOUSTON -- TEPPCO Partners, L.P. (NYSE:TPP) today reported first-quarter income before loss on early extinguishment of debt of $13.2 million, or $0.81 per limited partner unit. This compares with 1997 first-quarter net income of $17.8 million, or $1.14 per limited partner unit. The 1998 first quarter net loss after the charge of $72.8 million for early extinguishment of debt was $59.6 million, or $3.75 per limited partner unit. The charge resulted from the issuance on January 27, 1998, of $390 million principal amount of senior unsecured debt which was used to repay the outstanding First Mortgage Notes of approximately $327 million and a redemption premium of approximately $70 million.
"The 1998 first-quarter operating results were impacted dramatically by unprecedented warm weather. January and February were the warmest in United States history and many cities in TEPPCOs market saw record high temperatures into March", said William L. Thacker, chairman, president and chief executive officer.
"TEPPCOs delivered propane volumes in the Midwest and Northeast were approximately 1.3 million barrels, or 15%, below the same period in 1997. This reduction corresponds closely to the 14% decrease in degree days in these market areas during the first-quarter."
Operating revenues of $50.2 million for the first-quarter were 9% below the $55.4 million for the first-quarter of 1997, due to decreased pipeline transportation of propane previously noted, the sale of inventory in the prior year first-quarter at unseasonably high prices, unfavorable product exchange differentials and decreased terminaling. The decline in propane revenue was offset somewhat by increased revenue from refined products, which was up 4% from the first-quarter of 1997.
Total operating expenses, including fuel and power, for the quarter were $24.6 million, or $0.1 million below the 1997 first-quarter expenses of $24.7 million. The decrease was due primarily to lower fuel and power costs resulting from a 7 percent decrease in volumes delivered, offset by increased expense related to the connection to Colonial Pipe Line near Beaumont, Texas, which was completed in the second-quarter of 1997.
Interest expense declined $1.5 million from the first-quarter of 1997 due to the debt refinancing.
Other income-net for the quarter was $0.8 million compared with $1.5 million for the 1997 first-quarter. The decrease was due to lower interest income earned on cash balances and lower interest capitalized on construction balances related to capital projects.
"In spite of the impact on our results during the quarter, mainly as a result of weather, we believe TEPPCO had significant success." Thacker added. "Debt was refinanced, resulting in lower interest expense and more flexibility. The acquisition of the fractionators in Weld County, Cob., will have a positive impact starting in the second quarter. TEPPCO is also optimistic heading into the summer travel season."
TEPPCO Partners, L.P. is a publicly owned master limited partnership. TE Products Pipeline Company, Limited Partnership, the operating partnership, is one of the largest common carrier pipelines of refined petroleum products and liquefied petroleum gases in the United States.
This release may contain certain forward-looking information regarding the Partnership, including projections, estimates, forecasts, plans and objectives. Although management believes that all such statements are based upon reasonable assumptions, no assurance can be given that the actual results will not differ materially from those contained in such forward-looking statements.
|Contact:||Eric W. Thode|
|24 Hour Phone:||(704) 382-8333|
|Contact:||Brenda J. Peters (Investor Relations)|
|24 Hour Phone:||(704) 382-8333|