Enterprise Products Partners L.P. (“Enterprise”) (NYSE: EPD)
today announced its financial results for the three and nine months
ended September 30, 2016.
Third Quarter 2016
Highlights
Three months ended Nine months ended
September 30, September 30, 2016 2015
2016 2015 ($ in millions, except per
unit amounts) Operating income $ 905 $
909 $ 2,658 $ 2,606 Net income $ 643 $ 658 $ 1,883 $ 1,865 Fully
diluted earnings per unit $ 0.30 $ 0.32 $ 0.89 $ 0.92 Net cash flow
provided by operating activities (1)
$
854
$
690
$
2,699
$
2,591
Total gross operating margin (2) $ 1,312 $ 1,349 $ 3,891 $ 3,985
Adjusted EBITDA (2) $ 1,259 $ 1,310 $ 3,901 $ 3,932 Distributable
cash flow (2) (3) $ 978 $ 2,501 $ 3,072 $ 4,519
(1) Net cash flow provided by operating
activities includes the impact of timing of cash receipts and
payments related to operations. For the third quarters of 2016 and
2015, the net effect of changes in operating accounts, which are a
component of net cash flow provided by operating activities, were
reductions of $155 million and $377 million, respectively. (2)
Total gross operating margin, adjusted
earnings before interest, taxes, depreciation and amortization
(“Adjusted EBITDA”) and distributable cash flow are non-generally
accepted accounting principle (“non-GAAP”) financial measures that
are defined and reconciled later in this press release.
(3) Distributable cash flow includes cash proceeds
from asset sales and insurance recoveries of $16 million and $1.5
billion for the third quarters of 2016 and 2015, respectively, and
$44 million and $1.5 billion for the nine months ended September
30, 2016 and 2015, respectively. Distributable cash flow for the
third quarter and nine months ended September 30, 2015 includes
cash proceeds from the sale of the partnership’s offshore business
in July 2015.
- Enterprise increased its cash
distribution with respect to the third quarter of 2016 by 5.2
percent to $0.405 per unit compared to the distribution paid with
respect to the third quarter of 2015. The distribution will be paid
November 7, 2016 to unitholders of record as of the close of
business on October 31, 2016.
- Enterprise reported distributable cash
flow of $978 million for the third quarter of 2016, which provided
1.15 times coverage of the $0.405 per unit cash distribution and
resulted in $124 million of retained distributable cash flow. For
the nine months ended September 30, 2016, distributable cash flow
was $3.1 billion, which provided 1.22 times coverage of the
aggregate $1.20 per unit cash distribution, and Enterprise retained
$551 million of distributable cash flow, which is available to
reinvest in growth capital projects and reduce the need to issue
additional equity.
- Excluding cash proceeds from asset
sales and insurance recoveries, distributable cash flow for the
third quarter of 2016 was $962 million compared to $970 million for
the third quarter of 2015.
- Third Quarter
Volume Highlights
Three months
ended Sept. 30,
2016 2015 Onshore NGL, crude oil, refined products
& petrochemical pipeline volumes (million BPD)
5.0
5.2
Marine terminal volumes (million BPD) 1.2 1.3 Onshore natural gas
pipeline volumes (TBtu/d) 12.1 12.4 NGL fractionation volumes
(MBPD) 791 837 Fee-based natural gas processing volumes (Bcf/d) 4.6
5.0 Equity NGL production volumes (MBPD) 116
129
As used in this press release, “NGL” means natural gas liquids,
“BPD” means barrels per day, “MBPD” means thousand barrels per day,
“Bcf/d” means billion cubic feet per day; and “TBtu/d” means
trillion British thermal units per day.
- Capital investments were $621 million
in the third quarter of 2016, and $2.6 billion for the first nine
months of 2016. Included in these investments were sustaining
capital expenditures of $62 million and $179 million for the third
quarter and first nine months of 2016, respectively. These amounts
exclude $1.0 billion that Enterprise paid in July 2016 for the
second and final installment payment for the acquisition of the EFS
Midstream assets.
“Enterprise reported another solid quarter in light of the
challenging environment for the global energy industry,” said Jim
Teague, chief executive officer of Enterprise’s general partner.
“We are proud of our employees for their untiring efforts in the
commercial, operational and financial performance of the
partnership. For the third quarter of 2016, Enterprise generated $1
billion in distributable cash flow, increased our distribution to
partners by 5.2 percent and retained $124 million of distributable
cash flow to reinvest in the business. During the quarter, we
transported over 5 million barrels per day through our liquids
pipelines and handled over 1.2 million barrels per day at our
marine terminals. Increases in gross operating margin from many of
our fee-based businesses partially offset the effects of lower
earnings from our commodity sensitive businesses, lower volumes on
our Eagle Ford crude oil pipelines, weaker ethane recoveries
industry-wide, downtime and repairs at our Pascagoula natural gas
processing plant and pre-commissioning expenses for certain new
assets.”
“We are optimistic that the energy industry has weathered the
harshest part of this cycle and very proud of how our businesses
continued to perform. While the industry may still experience bouts
of commodity price weakness and volatility, we believe it has a
firmer foundation going into 2017 as the gap between supply and
demand has narrowed and should continue to do so. We are seeing
significant ‘green shoots’ of producer activity as a result of the
opportunity to hedge future sales of crude, NGLs and natural gas at
economic levels. In addition to the acceleration of investment in
the Permian Basin, we are seeing activity attributable to new
discoveries, deployment of new technology, including in
well-established areas such as the Eagle Ford and Haynesville; and
changes in ownership of acreage as some producers emerge from
restructuring.
“From the perspective of consumers of energy, a substantial
increase in demand for natural gas and NGLs is expected from new
domestic petrochemical, natural gas-fired power plants and LNG
facilities under construction and scheduled to begin operations
over the next one to three years. Through the end of 2017, five new
ethylene facilities on the U.S. Gulf Coast are scheduled to begin
operations that represent 333,000 barrels per day, or 30 percent
increase in demand for ethane. In addition, certain refining and
petrochemical customers are evaluating new facilities or
modifications to existing facilities that will require additional
midstream energy infrastructure.”
“We currently have $5.6 billion of growth capital projects under
construction that will begin commercial service between now and the
end of 2018, including our PDH facility, the Midland-to-Sealy crude
oil pipeline and a third natural gas processing plant in the
Delaware Basin. We expect these projects to support continued
distribution growth for our partners,” continued Teague.
Review of Third Quarter 2016
Results
NGL Pipelines & Services – Gross operating margin for
the NGL Pipelines & Services segment increased to $704 million
for the third quarter of 2016 from $696 million for the third
quarter of 2015.
Enterprise’s natural gas processing and related NGL marketing
business generated gross operating margin of $203 million for the
third quarters of both 2016 and 2015. Gross operating margin for
the third quarter of 2016 benefited from higher processing margins,
including hedging activities, and a $13 million increase from the
partnership’s NGL marketing activities due in part to increased
liquefied petroleum gases (“LPG”) loadings for export. Offsetting
these increases to gross operating margin were lower fees and
volumes from fee-based processing at Enterprise’s South Texas,
Rockies and Louisiana gas processing plants, and a $7 million
increase in operating expenses as the result of a fire at our
Pascagoula, Mississippi natural gas processing plant in June 2016.
We estimate the total impact of the Pascagoula plant outage during
the third quarter of 2016 in terms of higher operating expense,
lost gross operating margin opportunity and sustaining capital
expenditures was approximately $23 million. We currently expect the
plant to resume operations in December 2016.
Enterprise’s natural gas processing plants reported fee-based
processing volumes of 4.6 Bcf/d in the third quarter of 2016
compared to 5.0 Bcf/d for the third quarter of 2015. Equity NGL
production was 116 MBPD for the third quarter of 2016 compared to
129 MBPD for the third quarter of last year. A significant portion
of the decrease in the fee-based processing volumes and equity NGL
production was attributable to down time at the Pascagoula
plant.
Gross operating margin from the partnership’s NGL pipelines and
storage business increased to $378 million for the third quarter of
2016 from $366 million for the third quarter of 2015. Total NGL
transportation volumes were 2.9 million BPD for the third quarter
of 2016 compared to 2.8 million BPD for the same quarter of
2015.
Enterprise’s ATEX and Aegis ethane pipelines reported a $27
million increase in gross operating margin for the third quarter of
2016 compared to the third quarter of last year on a 112 MBPD
increase in transportation volumes. The third and final segment of
the Aegis ethane pipeline was completed in December 2015. Gross
operating margin for the third quarter of 2016 increased $9 million
from a 30 MBPD increase in LPG loadings at our marine terminal on
the Houston Ship Channel compared to the same quarter in 2015.
Partially offsetting these increases in gross operating margin were
lower transportation fees and volumes on the Mid-America and
Seminole pipelines which led to a $13 million decrease in gross
operating margin. Also contributing to lower gross operating margin
this quarter was an aggregate 74 MBPD decrease in NGL
transportation volumes from the partnership’s Dixie, South
Louisiana, Rio Grande and Tri-States NGL pipelines that led to an
aggregate $11 million decrease in gross operating margin.
Enterprise’s ethane export terminal, which is located on the
Houston Ship Channel, began commercial service in September 2016
loading an average of 20 MBPD of ethane in the third quarter. Gross
operating margin for the facility in the third quarter of 2016,
including commissioning expenses, was a loss of $3 million.
Contract commitments for this facility increase to 50 MBPD by the
end of 2016 and will increase to approximately 180 MBPD by the end
of 2017.
Gross operating margin from the partnership’s NGL fractionation
business was $122 million for the third quarter of 2016 compared to
$126 million for the third quarter of 2015, a $4 million decrease
primarily due to lower fractionation volumes. Total fractionation
volumes decreased 46 MBPD to 791 MBPD for the third quarter of 2016
compared to 837 MBPD for the third quarter of 2015 primarily due to
ethane rejection at regional natural gas processing facilities.
Crude Oil Pipelines & Services – Gross operating
margin from the partnership’s Crude Oil Pipelines & Services
segment was $254 million for the third quarter of 2016 compared to
$255 million for the third quarter of 2015. Total crude oil
pipeline transportation volumes were 1.4 million BPD for the third
quarter of 2016 compared to 1.5 million BPD for the same quarter of
2015. Total crude oil marine terminal volumes were 520 MBPD for the
third quarter of 2016 compared to 551 MBPD for the third quarter of
2015.
The EFS Midstream assets that we acquired effective July 1,
2015, had a $15 million increase in gross operating margin this
quarter compared to the third quarter of last year primarily due to
higher revenues and lower costs that more than offset the impact of
lower volumes. Enterprise completed construction and put into
service over 9 million barrels of additional storage capacity at
the partnership’s ECHO, EHT and Beaumont facilities since the third
quarter of 2015. These new storage tanks contributed toward a $13
million increase in gross operating margin in the third quarter of
2016 compared to the third quarter of last year for these
facilities.
Enterprise’s South Texas and Eagle Ford Crude Oil Pipeline
Systems reported an aggregate $28 million decrease in gross
operating margin for the third quarter of 2016 compared to the
third quarter of 2015 primarily due to lower volumes. Pipeline
volumes on these systems, net to our interest, were 351 MBPD for
the third quarter of 2016 compared to 449 MBPD for the same quarter
of 2015. Gross operating margin from Enterprise’s crude oil
marketing and related activities decreased $6 million this quarter
compared to the third quarter of 2015.
Natural Gas Pipelines & Services – Gross operating
margin from the partnership’s Natural Gas Pipelines & Services
segment was $179 million for the third quarter of 2016 compared to
$192 million for the third quarter of 2015. Total natural gas
transportation volumes were 12.1 TBtu/d for the third quarter of
2016 compared to 12.4 TBtu/d for the same quarter of last year. The
Texas Intrastate System reported a $16 million decrease in gross
operating margin primarily due to lower revenues attributable to
reduced producer drilling activity in the Eagle Ford and Barnett
Shale. Natural gas pipeline volumes for this system were 4.9 TBtu/d
for the third quarter of 2016 compared to 5.0 TBtu/d for the third
quarter of 2015.
Petrochemical & Refined Products Services – Gross
operating margin for the Petrochemical & Refined Products
Services segment was $172 million for the third quarter of 2016
compared to $192 million for the third quarter of 2015. Total
segment pipeline transportation volumes were 784 MBPD for the third
quarter of 2016 compared to 816 MBPD for the same quarter of
2015.
Enterprise’s refined products pipelines and related services
business reported a 34 percent increase in gross operating margin
for the third quarter of 2016 to $71 million from $53 million for
the third quarter of 2015. Gross operating margin from the TE
Products Pipeline and related terminals increased $14 million
primarily as a result of lower operating expenses. The
partnership’s refined products marine terminal in Beaumont
contributed $9 million to the increase in gross operating margin,
primarily due to higher demand for storage and marine vessel
loading services.
The partnership’s propylene business reported a 23 percent
increase in gross operating margin to $57 million for the third
quarter of 2016 from $47 million for the third quarter of 2015.
This increase was primarily due to higher sales margins, including
those from record propylene exports, and lower maintenance
expenses. The increase was partially offset by pre-commissioning
expenses associated with our propane dehydrogenation plant (“PDH”)
in Mont Belvieu of $7 million for the third quarter of 2016. The
PDH facility is under construction and is expected to begin
commissioning activities in the second quarter of 2017. Propylene
fractionation volumes were 76 MBPD for the third quarter of 2016
compared to 72 MBPD for the third quarter of last year.
Gross operating margin for Enterprise’s octane enhancement and
high-purity isobutylene business was $17 million for the third
quarter of 2016 versus $58 million for the third quarter of last
year. The decrease was primarily due to lower sales margins,
including hedging activities. Sales margins in this business were
impacted in part by higher global inventories of gasoline products.
Total production volumes from these plants were 27 MBPD for the
third quarter of 2016 compared to 20 MBPD for the third quarter of
last year.
Offshore Pipelines & Services – Enterprise closed on
the sale of its offshore Gulf of Mexico business on July 24, 2015.
As a result, the partnership had no contribution to gross operating
margin from these assets in the third quarter of 2016 compared to
$7 million in the third quarter of 2015.
Capitalization
Total debt principal outstanding at September 30, 2016 was $24.2
billion, including $1.5 billion of junior subordinated notes to
which the nationally recognized debt rating agencies ascribe
partial equity content. Approximately $1.0 billion of this debt is
attributable to working capital and restricted cash associated with
our marketing businesses, including capital related to contango
opportunities. This marketing-related working capital and related
debt is expected to decrease monthly through the first quarter of
2017. At September 30, 2016, Enterprise had consolidated liquidity
of $3.5 billion, which was comprised of unrestricted cash on hand
and available borrowing capacity under our revolving credit
facilities.
Total capital spending in the third quarter of 2016 was $621
million, which includes $62 million of sustaining capital
expenditures. For the first nine months of 2016, Enterprise’s
capital spending was $2.6 billion including $179 million of
sustaining capital expenditures. For 2016, we currently expect to
invest approximately $2.8 billion for growth projects and
approximately $250 million for sustaining capital expenditures.
These amounts exclude $1.0 billion that Enterprise paid in July
2016 for the second and final installment payment for the
acquisition of the EFS Midstream assets.
Conference Call to Discuss Third
Quarter 2016 Earnings
Today, Enterprise will host a conference call to discuss third
quarter 2016 earnings. The call will be broadcast live over the
Internet beginning at 9:00 a.m. CT and may be accessed by visiting
the partnership’s website at www.enterpriseproducts.com.
Use of Non-GAAP Financial
Measures
This press release and accompanying schedules include the
non-GAAP financial measures of total gross operating margin,
distributable cash flow and Adjusted EBITDA. The accompanying
schedules provide definitions of these non-GAAP financial measures
and reconciliations to their most directly comparable financial
measure calculated and presented in accordance with GAAP. Our
non-GAAP financial measures should not be considered as
alternatives to GAAP measures such as net income, operating income,
net cash flow provided by operating activities or any other measure
of financial performance calculated and presented in accordance
with GAAP. Our non-GAAP financial measures may not be comparable to
similarly-titled measures of other companies because they may not
calculate such measures in the same manner as we do.
Company Information and Use of
Forward-Looking Statements
Enterprise Products Partners L.P. is one of the largest publicly
traded partnerships and a leading North American provider of
midstream energy services to producers and consumers of natural
gas, NGLs, crude oil, refined products and petrochemicals. Our
services include: natural gas gathering, treating, processing,
transportation and storage; NGL transportation, fractionation,
storage and import and export terminals; crude oil gathering,
transportation, storage and terminals; petrochemical and refined
products transportation, storage and terminals; and a marine
transportation business that operates primarily on the United
States inland and Intracoastal Waterway systems. The partnership’s
assets include approximately 49,000 miles of pipelines; 250 million
barrels of storage capacity for NGLs, crude oil, refined products
and petrochemicals; and 14 billion cubic feet of natural gas
storage capacity.
This press release includes forward-looking statements. Except
for the historical information contained herein, the matters
discussed in this press release are forward-looking statements that
involve certain risks and uncertainties, such as the partnership’s
expectations regarding future results, capital expenditures,
project completions, liquidity and financial market conditions.
These risks and uncertainties include, among other things,
insufficient cash from operations, adverse market conditions,
governmental regulations and other factors discussed in
Enterprise’s filings with the U.S. Securities and Exchange
Commission. If any of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results or
outcomes may vary materially from those expected. The partnership
disclaims any intention or obligation to update publicly or reverse
such statements, whether as a result of new information, future
events or otherwise.
Enterprise Products Partners
L.P.
Exhibit A Condensed Statements of Consolidated Operations
– UNAUDITED ($ in millions, except per
unit amounts)
For the Three Months For the
Nine Months Ended September 30, Ended
September 30, 2016 2015
2016 2015
Revenues
$ 5,920.4 $ 6,307.9 $ 16,543.5 $
20,872.9
Costs and
expenses:
Operating costs and expenses 5,065.7 5,452.6 14,034.8 18,426.5
General and administrative costs 42.0
49.0 121.0
143.2 Total costs and expenses 5,107.7
5,501.6 14,155.8
18,569.7
Equity in income of
unconsolidated affiliates
92.3 103.1
269.8 302.5
Operating
income
905.0 909.4 2,657.5 2,605.7
Other income
(expense):
Interest expense (250.9 ) (243.7 ) (735.6 ) (723.2 ) Other, net
(6.2 ) (2.5 )
(25.5 ) (13.2 ) Total other expense
(257.1 ) (246.2 ) (761.1
) (736.4 )
Income before income
taxes
647.9 663.2 1,896.4 1,869.3 Provision for income taxes (4.8
) (5.5 ) (13.1 )
(4.4 )
Net
income
643.1 657.7 1,883.3 1,864.9
Net income
attributable to noncontrolling interests
(8.5 ) (8.4 )
(29.0 ) (28.5 )
Net income
attributable to limited partners
$ 634.6 $ 649.3 $ 1,854.3
$ 1,836.4
Per unit data (fully
diluted):
Earnings per unit $ 0.30 $ 0.32
$ 0.89 $ 0.92 Average limited
partner units outstanding (in millions) 2,105.5
2,010.5 2,079.8
1,993.3
Supplemental
financial data:
Net cash flow provided by operating activities $ 853.8
$ 689.6 $ 2,699.0
$ 2,591.2 Total debt principal outstanding at end of
period $ 24,163.0 $ 22,497.8
$ 24,163.0 $ 22,497.8
Non-GAAP distributable cash flow (1) $ 978.4 $
2,501.3 $ 3,071.7 $
4,518.5 Non-GAAP Adjusted EBITDA (2) $ 1,258.9
$ 1,309.9 $ 3,900.8
$ 3,932.2 Gross operating margin by segment: NGL
Pipelines & Services $ 703.5 $ 695.5 $ 2,206.3 $ 2,041.3 Crude
Oil Pipelines & Services 254.0 254.6 633.7 704.2 Natural Gas
Pipelines & Services 178.5 192.4 533.6 588.3 Petrochemical
& Refined Products Services 171.6 191.5 501.9 547.4 Offshore
Pipelines & Services -- 7.1
-- 97.5
Total segment gross operating margin (3) 1,307.6
1,341.1
3,875.5 3,978.7 Net adjustment
for shipper make-up rights (4) 4.4
7.5 15.0
6.0 Non-GAAP total gross operating margin (5) $
1,312.0 $ 1,348.6 $
3,890.5 $ 3,984.7 Capital spending:
Capital expenditures, net (6) $ 593.0 $ 988.9 $ 2,449.8 $ 2,619.1
Equity consideration issued for Step 2 of Oiltanking acquisition --
-- -- 1,408.7 Cash used for business combinations, net of cash
received 1,000.0 1,045.1 1,000.0 1,045.1 Investments in
unconsolidated affiliates 27.5 16.6 119.9 130.7 Other investing
activities 0.4 --
0.4 5.3 Total
capital spending, cash and non-cash $ 1,620.9
$ 2,050.6 $ 3,570.1 $
5,208.9
(1)
See Exhibit D for reconciliation to GAAP
net cash flow provided by operating activities.
(2)
See Exhibit E for reconciliation to GAAP
net cash flow provided by operating activities.
(3)
Within the context of this table, total
segment gross operating margin represents a subtotal and
corresponds to measures similarly titled within the financial
statement footnotes provided in our quarterly and annual filings
with the U.S. Securities and Exchange Commission (“SEC”).
(4)
Gross operating margin by segment for NGL
Pipelines & Services and Crude Oil Pipelines & Services
reflects adjustments for non-refundable deferred transportation
revenues relating to the make-up rights of committed shippers on
certain major pipeline projects. These adjustments are included in
managements’ evaluation of segment results. However, these
adjustments are excluded from non-GAAP total gross operating margin
in compliance with recently issued guidance from the SEC.
(5)
See Exhibit F for reconciliation to GAAP
total operating income.
(6)
Capital expenditures for property, plant
and equipment are presented net of contributions in aid of
construction cost.
Enterprise Products Partners
L.P.
Exhibit B
Selected Operating Data – UNAUDITED
For the Three Months For the
Nine Months Ended September 30, Ended
September 30, 2016 2015
2016 2015
Selected operating
data: (1)
NGL Pipelines & Services, net: NGL
pipeline transportation volumes (MBPD) 2,854 2,831 2,933 2,647 NGL
marine terminal volumes (MBPD) 373 324 439 294 NGL fractionation
volumes (MBPD) 791 837 822 819 Equity NGL production (MBPD) (2) 116
129 136 129 Fee-based natural gas processing (MMcf/d) (3) 4,578
5,035 4,857 4,911 Crude Oil Pipelines & Services, net: Crude
oil transportation volumes (MBPD) 1,397 1,535 1,383 1,463 Crude oil
marine terminal volumes (MBPD) 520 551 504 595 Natural Gas
Pipelines & Services, net: Natural gas transportation volumes
(BBtus/d) (4) 12,130 12,387 12,053 12,459 Petrochemical &
Refined Products Services, net: Propylene fractionation volumes
(MBPD) 76 72 75 71 Butane isomerization volumes (MBPD) 113 108 112
90 Standalone DIB processing volumes (MBPD) 85 89 90 79 Octane
additive and related plant production volumes (MBPD) 27 20 19 17
Pipeline transportation volumes, primarily
refined products and petrochemicals (MBPD)
784 816 836 777
Refined products and petrochemicals marine
terminal volumes (MBPD)
354 387 381 362 Offshore Pipelines & Services, net: Natural gas
transportation volumes (BBtus/d) -- 565 -- 587 Crude oil
transportation volumes (MBPD) -- 344 -- 357 Platform natural gas
processing (MMcf/d) -- 82 -- 101 Platform crude oil processing
(MBPD) -- 9 -- 13 Total, net:
NGL, crude oil, refined products and
petrochemical transportation volumes (MBPD)
5,035 5,526 5,152 5,244 Natural gas transportation volumes
(BBtus/d) 12,130 12,952 12,053 13,046 Equivalent transportation
volumes (MBPD) (5) 8,227 8,934 8,324 8,677
NGL, crude oil, refined products and
petrochemical marine terminal volumes (MBPD)
1,247 1,262 1,324 1,251
(1)
Operating rates are reported on a net basis, which takes into
account our ownership interests in certain joint ventures, and
include volumes for newly constructed assets from the related
in-service dates and for recently purchased assets from the related
acquisition dates. (2) Represents the NGL volumes we earn and take
title to in connection with our processing activities. (3) Volumes
reported correspond to the revenue streams earned by our gas
plants. “MMcf/d” means million cubic feet per day. (4) “BBtus/d”
means billion British thermal units per day. (5) Represents total
NGL, crude oil, refined products and petrochemical transportation
volumes plus equivalent energy volumes where 3.8 million British
thermal units (“MMBtus”) of natural gas transportation volumes are
equivalent to one barrel of NGLs transported.
Enterprise Products Partners
L.P.
Exhibit C
Selected Commodity Price Information
Polymer Refinery
Natural Normal Natural Grade
Grade WTI LLS Gas, Ethane,
Propane, Butane, Isobutane, Gasoline,
Propylene, Propylene, Crude Oil, Crude
Oil, $/MMBtu $/gallon
$/gallon $/gallon
$/gallon $/gallon
$/pound $/pound
$/barrel $/barrel (1) (2) (2) (2) (2)
(2) (3) (3) (4) (4)
2015 by quarter: 1st Quarter $2.99 $0.19
$0.53 $0.68 $0.68 $1.10 $0.50 $0.37 $48.63 $52.83 2nd Quarter $2.65
$0.18 $0.46 $0.59 $0.60 $1.26 $0.42 $0.29 $57.94 $62.97 3rd Quarter
$2.77 $0.19 $0.40 $0.55 $0.55 $0.98 $0.33 $0.21 $46.43 $50.17 4th
Quarter $2.27 $0.18 $0.42
$0.60 $0.61 $0.97 $0.31
$0.18 $42.18 $43.54
YTD 2015 Averages $2.67 $0.18
$0.45 $0.61 $0.61 $1.08
$0.39 $0.26 $48.80
$52.38
2016 by quarter: 1st Quarter $2.09 $0.16 $0.38
$0.53 $0.53 $0.76 $0.31 $0.18 $33.45 $35.11 2nd Quarter $1.95 $0.20
$0.49 $0.62 $0.63 $0.96 $0.33 $0.19 $45.59 $47.35 3rd Quarter $2.81
$0.19 $0.47 $0.63
$0.67 $0.98 $0.38
$0.24 $44.94 $46.52
YTD 2016
Averages $2.28 $0.18 $0.45
$0.59 $0.61 $0.90
$0.34 $0.20 $41.33 $43.00
(1) Natural gas prices are based on Henry-Hub
Inside FERC commercial index prices as reported by Platts, which is
a division of McGraw Hill Financial, Inc. (2) NGL prices for
ethane, propane, normal butane, isobutane and natural gasoline are
based on Mont Belvieu Non-TET commercial index prices as reported
by Oil Price Information Service. (3) Polymer-grade propylene
prices represent average contract pricing for such product as
reported by IHS Chemical, a division of IHS Inc. (“IHS Chemical”).
Refinery grade propylene prices represent weighted-average spot
prices for such product as reported by IHS Chemical. (4) Crude oil
prices are based on commercial index prices for West Texas
Intermediate (“WTI”) as measured on the New York Mercantile
Exchange (“NYMEX”) and for Louisiana Light Sweet (“LLS”) as
reported by Platts.
The weighted-average indicative market price for NGLs (based on
prices for such products at Mont Belvieu, Texas, which is the
primary industry hub for domestic NGL production) was $0.49 per
gallon during the third quarter of 2016 versus $0.45 per gallon for
the third quarter of 2015.
Fluctuations in our consolidated revenues and cost of sales
amounts are explained in large part by changes in energy commodity
prices. Energy commodity prices fluctuate for a variety of reasons,
including supply and demand imbalances and geopolitical
tensions.
A change in our consolidated marketing revenues due to lower
energy commodity sales prices may not result in a similar change in
gross operating margin or cash available for distribution, since
our consolidated cost of sales amounts would also change due to
comparable decreases in the purchase prices of the underlying
energy commodities.
Enterprise Products Partners L.P. Exhibit
D Distributable Cash Flow – UNAUDITED
($ in millions)
For the Three Months
For the Nine Months Ended September 30,
Ended September 30, 2016 2015
2016 2015 Net income
attributable to limited partners (GAAP) $ 634.6 $
649.3 $ 1,854.3 $ 1,836.4 Adjustments to GAAP net
income attributable to limited partners to derive non-GAAP
distributable cash flow: Add depreciation, amortization and
accretion expenses 391.9 372.8 1,155.3 1,147.7 Add distributions
received from unconsolidated affiliates 99.0 96.9 333.5 362.4
Subtract equity in income of unconsolidated affiliates (92.3 )
(103.1 ) (269.8 ) (302.5 ) Subtract sustaining capital expenditures
(1) (61.7 ) (84.3 ) (179.4 ) (195.8 )
Add net losses or subtract net gains
attributable to asset sales, insurance recoveries and related
property damage
(8.9 ) 12.3 4.8 14.7 Add cash proceeds from asset sales and
insurance recoveries 16.0 1,531.4 43.9 1,537.3
Add non-cash expense attributable to
changes in fair value of the Liquidity Option Agreement
6.9 4.3 28.0 15.8
Add non-cash expense or subtract benefit
attributable to changes in fair value of derivative instruments
(26.2 ) 2.2 42.1 (7.7 ) Add deferred income tax expense (benefit)
1.0 (1.6 ) 5.3 (13.3 ) Add non-cash asset impairment charges 6.8
26.8 22.0 139.1
Add or subtract other miscellaneous
adjustments to derive non-GAAP distributable cash flow, as
applicable
11.3 (5.7 )
31.7 (15.6 )
Distributable cash flow
(non-GAAP) 978.4 2,501.3 3,071.7 4,518.5 Adjustments to
non-GAAP distributable cash flow to derive GAAP net cash flow
provided by operating activities: Add sustaining capital
expenditures reflected in distributable cash flow 61.7 84.3 179.4
195.8
Subtract cash proceeds from asset sales
and insurance recoveries reflected in distributable cash flow
(16.0 ) (1,531.4 ) (43.9 ) (1,537.3 ) Add or subtract the net
effect of changes in operating accounts, as applicable (155.1 )
(377.2 ) (449.7 ) (627.9 ) Add or subtract miscellaneous non-cash
and other amounts to reconcile non-GAAP distributable cash flow
with GAAP net cash flow provided by operating activities, as
applicable (15.2 ) 12.6
(58.5 ) 42.1
Net cash
flow provided by operating activities (GAAP) $ 853.8
$ 689.6 $ 2,699.0
$ 2,591.2
(1)
Sustaining capital expenditures are capital expenditures (as
defined by GAAP) resulting from improvements to and major renewals
of existing assets. Such expenditures serve to maintain existing
operations but do not generate additional revenues.
Distributable cash flow
Our management compares the distributable cash flow we generate
to the cash distributions we expect to pay our partners. Using this
metric, management computes our distribution coverage ratio.
Distributable cash flow is an important non-GAAP liquidity measure
for our limited partners since it serves as an indicator of our
success in providing a cash return on investment. Specifically,
this liquidity measure indicates to investors whether or not we are
generating cash flows at a level that can sustain or support an
increase in our quarterly cash distributions. Distributable cash
flow is also a quantitative standard used by the investment
community with respect to publicly traded partnerships because the
value of a partnership unit is, in part, measured by its yield,
which is based on the amount of cash distributions a partnership
can pay to a unitholder. The GAAP measure most directly comparable
to distributable cash flow is net cash flow provided by operating
activities.
Enterprise Products Partners
L.P.
Exhibit E
Adjusted EBITDA – UNAUDITED
($ in millions)
For the Three
Months For the Nine Months For the Twelve Months
Ended September 30, Ended September 30,
Ended September 30, 2016
2015 2016 2015
2016 Net income (GAAP) $ 643.1
$ 657.7 $ 1,883.3 $ 1,864.9 $ 2,576.8
Adjustments to GAAP net income to derive
non-GAAP Adjusted EBITDA:
Subtract equity in income of unconsolidated affiliates (92.3 )
(103.1 ) (269.8 ) (302.5 ) (340.9 ) Add distributions received from
unconsolidated affiliates 99.0 96.9 333.5 362.4 433.2 Add interest
expense, including related amortization 250.9 243.7 735.6 723.2
974.2 Add provision for income taxes 4.8 5.5 13.1 4.4 6.2
Add depreciation, amortization and
accretion in costs and expenses
374.8 362.3 1,108.2 1,115.1 1,465.7 Add non-cash asset impairment
charges 6.8 26.8 22.0 139.1 45.5
Add non-cash net losses or subtract net
gains attributable to asset sales, insurance recoveries and related
property damage
(8.9 ) 13.6 4.8 17.5 6.2
Add non-cash expense attributable to
changes in fair value of the Liquidity Option Agreement
6.9 4.3 28.0 15.8 37.6
Add non-cash expense or subtract benefit
attributable to changes in fair value of derivative instruments
(26.2 ) 2.2
42.1 (7.7 ) 31.4
Adjusted EBITDA (non-GAAP) 1,258.9 1,309.9 3,900.8
3,932.2 5,235.9 Adjustments to non-GAAP Adjusted EBITDA to derive
GAAP net cash flow provided by operating activities:
Subtract interest expense, including
related amortization, reflected in Adjusted EBITDA
(250.9 ) (243.7 ) (735.6 ) (723.2 ) (974.2 )
Subtract provision for income taxes
reflected in Adjusted EBITDA
(4.8 ) (5.5 ) (13.1 ) (4.4 ) (6.2 )
Subtract distributions received for return
of capital from unconsolidated affiliates
(12.5 ) -- (51.9 ) -- (51.9 )
Add deferred income tax expense or
subtract benefit
1.0 (1.6 ) 5.3 (13.3 ) (2.0 )
Add or subtract the net effect of changes
in operating accounts, as applicable
(155.1 ) (377.2 ) (449.7 ) (627.9 ) (145.1 )
Add miscellaneous non-cash and other
amounts to reconcile non-GAAP Adjusted EBITDA with GAAP net cash
flow provided by operating activities
17.2 7.7
43.2 27.8
53.7
Net cash flow provided by operating
activities (GAAP) $ 853.8 $ 689.6
$ 2,699.0 $ 2,591.2
$ 4,110.2
Adjusted EBITDA
Adjusted EBITDA is commonly used as a supplemental financial
measure by our management and external users of our financial
statements, such as investors, commercial banks, research analysts
and rating agencies, to assess the financial performance of our
assets without regard to financing methods, capital structures or
historical cost basis; the ability of our assets to generate cash
sufficient to pay interest and support our indebtedness; and the
viability of projects and the overall rates of return on
alternative investment opportunities.
Since Adjusted EBITDA excludes some, but not all, items that
affect net income or loss and because these measures may vary among
other companies, the Adjusted EBITDA data presented in this press
release may not be comparable to similarly titled measures of other
companies. The GAAP measure most directly comparable to Adjusted
EBITDA is net cash flow provided by operating activities.
Enterprise Products Partners
L.P.
Exhibit F
Total Gross Operating Margin – UNAUDITED
($ in millions)
For the Three
Months For the Nine Months Ended September 30,
Ended September 30, 2016
2015 2016 2015
Total gross operating margin (non-GAAP) $ 1,312.0
$ 1,348.6 $ 3,890.5 $ 3,984.7
Adjustments to reconcile non-GAAP total
gross operating margin to GAAP total operating income:
Subtract depreciation, amortization and
accretion expense amounts not reflected in gross operating
margin
(367.1 ) (351.1 ) (1,085.6 ) (1,082.0 )
Subtract non-cash asset impairment charges
included in operating expenses not reflected in gross operating
margin
(6.8 ) (26.8 ) (21.6 ) (139.1 )
Add net gains or subtract net losses
attributable to asset sales, insurance recoveries and related
property damage not reflected in gross operating margin
8.9 (12.3 ) (4.8 ) (14.7 )
Subtract general and administrative costs
not reflected in gross operating margin
(42.0 ) (49.0 )
(121.0 ) (143.2 )
Total operating income
(GAAP) $ 905.0 $ 909.4
$ 2,657.5 $ 2,605.7
Total gross operating margin
We evaluate segment performance based on our financial measure
of gross operating margin. Gross operating margin is an important
performance measure of the core profitability of our operations and
forms the basis of our internal financial reporting. We believe
that investors benefit from having access to the same financial
measures that our management uses in evaluating segment
results.
The term “total gross operating margin” represents GAAP
operating income exclusive of (i) depreciation, amortization and
accretion expenses, (ii) impairment charges, (iii) gains and losses
attributable to asset sales, insurance recoveries and related
property damage and (iv) general and administrative costs. Total
gross operating margin includes equity in the earnings of
unconsolidated affiliates, but is exclusive of other income and
expense transactions, income taxes, the cumulative effect of
changes in accounting principles and extraordinary charges. Total
gross operating margin is presented on a 100 percent basis before
any allocation of earnings to noncontrolling interests. The GAAP
financial measure most directly comparable to total gross operating
margin is operating income.
Total gross operating margin excludes amounts attributable to
shipper make-up rights as described in footnote (4) to Exhibit A of
this press release.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161027005386/en/
Enterprise Products Partners L.P.Randy Burkhalter,
713-381-6812Vice President, Investor RelationsorRick Rainey,
713-381-3635Vice President, Media Relations
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