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Previous: NEW IMAGE INDUSTRIES INC, 10-Q, 1995-05-15 |
Next: SURGICAL LASER TECHNOLOGIES INC /DE/, 10-Q, 1995-05-15 |
<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
<TABLE>
<S> <C>
For the Quarterly Period Commission File
Ended March 31, 1995 Number 1-10311
</TABLE>
KANEB PIPE LINE PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 75-2287571
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
</TABLE>
2435 North Central Expressway
Richardson, Texas 75080
(Address of principle executive offices, including zip code)
(214) 699-4000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant(1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
---- ----
================================================================================
<PAGE> 2
KANEB PIPE LINE PARTNERS, L.P. AND SUBSIDIARIES
FORM 10-Q
THREE MONTHS ENDED MARCH 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Income
- Three Months Ended March 31, 1995 and 1994 1
Condensed Consolidated Balance Sheets
- March 31, 1995 and December 31, 1994 2
Condensed Consolidated Statements of Cash Flows
- Three Months Ended March 31, 1995 and 1994 3
Notes to Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 5
Signature 7
</TABLE>
<PAGE> 3
KANEB PIPE LINE PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(In Thousands - Except Per Unit Amounts)
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Revenues $ 20,382 $ 18,434
----------- -----------
Costs and expenses:
Operating costs 8,558 8,180
Depreciation and amortization 2,011 1,736
General and administrative 1,187 1,300
----------- -----------
Total costs and expenses 11,756 11,216
----------- -----------
Operating income 8,626 7,218
Other income, net (principally interest) 231 345
Interest expense (1,375) (871)
----------- -----------
Income before minority interest
and income tax expense 7,482 6,692
Minority interest in net income (73) (64)
Income tax expense (110) (249)
----------- -----------
Net income 7,299 6,379
General partner's interest in net income (73) (64)
----------- -----------
Limited partners' interest in net income $ 7,226 $ 6,315
=========== ===========
Allocation of net income per Senior Preference Unit $ .55 $ .55
=========== ===========
Weighted average number of Senior Preference Units
outstanding 7,250 7,250
=========== ===========
</TABLE>
See notes to consolidated financial statements.
1
<PAGE> 4
KANEB PIPE LINE PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
------------ -----------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 4,443 $ 4,145
Accounts receivable 6,404 5,605
Current portion of receivable from general partner 2,319 2,241
Prepaid expenses 2,105 1,924
------------ -----------
Total current assets 15,271 13,915
------------ -----------
Receivable from general partner, less current portion 2,934 3,544
------------ -----------
Property and equipment 243,833 214,556
Less accumulated depreciation and amortization 70,918 68,910
------------ -----------
Net property and equipment 172,915 145,646
------------ -----------
$ 191,120 $ 163,105
============ ===========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Current portion of long-term debt $ 1,602 $ 1,548
Accounts payable, accrued expenses and
distributions payable 15,544 13,299
Deferred terminaling fees 1,668 1,641
Payable to general partner 665 786
------------ -----------
Total current liabilities 19,479 17,274
------------ -----------
Long-term debt, less current portion 69,844 43,265
------------ -----------
Other liabilities and deferred taxes 1,887 1,820
------------ -----------
Minority interest 983 992
------------ -----------
Partners' capital 98,927 99,754
------------ -----------
$ 191,120 $ 163,105
============ ===========
</TABLE>
See notes to consolidated financial statements.
2
<PAGE> 5
KANEB PIPE LINE PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(IN THOUSANDS)
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Operating activities:
Net income $ 7,299 $ 6,379
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 2,011 1,736
Minority interest in net income 73 64
Deferred income taxes 107 244
Changes in working capital components 1,171 411
----------- -----------
Net cash provided by operating activities 10,661 8,834
----------- -----------
Investing activities:
Acquisition of West Pipeline (27,100) -
Capital expenditures (2,177) (3,852)
Other (43) (56)
----------- -----------
Net cash used by investing activities (29,320) (3,908)
----------- -----------
Financing activities:
Changes in receivable from general partner 532 464
Issuance of long-term debt 28,500 -
Payments of long-term debt (1,867) (2,821)
Distributions to partners (8,208) (7,116)
----------- -----------
Net cash provided (used) by financing activities 18,957 (9,473)
----------- -----------
Increase (decrease) in cash 298 (4,547)
Cash at beginning of period 4,145 15,061
----------- -----------
Cash at end of period $ 4,443 $ 10,514
=========== ===========
Supplemental information - cash paid for interest $ 497 $ 871
=========== ===========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 6
KANEB PIPE LINE PARTNERS, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The unaudited financial statements of Kaneb Pipe Line Partners, L.P. (the
"Partnership") for the periods ended March 31, 1995 and 1994 have been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis. Significant accounting policies followed
by the Partnership were disclosed in the notes to the financial
statements included in the Partnership's Annual Report on Form 10K for
the period ended December 31, 1994. In the opinion of the Partnership's
management, the accompanying financial statements contain the
adjustments, consisting of normal recurring accruals, necessary to
present fairly the financial position of the Partnership at March 31,
1995 and the results of its operations and cash flows for the period
ended March 31, 1995. Operating results for the three-month period ended
March 31, 1995 are not necessarily indicative of the results that may be
expected for the year ended December 31, 1995.
2. ACQUISITIONS
Effective February 24, 1995, the Partnership, through KPOP, acquired the
refined petroleum product pipeline assets of Wyco Pipe Line Company (the
"West Pipeline") for $27.1 million. The acquisition was financed by the
issuance of first mortgage notes to three insurance companies, which are
due February 24, 2002 and bear interest at the rate of 8.37% per annum.
The acquisition has been accounted for as a purchase and, accordingly,
the results of operations of the West Pipeline are included in the
Partnership's consolidated statement of income subsequent to the date of
acquisition.
The following summarized unaudited pro forma consolidated results of
operations for the three months ended March 31, 1995 and 1994, assume the
acquisition occurred as of the beginning of the period presented. These
pro forma results have been prepared for comparative purposes only and do
not purport to be indicative of the results of operations which might
have resulted had the combination been in effect at the dates indicated,
or which may occur in the future.
<TABLE>
<CAPTION>
1995 1994
--------------- --------------
<S> <C> <C>
Revenues $ 22,097,000 $ 23,392,000
================ ================
Net income $ 7,302,000 $ 8,509,000
================ ================
Allocation of net income per
Senior Preference Unit and Preference Unit $ .55 $ .55
================ ================
</TABLE>
3. CASH DISTRIBUTIONS TO SENIOR PREFERENCE UNITHOLDERS
The cash distribution of $.55 per unit for the fourth quarter of 1994 was
made on February 13, 1995. The distribution of $.55 for the first
quarter of 1995 was declared to holders of record as of April 28, 1995
and is payable on May 15, 1995.
4
<PAGE> 7
KANEB PIPE LINE PARTNERS, L.P. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
- --------------------------------------------------------------------------------
FINANCIAL CONDITION
In February 1995, the Partnership acquired the refined petroleum products
pipeline assets of Wyco Pipe Line Company (the "West Pipeline"),
including an integrated pipeline system of approximately 550 miles of
pipeline with four terminals in Wyoming, South Dakota and Colorado. This
pipeline serves the growing Denver and northeastern Colorado markets.
The acquisition was financed by the sale of $27 million of first mortgage
notes to three insurance companies, which are due February 24, 2002 and
bear interest at the rate of 8.37% per annum.
During the first three months of 1995, the Partnership's working capital
requirements for operations, capital expenditures and cash distributions
were funded through the use of internally generated funds.
Cash provided by operations was $10.7 million and $8.8 million for the
periods ended March 31, 1995 and 1994, respectively. Capital
expenditures were $2.2 million in the 1995 period compared to $3.9
million in 1994. The Partnership anticipates that capital expenditures
will total approximately $8.0 million (excluding any further
acquisitions) for the year 1995.
The Partnership intends to fund future cash distributions and maintenance
capital expenditures with cash and cash flows from operating activities.
Additional information relative to sources and uses of cash is presented
in the financial statements included in this report.
OPERATING RESULTS
PIPELINE OPERATIONS
<TABLE>
<CAPTION>
Quarter Ended March 31,
------------------------------------
1995 1994
---------------- ----------------
<S> <C> <C>
Revenues $ 11,634 $ 10,920
Operating costs 4,378 4,532
Depreciation and amortization 1,181 1,062
General and administrative expenses 672 813
---------------- ----------------
Operating income $ 5,403 $ 4,513
================ ================
</TABLE>
For the quarter ended March 31, 1995, revenues increased 6% and operating
income increased 20% over the comparable prior year period, primarily as
a result of the acquisition of the West Pipeline in February 1995.
5
<PAGE> 8
KANEB PIPE LINE PARTNERS, L.P. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
- --------------------------------------------------------------------------------
TERMINALING OPERATIONS
<TABLE>
<CAPTION>
Quarter Ended March 31,
------------------------------------
1995 1994
---------------- ----------------
<S> <C> <C>
Revenues $ 8,748 $ 7,514
Operating costs 4,180 3,648
Depreciation and amortization 830 674
General and administrative 515 487
---------------- ----------------
Operating income $ 3,223 $ 2,705
================ ================
</TABLE>
For the quarter ended March 31, 1995, revenues increased 16% over the
same period of 1994 primarily as a result of the acquisition of the
Westwego terminal in June 1994. The average annual revenues per barrel
of tankage utilized increased 11% to 6.4 million barrels while the
average annualized revenue per barrel stored increased to $5.40 in the
first quarter of 1995 compared to $5.16 per barrel in the first quarter
of 1994.
6
<PAGE> 9
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned.
<TABLE>
<S> <C> <C>
KANEB PIPE LINE PARTNERS, L.P.
(Registrant)
By KANEB PIPE LINE COMPANY
------------------------------
(Managing General Partner)
Date: May 15, 1995 /s/ Jimmy L. Harrison
---------------------------------
Jimmy L. Harrison
Controller
</TABLE>
7
<PAGE> 10
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ----------- ------------
<S> <C> <C>
27 Financial Data Schedule.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-1-1995
<PERIOD-END> MAR-31-1995
<CASH> 4,443
<SECURITIES> 0
<RECEIVABLES> 6,404
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 15,271
<PP&E> 243,833
<DEPRECIATION> 70,918
<TOTAL-ASSETS> 191,120
<CURRENT-LIABILITIES> 19,479
<BONDS> 69,844
<COMMON> 0
0
0
<OTHER-SE> 98,927
<TOTAL-LIABILITY-AND-EQUITY> 191,120
<SALES> 0
<TOTAL-REVENUES> 20,382
<CGS> 0
<TOTAL-COSTS> 11,756
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,375
<INCOME-PRETAX> 7,482
<INCOME-TAX> 110
<INCOME-CONTINUING> 7,299
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,299
<EPS-PRIMARY> .55
<EPS-DILUTED> .55
</TABLE>
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