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TransMontaigne Partners L.P. Announces Financial Results For The Year And The Three Months Ended December 31, 2012 And Filing Of Annual Report On Form 10-K

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

FINANCIAL RESULTS

An overview of the financial performance for the year ended December 31, 2012, as compared to the year ended December 31, 2011, includes:

  • Distributable cash flow generated during the year ended December 31, 2012 was $58.1 million compared to $53.1 million for the year ended December 31, 2011.
  • The distribution declared per limited partner unit was $2.55 per unit for the year ended December 31, 2012, as compared to $2.48 per unit for the year ended December 31, 2011.
  • Annual operating income for the year ended December 31, 2012 was $42.1 million compared to $50.1 million for the year ended December 31, 2011, principally due to the following:
    • A one-time gain for the prior year ended December 31, 2011 of approximately $9.6 million from the contribution of the Brownsville light petroleum product storage business to the Frontera joint venture, in exchange for a cash payment of approximately $25.6 million and a 50% ownership interest.
    • Revenue was $156.2 million compared to $152.3 million due to increases in revenue at the Gulf Coast, Midwest, River and Southeast terminals of approximately $0.7 million, $2.7 million, $1.5 million and $0.3 million, respectively, offset by decreases in revenue at the Brownsville terminals of approximately $1.2 million. 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 $66.0 million compared to $64.5 million due to increases in direct operating costs and expenses at the Gulf Coast, Midwest, River and Southeast terminals of approximately $1.2 million, $0.6 million, $0.6 million and $0.2 million, respectively, offset by a decrease in direct operating costs and expenses at the Brownsville terminals of approximately $1.2 million.
    • An increase in depreciation and amortization expense of approximately $0.6 million.
  • Annual net earnings decreased to $38.6 million from $46.5 million and net earnings per limited partner unit - basic decreased to $2.31 per unit from $2.92 per unit due principally to the decrease in operating income discussed above.

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

  • Distributable cash flow generated during the three months ended December 31, 2012 was $10.2 million compared to $13.6 million for the three months ended December 31, 2011.
  • The distribution declared per limited partner unit was $0.64 per unit for the three months ended December 31, 2012, as compared to $0.63 per unit for the three months ended December 31, 2011.
  • Quarterly operating income for the three months ended December 31, 2012 was $8.0 million compared to $11.5 million for the three months ended December 31, 2011, principally due to the following:
    • Revenue was $40.1 million compared to $39.2 million due to increases in revenue at the Midwest, Brownsville and River terminals of approximately $0.9 million, $0.7 million and $0.3 million, respectively, offset by decreases in revenue at the Gulf Coast and Southeast terminals of approximately $0.8 million and $0.3 million, respectively.
    • Direct operating costs and expenses were $19.6 million compared to $15.8 million due to increases in direct operating costs and expenses at the Gulf Coast, Midwest, Brownsville and Southeast terminals of approximately $1.5 million, $0.7 million, $0.6 million and $1.4 million, respectively, offset by a decrease in direct operating costs and expenses at the River terminals of approximately $0.4 million. The increase in direct operating costs and expenses is primarily attributable to the timing of repairs and maintenance across our terminaling and transportation facilities. For the year ended December 31, 2012, we incurred 40% of our total annual repairs and maintenance costs in the fourth quarter, whereas for the year ended December 31, 2011, we incurred repairs and maintenance costs more ratable throughout the year.
    • An increase in depreciation and amortization expense of approximately $0.4 million.
  • Quarterly net earnings decreased to $6.9 million from $10.5 million and net earnings per limited partner unit - basic decreased to $0.39 per unit from $0.65 per unit due principally to the decrease in operating income discussed above.

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 Year
ended ended
December 31, December 31,
2012   2011 2012   2011
Firm Commitments:
Terminaling services fees, net:
External customers $ 8,308 $ 7,905 $ 32,412 $ 32,744
Affiliates 21,559 20,574 84,347 81,190
Total firm commitments 29,867 28,479 116,759 113,934
Variable:
Terminaling services fees, net:
External customers 829 593 2,814 2,585
Affiliates (8 ) (37 ) (108 ) (166 )
Total 821 556 2,706 2,419
Pipeline transportation fees 1,662 1,503 5,656 4,746
Management fees and reimbursed costs 1,532 1,189 5,806 3,899
Other 6,208 7,512 25,312 27,294
Total variable 10,223 10,760 39,480 38,358
Total revenue $ 40,090 $ 39,239 $ 156,239 $ 152,292
 

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, 2012 was as follows (in thousands):

 
At
December 31,
2012
Remaining terms on terminaling services agreements that generated "firm commitments":
Less than 1 year remaining $ 13,557
1 year or more, but less than 3 years remaining 84,574
3 years or more, but less than 5 years remaining 16,828
5 years or more remaining 1,800
Total firm commitments for the year ended December 31, 2012 $ 116,759
 

RECENT DEVELOPMENTS

On December 20, 2012, we acquired a 42.5% interest in Battleground Oil Specialty Terminal Company LLC, or BOSTCO, from Kinder Morgan Energy Partners, L.P., or Kinder Morgan, for approximately $79 million. BOSTCO is a new black oil terminal under construction on the Houston Ship Channel designed for the handling of residual fuel, feedstocks, distillates and other black oils. The initial phase of the BOSTCO project involves construction of 50 storage tanks with approximately 6.1 million barrels of storage capacity at an estimated cost of $425 million. The BOSTCO facility‚Äôs docks will benefit from one of the deepest vessel drafts and nearest access points in the Houston Ship Channel and will be well positioned to capitalize on increasing exports of petroleum related products. The BOSTCO facility is scheduled to begin commercial operation in the fourth quarter of 2013. Completion of the full 6.1 million barrels of storage capacity and related infrastructure is scheduled for the first half of 2014.

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