UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2003
OR
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No.: 1-16335
Williams Energy Partners L.P.
(Exact name of registrant as specified in its charter)
| Delaware |
73-1599053 | |
| (State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
One Williams Center, P.O. Box 22186, Tulsa, Oklahoma 74121-2186
(Address of principal executive offices and zip code)
877-934-6571
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
As of May 12, 2003, there were outstanding 13,679,694 common units, 7,830,924 Class B units and 5,679,694 subordinated units.
PART I
FINANCIAL INFORMATION
| Page | ||||
| ITEM 1. |
FINANCIAL STATEMENTS |
|||
| WILLIAMS ENERGY PARTNERS L.P. |
||||
| Consolidated Statements of Income for the three months ended March 31, 2003 and 2002 |
2 | |||
| Consolidated Balance Sheets as of March 31, 2003 and December 31, 2002 |
3 | |||
| Consolidated Statements of Cash Flows for the three months ended March 31, 2003 and 2002 |
4 | |||
| 5 | ||||
| ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
14 | ||
| ITEM 3. |
22 | |||
| ITEM 4. |
22 | |||
| 23 | ||||
| PART II
OTHER INFORMATION | ||||
| ITEM 1. |
24 | |||
| ITEM 2. |
24 | |||
| ITEM 3. |
24 | |||
| ITEM 4. |
24 | |||
| ITEM 5. |
24 | |||
| ITEM 6. |
24 | |||
1
PART I
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per unit amounts)
(Unaudited)
| Three Months Ended March 31, |
||||||||
| 2002 |
2003 |
|||||||
| Transportation and terminals revenues: |
||||||||
| Third party |
$ |
72,753 |
|
$ |
79,463 |
| ||
| Affiliate |
|
7,569 |
|
|
8,251 |
| ||
| Product sales revenues: |
||||||||
| Third party |
|
6,625 |
|
|
31,948 |
| ||
| Affiliate |
|
15,491 |
|
|
53 |
| ||
| Affiliate management fee revenues |
|
210 |
|
|
— |
| ||
| Total revenues |
|
102,648 |
|
|
119,715 |
| ||
| Costs and expenses: |
||||||||
| Operating |
|
32,196 |
|
|
33,751 |
| ||
| Environmental |
|
870 |
|
|
1,797 |
| ||
| Environmental indemnified by Williams |
|
— |
|
|
(1,186 |
) | ||
| Product purchases |
|
18,409 |
|
|
27,426 |
| ||
| Depreciation and amortization |
|
8,964 |
|
|
9,379 |
| ||
| Affiliate general and administrative |
|
13,457 |
|
|
10,438 |
| ||
| Total costs and expenses |
|
73,896 |
|
|
81,605 |
| ||
| Operating profit |
|
28,752 |
|
|
38,110 |
| ||
| Interest expense: |
||||||||
| Affiliate interest expense |
|
407 |
|
|
— |
| ||
| Other interest expense |
|
906 |
|
|
9,031 |
| ||
| Interest income |
|
(550 |
) |
|
(526 |
) | ||
| Other (income)/expense |
|
(953 |
) |
|
547 |
| ||
| Income before income taxes |
|
28,942 |
|
|
29,058 |
| ||
| Provision for income taxes |
|
7,816 |
|
|
— |
| ||
| Net income |
$ |
21,126 |
|
$ |
29,058 |
| ||
| Allocation of net income: |
||||||||
| Portion applicable to period after April 11, 2002 as it relates to the operations of Williams Pipe Line: |
||||||||
| Limited partners’ interest |
$ |
8,265 |
|
$ |
27,008 |
| ||
| General partner’s interest |
|
242 |
|
|
2,050 |
| ||
| Portion applicable to partners’ interests |
|
8,507 |
|
|
29,058 |
| ||
| Portion applicable to non-partnership interests |
|
12,619 |
|
|
— |
| ||
| Net income |
$ |
21,126 |
|
$ |
29,058 |
| ||
| Basic net income per limited partner unit |
$ |
0.73 |
|
$ |
0.99 |
| ||
| Weighted average number of limited partner units outstanding used for basic net income per unit calculation |
|
11,359 |
|
|
27,190 |
| ||
| Diluted net income per limited partner unit |
$ |
0.72 |
|
$ |
0.99 |
| ||
| Weighted average number of limited partner units outstanding used for diluted net income per unit calculation |
|
11,407 |
|
|
27,318 |
| ||
See accompanying notes.
2
CONSOLIDATED BALANCE SHEETS
(In thousands)
| December 31, 2002 |
March 31, 2003 |
|||||||
| (Unaudited) |
||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
75,151 |
|
$ |
93,409 |
| ||
| Accounts receivable (less allowance for doubtful accounts of $658 and $457 at March 31, 2003 and December 31, 2002, respectively) |
|
23,262 |
|
|
24,452 |
| ||
| Other accounts receivable |
|
1,395 |
|
|
3,178 |
| ||
| Affiliate accounts receivable |
|
15,608 |
|
|
17,121 |
| ||
| Inventory |
|
5,224 |
|
|
4,912 |
| ||
| Other current assets |
|
4,584 |
|
|
3,366 |
| ||
| Total current assets |
|
125,224 |
|
|
146,438 |
| ||
| Property, plant and equipment, at cost |
|
1,334,527 |
|
|
1,338,591 |
| ||
| Less: accumulated depreciation |
|
401,396 |
|
|
410,523 |
| ||
| Net property, plant and equipment |
|
933,131 |
|
|
928,068 |
| ||
| Goodwill (less accumulated amortization of $141 at March 31, 2003 and December 31, 2002) |
|
22,295 |
|
|
22,295 |
| ||
| Other intangibles (less accumulated amortization of $360 and $297 at March 31, 2003 and December 31, 2002, respectively) |
|
2,432 |
|
|
2,368 |
| ||
| Long-term affiliate receivables |
|
11,656 |
|
|
11,610 |
| ||
| Long-term receivables |
|
9,268 |
|
|
9,311 |
| ||
| Other noncurrent assets |
|
12,355 |
|
|
12,459 |
| ||
| Total assets |
$ |
1,116,361 |
|
$ |
1,132,549 |
| ||
| LIABILITIES & PARTNERS’ CAPITAL |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ |
16,967 |
|
$ |
9,697 |
| ||
| Affiliate accounts payable |
|
11,510 |
|
|
21,790 |
| ||
| Cash overdraft |
|
1,967 |
|
|
2,304 |
| ||
| Accrued affiliate payroll and benefits |
|
4,921 |
|
|
5,758 |
| ||
| Accrued taxes other than income |
|
13,697 |
|
|
12,143 |
| ||
| Accrued interest payable |
|
67 |
|
|
2,142 |
| ||
| Accrued environmental liabilities |
|
10,359 |
|
|
11,811 |
| ||
| Deferred revenue |
|
11,550 |
|
|
10,375 |
| ||
| Accrued product purchases |
|
2,925 |
|
|
7,873 |
| ||
| Accrued casualty losses |
|
655 |
|
|
221 |
| ||
| Other current liabilities |
|
3,278 |
|
|
2,803 |
| ||
| Long-term debt due within one year |
|
— |
|
|
90,000 |
| ||
| Total current liabilities |
|
77,896 |
|
|
176,917 |
| ||
| Long-term debt |
|
570,000 |
|
|
480,000 |
| ||
| Long-term affiliate payable |
|
4,293 |
|
|
397 |
| ||
| Other deferred liabilities |
|
488 |
|
|
204 |
| ||
| Environmental liabilities |
|
11,927 |
|
|
10,991 |
| ||
| Commitments and contingencies |
||||||||
| Partners’ capital: |
||||||||
| Partners’ capital |
| |||||||