Overview of Business Segments
business produced first quarter segment earnings before DD&A and certain items of $176 million versus $180 million for the comparable period in 2011. This segment currently is on track to meet its published annual budget of 6 percent growth.
“Highlights in the first quarter included good results at our Southeast and West Coast Terminals, reflecting higher contract revenues and new tanks coming online at the Carson, Calif., facility, as well as increased earnings from Plantation due to higher tariffs,” Kinder said. “First quarter segment earnings were impacted by lower FERC rates and military volumes on our Pacific system, and a decrease in volumes on CALNEV. Looking ahead, construction of our crude and condensate pipeline,
which will transport product from the Eagle Ford Shale in south Texas to the Houston Ship Channel, is nearing completion and is expected to begin service in May.”
Total refined products volumes decreased 1.6 percent compared to the first quarter of 2011. The Pacific system was up slightly compared to the same period last year, with volume growth in both Arizona and northern California. Overall segment gasoline volumes (including transported ethanol on the Central Florida Pipeline) were down 0.8 percent compared to first quarter of 2011, with a significant downturn on CALNEV due to a competing pipeline from Salt Lake City that began service this quarter. Excluding Plantation, which was impacted by production issues at a refinery, diesel volumes declined 2.6 percent versus the same period last year with lower volumes on CALNEV (competing pipeline) and on Central Florida where local power plant demand was satisfied by lower-priced natural gas. Jet fuel volumes were up 4.7 percent compared to the first quarter last year, primarily reflecting an increase in commercial volumes at major airports the company serves in Phoenix, Las Vegas and Charlotte, and at Washington Reagan National. NGL volumes increased by 12 percent compared to the first quarter of last year to 7.4 million barrels.