Enterprise Products Partners L.P. (“Enterprise”) (NYSE: EPD)
today announced its financial results for the three months ended
March 31, 2017.
First Quarter 2017
Highlights
Three months ended
March 31,
2017 2016 ($ in millions, except per unit amounts)
Operating income $ 1,032 $ 916 Net income $ 771 $ 670
Fully diluted earnings per unit $ 0.36 $ 0.32 Net cash flow
provided by operating activities (1) $ 854 $ 900 Total gross
operating margin (2) $ 1,469 $ 1,324 Adjusted EBITDA (2) $ 1,414 $
1,327 Distributable cash flow (2) $ 1,129 $ 1,054 (1)
Net cash flow provided by operating activities includes the impact
of the timing of cash receipts and payments related to operations.
For the first quarters of 2017 and 2016, the net effect of changes
in operating accounts, which are a component of net cash flow
provided by operating activities, were reductions of $310 million
and $186 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.
- Net income for the first quarter of
2017 was $771 million compared to $670 million for the first
quarter of 2016. Net income attributable to limited partners was
$761 million, or $0.36 per unit on a fully diluted basis for the
first quarter of 2017 compared to $661 million or $0.32 per unit on
a fully diluted basis for the first quarter of 2016.
- Enterprise increased its cash
distribution with respect to the first quarter of 2017 by 5.1
percent over the first quarter of 2016 to $0.415 per unit, or $1.66
per unit on an annualized basis. This is the 51st consecutive
quarterly increase and the 60th increase since the partnership’s
initial public offering in 1998. This distribution will be paid on
May 8, 2017 to unitholders of record as of the close of business on
April 28, 2017.
- Enterprise generated distributable cash
flow of $1.1 billion for the first quarter of 2017, which provided
approximately 1.3 times coverage of the $0.415 per unit
distribution. The partnership retained $238 million of
distributable cash flow for the first quarter of 2017, providing
financial flexibility to fund growth capital projects, reduce debt
and decrease the need to issue additional equity.
- First Quarter
Volume Highlights
Three months
ended
March 31,
2017 2016
NGL, crude oil, refined products &
petrochemical
pipeline volumes (million
BPD)
5.4
5.2
Marine terminal volumes (million BPD) 1.4 1.3 Natural gas pipeline
volumes (TBtu/d) 11.4 11.9 NGL fractionation volumes (MBPD) 799 836
Fee-based natural gas processing volumes (Bcf/d) 4.5 4.8 Equity NGL
production volumes (MBPD) 150
145
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.
- Enterprise made capital investments of
approximately $460 million during the first quarter of 2017,
including $48 million of sustaining capital expenditures.
“Enterprise reported strong operational and financial results
for the first quarter of 2017,” said Jim Teague, chief executive
officer of Enterprise’s general partner. “These results were driven
by record liquid pipeline and marine terminal volumes. During the
quarter, we benefited from modifications to our octane enhancement
facility that were completed in 2016 to enable the facility to
operate at higher utilization rates. Our results were also driven
by contributions from our propylene fractionation business, new
assets and the ramp up in commitments on assets such as our ATEX
ethane pipeline and ethane export terminal. Higher NGL and crude
oil prices led to higher margins in our commodity-sensitive
businesses.”
Teague added, “this operational performance enabled the
partnership to generate record total gross operating margin and
distributable cash flow, excluding proceeds from sale of assets.
This supported a 5.1 percent increase in our cash distribution
compared to the first quarter of 2016 and provided approximately
1.3 times coverage of the cash distribution. We plan to reinvest
$238 million of retained distributable cash flow in the
partnership. Our credit ratios also improved due to the increase in
total gross operating margin and a decrease in debt used for
working capital purposes.”
“Due to prolific drilling activity and production growth in the
Permian basin and interest from customers, we elected to accelerate
the construction of the Midland-to-Sealy crude oil pipeline and our
ninth NGL fractionator at Mont Belvieu. We also sanctioned our Shin
Oak NGL pipeline to transport growing volumes of NGLs from the
Permian Basin to our Mont Belvieu complex. We now have a total of
$8.4 billion of growth projects under construction scheduled to be
completed this year through 2020. We are in the process of
completing construction and beginning commissioning activities at
our largest growth project, the propane dehydrogenation (“PDH”)
plant at Mont Belvieu. Our commercial team continues to progress on
several other projects that are in varying stages of development,”
said Teague.
“The U.S. energy industry is finally entering the much awaited
multi-year period of growing demand, both domestically and abroad,
for U.S. NGLs, natural gas and crude oil. Over the next three
years, the U.S. petrochemical industry is scheduled to increase its
domestic ethylene production capacity by 40 percent, of which
almost half will be completed in 2017. These new facilities will
use ethane produced from U.S. shale as feedstock, totaling
approximately 675,000 barrels per day, or 60 percent growth in
ethane demand. In addition, by the end of 2017, Enterprise’s ethane
export terminal will be handling approximately 125,000 barrels per
day destined for ethylene crackers in the United Kingdom, Europe
and Asia.”
“As it relates to natural gas demand, exports of U.S. natural
gas and LNG are expected to grow by 73 percent, or 7 Bcf/d, over
the next three years as new pipelines and LNG facilities are
completed. In addition, the U.S. power industry is slated to
increase natural gas demand for power generation by 7 percent, or
approximately 2 Bcf/d. Finally, in terms of U.S. crude oil and
condensate, some of the highest valued markets for these products
are international markets in Asia and Europe. As producers in the
energy industry emerge from a challenging business cycle, we
believe Enterprise’s integrated midstream system is well positioned
to benefit from this extended period of demand growth coupled with
the expected increase in U.S. production as rig counts rebound,”
concluded Teague.
Review of First Quarter 2017
Results
NGL Pipelines & Services – Gross operating margin
from the NGL Pipelines & Services segment increased 9 percent
to a record $856 million for the first quarter of 2017 from $784
million for the first quarter of 2016.
Gross operating margin from Enterprise’s natural gas processing
business and related NGL marketing activities increased $44
million, or 19 percent, to $278 million for the first quarter of
2017, compared to $234 million for the first quarter of 2016. Gross
operating margin from the partnership’s natural gas processing
plants increased approximately $21 million, primarily due to higher
processing margins, including the impact of hedging activities.
Enterprise’s NGL marketing activities contributed $23 million to
the increase in gross operating margin, primarily due to higher
sales volumes. Enterprise’s natural gas processing plants reported
fee-based processing volumes of 4.5 Bcf/d in the first quarter of
2017 compared to 4.8 Bcf/d in the first quarter of 2016. Decreases
in fee-based processing volumes from our South Texas and Meeker
natural gas processing plants more than offset an increase from our
South Eddy plant in the Delaware Basin, which began operations in
May 2016. The partnership’s equity NGL production increased to 150
MBPD this quarter from 145 MBPD for the first quarter of 2016. An
increase in equity NGL production from the South Eddy and Rocky
Mountain plants was partially offset by lower equity NGL volumes
extracted by our plants in South Texas.
Gross operating margin from the partnership’s NGL pipelines and
storage business increased $28 million, or 7 percent, to $455
million for the first quarter of 2017. NGL pipeline transportation
volumes were a record 3.2 million BPD for the first quarter of 2017
compared to 3.0 million BPD for the same quarter of 2016. The
partnership’s total NGL marine terminal volumes were a record 569
MBPD for the first quarter of 2017 compared to 456 MBPD for the
first quarter of 2016.
Higher fees from the partnership’s Mont Belvieu NGL and related
product storage business led to a $16 million increase in gross
operating margin this quarter. Enterprise’s LPG export and ethane
export terminals on the Houston Ship Channel and a related pipeline
reported a combined $14 million increase in gross operating margin
due to higher volumes. Volumes at our LPG export terminal increased
53 MBPD this quarter compared to the same quarter in 2016, and we
loaded 58 MBPD of ethane during the first quarter of 2017.
Transportation volumes on the related Houston Ship Channel Pipeline
System increased 147 MBPD quarter-to-quarter.
Enterprise’s ATEX and Aegis ethane pipelines reported a $9
million increase in gross operating margin for the first quarter of
2017 compared to the first quarter of 2016, primarily due to a 31
MBPD increase in transportation volumes. Committed volumes under
long-term contracts on ATEX increased to 116 MBPD for 2017 from 104
MBPD in 2016. Committed volumes are 131 MBPD under these contracts
for 2018.
Partially offsetting these increases in gross operating margin
was a $4 million decrease in gross operating margin from the South
Texas NGL Pipeline System, primarily due to reduced producer
activity in the Eagle Ford.
Enterprise’s NGL fractionation business reported gross operating
margin of $123 million for each of the first quarters of 2017 and
2016. Total NGL fractionation volumes were 799 MBPD this quarter
compared to 836 MBPD for the same quarter in 2016.
Crude Oil Pipelines & Services – Gross operating
margin from the partnership’s Crude Oil Pipelines & Services
segment increased 31 percent to $265 million for the first quarter
of 2017 from $202 million for the first quarter of 2016. Total
crude oil pipeline volumes were 1.4 million BPD for each of the
first quarters of 2017 and 2016. Total crude oil marine terminal
volumes were 475 MBPD for the first quarter of this year compared
to 479 MBPD for the first quarter of last year.
Gross operating margin from Enterprise’s crude oil marketing and
related activities increased $56 million in the first quarter of
2017 compared to the first quarter of 2016. Approximately $33
million of this increase is associated with the non-cash,
mark-to-market valuation on financial instruments related to
blending activities. The partnership had $20 million of
mark-to-market gains in the first quarter of 2017 versus $13
million of mark-to-market losses in the first quarter of 2016. The
remainder of the $56 million increase in gross operating margin is
primarily due to an increase in sales margins from crude oil
marketing activities associated with our firm capacity on the
Seaway Pipeline.
The partnership’s West Texas Pipeline System reported an $11
million increase in gross operating margin for the first quarter of
2017 compared to the first quarter of 2016 on a 17 MBPD increase in
transportation volumes between the two periods.
Enterprise’s South Texas Crude Oil Pipeline System reported an
$11 million decrease in gross operating margin for the first
quarter of 2017 compared to the first quarter of 2016, primarily
due to lower volumes. Pipeline volumes decreased by 62 MBPD to 176
MBPD for the first quarter of 2017 compared to the same quarter of
last year.
Natural Gas Pipelines & Services – Enterprise’s
Natural Gas Pipelines & Services segment reported gross
operating margin of $171 million for the first quarter of 2017
compared to $178 million for the first quarter of 2016. Total
natural gas transportation volumes were 11.4 TBtu/d for the first
quarter of 2017 compared to 11.9 TBtu/d for the first quarter of
2016.
The Texas Intrastate system reported gross operating margin of
$74 million for the first quarter of 2017 compared to $85 million
for the first quarter of 2016. This decrease was primarily due to
lower average fees and volumes in the first quarter of 2017
compared to the first quarter of 2016. Natural gas pipeline volumes
for this system were 4.3 TBtu/d this quarter compared to 4.9 TBtu/d
for the same quarter of last year.
The Jonah Gathering System reported a $7 million decrease in
gross operating margin for the first quarter of 2017 compared to
the same quarter of last year, primarily due to lower
transportation volumes and fees.
The partnership’s Permian Basin Gathering System reported an $8
million increase in gross operating margin for the first quarter of
2017 from the first quarter of last year, attributable to increased
producer drilling activity across the Permian Basin. This system
delivers natural gas to the two new processing plants Enterprise
placed into service in 2016.
Petrochemical & Refined Products Services – Gross
operating margin for the Petrochemical & Refined Products
Services segment increased 18 percent to $182 million for the first
quarter of 2017 from $155 million for the first quarter of 2016.
Total segment pipeline transportation volumes were 827 MBPD for the
first quarter of 2017 compared to 852 MBPD for the first quarter of
last year. Refined products and petrochemical marine terminal
volumes were 399 MBPD for the first quarter of 2017 compared to 347
MBPD for the same quarter of last year.
Gross operating margin from Enterprise’s octane enhancement and
high-purity isobutylene business increased $29 million for the
first quarter of 2017 compared to the first quarter of 2016,
primarily due to higher volumes. In the first half of 2016,
modifications to the octane enhancement facility were completed to
mitigate the need for lengthy annual turnarounds. With these
improvements, the facility is now expected to have planned
turnarounds, excluding catalyst replacements, once every three
years as opposed to the historical need for annual turnarounds.
Total octane enhancement and high-purity isobutylene plant
production was 20 MBPD for the first quarter of 2017 compared to 10
MBPD for the same quarter of 2016.
The partnership’s propylene business reported a $17 million
increase in gross operating margin to $69 million for the first
quarter of 2017 compared to $52 million for the first quarter of
last year. This increase in gross operating margin is primarily due
to higher propylene sales margins and volumes and higher propylene
fractionation fees at the Mont Belvieu plants. Propylene
fractionation volumes increased 16 percent to 80 MBPD this quarter
from 69 MBPD for the first quarter of last year. Gross operating
margin for this business includes $8 million of pre-commissioning
expenses associated with the PDH facility in the first quarter of
2017, which is expected to begin operations by mid-2017.
Enterprise’s refined products pipelines and related services
business reported gross operating margin of $77 million for the
first quarter of 2017 compared to $87 million for the first quarter
of 2016. This decrease in gross operating margin was primarily due
to lower transportation volumes and fees on the TE Products
Pipeline.
Gross operating margin for Enterprise’s butane isomerization and
related operations decreased $5 million, primarily due to lower
butane isomerization volumes, which were 92 MBPD for the first
quarter of 2017 compared to 110 MBPD for the first quarter of 2016.
One of the partnership’s three butane isomerization towers had 26
days of unplanned downtime during the first quarter of 2017, which
contributed to the decrease in volumes.
Capitalization
Total debt principal outstanding at March 31, 2017 was $23.6
billion, including $1.5 billion of junior subordinated notes to
which the nationally recognized debt rating agencies ascribe
partial equity content. At March 31, 2017, Enterprise had
consolidated liquidity of $4.1 billion, which was comprised of
unrestricted cash on hand and available borrowing capacity under
our revolving credit facilities.
Total capital spending in the first quarter of 2017 was $460
million, which included $48 million of sustaining capital
expenditures. For 2017, we currently expect to invest in the range
of $2.7 billion to $3.0 billion for growth capital projects,
including $189 million for the Azure acquisition, and approximately
$250 million for sustaining capital expenditures.
Conference Call to Discuss First
Quarter 2017 Earnings
Enterprise will host a conference call today to discuss first
quarter 2017 earnings. The call will be broadcast live over the
Internet beginning at 9:00 a.m. CT and may be accessed by visiting
the company’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 export and import terminals; crude oil gathering,
transportation, storage and export and import terminals;
petrochemical and refined products transportation, storage, export
and import terminals and related services; and a marine
transportation business that operates primarily on the United
States inland and Intracoastal Waterway systems. The partnership’s
assets include approximately 49,300 miles of pipelines; 260 million
barrels of storage capacity for NGLs, crude oil, refined products
and petrochemicals; and 14 Bcf 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
Ended March 31,
2017 2016
Revenues
$ 7,320.4 $ 5,005.3
Costs and
expenses:
Operating costs and expenses 6,333.2 4,146.9 General and
administrative costs 50.4 43.9
Total costs and expenses 6,383.6
4,190.8
Equity in income of
unconsolidated affiliates
94.8 101.1
Operating
income
1,031.6 915.6
Other income
(expense):
Interest expense (249.3 ) (240.6 ) Other, net (5.3 )
3.6 Total other expense (254.6 )
(237.0 )
Income before income
taxes
777.0 678.6 Provision for income taxes (6.0 )
(8.4 )
Net
income
771.0 670.2
Net income
attributable to noncontrolling interests
(10.3 ) (9.0 )
Net income
attributable to limited partners
$ 760.7 $ 661.2
Per unit data (fully
diluted):
Earnings per unit $ 0.36 $ 0.32 Average
limited partner units outstanding (in millions) 2,134.9
2,040.5
Supplemental
financial data:
Net cash flow provided by operating activities $ 854.0
$ 899.7 Total debt principal outstanding at
end of period $ 23,624.8 $ 22,946.4
Non-GAAP distributable cash flow (1) $ 1,128.6
$ 1,053.6 Non-GAAP Adjusted EBITDA (2) $ 1,414.4
$ 1,327.2 Gross operating margin by
segment: NGL Pipelines & Services $ 856.0 $ 783.7 Crude Oil
Pipelines & Services 264.6 202.3 Natural Gas Pipelines &
Services 170.9 177.7 Petrochemical & Refined Products Services
181.8 154.8 Total segment
gross operating margin (3) 1,473.3 $ 1,318.5 Net adjustment for
shipper make-up rights (4) (4.2 ) 5.8
Non-GAAP total gross operating margin (5) $ 1,469.1
$ 1,324.3 Capital spending: Capital
expenditures, net (6) $ 430.4 $ 995.0 Investments in unconsolidated
affiliates 13.7 70.4 Other investing activities 16.0
-- Total capital spending $ 460.1
$ 1,065.4 (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
Ended March 31,
2017 2016
Selected operating
data: (1)
NGL Pipelines & Services, net: NGL pipeline
transportation volumes (MBPD) 3,225 2,954 NGL marine terminal
volumes (MBPD) 569 456 NGL fractionation volumes (MBPD) 799 836
Equity NGL production (MBPD) (2) 150 145 Fee-based natural gas
processing (MMcf/d) (3) 4,489 4,781 Crude Oil Pipelines &
Services, net: Crude oil pipeline transportation volumes (MBPD)
1,356 1,393 Crude oil marine terminal volumes (MBPD) 475 479
Natural Gas Pipelines & Services, net: Natural gas pipeline
transportation volumes (BBtus/d) (4) 11,429 11,895 Petrochemical
& Refined Products Services, net: Propylene fractionation
volumes (MBPD) 80 69 Butane isomerization volumes (MBPD) 92 110
Standalone DIB processing volumes (MBPD) 83 96 Octane additive and
related plant production volumes (MBPD) 20 10
Pipeline transportation volumes, primarily
refined products
and petrochemicals
(MBPD)
827 852
Refined products and petrochemicals marine
terminal volumes
(MBPD)
399 347 Total, net:
NGL, crude oil, petrochemical and refined
products
pipeline transportation
volumes (MBPD)
5,408 5,199 Natural gas pipeline transportation volumes (BBtus/d)
11,429 11,895 Equivalent pipeline transportation volumes (MBPD) (5)
8,416 8,329
NGL, crude oil, refined products and
petrochemical
marine terminal volumes
(MBPD)
1,443 1,282
(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)
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 4th Quarter $ 2.98
$ 0.24 $ 0.58 $
0.83 $ 0.90 $ 1.08
$ 0.36 $ 0.24
$ 49.29 $ 50.53
YTD 2016
Averages $ 2.46 $ 0.20
$ 0.48 $ 0.65 $
0.68 $ 0.94 $ 0.34
$ 0.21 $ 43.32
$ 44.88
2017 by quarter:
1st Quarter
$ 3.32 $ 0.23 $ 0.71
$ 0.98 $ 0.94
$ 1.10 $ 0.47
$ 0.32 $ 51.91 $
53.52 (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 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 $0.66 per
gallon during the first quarter of 2017 versus $0.40 per gallon for
the first quarter of 2016.
Fluctuations in our consolidated revenues and cost of sales
amounts are explained in large part by changes in energy commodity
prices. Energy commodity prices fluctuate for a variety of reasons,
including supply and demand imbalances and geopolitical
tensions.
A change in our consolidated marketing revenues due to lower
energy commodity sales prices may not result in a similar change in
gross operating margin or cash available for distribution, since
our consolidated cost of sales amounts would also change due to
comparable decreases in the purchase prices of the underlying
energy commodities.
Enterprise Products Partners L.P.
Exhibit D Distributable Cash Flow –
UNAUDITED ($ in millions)
For the Three Months
Ended March 31,
2017 2016 Net income attributable to
limited partners (GAAP) $ 760.7 $ 661.2
Adjustments to GAAP net income
attributable to limited partners to derive non-GAAP
distributable cash flow:
Add depreciation, amortization and accretion expenses 402.3 382.1
Add distributions received from unconsolidated affiliates 102.5
115.8 Subtract equity in income of unconsolidated affiliates (94.8
) (101.1 ) Subtract sustaining capital expenditures (1) (48.0 )
(59.3 ) Add net losses or subtract net gains attributable to asset
sales (0.3 ) 4.9 Add cash proceeds from asset sales 2.0 13.4
Add non-cash expense or subtract benefit
attributable to changes in fair
value of the Liquidity Option
Agreement
5.5 (2.2 )
Add non-cash expense or subtract benefit
attributable to changes in
fair value of derivative
instruments
(20.3 ) 20.1 Add deferred income tax expense 0.1 4.1 Add non-cash
asset impairment and related charges 11.2 1.7
Add or subtract other miscellaneous
adjustments to derive non-GAAP
distributable cash flow, as
applicable
7.7 12.9
Distributable
cash flow (non-GAAP) 1,128.6 1,053.6
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
48.0 59.3 Subtract cash proceeds from asset sales reflected in
distributable cash flow (2.0 ) (13.4 ) Add or subtract the net
effect of changes in operating accounts, as applicable (310.4 )
(186.4 )
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
(10.2 ) (13.4 )
Net cash flow
provided by operating activities (GAAP) $ 854.0
$ 899.7 (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 Twelve
Months Ended
March 31,
For the Three Months
Ended March 31,
2017 2016 2017
Net income (GAAP) $ 771.0 $ 670.2 $ 2,653.8
Adjustments to GAAP net income to derive non-GAAP Adjusted EBITDA:
Subtract equity in income of unconsolidated affiliates (94.8 )
(101.1 ) (355.7 ) Add distributions received from unconsolidated
affiliates 102.5 115.8 438.2 Add interest expense, including
related amortization 249.3 240.6 991.3 Add provision for income
taxes 6.0 8.4 21.0 Add depreciation, amortization and accretion in
costs and expenses 384.3 367.1 1,504.1 Add non-cash asset
impairment and related charges 11.2 1.7 63.0 Add non-cash net
losses or subtract net gains attributable to asset sales (0.3 ) 6.6
(9.4 )
Add non-cash expense or subtract benefit
attributable to changes in fair
value of the Liquidity Option
Agreement
5.5 (2.2 ) 32.2
Add losses or subtract gains attributable
to unrealized changes
in the fair market value of
derivative instruments
(20.3 ) 20.1
4.6
Adjusted EBITDA (non-GAAP) 1,414.4 1,327.2
5,343.1
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
(249.3 ) (240.6 ) (991.3 )
Subtract provision for income taxes
reflected in
Adjusted EBITDA
(6.0 ) (8.4 ) (21.0 )
Subtract distributions received for return
of capital from
unconsolidated affiliates
(12.0 ) (9.1 ) (73.9 ) Add deferred income tax expense 0.1 4.1 2.6
Add or subtract the net effect of changes
in operating accounts, as
applicable
(310.4 ) (186.4 ) (304.9 )
Add or subtract miscellaneous non-cash and
other amounts to reconcile
non-GAAP Adjusted EBITDA with
GAAP net cash flow provided by
operating activities
17.2 12.9
66.5
Net cash flow provided by operating
activities (GAAP) $ 854.0 $ 899.7
$ 4,021.1
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 Gross Operating
Margin – UNAUDITED ($ in
millions)
For the Three Months
Ended March 31,
2017 2016 Total gross operating
margin (non-GAAP) $ 1,469.1 $ 1,324.3
Adjustments to reconcile non-GAAP gross
operating margin to
GAAP operating income:
Subtract depreciation, amortization and
accretion expense
amounts not reflected in gross
operating margin
(376.2 ) (358.2 )
Subtract non-cash asset impairment charges
not reflected in gross
operating margin
(11.2 ) (1.7 )
Add net gains or subtract net losses
attributable to asset sales
not reflected in gross
operating margin
0.3 (4.9 )
Subtract general and administrative costs
not reflected in
gross operating margin
(50.4 ) (43.9 )
Operating income
(GAAP) $ 1,031.6 $ 915.6
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/20170502005326/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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