Exhibit 99.1
Pacific Energy Partners, L.P. Announces
First Quarter 2003 Financial Results
LONG BEACH, Calif.--(BUSINESS WIRE)--April 30, 2003--Pacific
Energy Partners, L.P. (NYSE:PPX) announced net income for the three
months ended March 31, 2003, of $6.1 million compared with $9.2
million in the corresponding period of 2002, a decrease of $3.1
million, or 34%. Net income per unit for the first quarter of 2003 was
$0.29 per limited partner unit. The results for the 2002 period are
prior to the Partnership's July 2002 initial public offering and
reflect a significantly different capital structure. Ownership for the
full three months of 2003 of our Western Corridor system and Salt Lake
City Core system, which were acquired on March 1, 2002, increased our
current quarter income. However, this increase was more than offset by
higher interest expense, increased general and administrative expense
as a result of the significant growth we experienced in 2002 and
becoming a publicly traded company, and lower volumes on the West
Coast and in the Rocky Mountains.
On April 21, 2003, the Partnership declared a quarterly cash
distribution of $0.4625 per unit to unitholders for the first quarter
of 2003. The distribution will be paid on May 15, 2003, to record
holders as of April 30, 2003. Distributable cash flow for the first
quarter of 2003 was $10.3 million, or $0.48 per limited partner unit.
Irvin Toole, Jr., President and CEO, said, "We continue to look
forward to closing the acquisition of the assets of Edison Pipeline
and Terminal Company (EPTC) which requires approval by the California
Public Utilities Commission (CPUC). Although it is possible that we
could receive CPUC approval in the second quarter of 2003, it now
appears more likely that a CPUC decision will not be issued until the
third quarter. As we have indicated previously, we expect this
acquisition to be immediately accretive to both net income and
distributable cash flow per unit. Excluding the pending EPTC
acquisition, we continue to expect net income per unit for 2003 to be
in the range of $1.10 to $1.20 per unit. We are forecasting net income
for the second quarter to be in the range of $0.26 to $0.30 per unit."
As expected, in the first quarter of 2003, maintenance activities
were undertaken by several customers at their refineries in both Los
Angeles and Salt Lake City which reduced our volumes as compared to
first quarter 2002 when less maintenance occurred. Net revenues for
the three months ended March 31, 2003, totaled $31.0 million compared
to $26.6 million for the comparable period in 2002, an increase of
$4.4 million, or 17%. This increase was associated primarily with the
acquisition of the Western Corridor system and Salt Lake City Core
system assets in the Rocky Mountain region on March 1, 2002. The first
quarter of 2002 included one month of operations, whereas the first
quarter of 2003 included three months of operations.
Total expenses for the three months ended March 31, 2003, were
$21.2 million compared to $16.5 million for the comparable period in
2002, an increase of $4.7 million, or 28%. Operating costs, general
and administrative costs and depreciation all increased as a result of
the Rocky Mountain asset acquisition. In addition, general and
administrative expense increased as result of costs associated with
being a public company and costs associated with the company's
long-term incentive plan.
Net interest expense for the three months ended March 31, 2003
totaled $4.0 million, an increase of $2.7 million from the first
quarter of 2002, reflecting our current capital structure.
Capital expenditures were $0.6 million for the quarter ended March
31, 2003, of which $0.3 million was for sustaining, or maintenance
projects. We expect maintenance capital expenditures during 2003 to be
approximately $2.7 million.
Pacific Energy Partners, L.P., a Delaware limited partnership
headquartered in Long Beach, California, owns and operates crude oil
midstream assets located in California and the Rocky Mountain region
with over 3,000 miles of pipelines and 4.6 million barrels of storage
capacity. The Partnership is engaged in gathering, blending,
transporting, storing and distributing crude oil. The Partnership
generates revenues primarily by charging tariff rates for transporting
crude oil through its pipelines.
We will host a conference call at 4:30 p.m. EST on Thursday, May
1, 2003, to discuss the results of the first quarter of 2003. Please
join us at www.PacificEnergyPartners.com for the live broadcast. The
call, with questions and answers, will continue to be available on our
web site following the live discussion.
This news release includes "forward-looking" statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All
statements other than statements of historical fact included or
incorporated herein may constitute forward-looking statements. Words
such as "anticipates," "expects," "estimates," "forecasts," "projects"
and similar expressions, identify these forward-looking statements.
Although the Partnership believes that the expectations reflected in
the forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to be correct. The
forward-looking statements involve risks and uncertainties that affect
the Partnership's operations, financial performance and other factors
discussed in its filings with the Securities and Exchange Commission
("SEC"). Among the factors that could cause results to differ
materially are those risks discussed in the Partnership's SEC filings
including our Annual Report on Form 10-K for the year ended December
31, 2002 and our Registration Statement on Form S-1, as amended, filed
with the SEC and relating to our initial public offering.
PACIFIC ENERGY PARTNERS, L.P.
Successor to Pacific Energy (Predecessor)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND OPERATING HIGHLIGHTS
(Unaudited)
(In thousands)
For the Three
Months Ended,
March 31,
2002 2003
Operating revenues:
Pipeline transportation revenue $21,069 $25,291
Crude oil sales, net of purchases 5,526 5,659
Net revenues 26,595 30,950
Expenses:
Operating 11,206 13,045
Transition costs 832 --
General and administrative expenses 1,342 3,982
Depreciation and amortization 3,087 4,181
Total expenses 16,467 21,208
Share of net income of Frontier 268 341
Operating income 10,396 10,083
Net interest expense (1,332) (3,990)
Other income 117 35
Net income $9,181 $6,128
Calculation of unitholders' interest for the
three months ended March 31, 2003:
Net income $6,128
Less: General Partner's interest (123)
Unitholders' interest in net income $6,005
Net income per unit(1) $0.29
Calculation of Distributable Cash Flow(2) for
the three months ended March 31, 2003:
Net income $6,128
Plus: depreciation and amortization 4,181
Plus: amortization of debt issue costs 270
Less: maintenance capital expenditures (324)
Distributable Cash Flow 10,255
Less: General Partner's interest (205)
Unitholders' interest in Distributable Cash Flow $10,050
Distributable Cash Flow per Unit(1) $0.48
Operating Data (barrels per day, in thousands)
West Coast Operations:
Pipeline throughput 168.5 159.3
Rocky Mountain Operations:
Salt Lake City Core system throughput(3) 68.8 64.8
Western Corridor system throughput(3) 21.1 13.4
AREPI pipeline throughput 41.9 35.5
Frontier pipeline throughput 39.8 35.3
(1) Based on 20,930,000 weighted average units outstanding which
include 1,865,000 common and 10,465,000 subordinated units held by
the General Partner.
(2) Distributable Cash Flow provides additional information for
evaluating our ability to make the minimum quarterly distribution
and is presented solely as a supplemental measure. You should not
consider Distributable Cash Flow as an alternative to net income,
income before taxes, cash flow from operations, or any other
measure of financial performance presented in accordance with
accounting principles generally accepted in the United States. Our
Distributable Cash Flow may not be comparable to similarly titled
measures of other entities. Additional information regarding
distributable cash flow is included in our current report on Form
8-K to be filed on May 1, 2003.
(3) Volumes for 2002 represent one month from the acquisition date of
March 1, 2002.
PACIFIC ENERGY PARTNERS, L.P.
Successor to Pacific Energy (Predecessor)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
Dec. 31, March 31,
2002 2003
Assets
Current assets $66,071 $70,611
Property and equipment, net 404,842 401,335
Investment in Frontier 9,175 8,424
Other assets 6,950 6,701
Total assets $487,038 $487,071
Liabilities and Partners' Capital
Current liabilities $41,643 $45,883
Long-term debt 225,000 225,000
Other long term liabilities 5,200 5,604
Accumulated other comprehensive loss (7,375) (8,236)
Partners' capital (net parent investment) 222,570 218,820
Total liabilities and partners' capital $487,038 $487,071
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
For the Three
Months Ended
March 31,
2002 2003
Cash flows from operating activities:
Net income $9,181 $6,128
Depreciation, amortization and share of
net income of Frontier 2,819 4,110
Working capital adjustments (8,486) (4,344)
Net cash provided by operating activities 3,514 5,894
Cash flows from investing activities:
Acquisition of pipeline assets (96,055) --
Additions to property and equipment (564) (560)
Disposal of property and equipment -- 47
Net cash used in investing activities (96,619) (513)
Cash flows from financing activities:
Net proceeds from note payable to bank 87,000 --
Capital contributions of members 8,744 --
Distributions to members and partners (6,000) (9,878)
Due from related party (122) --
Net cash provided by (used in) financing
activities 89,622 (9,878)
Net increase (decrease) in cash and cash
equivalents (3,483) (4,497)
Cash and cash equivalents, beginning of period 9,511 23,873
Cash and cash equivalents, end of period $6,028 $19,376
CONTACT: Pacific Energy Partners, L.P.
Thomas L. Lambert, 562/728-2871
562/728-2881 (fax)