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TransMontaigne Partners L.P. Announces Financial Results For The Quarter Ended March 31, 2012

Stocks in this article: TLP

TransMontaigne Partners L.P. (NYSE:TLP) today announced its financial results for the three months ended March 31, 2012.

FINANCIAL RESULTS

An overview of the financial performance for the three months ended March 31, 2012, as compared to the three months ended March 31, 2011, includes:

  • Distributable cash flow generated during the three months ended March 31, 2012 was $16.0 million compared to $15.4 million for the three months ended March 31, 2011.
  • Operating income for the quarter ended March 31, 2012 was $10.9 million compared to $12.3 million for the quarter ended March 31, 2011, principally due to the following:
    • An increase in direct general and administrative expenses of approximately $1.8 million, which is primarily the result of our change in independent auditor and re-audits of prior periods as more fully described below under “Recent Developments”.
    • Revenue was $38.8 million compared to $39.1 million due a decrease in revenue at the Brownsville terminals of approximately $2.2 million, offset by increases in revenue at the Gulf Coast, Midwest, River and Southeast terminals of approximately $0.5 million, $0.3 million, $0.5 million and $0.6 million, respectively. The decrease in the Brownsville revenue is 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 $14.0 million compared to $14.6 million due to decreases in direct operating costs and expenses at the Midwest, Brownsville and Southeast terminals of approximately $0.1 million, $1.1 million and $0.2 million, respectively, offset by an increase in direct operating costs and expenses at the River terminals of approximately $0.8 million.
    • Equity in earnings from the Frontera Brownsville LLC joint venture of approximately $0.1 million.
  • Quarterly net earnings decreased to $10.1 million from $11.3 million due principally to the decrease in quarterly operating income discussed above, offset by a decrease in deferred financing expense of approximately $0.3 million.
  • Net earnings per limited partner unit—basic decreased to $0.62 per unit from $0.71 per unit.
  • The distribution declared per limited partner unit was $0.63 per unit for the three months ended March 31, 2012, as compared to $0.61 per unit for the three months ended March 31, 2011.

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 March 31,
2012   2011
Firm Commitments:
Terminaling services fees, net:
External customers $ 7,805 $ 9,354
Affiliates   20,762       19,793
Total firm commitments   28,567       29,147
Variable:
Terminaling services fees, net:
External customers 728 1,094
Affiliates   (7 )     17
Total 721 1,111
Pipeline transportation fees 1,527 960
Management fees and reimbursed costs 1,455 471
Other   6,563     7,447
Total variable   10,266     9,989
Total revenue $ 38,833   $ 39,136
 

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 three months ended March 31, 2012 was as follows (in thousands):

  At March 31, 2012
Remaining terms on terminaling services agreements that generated “firm commitments”:
Less than 1 year remaining $ 1,796
1 year or more, but less than 3 years remaining 22,543
3 years or more, but less than 5 years remaining 2,546
5 years or more remaining   1,682
Total firm commitments for the three months ended March 31, 2012 $ 28,567
 

RECENT DEVELOPMENTS

On April 16, 2012, we announced a distribution of $0.63 per unit for the period from January 1, 2012 through March 31, 2012, payable on May 8, 2012 to unitholders of record on April 30, 2012.

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