EXHIBIT 99
JANUARY 27, 2003
WILLIAMS ENERGY PARTNERS REPORTS 52 PERCENT PROFIT
GROWTH IN FOURTH QUARTER
PROVIDES 2003 EARNINGS GUIDANCE
TULSA, OKLA. -- Williams Energy Partners L.P. (NYSE:WEG) today announced
fourth-quarter 2002 operating profit of $37.3 million compared with $24.6
million in 2001, representing a 52 percent increase.
The growth in fourth-quarter operating profit was partially due to significantly
higher transportation and terminals revenues on Williams Pipe Line. These
revenues grew due to higher rates resulting from longer haul shipments, higher
tariff and ancillary service rates and increased volumes. Williams Pipe Line
profits were further improved by decreased operating expenses due to lower
maintenance costs.
Higher operating profit from the partnership's independent petroleum products
terminals, which are connected to third-party pipelines, was offset by lower
profit from the ammonia pipeline system. These results were due to increased
rates at the Gulf Coast terminals and higher expenses associated with the
ammonia pipeline.
Although the Williams Pipe Line system was acquired April 11, 2002, the
acquisition is treated similar to a pooling of interest under accounting rules
requiring that historical financial statements be restated to include the
results from Williams Pipe Line for all periods.
Net income for the fourth-quarter 2002 was $27.6 million compared with $13.8
million for 2001. This increase was attributable to higher operating profit and
the elimination of income taxes due to the partnership structure, partially
offset by debt placement fees and increased interest expense associated with the
Williams Pipe Line acquisition.
Diluted earnings per unit increased to 95 cents for the fourth-quarter 2002
compared with 42 cents in the 2001 fourth quarter. Per unit numbers are not
restated to include Williams Pipe Line results prior to the partnership's
ownership.
"Efforts to improve operating efficiency made a substantial contribution during
the fourth quarter," said Don Wellendorf, chief executive officer. "During 2003,
we plan to continue to focus on our strategy of improving cash flow from our
current businesses while pursuing accretive acquisitions."
For the year ended Dec. 31, 2002, operating profit was $137.1 million compared
with $109.3 million for the same period in 2001, representing an increase of 25
percent. Net income for the 2002 period was $99.2 million compared with $67.9
million for the 2001 period. Diluted earnings per unit for 2002 increased to
$3.67 compared with $1.87 in 2001.
The average number of limited partner units outstanding on a diluted basis was
27.3 million units for fourth-quarter 2002 and 22 million units for the year,
compared with 11.4 million units for both periods during 2001.
Management currently anticipates earnings per unit between 65 and 70 cents for
first-quarter 2003 and between $3.25 and $3.35 for the full-year 2003. Current
analyst expectations for 2003 average $3.22. The partnership's first-quarter
earnings typically reflect lower volumes transported on Williams Pipe Line due
to seasonally lower refined products demand.
Earnings per unit for the year 2003 are currently predicted to be lower than
2002 results due to increased costs from system integrity work and higher
interest costs from the Williams Pipe Line long-term debt financing.
In addition, earnings per unit will decline due to a higher number of units
outstanding during 2003 compared with 2002. Absent future equity issuances, the
average number of units outstanding for 2003 will be 27.3 million on a diluted
basis, which is higher than the 22 million average units for 2002 due to the
partnership's May 2002 equity issuance.
These decreases in 2003 will be partially offset by the reflection of a full
year of Williams Pipe Line ownership in 2003 earnings per unit results.
An investor call with management regarding fourth-quarter 2002 earnings is
scheduled today at 1:30 p.m. Eastern. To participate, dial (800) 479-9001 and
provide code 739873. International callers should dial (719) 457-2618 and
provide the same code. A webcast also will be available at
www.williamsenergypartners.com/calendar.jsp.
Audio replays of the conference call will be available from 4:30 p.m. Eastern
today through midnight on Feb. 3. To access the replay, dial (888) 203-1112.
International callers should dial (719) 457-0820. The access replay code is
739873.
Webcast replays also will be available at
www.williamsenergypartners.com/calendar.jsp beginning at 4:30 p.m. Eastern
today.
ABOUT WILLIAMS ENERGY PARTNERS L.P.
Williams Energy Partners L.P. was formed to own, operate and acquire a
diversified portfolio of energy assets. The partnership primarily transports,
stores and distributes refined petroleum products and ammonia. The general
partner of WEG is a subsidiary of Williams, which moves, manages and markets a
variety of energy products, including natural gas, liquid hydrocarbons,
petroleum and electricity.
###
Portions of this document may constitute "forward-looking statements" as defined
by federal law. Such statements are subject to certain risks, uncertainties and
assumptions. Should one or
more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
anticipated, estimated or projected. Examples of such uncertainties and risk
factors include, but are not limited to, changes in the price for crude oil,
changes in demand for refined petroleum products, adverse developments affecting
our ammonia pipeline customers, changes in federal government policies affecting
farm subsidies, changes to cost estimates relating to specific acquisitions,
changes in economic and industry conditions and changes in regulatory
requirements (including changes in environmental requirements). These and other
factors are set forth in the Partnership's filings with the Securities and
Exchange Commission.
- --------------------------------------------------------------------------------
CONTACT INFORMATION:
<Table>
Paula Farrell Williams Energy Partners Investor Relations 918-573-9233 paula.farrell@williams.com
Susie Hereden Williams Energy Partners Media Relations 918-573-2278 susie.hereden@williams.com
</Table>
WILLIAMS ENERGY PARTNERS L.P.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)
(UNAUDITED)
<Table>
<Caption>
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------------- -------------------------
2002 2001 2002 2001
----------- ----------- ----------- -----------
Transportation and terminals revenues:
Third party ............................................................ $ 89,605 $ 79,456 $ 330,545 $ 314,027
Affiliate .............................................................. 8,229 7,185 33,195 26,867
Product sales revenues:
Third party ............................................................ 15,398 4,913 45,339 40,302
Affiliate .............................................................. 1,097 22,068 25,188 66,385
Affiliate construction and management fee revenues ........................ -- 211 210 1,018
----------- ----------- ----------- -----------
Total revenues ....................................................... 114,329 113,833 434,477 448,599
Costs and expenses:
Operating .............................................................. 42,279 44,189 155,146 160,880
Product purchases ...................................................... 15,519 23,349 63,982 95,268
Depreciation and amortization .......................................... 8,751 9,270 35,096 35,767
Affiliate general and administrative ................................... 10,451 12,407 43,182 47,365
----------- ----------- ----------- -----------
Total costs and expenses ............................................. 77,000 89,215 297,406 339,280
----------- ----------- ----------- -----------
Operating profit .......................................................... 37,329 24,618 137,071 109,319
Interest expense:
Affiliate interest expense ............................................. -- 2,635 407 9,770
Other interest expense ................................................. 8,310 1,073 22,500 4,836
Interest income ........................................................... (212) (621) (1,149) (2,493)
Debt placement fee amortization ........................................... 2,729 93 9,950 253
Other (income) expense .................................................... (1,064) 944 (2,112) (431)
----------- ----------- ----------- -----------
Income before income taxes ................................................ 27,566 20,494 107,475 97,384
Provision (benefit) for income taxes ...................................... -- 6,712 8,322 29,512
----------- ----------- ----------- -----------
Net income (loss) ......................................................... $ 27,566 $ 13,782 $ 99,153 $ 67,872
=========== =========== =========== ===========
Allocation of net income:
Limited partners' interest in income applicable to the period after
February 9, 2001 .................................................... $ 25,892 $ 4,731 $ 80,713 $ 21,217
General partner's interest in net income ............................... 1,674 55 4,402 226
----------- ----------- ----------- -----------
Portion applicable to partners' interests ........................... 27,566 4,786 85,115 21,443
Portion applicable to non-partnership interests ........................ -- 8,996 14,038 46,429
----------- ----------- ----------- -----------
Net income ........................................................... $ 27,566 $ 13,782 $ 99,153 $ 67,872
=========== =========== =========== ===========
Basic net income per limited partner unit ................................. $ 0.95 $ 0.42 $ 3.68 $ 1.87
=========== =========== =========== ===========
Weighted average number of limited partner units outstanding used for
basic net income per unit calculation .................................. 27,190 11,359 21,911 11,359
=========== =========== =========== ===========
Diluted net income per limited partner unit ............................... $ 0.95 $ 0.42 $ 3.67 $ 1.87
=========== =========== =========== ===========
Weighted average number of limited partner units outstanding used for
diluted net income per unit calculation ................................ 27,307 11,398 21,968 11,370
=========== =========== =========== ===========
</Table>
WILLIAMS ENERGY PARTNERS L.P.
OPERATING STATISTICS
<Table>
<Caption>
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------ -----------------
2002 2001 2002 2001
------- ------- ------- -------
WILLIAMS PIPE LINE SYSTEM:
Transportation revenue per barrel 96.4 90.0 94.9 90.8
shipped (cents per barrel)
Transportation barrels shipped 62.5 60.9 234.6 236.1
(million barrels)
Barrel miles (billions) 18.9 18.3 71.0 70.5
PETROLEUM PRODUCT TERMINALS:
Marine terminal average storage
capacity utilized per month 15.9 15.9 16.2 15.7
(million barrels)
Marine terminal throughput 4.8 4.0 20.5 11.4
(million barrels)
Inland terminal throughput 13.6 15.3 57.3 56.7
(million barrels)
AMMONIA PIPELINE SYSTEM:
Volume shipped (thousand tons) 234 252 712 763
</Table>
WILLIAMS ENERGY PARTNERS L.P.
OPERATING MARGINS
(UNAUDITED, IN THOUSANDS)
<Table>
<Caption>
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------------- -------------------------
2002 2001 2002 2001
---------- ---------- ---------- ----------
WILLIAMS PIPE LINE SYSTEM:
Transportation and terminals revenues $ 73,981 $ 64,297 $ 272,522 $ 254,840
Less: Operating expenses 29,654 32,781 114,684 123,566
---------- ---------- ---------- ----------
Transportation and terminals margin 44,327 31,516 157,838 131,274
Product sales revenues 16,357 26,981 69,167 106,687
Less: Product purchases 15,519 23,349 63,982 95,268
---------- ---------- ---------- ----------
Product margin 838 3,632 5,185 11,419
---------- ---------- ---------- ----------
Construction and management fee revenue -- 211 210 1,018
---------- ---------- ---------- ----------
Total operating margin $ 45,165 $ 35,359 $ 163,233 $ 143,711
========== ========== ========== ==========
PETROLEUM PRODUCTS TERMINALS:
Total revenues $ 19,477 $ 17,875 $ 79,443 $ 71,510
Less: Operating expenses 10,831 10,617 35,599 33,270
---------- ---------- ---------- ----------
Operating margin $ 8,646 $ 7,258 $ 43,844 $ 38,240
========== ========== ========== ==========
AMMONIA PIPELINE SYSTEM:
Total revenues $ 4,514 $ 4,469 $ 13,135 $ 14,544
Less: Operating expenses 1,794 791 4,863 4,044
---------- ---------- ---------- ----------
Operating margin $ 2,720 $ 3,678 $ 8,272 $ 10,500
========== ========== ========== ==========
Total segment operating margin $ 56,531 $ 46,295 $ 215,349 $ 192,451
========== ========== ========== ==========
</Table>