Estate of H.A. True, Jr. - Page 75




                                       - 159 -                                        
          in a given period of time.  During the period 1979 through 1993,            
          Belle Fourche’s throughput ranged from approximately 26 to 36               
          million barrels per year;55 the highest volume was in 1993 (36.2            
          million barrels), while the lowest volume was in 1988 (26.2                 
          million barrels).  Since 1990, the company’s throughput has                 
          steadily increased.                                                         
              Belle Fourche earned revenue from its pipeline system by                
          charging tariffs for transportation, delivery, and testing of               
          crude oil.  Amounts charged by Belle Fourche were regulated by              
          Federal and State agencies.                                                 
              During the period 1988 through 1993, revenues increased at a            
          compounded annual growth rate of 11 percent, from a low of $10.5            
          million in 1988 to a high of $17.5 million in 1993.  Belle                  
          Fourche was profitable from 1988 to 1993, generating the highest            
          pre-tax income of $8.2 million in 1990 and the lowest of $3.7               
          million in 1993 (As an S corporation, Belle Fourche is not                  
          required to pay corporate level income taxes.).  However, pre-tax           
          income margins have declined from a high of 61 percent in 1990 to           
          a low of 21 percent in 1993.  This trend is attributable to a               



               55Petitioners’ expert’s reports stated that Belle Fourche’s            
          historical average throughput was 25,000 barrels per day.                   
          Annualizing that figure would result in  average throughput of              
          just over 9 million barrels per year.  The parties did not                  
          address this discrepancy at trial or on brief.  We find the 26 to           
          36 million barrels per year average to be more reliable because             
          it was derived from respondent’s expert’s analysis of filings               
          with regulatory agencies.                                                   




Page:  Previous  149  150  151  152  153  154  155  156  157  158  159  160  161  162  163  164  165  166  167  168  Next

Last modified: May 25, 2011