The third quarter of 2011 includes an income tax benefit of $27.3 million as a result of the elimination of deferred tax accounts related to the conversion to a non-taxable entity in connection with the Partnership’s initial public offering. Net income for the third quarter of 2011, excluding this benefit and other gains and losses, was $13.8 million. Net income excluding gains and losses, which is a non-GAAP financial measure, is defined and reconciled to net income below.

Adjusted EBITDA was $18.1 million for the third quarter of 2011 compared to $16.6 million for the third quarter of 2010. Adjusted EBITDA was $51.7 million for the nine months ended September 30, 2011 compared to $48.5 million for the corresponding period in 2010. Adjusted EBITDA, which is a non-GAAP financial measure, is defined and reconciled to net income below.

“We are pleased to report solid results for the third quarter, our first period of operations since going public in July,” said Carlin Conner, Chairman, President and Chief Executive Officer of the Partnership’s general partner. “The successful launch of the Partnership was a significant milestone for Oiltanking and an integral part of our strategy to continue to grow our North American operations.”

“Over the last 30 years, we have established a strategic position with deepwater docks, tank storage and pipeline connectivity to the major refineries along the upper Gulf Coast, making us an important part of the crude oil supply chain in the U.S. With several significant pipelines being reversed or under-construction to deliver additional crude oil from domestic shale plays, Cushing and Canadian oil sands to the Gulf Coast refineries, we are excited about our prospects for growth. Our recently announced crude expansion project represents our first phase of growth plans to take advantage of the incremental crude flows to the Gulf Coast that will allow us to transport and store additional crude for our customers and further position us for growth.”

On October 20, 2011, the Partnership declared its first regular cash distribution of $10.6 million, or $0.2678 per unit. This prorated amount corresponds to a quarterly distribution of $0.3375 per unit, or $1.35 per unit on an annualized basis. Distributable cash flow for the third quarter of 2011 provided distribution coverage of 1.20 times the amount needed for the Partnership to fund a full quarter distribution to both the general and limited partners. Distributable cash flow and distribution coverage ratio, which are non-GAAP financial measures, are defined and reconciled to net income below.

The Partnership’s additional storage capacity of one million barrels that is in the process of being constructed is progressing on time and on budget. We expect that the first two-thirds of this storage capacity will be placed into service by December 1, 2011, with the remaining capacity coming on line early in the second quarter of 2012.

The Partnership’s overall operating results for the third quarter of 2011 improved as compared to the third quarter of 2010. Operating expenses were lower for the third quarter of 2011 by $0.7 million as compared to the third quarter of 2010, primarily due to favorable property taxes. Selling, general and administrative expenses were also lower quarter-over-quarter by $0.8 million primarily due to lower employee-related costs. Revenues remained strong for the third quarter of 2011 as compared to the third quarter of 2010, as higher storage service fees and throughput fees were offset by lower ancillary service fees.