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TransMontaigne Partners L.P. Announces Financial Results For The Three Months Ended December 31, 2011

TransMontaigne Partners L.P. (NYSE:TLP) today announced its unaudited financial results for the three months ended December 31, 2011.

FINANCIAL RESULTS

An overview of the financial performance for the three months ended December 31, 2011, as compared to the three months ended December 31, 2010, includes:

  • Quarterly operating income increased to $11.5 million from a $2.2 million loss, principally due to the following:
    • Revenue was $39.2 million compared to $39.5 million due to increases in revenue at the Gulf Coast, Midwest and Southeast terminals of approximately $0.7 million, $0.1 million and $1.3 million, respectively, offset by decreases in revenue at the Brownsville and River terminals of approximately $2.3 million and $0.1 million, respectively. The decrease in the Brownsville revenue is primarily attributable to our contribution of product storage capacity to the Frontera joint venture in the second quarter of 2011.
    • Direct operating costs and expenses were $15.8 million compared to $20.8 million due to decreases in direct operating costs and expenses at the Gulf Coast, Midwest, Brownsville, River and Southeast terminals of $2.7 million, $0.6 million, $0.5 million, $0.2 million and $1.0 million, respectively. The decrease in direct operating costs and expenses is primarily attributable to the timing of repairs and maintenance across our terminaling and transportation facilities. For the three months ended December 31, 2011, we had repairs and maintenance expenditures of approximately $5.5 million, which is a decrease of approximately $4.5 million from the three months ended December 31, 2010. During the quarter ended December 31, 2010, we incurred 49% of our total repairs and maintenance for 2010. During 2011, we have attempted to perform our repairs and maintenance more ratably through the year.
    • An increase in direct general and administrative expenses of approximately $0.5 million.
    • For the three months ended December 31, 2010, approximately $8.5 million and $0.8 million of non-cash charges related to a goodwill write-off and a loss on disposition of assets, respectively.
  • Quarterly net earnings increased to $10.5 million from a $2.8 million loss due principally to the increase in operating income discussed above.
  • Net earnings per limited partner unit—basic increased to $0.65 from a $0.24 per unit loss. Distributable cash flow generated during the three months ended December 31, 2011 was $13.6 million compared to $8.9 million for the three months ended December 31, 2010.
  • The distribution declared per limited partner unit was $0.63 per unit for the three months ended December 31, 2011, as compared to $0.61 per unit for the three months ended December 31, 2010.

An overview of select financial data for the year ended December 31, 2011, as compared to the year ended December 31, 2010, includes:

  • Revenue was $152.3 million compared to $150.9 million due to increases in revenue at the Gulf Coast, Midwest and Southeast terminals of approximately $2.3 million, $0.1 million and $5.4 million, respectively, offset by decreases in revenue at the Brownsville and River terminals of approximately $4.4 million and $2.1 million, respectively. The decrease in the Brownsville revenue is primarily attributable to our contribution of product storage capacity to Frontera Brownsville LLC (the “Frontera joint venture”) in the second quarter of 2011.
  • Direct operating costs and expenses were $64.5 million compared to $64.7 million due to decreases in direct operating costs and expenses at the Gulf Coast and Midwest terminals of $1.7 million and $0.3 million, respectively, offset by an increase in direct operating costs and expenses at the River and Southeast terminals of approximately $0.1 million and $1.8 million, respectively.
  • The distributions declared per limited partner unit were $2.48 per unit for the year ended December 31, 2011, as compared to $2.41 per unit for the year ended December 31, 2010.

Our terminaling services agreements are structured as either throughput agreements or storage agreements. Most of our throughput agreements contain provisions that require our customers to throughput a minimum volume of product at our facilities over a stipulated period of time, which results in a fixed amount of revenue to be recognized by us. Our storage agreements require our customers to make minimum payments based on the volume of storage capacity made available to the customer under the agreement, which results in a fixed amount of revenue to be recognized by us. We refer to the fixed amount of revenue recognized pursuant to our terminaling services agreements as being "firm commitments." Revenue recognized in excess of firm commitments and revenue recognized based solely on the volume of product distributed or injected are referred to as "variable." Our revenue was as follows (in thousands):

  Three months ended December 31,   Year ended December 31,
2011   2010 2011   2010
Firm Commitments:
Terminaling services fees, net:
External customers $ 7,905 $ 9,062 $ 32,744 $ 35,554
Affiliates   20,574     20,339     81,190     82,651  
Total firm commitments 28,479 29,401 113,934 118,205
Variable:
Terminaling services fees, net:
External customers 593 1,494 2,585 4,230
Affiliates   (37 )   (64 )   (166 )   (146 )
Total 556 1,430 2,419 4,084
Pipeline transportation fees 1,503 1,265 4,746 4,817
Management fees and reimbursed costs 1,189 580 3,899 2,161
Other   7,512     6,788     27,294     21,632  
Total variable   10,760     10,063     38,358     32,694  
Total revenue $ 39,239   $ 39,464   $ 152,292   $ 150,899  
 

The amount of revenue recognized as "firm commitments" based on the remaining contractual term of the terminaling services agreements that generated "firm commitments" for the year ended December 31, 2011 was as follows (in thousands):

  At December 31, 2011
Remaining terms on terminaling services agreements that generated "firm commitments":
Less than 1 year remaining $ 9,754
1 year or more, but less than 3 years remaining 52,389
3 years or more, but less than 5 years remaining 49,462
5 years or more remaining   2,329
Total firm commitments for the year ended December 31, 2011 $ 113,934
 

CHANGE IN INDEPENDENT AUDITOR

As previously disclosed, the audit committee of our general partner dismissed KPMG LLP, from its engagement as the principal accountant to audit the financial statements of TransMontaigne Partners L.P on December 15, 2011. The dismissal of KPMG LLP resulted from the determination that KPMG LLP was not “independent” of TransMontaigne Partners within the meaning of the rules of applicable regulatory agencies, and did not qualify as independent at the time of our audits for the years ended December 31, 2010 and 2009, and prior periods. Although KPMG LLP was not independent with respect to TransMontaigne Partners, the audit committee and management of our general partner believe that the financial statements contained in those filings fairly present, in all material respects, the financial condition and results of operations of TransMontaigne Partners as of the end of and for the periods presented and may continue to be relied upon. In conjunction with our investigation of this matter and our discussions with KPMG LLP, Deloitte & Touche LLP and the Securities and Exchange Commission (SEC), it was determined that our investors will receive a meaningful benefit from the reassurance that will be provided by having our financial statements for the years ended December 31, 2010 and December 31, 2009 re-audited, and by having the quarterly financial information that will be contained in TransMontaigne Partners' 2011 Annual Report re-reviewed, by Deloitte & Touche LLP, TransMontaigne Partners’ new independent registered public accounting firm.

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