UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
Commission File Number 1-11234
ENRON LIQUIDS PIPELINE, L.P.
(Exact name of registrant as specified in its charter)
Delaware 76-0380342
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
Enron Building
1400 Smith Street
Houston, Texas 77002
(Address of principal executive (Zip Code)
offices)
(713) 853-6161
(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>
ENRON LIQUIDS PIPELINE, L.P.
TABLE OF CONTENTS
Page No.
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Income Statement - Three Months
and Nine Months Ended September 30, 1996 and 1995 3
Consolidated Balance Sheet - September 30, 1996
and December 31, 1995 4
Consolidated Statement of Cash Flows - Nine
Months Ended September 30, 1996 and 1995 5
Consolidated Statement of Partners' Capital 6
Notes to Consolidated Financial Statements 7
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings 16
ITEM 6. Exhibits and Reports on Form 8-K 16
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ENRON LIQUIDS PIPELINE, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(In Thousands, Except Per Unit Amounts)
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues
Trade $13,374 $14,285 $44,075 $39,131
Related party 1,048 930 3,446 4,114
14,422 15,215 47,521 43,245
Costs and Expenses
Cost of products sold 915 2,956 4,181 4,282
Operations and maintenance
Related party 1,650 683 4,845 1,205
Other 3,172 2,567 8,833 7,141
Fuel and power 938 907 3,134 2,886
Depreciation and amortization 2,490 2,342 7,344 7,145
General and administrative
Related party 1,453 1,373 4,376 4,118
Other 979 772 2,427 2,435
Taxes other than income taxes 877 785 2,449 2,505
12,474 12,385 37,589 31,717
Operating Income 1,948 2,830 9,932 11,528
Other Income (Expense)
Equity in earnings of partnerships 1,358 1,371 3,784 4,049
Interest expense (3,076) (3,122) (9,404) (9,316)
Other 2,496 223 3,110 1,363
Minority Interest (24) (10) (66) (67)
Income Before Income Taxes 2,702 1,292 7,356 7,557
Income Tax Expense 356 314 847 968
Net Income $ 2,346 $ 978 $ 6,509 $ 6,589
Net Income Per Unit $ 0.35 $ 0.14 $ 0.98 $ 0.99
Number of Units Used in Computation 6,510 6,510 6,510 6,510
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ENRON LIQUIDS PIPELINE, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In Thousands)
(Unaudited)
<CAPTION>
September 30, December 31,
1996 1995
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 12,847 $ 14,202
Accounts receivable
Trade 5,145 7,913
Related parties 2,322 2,183
Inventories
Products 597 832
Materials and supplies 1,744 2,075
22,655 27,205
Property, Plant and Equipment, at cost 271,770 263,838
Less accumulated depreciation 33,820 26,984
237,950 236,854
Investments in Partnerships 31,674 32,613
Deferred Charges and Other Assets 6,539 6,992
TOTAL ASSETS $298,818 $303,664
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities
Accounts payable
Trade $ 3,085 $ 5,272
Related parties 6,464 2,664
Current portion of long-term debt 1,700 1,700
Accrued liabilities 2,861 2,808
Accrued taxes 2,072 2,155
Distribution payable 4,210 4,210
20,392 18,809
Long-Term Liabilities and Deferred Credits
Long-term debt 155,642 156,938
Other 3,187 2,264
158,829 159,202
Commitments and Contingencies (Notes 1 and 2)
Minority Interest 2,476 2,537
Partners' Capital
Common units 99,950 105,100
General Partner
Limited Partner Interest 16,004 16,787
General Partner Interest 1,167 1,229
117,121 123,116
TOTAL LIABILITIES AND PARTNERS' CAPITAL $298,818 $303,664
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ENRON LIQUIDS PIPELINE, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(In Thousands)
(Unaudited)
<CAPTION>
Nine Months Ended
September 30,
1996 1995
<S> <C> <C>
Cash Flows From Operating Activities
Reconciliation of net income to net cash
provided by (used in) operating activities
Net income $ 6,509 $ 6,589
Depreciation 7,344 7,145
Equity in earnings of partnerships (3,784) (4,049)
Distributions from investments in partnerships 5,206 4,626
Changes in components of working capital
Accounts receivable 2,629 480
Inventories 566 (769)
Accounts payable 1,613 (1,427)
Accrued liabilities 53 3,657
Accrued taxes (83) (458)
Other, net 1,024 (120)
Net Cash Provided by Operating Activities 21,077 15,674
Cash Flows From Investing Activities
Additions to property, plant and equipment (8,022) (4,419)
Contributions to partnership investment (484) (431)
Net Cash Used in Investing Activities (8,506) (4,850)
Cash Flows From Financing Activities
Decrease in short-term debt - (650)
Issuance of long-term debt - 4,000
Decrease in long-term debt (1,296) (870)
Distributions to partners
Common units (10,677) (10,677)
General partner (1,827) (1,827)
Minority interest (126) (126)
Net Cash Used in Financing Activities (13,926) (10,150)
Increase (Decrease) in Cash and Cash Equivalents (1,355) 674
Cash and Cash Equivalents, Beginning of Period 14,202 11,014
Cash and Cash Equivalents, End of Period $ 12,847 $ 11,688
Supplemental Disclosures of Cash Flow Information
Cash Paid During the Year for
Interest (net of capitalized interest) $ 7,090 $ 6,596
Income taxes 347 333
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ENRON LIQUIDS PIPELINE, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
(In Thousands)
(Unaudited)
<CAPTION>
General Partner
Limited General Total
Common Partner Partner Partners'
Units Interest Interest Capital
<S> <C> <C> <C> <C>
Partners' Capital at December 31, 1995 $105,100 $16,787 $1,229 $123,116
Net Income 5,527 843 139 6,509
Distributions (10,677) (1,626) (201) (12,504)
Partners' Capital at September 30, 1996 $ 99,950 $16,004 $1,167 $117,121
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 1. FINANCIAL STATEMENTS
ENRON LIQUIDS PIPELINE, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. General
The consolidated financial statements included herein
have been prepared by Enron Liquids Pipeline, L.P. (the
"Partnership") without audit pursuant to the rules and
regulations of the Securities and Exchange Commission.
Accordingly, they reflect all adjustments which are, in the
opinion of management, necessary for a fair presentation of
the financial results for the interim periods. Certain
information and notes normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted
pursuant to such rules and regulations. The Partnership
believes, however, that the disclosures are adequate to make
the information presented not misleading. These
consolidated financial statements should be read in
conjunction with the consolidated financial statements and
the notes thereto included in the Partnership's Annual
Report on Form 10-K for the year ended December 31, 1995
("Form 10-K").
The preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results
could differ from those estimates.
Certain reclassifications have been made to the
consolidated financial statements for the prior year to
conform with the current presentation.
2. Litigation
As previously reported in Note 5 to the financial
statements included in the Form 10-K, on June 17, 1992,
Enterprise Products Company and the other owners of the Mont
Belvieu Fractionator (the "Plaintiffs") filed a lawsuit in a
Texas state court against Tenneco Inc., Tenneco Oil and
Enron Natural Gas Liquids Corporation ("ENGL"), currently a
subsidiary of the Partnership. The Plaintiffs in the
lawsuit alleged, among other things, that Tenneco Oil
breached the operating agreement among the owners of the
Mont Belvieu Fractionator when it assigned its partnership
interest in Mont Belvieu Associates to ENGL. The Plaintiffs
sought damages in an unspecified amount.
On February 9, 1993, the Plaintiffs amended their
complaint in this lawsuit to name Enron Corp. ("Enron"),
Enron Liquids Pipeline Company (the "General Partner"), the
Partnership and the Enron Liquids Pipeline Operating Limited
Partnership ("ELPOLP") as additional defendants and to
allege that Enron's purchase of the stock of ENGL in 1991
and the sale of the stock of ENGL to the Partnership in
August 1992 constituted breaches of the Agreement among the
owners of the Mont Belvieu Fractionator. The Court
dismissed ENGL, Enron, the General Partner, the Partnership
and ELPOLP (collectively, the "Enron Defendants") from the
lawsuit. The Court of Appeals reversed the lower Court's
dismissal of the Enron Defendants. The Texas Supreme Court
heard argument in the case in April 1996. On July 8, 1996
the Texas Supreme Court reversed the decision of the Court of
Appeals and rendered judgment in favor of the Enron Defendants.
The Plaintiffs' Motion for Rehearing has been denied.
The case is concluded.
As previously reported, on September 12, 1995, the
State of Illinois filed suit against the General Partner for
events related to a fire that occurred in September 1994 at
the North System's above-ground natural gasoline storage
sphere at Morris, Illinois. The suit seeks civil penalties
in the stated amount of $50,000 each for three counts of air
and water pollution, plus $10,000 per day for any continuing
violation. The State also seeks an injunction against
future similar events. On August 29, 1996 the Illinois
Attorney General's office proposed a settlement in the form
of a consent decree that would require the Partnership to
implement several fire protection recommendations, pay a
$100,000 civil penalty, and pay a $500 per day penalty if
established deadlines for implementing the recommendations
are not met. At present, settlement discussions are
ongoing. If attempts at settlement are unsuccessful, the
General Partner will vigorously defend itself and the
Partnership against the charges. The Partnership believes
that the ultimate resolution of this matter will not have a
material adverse effect on its financial position or results
of operations.
3. Income Taxes
The Partnership is not a taxable entity for Federal
income tax purposes. ENGL, however, is subject to Federal
corporate income taxes. Accordingly, for financial
reporting purposes, no recognition has been given to income
taxes related to the operations of the Partnership other
than those recorded by ENGL.
4. Distributions
On September 19, 1996, the Partnership declared a cash
distribution for the quarterly period ended September 30,
1996, of $0.63 per unit. The distribution will be paid on
November 14, 1996, to unitholders of record as of October
31, 1996.
5. Investment in Mont Belvieu Associates
Summarized income statement information for the
Partnership's investment in Mont Belvieu Associates, of
which it holds a 50% interest, is presented below (in
thousands):
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Income Statement
Revenues $7,291 $6,558 $19,667 $19,282
Expenses 4,385 3,687 12,034 11,134
Net Income $2,906 $2,871 $ 7,633 $ 8,148
</TABLE>
6. Chevron Contract Buyout
As previously reported, in late April 1996, the
Partnership was notified by Chevron, USA ("Chevron") that it
was exercising its right to terminate the gas processing
agreement at the Partnership's Painter gas processing
facility effective as of August 1, 1996. Under a contract
that was to extend through December 1998, Chevron provided
all gas that was processed at the Painter facility. The gas
processing agreement with Chevron allowed for early
termination by Chevron subject to an approximate $2.86
million one time termination payment based upon an agreed
contractual schedule. Due to a force majeure event, which
occurred on June 14, 1996, the Painter gas processing
facilities were shut-down. As a result, Chevron disputed
its obligation to pay the full scheduled early termination
payment, and offered $2.45 million to settle its obligations
under the contract. The Partnership accepted the settlement
offer in September 1996. Excluding the buyout payment,
early termination of the Chevron gas processing agreement
will result in an estimated loss of revenues of $1.0 million
in the last quarter of 1996 and $3.9 million in each of 1997
and 1998.
The Partnership has decided not to repair the gas
processing facilities unless and until such time as
commercial operation of the plant can be restored. The
fractionation, terminaling and storage operations conducted
at the Painter facility are continuing. The fractionation
agreement with Chevron, which extends through November 1997,
remains in effect, and the Partnership has fractionation
agreements with other third parties. The Partnership is
actively pursuing discussions with several third parties
regarding a possible transaction involving a lease, exchange
or sale of the Painter facilities and continues to evaluate
its strategic alternatives for the commercial application of
the Painter facilities.
Although the Partnership can give no assurances, it
believes that distributions to unitholders will continue at
the current level for the foreseeable future despite the
cessation of gas processing operations at the Painter
facility.
7. Possible Sale of the Stock of General Partner
Enron is considering the sale of certain of its natural
gas liquids businesses including the stock of the General
Partner to a third party. The Partnership Agreements do not
restrict Enron's ability to make such a sale without the
approval of the unitholders. Although a sale of the stock
of the General Partner may result in certain increased costs
to the Partnership, the Partnership does not believe a sale
would have a material adverse effect on its financial
position or results of operations.
8. Possible Sale of an Interest in the Cypress Pipeline
Since Enron is considering the sale of the General
Partner, the investor shipper on the Cypress Pipeline has
asserted that a "change of control" as defined in the
shipper's contract with the Partnership will occur giving
the shipper a right to purchase 100% of the Cypress Pipeline
for a price calculated in accordance with a formula set
forth in such contract. The shipper has until November 13,
1996 to exercise this right unless such date is extended by
the Partnership. In addition, this shipper has the right
exercisable in any year to purchase a 50% interest in the
Cypress Pipeline at a price based on the same formula. The
Partnership believes that it could reinvest the proceeds of
any such sale in other operating assets.
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ENRON LIQUIDS PIPELINE, L.P. AND SUBSIDIARIES
Results of Operations
Third Quarter 1996 Compared With Third Quarter 1995
Net income of the Partnership increased to $2.3 million
in 1996 from $1.0 million in 1995. The increase primarily
reflects a $2.45 million buyout payment received from
Chevron for early termination of a gas processing contract
at the Painter Plant. Lower operating earnings at the Cora
Terminal and the Painter Plant and a loss at the Bushton
Facility in connection with the Mobil Natural Gas, Inc.
processing agreement ("Mobil Agreement") were partially
offset by higher earnings on the Central Basin Pipeline.
Revenues of the Partnership decreased $0.8 million (6%)
in the third quarter of 1996 compared to the same period in
1995. The decrease was due primarily to higher 1995
revenues relating to a temporary selling arrangement with a
shipper on the North System in that year. Also, revenues at
the Painter Plant were lower due to the loss of the Chevron
gas processing contract and unscheduled downtime. These
decreases were offset by increased revenues as a result of a
72% increase in transport volumes on the Central Basin
Pipeline combined with revenues earned in connection with
the Mobil Agreement. Throughput volumes on the North System
increased 10% in the third quarter of 1996 compared to last
year, however, such increased volumes earned a lower average
tariff.
Operating statistics for the third quarter are as
follows:
<TABLE>
<CAPTION>
Third Quarter
1996 1995
<S> <C> <C>
North System
Delivery Volumes (MMBbl)(1) 6.7 6.1
Average Tariff ($/Bbl) $0.74 $0.76
Cypress Pipeline
Delivery Volumes (MMBbl) 3.0 3.1
Average Tariff ($/Bbl) $0.47 $0.50
Central Basin Pipeline
Delivery Volumes (MMcf/d)(2) 191.2 110.8
Average Tariff ($/Mcf)(3) $0.16 $0.16
Cora Terminal
Transport Volumes (MM Tons)(4) 1.6 1.9
Average Revenues ($/Ton) $1.29 $1.19
Painter Gas Processing Plant
Processing Volumes (MMcf/d) - 33.1
Average Revenues ($/Mcf) n/a $0.34
Fractionator Volumes (MBbl/d)(5) 4.0 4.0
Average Revenues ($/Bbl) $0.98 $1.10
<FN>
(1) Million barrels.
(2) Million cubic feet per day.
(3) Price per thousand cubic feet.
(4) Million tons.
(5) Thousand barrels per day.
</TABLE>
Cost of products sold decreased significantly because
of higher 1995 product costs relating to a temporary selling
arrangement on the North System in that year.
Operations and maintenance expense increased to $4.8
million in the third quarter of 1996 compared to $3.3
million in the same period in 1995. This increase is
primarily due to expenses incurred in connection with the
Mobil Agreement as well as an unfavorable position on the
North System's net product gains and losses.
Other income increased to $2.5 million in the third
quarter of 1996 primarily as a result of the cash buyout
received from Chevron for early termination of a gas
processing contract at the Painter Plant (see Note 6 in the
Notes to Consolidated Financial Statements).
Results of Operations
Nine Months Ended September 30, 1996 Compared With Nine
Months Ended September 30, 1995
Net income of the Partnership decreased slightly to
$6.5 million in 1996 from $6.6 million in 1995. The
decrease primarily reflects lower operating earnings from
the North System and the Painter Plant as well as lower
equity earnings from the Mont Belvieu Fractionator,
partially offset by higher earnings on the Central Basin
Pipeline and other income at the Painter Plant resulting
from the cash buyout payment received from Chevron as
discussed above.
Revenues of the Partnership increased $4.3 million
(10%) in the nine months ended September 30, 1996 compared
to the same period in 1995. The increase in revenues was
due primarily to a 54% increase in transport volumes on the
Central Basin Pipeline combined with revenues earned at the
Bushton Facility in connection with the Mobil Agreement.
Throughput volumes on the North System increased 7% in the
first nine months of 1996, despite the July 1995 closing of
a synthetic natural gas facility owned by a customer of a
North System shipper, primarily due to increased propane
deliveries. Such increased volumes, however, resulted in a
lower average tariff than deliveries previously made to the
synthetic natural gas facility, thus resulting in a decrease
in the North System's transportation revenues, net of tariff
divisions to third party pipelines. The North System's
higher 1995 revenues also reflect a temporary selling
arrangement with a shipper in that year. Revenues at the
Painter Plant decreased due to the Chevron gas processing
contract termination as well as unscheduled downtime.
Operating statistics for the nine months ended
September 30, 1996 and 1995 are as follows:
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1996 1995
<S> <C> <C>
North System
Delivery Volumes (MMBbl) 22.5 21.1
Average Tariff ($/Bbl) $0.78 $0.85
Cypress Pipeline
Delivery Volumes (MMBbl) 8.6 7.8
Average Tariff ($/Bbl) $0.47 $0.51
Central Basin Pipeline
Delivery Volumes (MMcf/d) 163.1 105.6
Average Tariff ($/Mcf) $0.16 $0.15
Cora Terminal
Transport Volumes (MM Tons) 4.4 4.8
Average Revenues ($/Ton) $1.31 $1.29
Painter Gas Processing Plant
Processing Volumes (MMcf/d) 18.3 33.7
Average Revenues ($/Mcf) $0.34 $0.34
Fractionator Volumes (MBbl/d) 4.6 3.7
Average Revenues ($/Bbl) $0.97 $1.09
</TABLE>
Operations and maintenance expense increased to $13.7
million in the nine months ended September 30, 1996 compared
to $8.3 million in the same period in 1995. This increase
is primarily due to expenses incurred in connection with the
Mobil Agreement as well as a new storage agreement with a
Partnership affiliate on the North System that went into
effect on January 1, 1996. The new storage agreement
increases the North System's storage capacity in the Bushton
area from 1.5 MMBbl to 5.0 MMBbl.
Equity in earnings of partnerships decreased $0.3
million (8%) in the nine months ended September 30, 1996
compared to the same period in 1995 reflecting lower
earnings at the Mont Belvieu Fractionator. This decrease
was primarily due to lower volumes processed as a result of
higher natural gas prices relative to natural gas liquids
("NGLs") prices which led customers to sell natural gas
rather than remove the NGLs. This decrease was partially
offset by higher earnings from the Heartland Partnership as
a result of increased pipeline throughput.
Other income increased to $3.1 million in the nine
months ended September 30, 1996 compared to $1.4 million in
the same period in 1995. The increase is primarily due to
the $2.5 million buyout payment received from Chevron in
1996 offset by a $0.5 million business interruption
insurance settlement received in 1995 related to a previous
year event on the North System.
As previously discussed, Chevron exercised its right to
terminate the gas processing agreement at the Partnership's
Painter gas processing facility effective as of August 1,
1996. The Partnership is actively discussing strategic
alternatives with several third parties regarding commercial
application of the Painter facilities. Although the
Partnership can give no assurances, it believes that
distributions to unitholders will continue at the current
level for the foreseeable future despite the cessation of
gas processing operations at the Painter facility (see Note
6 of the Notes to Consolidated Financial Statements).
Financial Condition
General
The Partnership's primary cash requirements, in
addition to normal operating expenses, are debt service,
sustaining capital expenditures, discretionary capital
expenditures, and quarterly distributions to partners. In
addition to utilizing cash generated from operations, the
Partnership could meet its cash requirements through the
utilization of credit facilities or by issuing additional
limited partner interests in the Partnership. The
Partnership has credit facilities with Enron which provide
for up to $5.0 million in uncommitted credit. In addition,
the Partnership has a $15.0 million committed line of credit
with a bank of which $7.0 million was available at September
30, 1996. The Partnership also has the ability to borrow up
to an additional $25.0 million in accordance with the
provisions of its First Mortgage Notes. Additionally, Enron
Transportation Services, L.P. ("ETS"), one of the operating
limited partnerships of the Partnership, has established a
$2.0 million revolving line of credit with a bank which
could be used to meet its cash requirements. Pursuant to
the Omnibus Agreement between the Partnership and the
General Partner, Enron has agreed that, if
necessary, it will contribute up to $25.4 million to the
Partnership through September 30, 1997 in exchange for
additional partnership interests to support the
Partnership's ability to distribute the Minimum Quarterly
Distribution, as defined in the Partnership Agreement.
The first annual $11.0 million prepayment on the $110.0
million First Mortgage Notes is due June 30, 1998. In
anticipation of the prepayment, the note agreement with the
noteholders requires cash reserves to be set aside beginning
September 30, 1997. The Partnership expects to refinance
the First Mortgage Notes in 1997 with terms that will
effectively delay the prepayment and cash reserve
requirements.
Cash Provided by Operating Activities
Cash flow from operations totaled $21.1 million during
the nine months ended September 30, 1996 compared to $15.7
million in the same period in 1995. The increase primarily
reflects an increase in cash provided from working capital
from the North System and the cash buyout payment received
from Chevron.
Cash Used in Investing Activities
Cash used in investing activities totaled 8.5 million
during the nine months ended September 30, 1996 compared to
$4.9 million during the same period of 1995. Additions to
property, plant and equipment totaled $8.0 million in the
nine months ended September 30, 1996 compared to $4.4
million during the same period in 1995. The increase
primarily reflects additions on the North System relating to
a new propane terminal in Tampico, Illinois and a propane
storage expansion project at the Morris, Illinois terminal.
Cash Used in Financing Activities
Cash used in financing activities totaled $13.9 million
during the nine months ended September 30, 1996 as compared
to $10.2 million during the same period in 1995. Both
periods primarily reflect cash distributions paid to
unitholders; additionally 1995 reflects the issuance of $4.0
million of long-term debt.
Information Regarding Forward Looking Statements
This filing includes forward looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934.
Although the Partnership believes that its expectations are
based on reasonable assumptions, it can give no assurance
that its goals will be achieved. Price trends and overall
demand for NGLs, CO2 and coal in the United States and the
condition of the capital markets and equity markets could
cause actual results to differ from those in the forward
looking statements herein.
<PAGE>
PART II. OTHER INFORMATION
ENRON LIQUIDS PIPELINE, L.P. AND SUBSIDIARIES
ITEM 1. Legal Proceedings
See Part I, Item 1, Note 2 to Consolidated Financial
Statements entitled "Litigation" which is incorporated herein
by reference.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
None.
(b) Reports on Form 8-K.
None filed during the quarter ended September 30, 1996.
<PAGE>
SIGNATURES
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 thereunto duly authorized.
ENRON LIQUIDS PIPELINE, L.P.
(A Delaware Limited Partnership)
By: Enron Liquids Pipeline Company,
as General Partner
Date: November 12, 1996 By: E.G. Parks
E.G. Parks
Senior Vice President and
Controller
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 12,847
<SECURITIES> 0
<RECEIVABLES> 7,467
<ALLOWANCES> 0
<INVENTORY> 2,341
<CURRENT-ASSETS> 22,655
<PP&E> 271,770
<DEPRECIATION> 33,820
<TOTAL-ASSETS> 298,818
<CURRENT-LIABILITIES> 20,392
<BONDS> 158,829
0
0
<COMMON> 117,121
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 298,818
<SALES> 14,422
<TOTAL-REVENUES> 14,422
<CGS> 915
<TOTAL-COSTS> 12,474
<OTHER-EXPENSES> (3,830)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,076
<INCOME-PRETAX> 2,702
<INCOME-TAX> 356
<INCOME-CONTINUING> 2,346
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,346
<EPS-PRIMARY> 0.35
<EPS-DILUTED> 0.35
</TABLE>
