Exhibit 99.1
Pacific Energy Partners, L.P. Reports Record Earnings for
First Quarter 2004
LONG BEACH, Calif.--(BUSINESS WIRE)--April 28, 2004--Pacific
Energy Partners, L.P. (NYSE:PPX) announced net income for the three
months ended March 31, 2004, of $8.1 million, or $0.31 per diluted
limited partner unit compared to $6.1 million, or $0.29 per limited
partner unit in the first quarter of 2003.
The first quarter 2004 results are the highest quarterly earnings
for the Partnership since its July 2002 initial public offering. The
results of the current quarter reflect the benefit of the Pacific
Terminals storage and distribution system, which was acquired on July
31, 2003, and higher volumes and revenue on the Rocky Mountain
pipelines, partially offset by lower volumes and revenue from the West
Coast pipelines, lower margins in the gathering and blending
operation, and increased maintenance expenses.
On April 19, 2004, the Partnership announced a cash distribution
of $0.4875 per unit for the first quarter of 2004, unchanged from the
prior quarter but 5.4 percent higher than in the first quarter of
2003. The distribution will be paid on May 14, 2004, to record holders
as of April 30, 2004. Distributable cash flow available to the limited
partners' interest for the first quarter of 2004 was $13.5 million. On
a weighted average and diluted basis, there were 25,149,000 limited
partner units outstanding during the first quarter of 2004,
approximately 20 percent more units outstanding than in the first
quarter of 2003, due to the August 2003 equity financing associated
with the Pacific Terminals acquisition.
Irvin Toole, Jr., President and CEO, said, "We are pleased to
report record first quarter earnings. The Pacific Terminals storage
and distribution assets that were acquired last July have demonstrated
their value this quarter, with income contribution more than
offsetting the impact of lower West Coast pipeline volumes resulting
primarily from unusually high levels of refinery maintenance in the
Los Angeles Basin. We continue to expect net income per unit for 2004
to be in the range of $1.30 to $1.40 per limited partner unit and are
forecasting net income for the second quarter of 2004 to be in the
range of $0.26 to $0.30 per unit."
Mr. Toole continued, "Regulatory approvals for the previously
announced Rangeland Pipeline acquisition have been received, and
closing is expected to occur in May 2004. We also expect to sign a
binding purchase and sale agreement for the Mid Alberta Pipeline
assets during the same time period."
OPERATING RESULTS BY SEGMENT
WEST COAST OPERATIONS
Operating income was $12.3 million for the three months ended
March 31, 2004 compared to $10.7 million in the corresponding period
in 2003. This increase of 15 percent was primarily due to the income
earned by Pacific Terminals, which acquired the EPTC storage and
distribution assets on July 31, 2003, partially offset by lower
revenue due to reduced pipeline volumes. Pipeline volumes for the
three months ended March 31, 2004 were 16 percent lower compared to
the corresponding period in 2003 primarily due to extensive
maintenance downtime at Los Angeles Basin refineries. Gathering and
blending margins were also lower than in the prior year quarter, in
part due to reduced demand for blended crude oil caused by new
California gasoline specifications.
ROCKY MOUNTAIN OPERATIONS
Operating income was $3.6 million for the three months ended March
31, 2004, compared to $3.3 million in the corresponding period in
2003. This increase of 9 percent was the result of higher pipeline
volumes and revenue partially offset by moderately higher expenses for
maintenance and power. The $3 million expansion of pipeline capacity
to Salt Lake City remains on track to become operational during the
second quarter of 2004.
CAPITAL EXPENDITURES
Capital expenditures were $2.4 million for the quarter ended March
31, 2004, of which $0.5 million was for sustaining capital projects.
Pacific Energy Partners, L.P. is a Delaware limited partnership
headquartered in Long Beach, Calif. Pacific Energy Partners is engaged
principally in the business of gathering, transporting, storing and
distributing crude oil and other related products in California and
the Rocky Mountain region. Pacific Energy Partners generates revenues
primarily by transporting crude oil on its pipelines and by leasing
capacity in its storage facilities. Pacific Energy Partners also buys,
blends and sells crude oil, activities that are complementary to its
pipeline transportation business.
We will host a conference call at 2:00 p.m. ET on Thursday, April
29, 2004, to discuss the results of the first quarter of 2004. 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.
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 and financial performance. Among the
factors that could cause results to differ materially are those risks
discussed in the Partnership's filings with the Securities and
Exchange Commission, including our Annual Report on Form 10-K for the
year ended December 31, 2003.
PACIFIC ENERGY PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands)
For the Three
Months Ended
March 31,
2004 2003
Operating revenues: ---- ----
Pipeline transportation revenue $24,727 $25,320
Storage and terminaling revenue 10,123 --
Crude oil sales, net of purchases 4,812 5,630
Net revenues 39,662 30,950
Expenses:
Operating 18,917 12,648
Transition costs -- 397
General and administrative 3,854 3,982
Depreciation and amortization 5,242 4,181
Total expenses 28,013 21,208
Share of net income of Frontier 393 341
Operating income 12,042 10,083
Net interest expense (4,107) (3,990)
Other income 142 35
Net income $8,077 $6,128
Weighted average units outstanding:
Basic 24,999 20,930
Diluted 25,149 21,000
Calculation of unitholders' interest in net income
for the three months ended March 31, 2004 and 2003:
- ---------------------------------------------------
Net income $8,077 $6,128
Less: General Partner's interest (162) (123)
Unitholders' interest in net income $7,915 $6,005
Basic net income per unit $0.32 $0.29
Diluted net income per unit $0.31 $0.29
PACIFIC ENERGY PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND OPERATING HIGHLIGHTS BY SEGMENT
Three Months Ended March 31, 2004 and 2003
(Unaudited)
(In thousands)
Rocky Intersegment and
West Coast Mountain Intrasegment
Operations Operations Eliminations(1) Total
---------- ---------- -------------- -----
Three Months Ended March 31, 2004:
Segment revenue:
Pipeline transportation
revenue $15,691 $10,543 $(1,507) $24,727
Storage and
terminaling
revenue 10,223 -- (100) 10,123
Crude oil sales,
net of purchases 4,812 -- 4,812
Net revenue 30,726 10,543 39,662
Segment expenses:
Operating expense 14,706 5,818 (1,607) 18,917
Transition costs -- -- --
Depreciation and
amortization 3,765 1,477 5,242
Total expenses 18,471 7,295 24,159
Share of net income
of Frontier -- 393 393
Operating income $12,255 $3,641 $15,896
Operating Data (barrels per day, in thousands)
Line 2000 and Line 63
pipeline volume 133.6
Salt Lake City Core system volume 62.0
Western Corridor system volume 16.0
AREPI pipeline volume 43.9
Frontier pipeline volume 43.9
Three Months Ended March 31, 2003:
Segment revenue:
Pipeline transportation
revenue $17,334 $9,399 $(1,413) $25,320
Storage and
terminaling
revenue -- -- --
Crude oil sales,
net of purchases 5,630 -- 5,630
Net revenue 22,964 9,399 30,950
Segment expenses:
Operating expense 9,419 4,642 (1,413) 12,648
Transition costs -- 397 397
Depreciation and
amortization 2,822 1,359 4,181
Total expenses 12,241 6,398 17,226
Share of net income
of Frontier -- 341 341
Operating income $10,723 $3,342 $14,065
Operating Data (barrels per day, in thousands)
Line 2000 and Line 63
pipeline volume 159.3
Salt Lake City Core system volume 64.8
Western Corridor system volume 13.4
AREPI pipeline volume 35.5
Frontier pipeline volume 35.3
(1) Eliminations are required to account for revenue on services
provided by one subsidiary to another.
PACIFIC ENERGY PARTNERS, L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, Dec. 31,
2004 2003
---- ----
(Unaudited)
Assets
Current assets $97,074 $68,796
Property and equipment, net 565,285 567,954
Investment in Frontier Pipeline Company 6,897 6,886
Other assets 16,284 6,567
Total assets $685,540 $650,203
Liabilities and Partners' Capital
Current liabilities $45,838 $49,991
Long-term debt 225,000 298,000
Other long term liabilities 10,832 7,145
Undistributed employee long-term incentive plan 1,397 738
Accumulated other comprehensive loss (9,844) (5,608)
Partners' capital 412,317 299,937
Total liabilities and
partners' capital $685,540 $650,203
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
For the Three
Months Ended
March 31,
2004 2003
---- ----
Cash flows from operating activities:
Net income $8,077 $6,128
Depreciation, amortization, non-cash employee
compensation under long-term incentive plan
and Frontier adjustment 6,108 6,142
Working capital adjustments (847) (6,376)
Net cash provided by operating activities 13,338 5,894
Cash flows from investing activities:
Acquisitions (9,920) --
Net additions to property and equipment
and other (2,413) (513)
Net cash used in investing activities (12,333) (513)
Cash flows from financing activities:
Issuance of common units, net of fees
and offering expenses 114,250 --
Capital contribution from the general partner 2,443 --
Proceeds from note payable to bank 16,500 --
Repayment of long-term debt (89,500) --
Deferred financing costs (175) --
Distributions to partners (12,390) (9,878)
Net cash provided by (used in) financing
activities 31,128 (9,878)
Net increase (decrease) in cash and cash equivalents 32,133 (4,497)
Cash and cash equivalents, beginning of period 9,699 23,873
Cash and cash equivalents, end of period $41,832 $19,376
PACIFIC ENERGY PARTNERS, L.P.
RECONCILIATION OF OPERATING INCOME BY SEGMENT TO CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands)
For the Three
Months Ended
March 31,
2004 2003
Operating income by segment: ---- ----
West Coast $12,255 $10,723
Rocky Mountain 3,641 3,342
15,896 14,065
General expenses and other income/(expense):(1)
General and administrative expense (3,854) (3,982)
Net interest expense (4,107) (3,990)
Other income 142 35
Net income $8,077 $6,128
CALCULATION OF DISTRIBUTABLE CASH FLOW(2)
(Unaudited)
(In thousands)
For the Three
Months Ended
March 31,
2004 2003
---- ----
Net income $8,077 $6,128
Plus: depreciation and amortization 5,242 4,181
Plus: amortization of debt issue costs 311 270
Plus: non-cash employee compensation under
long-term incentive plan 659 1,034
Less: sustaining capital expenditures (547) (324)
Distributable Cash Flow 13,742 11,289
Less: General Partner's interest (275) (226)
Unitholders' interest in Distributable Cash Flow $13,467 $11,063
(1) General and administrative expenses, net interest expense and
other income are not allocated among the West Coast and Rocky
Mountain operations.
(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 annual report on Form
10-K for the year ended December 31, 2003.
CONTACT: Pacific Energy Partners, L.P.
Thomas L. Lambert, 562-728-2871
Fax: 562-728-2881