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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): SEPTEMBER 30, 2001
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TEPPCO PARTNERS, L.P.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 1-10403 76-0291058
(State or Other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
2929 ALLEN PARKWAY 77252-2521
P.O. BOX 2521 (Zip Code)
HOUSTON, TEXAS
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: (713) 759-3636
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Item 5. Other Events
Financial Information for Significant Subsidiaries as Potential
Guarantors of Partnership Debt Securities
In connection with the filing of a shelf registration statement on Form
S-3 with the Securities and Exchange Commission concurrently with this report,
TE Products Pipeline Company, Limited Partnership, TCTM, L.P., TEPPCO Midstream
Companies, L.P. and Jonah Gas Gathering Company, TEPPCO Partners' four
"significant subsidiaries" as defined by the rules and regulations of the
Securities and Exchange Commission (the "Guarantor Subsidiaries"), may issue
unconditional guarantees of senior or subordinated debt securities of TEPPCO
Partners in the event that TEPPCO Partners issues any debt securities from time
to time under the registration statement. If issued, the guarantees will be
full, unconditional and joint and several.
We are filing supplemental consolidating financial information of
TEPPCO Partners, L.P. for its Guarantor Subsidiaries and its Non-Guarantor
Subsidiaries which is incorporated herein by reference to Exhibit 99.1. For
purposes of such consolidating information, TEPPCO Partners' and the Guarantor
Subsidiaries' investments in their respective subsidiaries are accounted for by
the equity method of accounting.
Financial Information for the General Partner of TEPPCO Partners, L.P.
We are also filing the consolidated balance sheets of Texas Eastern
Products Pipeline Company, LLC and subsidiary as of December 31, 2000 and
September 30, 2001 (unaudited) which are incorporated herein by reference to
Exhibit 99.2.
Additionally, we have included as exhibits accountants' consents to the
incorporation by reference of various reports in a previously filed registration
statement.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
23.1 Consent of KPMG LLP.
23.2 Consent of PricewaterhouseCoopers (Houston).
23.3 Consent of PricewaterhouseCoopers (Denver).
99.1 Unaudited Supplemental Condensed Consolidating
Financial Information of TEPPCO Partners, L.P.
99.2 Consolidated Balance Sheets of Texas Eastern Products
Pipeline Company, LLC and subsidiary as of December
31, 2000 and September 30, 2001 (unaudited).
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TEPPCO PARTNERS, L.P.
(Registrant)
By: Texas Eastern Products Pipeline
Company, LLC, General Partner
/s/ CHARLES H. LEONARD
------------------------------------
Charles H. Leonard
Senior Vice President, Chief
Financial Officer and Treasurer
Dated: November 30, 2001
3
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
23.1 Consent of KPMG LLP.
23.2 Consent of PricewaterhouseCoopers LLP (Houston).
23.3 Consent of PricewaterhouseCoopers LLP (Denver).
99.1 Unaudited Supplemental Condensed Consolidating Financial
Information of TEPPCO Partners, L.P.
99.2 Consolidated Balance Sheets of Texas Eastern Products Pipeline
Company, LLC and subsidiary as of December 31, 2000 and
September 30, 2001 (unaudited).
4
EXHIBIT 23.1
INDEPENDENT ACCOUNTANTS' CONSENT
We consent to the incorporation by reference in the Registration Statement (No.
33-81976) on Form S-3 of TEPPCO Partners, L.P. of our report dated June 1, 2001,
relating to the consolidated balance sheets of Texas Eastern Products Pipeline
Company, LLC and subsidiary as of December 31, 2000, which report appears in the
Current Report on Form 8-K of TEPPCO Partners, L.P. filed November 30, 2001.
/s/ KPMG LLP
Houston, Texas
November 30, 2001
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-3 (No. 33-81976) of TEPPCO Partners, L.P. of our reports
dated September 25, 2000 relating to the combined financial statements of ARCO
Pipe Line Company's APL Business (as defined in the Amended and Restated
Purchase Agreement with Texas Eastern Products Pipeline Company, LLC) and the
financial statements of Seaway Crude Pipeline Company, which appear in the
Current Report on Form 8-K/A of TEPPCO Partners, L.P. filed October 3, 2000.
/s/ PricewaterhouseCoopers LLP
Houston, Texas
November 30, 2001
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-3 (No. 33-81976) of TEPPCO Partners, L.P. of our report
dated October 31, 2001 relating to the financial statements of Jonah Gas
Gathering Company as of December 31, 2000 and for the periods June 1, 2000 to
December 31, 2000 and January 1, 2000 to May 31 2000 (Predecessor), which
appears in the Current Report on Form 8-K/A of TEPPCO Partners, L.P. filed
November 9, 2001.
/s/ PricewaterhouseCoopers LLP
Denver, Colorado
November 30, 2001
EXHIBIT 99.1
SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION
In connection with the Partnership's filing of a shelf registration
statement on Form S-3 with the Securities and Exchange Commission, TE Products
Pipeline Company, Limited Partnership, TCTM, L.P., TEPPCO Midstream Companies,
L.P. and Jonah Gas Gathering Company, the Partnership's four "significant
subsidiaries" as defined by the rules and regulations of the Securities and
Exchange Commission (the "Guarantor Subsidiaries"), may issue unconditional
guarantees of senior or subordinated debt securities of the Partnership in the
event that the Partnership issues such securities from time to time under the
registration statement. If issued, the guarantees will be full, unconditional
and joint and several. The following unaudited consolidated financial
information of TEPPCO Partners, L.P. is furnished as of the dates and for the
periods indicated. For purposes of the following consolidating information, the
Partnership and the Guarantor Subsidiaries investments in their respective
subsidiaries are accounted for by the equity method of accounting.
TEPPCO
TEPPCO GUARANTOR NON-GUARANTOR CONSOLIDATING PARTNERS, L.P.
SEPTEMBER 30, 2001 PARTNERS, L.P. SUBSIDIARIES SUBSIDIARIES ADJUSTMENTS CONSOLIDATED
-------------- -------------- -------------- -------------- --------------
(IN THOUSANDS)
Assets
Current assets ................................. $ 3,127 $ 45,761 $ 322,247 $ (11,768) $ 359,367
Property, plant and equipment - net ............ -- 813,589 329,607 -- 1,143,196
Equity investments ............................. 493,468 285,553 230,632 (739,760) 269,893
Intercompany notes receivable .................. 830,027 -- -- (830,027) --
Other assets ................................... 5,732 238,888 61,389 (4,915) 301,094
-------------- -------------- -------------- -------------- --------------
Total assets ................................ $ 1,332,354 $ 1,383,791 $ 943,875 $ (1,586,470) $ 2,073,550
============== ============== ============== ============== ==============
Liabilities and partners' capital
Current liabilities ............................ $ 365,767 $ 407,542 $ 312,696 $ (356,734) $ 729,271
Long term debt ................................. 472,000 389,807 -- -- 861,807
Intercompany notes payable ..................... -- 89,060 380,967 (470,027) --
Other long term liabilities and minority
interest ..................................... -- 3,918 -- 12,038 15,956
Redeemable Class B Units held by related
party ........................................ -- -- -- 106,270 106,270
Total partners' capital ........................ 494,587 493,464 250,212 (878,017) 360,246
-------------- -------------- -------------- -------------- --------------
Total liabilities and partners' capital .. $ 1,332,354 $ 1,383,791 $ 943,875 $ (1,586,470) $ 2,073,550
============== ============== ============== ============== ==============
TEPPCO
TEPPCO GUARANTOR NON-GUARANTOR CONSOLIDATING PARTNERS, L.P.
THREE MONTHS ENDED SEPTEMBER 30, 2001 PARTNERS, L.P. SUBSIDIARIES SUBSIDIARIES ADJUSTMENTS CONSOLIDATED
-------------- -------------- -------------- -------------- --------------
(IN THOUSANDS)
Operating revenues .................. $ -- $ 58,527 $ 932,289 $ -- $ 990,816
Costs and expenses .................. -- 36,458 927,237 -- 963,695
-------------- -------------- -------------- -------------- --------------
Operating income .................. -- 22,069 5,052 -- 27,121
-------------- -------------- -------------- -------------- --------------
Interest expense - net .............. (8,774) (7,181) (7,393) 8,774 (14,574)
Equity earnings ..................... 19,092 3,868 5,941 (23,256) 5,645
Other income - net .................. 8,774 433 564 (8,774) 997
-------------- -------------- -------------- -------------- --------------
Income before minority interest ... 19,092 19,189 4,164 (23,256) 19,189
Minority interest ................... -- -- -- (97) (97)
-------------- -------------- -------------- -------------- --------------
Net income ........................ $ 19,092 $ 19,189 $ 4,164 $ (23,353) $ 19,092
============== ============== ============== ============== ==============
TEPPCO
TEPPCO GUARANTOR NON-GUARANTOR CONSOLIDATING PARTNERS, L.P.
NINE MONTHS ENDED SEPTEMBER 30, 2001 PARTNERS, L.P. SUBSIDIARIES SUBSIDIARIES ADJUSTMENTS CONSOLIDATED
-------------- -------------- -------------- -------------- --------------
(IN THOUSANDS)
Operating revenues .................. $ -- $ 199,374 $ 2,650,359 $ -- $ 2,849,733
Costs and expenses .................. -- 107,712 2,625,525 -- 2,733,237
-------------- -------------- -------------- -------------- --------------
Operating income .................. -- 91,662 24,834 -- 116,496
-------------- -------------- -------------- -------------- --------------
Interest expense - net .............. (26,577) (22,160) (23,165) 26,577 (45,325)
Equity earnings ..................... 87,865 18,048 15,905 (106,548) 15,270
Other income - net .................. 26,577 1,115 1,109 (26,577) 2,224
-------------- -------------- -------------- -------------- --------------
Income before minority interest ... 87,865 88,665 18,683 (106,548) 88,665
Minority interest ................... -- -- -- (800) (800)
-------------- -------------- -------------- -------------- --------------
Net income ........................ $ 87,865 $ 88,665 $ 18,683 $ (107,348) $ 87,865
============== ============== ============== ============== ==============
TEPPCO
TEPPCO GUARANTOR NON-GUARANTOR CONSOLIDATING PARTNERS, L.P.
NINE MONTHS ENDED SEPTEMBER 30, 2001 PARTNERS, L.P. SUBSIDIARIES SUBSIDIARIES ADJUSTMENTS CONSOLIDATED
-------------- ------------ -------------- -------------- --------------
(IN THOUSANDS)
Cash flows from operating activities
Net Income .................................. $ 87,865 $ 88,665 $ 18,681 $ (107,346) $ 87,865
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization ........... -- 20,051 11,124 -- 31,175
Equity earnings, net of distributions ... (13,340) 3,375 5,600 10,455 6,090
Changes in assets and liabilities
and other ............................ 2,601 2,656 (17,728) 799 (11,672)
-------------- ------------ -------------- -------------- --------------
Net cash provided by operating activities ..... 77,126 114,747 17,677 (96,092) 113,458
-------------- ------------ -------------- -------------- --------------
Cash flows from investing activities .......... (446,301) (443,433) (28,166) 446,301 (471,599)
Cash flows from financing activities .......... 369,175 325,548 19,562 (350,209) 364,076
-------------- ------------ -------------- -------------- --------------
Net increase (decrease) in cash and cash
equivalents ................................. -- (3,138) 9,073 -- 5,935
Cash and cash equivalents at beginning of
period ...................................... -- 9,167 17,929 -- 27,096
-------------- ------------ -------------- -------------- --------------
Cash and cash equivalents at end of period .... $ -- $ 6,029 $ 27,002 $ -- $ 33,031
============== ============ ============== ============== ==============
EXHIBIT 99.2
INDEX TO FINANCIAL STATEMENTS
Texas Eastern Products Pipeline Company, LLC
Independent Auditors' Report..................................................................... F-2
Consolidated Balance Sheets...................................................................... F-3
Notes to Consolidated Balance Sheets............................................................. F-4
F-1
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Texas Eastern Products Pipeline Company, LLC:
We have audited the accompanying consolidated balance sheet of Texas Eastern
Products Pipeline Company, LLC and subsidiary as of December 31, 2000 (see Note
1 of the Notes to the Consolidated Balance Sheets). This consolidated financial
statement is the responsibility of the Company's management. Our responsibility
is to express an opinion on this consolidated financial statement based on our
audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the balance sheet
is free of material misstatement. An audit of a balance sheet includes
examining, on a test basis, evidence supporting the amounts and disclosures in
that balance sheet. An audit of a balance sheet also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall balance sheet presentation. We believe that our audit
of the balance sheet provides a reasonable basis for our opinion.
In our opinion, the consolidated balance sheet referred to above presents
fairly, in all material respects, the financial position of Texas Eastern
Products Pipeline Company, LLC and subsidiary as of December 31, 2000, in
conformity with accounting principles generally accepted in the United States of
America.
KPMG LLP
Houston, Texas
June 1, 2001
F-2
TEXAS EASTERN PRODUCTS PIPELINE COMPANY, LLC
AND SUBSIDIARY
Consolidated Balance Sheets
(In thousands)
SEPTEMBER 30, DECEMBER 31,
2001 2000
-------------- --------------
(UNAUDITED)
ASSETS
Current Assets:
Accounts receivable, TE Products Pipeline Company,
Limited Partnership $ 12,522 5,053
Accounts receivable, TCTM, L.P. 731 1,584
-------------- --------------
Total current assets 13,253 6,637
Advances to related parties 7,678 387
Investment in TE Products Pipeline Company,
Limited Partnership -- 2,383
Investment in TEPPCO Partners, L.P. 11,848 1,823
Investment in TCTM, L.P. -- 1,913
-------------- --------------
Total assets $ 32,779 13,143
============== ==============
LIABILITIES AND MEMBER'S EQUITY
Current liabilities - accrued income taxes $ 350 382
Deferred income taxes 806 979
Member's equity:
Member's equity 41,623 21,782
Note receivable, Duke Energy Field Services, LP (10,000) (10,000)
-------------- --------------
Total member's equity 31,623 11,782
-------------- --------------
Total liabilities and member's equity $ 32,779 13,143
============== ==============
See accompanying Notes to Consolidated Balance Sheets
F-3
(1) BASIS OF PRESENTATION
The accompanying consolidated balance sheets include the accounts of
Texas Eastern Products Pipeline Company, LLC and its wholly-owned
subsidiary TEPPCO Investments, LLC (collectively, the Company). On March
31, 2000, Texas Eastern Products Pipeline Company and TEPPCO Investments,
Inc. were converted to limited liability companies, with a resulting name
change for both companies to Texas Eastern Products Pipeline Company, LLC
and TEPPCO Investments, LLC, respectively. Additionally on March 31,
2000, Texas Eastern Products Pipeline Company, LLC (the LLC) distributed
its ownership of a wholly-owned subsidiary, TEPPCO Holdings, Inc. to Duke
Energy Corporation (Duke Energy), the Company's ultimate parent. The LLC
also distributed to, and Duke Energy assumed, all assets and liabilities
of the LLC, except those relating to the performance of its duties as
general partner of the Partnership (see below) and $10 million of the
demand note receivable due from Duke Energy Field Services, LP (DEFS), a
joint venture formed between Duke Energy and Phillips Petroleum
Corporation. Also on March 31, 2000, Duke Energy indirectly contributed
its remaining investment in the LLC to DEFS.
Prior to July 26, 2001, the Company was the general partner of TEPPCO
Partners, L.P., TE Products Pipeline Company, Limited Partnership and
TCTM, L.P. On July 26, 2001, the Company restructured its general partner
ownership of TE Products Pipeline Company, Limited Partnership and TCTM,
L.P. (collectively, the Operating Partnerships) to cause them to be
wholly-owned by TEPPCO Partners, L.P. (the Partnership). TEPPCO GP, Inc.
(TEPPCO GP), a subsidiary of the Partnership, succeeded the Company as
general partner of the Operating Partnerships. All remaining partner
interests in the Operating Partnerships not already owned by the
Partnership were transferred to the Partnership. In exchange for this
contribution, the Company's interest as general partner of the
Partnership was increased to 2%. The increased percentage is the economic
equivalent of the aggregate interest the Company had prior to the
restructuring through its combined interests in the Partnership and the
Operating Partnerships.
On September 30, 2001, the Partnership completed the purchase of Jonah
Gas Gathering Company (Jonah). The acquired business is owned through
TEPPCO Midstream Companies, L.P. (TEPPCO Midstream). The Partnership
holds a 99.999% limited partner interest in TEPPCO Midstream and TEPPCO
GP holds the remaining .001% interest as general partner. The Jonah
assets will be commercially managed and operated by DEFS.
The Company, as general partner, performs all management and operating
functions required for the Partnership pursuant to the Agreements of
Limited Partnership of TEPPCO Partners, L.P., TE Products Pipeline
Company, Limited Partnership, TCTM, L.P., and TEPPCO Midstream Companies,
L.P. (collectively, the Partnership Agreements). The general partner is
reimbursed for all reasonable direct and indirect expenses incurred in
managing the Partnership, the Operating Partnerships and TEPPCO
Midstream.
These consolidated balance sheets should be read in conjunction with the
consolidated financial statements and notes thereto presented in the
TEPPCO Partners, L.P. Annual Report on Form 10-K for the year ended
December 31, 2000.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated balance sheets include the accounts of the Company.
Significant intercompany items have been eliminated in consolidation. The
Company's investments in the Partnership are accounted for using the
equity method.
F-4
CASH AND CASH EQUIVALENTS
Cash equivalents are defined as all highly marketable securities with a
maturity of three months or less when purchased. The Company generally
does not maintain cash balances. Cash transactions are generally settled
through intercompany accounts.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Accounts receivable and accounts payable approximate fair value due to
the short-term maturity of these financial instruments. The fair value of
the Company's note receivable is more fully described in note 4, Note
Receivable.
USE OF ESTIMATES
The preparation of the consolidated balance sheets in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect certain
reported amounts of assets and liabilities, and disclosure of contingent
assets and liabilities. Actual results could differ from these estimates.
INCOME TAXES
As discussed in note 1, Basis of Presentation, on March 31, 2000, Texas
Eastern Products Pipeline Company and TEPPCO Investments, Inc. were
converted to limited liability companies, and the Company's ownership of
TEPPCO Holdings, Inc. was distributed to Duke Energy. As such, the
Company became a nontaxable entity for federal income tax purposes as of
March 31, 2000, but remains a taxable entity for state income taxes.
Prior to March 31, 2000, the Company followed the asset and liability
method of accounting for federal income tax. Under this method, deferred
income taxes reflect the impact of temporary differences between the
amount of assets and liabilities for financial reporting purposes and
such amounts as measured by tax laws and regulations. These deferred
income taxes are measured by applying enacted tax laws and statutory tax
rates applicable to the period in which the differences are expected to
affect taxable income. Also prior to March 31, 2000, under an agreement
with Duke Energy, the Company computed federal taxes as if it was filing
a separate consolidated tax return and paid such tax, if any, to Duke
Energy in lieu of federal taxes otherwise payable to the government. The
Company continues to follow the asset and liability method of accounting
for state income taxes.
INTERIM FINANCIAL STATEMENT
The accompanying interim unaudited consolidated balance sheet reflects
all adjustments which are, in the opinion of management, of a normal and
recurring nature and necessary for a fair statement of financial position
of the Company as of September 30, 2001.
(3) RELATED-PARTY TRANSACTIONS
Pursuant to the Partnership Agreements, the Company is entitled to
reimbursement of all direct and indirect expenses related to business
activities of the Partnership (see note 1). Accounts receivable, TE
Products Pipeline Company, Limited Partnership and accounts receivable,
TCTM, L.P. on the consolidated balance sheets represent unpaid amounts
charged to the Partnership for these costs. Advances to related parties
on the consolidated balance sheets primarily represent advances made to
DEFS.
F-5
(4) NOTE RECEIVABLE
As of September 30, 2001 and December 31, 2000, the Company held a $10
million demand note receivable due from DEFS. Interest is payable
quarterly. The rate on the note fluctuates quarterly based on the
one-month LIBOR rate, plus 50 basis points, as of the last day of the
preceding calendar quarter. Under the terms of the note, DEFS may prepay
the note, in whole or in part, without premium or penalty. The Company
believes that the amount included in the consolidated balance sheets for
the note receivable materially represents fair value at September 30,
2001 and December 31, 2000, as the underlying interest rate is based on
market rates. The note receivable due from DEFS is classified as
contra-equity on the consolidated balance sheet as of September 30, 2001
and December 31, 2000. On March 31, 2000, the LLC distributed $115
million of the note receivable to Duke Energy (see note 1), reducing the
note receivable balance from $125 million to $10 million.
(5) INVESTMENTS
Prior to July 26, 2001, the Company owned a 1.0101% general partner
interest in each of the Operating Partnerships and a 1.0% general partner
interest in the Partnership. On July 26, 2001, the Company restructured
its general partner ownership of the Operating Partnerships to cause them
to be wholly-owned by the Partnership. TEPPCO GP, a subsidiary of the
Partnership, succeeded the Company as general partner of the Operating
Partnerships. All remaining partner interests in the Operating
Partnerships not already owned by the Partnership were transferred to the
Partnership. In exchange for this contribution, the Company's interest as
general partner of the Partnership was increased to 2%. The increased
percentage is the economic equivalent of the aggregate interest the
Company had prior to the restructuring through its combined interests in
the Partnership and the Operating Partnerships (see note 1).
The assets and liabilities of the Partnership are summarized below (in
thousands):
SEPTEMBER 30, DECEMBER 31,
2001 2000
-------------- --------------
(UNAUDITED)
Current assets $ 359,367 363,397
Property, plant and equipment, net 1,143,196 949,705
Other assets 570,987 309,708
-------------- --------------
$ 2,073,550 1,622,810
============== ==============
Current liabilities $ 729,271 358,271
Long-term debt 861,807 835,784
Other liabilities and deferred credits 15,956 3,991
Redeemable Class B Units held by related party 106,270 105,411
Minority interest -- 4,296
Partners' capital 360,246 315,057
-------------- --------------
$ 2,073,550 1,622,810
============== ==============
(6) INCOME TAXES
As discussed in note 1, Basis of Presentation, as of March 31, 2000,
Texas Eastern Products Pipeline Company and TEPPCO Investments, Inc. were
converted to limited liability companies, and the Company's ownership of
TEPPCO Holdings, Inc. was distributed to Duke Energy. As such, the
Company became a nontaxable entity for federal income tax purposes as of
March 31, 2000. In
F-6
connection with the conversion to limited liability companies, the
federal deferred tax liability balance of $39.2 million at March 31, 2000
was recorded as a tax benefit in earnings. Also discussed in note 1,
Basis of Presentation, in connection with the contribution of the LLC to
DEFS on March 31, 2000, accrued income taxes of $15.7 million and
deferred taxes of $2.2 million of the Company were assumed by Duke
Energy.
At September 30, 2001 and December 31, 2000, accrued income taxes payable
was comprised of $350,000 and $382,000, respectively, of state income
taxes.
As of September 30, 2001 and December 31, 2000, the difference between
the financial statement carrying value and related tax basis of existing
assets and liabilities, primarily the Company's equity investments in the
Partnership, resulted in a deferred tax liability for state income taxes
of $806,000 and $979,000, respectively.
F-7
