Enterprise Management to Recommend 5.2% Distribution Growth for 2016; Affiliates of GP to Purchase $200 Million of Common Uni...
January 04 2016 - 7:15AM
Business Wire
Enterprise Products Partners L.P. (NYSE:EPD) today announced
that its management plans to recommend to the board of its general
partner distributions totaling $1.61 per unit with respect to 2016,
which, if approved by the board, would represent a 5.2 percent
increase compared to a total of $1.53 per unit of distributions
declared with respect to 2015.
Distributions Distributions Declared
Recommended $/unit 2015 2016* First Quarter $ 0.375 $ 0.395
Second Quarter $ 0.380 $ 0.400 Third Quarter $ 0.385 $ 0.405 Fourth
Quarter $ 0.390 $ 0.410 Total $ 1.530 $ 1.610
* Subject to approval by the board of directors
of Enterprise’s general partner.
Enterprise also announced that affiliates of Enterprise Products
Company and its general partner (collectively, “EPCO”) have
indicated their intention to purchase a total of $200 million of
Enterprise common units during the first quarter of 2016 through
the partnership’s distribution reinvestment plan and/or the
partnership’s at-the-market (“ATM”) equity issuance program.
Enterprise will use the proceeds from these purchases to fund a
portion of its growth capital investments and for general company
purposes. EPCO owns approximately 34 percent of Enterprise’s common
units.
“Historically, it has been Enterprise’s practice to not provide
guidance with respect to distribution growth; however, due to
recent actions by some of our midstream peers to reduce or freeze
their dividends/ distributions, we believe it is important to
provide our investors with visibility into management’s planned
recommendations for Enterprise’s distribution growth for 2016,”
said A.J. “Jim” Teague, chief executive officer of Enterprise’s
general partner. “While we are entering the second year of a
commodity price cycle, which will provide additional challenges as
well as opportunities, we believe our partnership model provides us
the flexibility to continue to provide our partners with
distribution growth in 2016. This model includes a simple company
structure, a supportive general partner, no incentive distribution
rights, focus on fee-based cash flows, willingness to sell non-core
assets to reinvest in projects that integrate with our value chain
and have better returns on capital, moderate distribution growth,
solid distribution coverage and reasonable use of financial
leverage.”
“Our distribution growth is supported by approximately $6.0
billion of new projects that will begin commercial operations and
generate new sources of cash flow during 2016. These projects
include our recently completed expansion of the partnership’s LPG
export facility on the Houston Ship Channel and the final phase of
the Aegis ethane pipeline. One of our long-held financial goals has
been to balance consistent distribution growth for our partners
with the retention of distributable cash flow to reinvest in the
partnership. We expect to successfully execute on this goal again
in 2016,” stated Teague.
“EPCO and our general partner continue to be supportive of
Enterprise’s growth,” stated Teague. “From 2010 through 2015, EPCO
purchased approximately $635 million of common units directly from
the partnership to provide capital for growth projects. In 2010,
EPCO also facilitated the elimination of our general partner
incentive distribution rights in a non-taxable transaction for our
partners. EPCO’s financial strength and willingness to reinvest in
the partnership continues to provide Enterprise with additional
financial flexibility.”
“EPCO is pleased to increase our investment in Enterprise by
$200 million in the first quarter of 2016,” stated Randa Duncan
Williams, chairman of EPCO. “We will also evaluate the purchase of
additional common units during 2016 to further support Enterprise’s
growth. We are confident in the partnership’s strong financial
position, innovation and prospects for future distribution
growth.”
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy the common units described herein
or any other securities. Each of the anticipated purchases and
sales described above would be made only by means of a prospectus
and related prospectus supplement, which are part of an effective
registration statement.
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; 225 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” as
defined by the Securities and Exchange Commission. All statements,
other than statements of historical fact, included herein that
address activities, events, developments or transactions that
Enterprise expects, believes or anticipates will or may occur in
the future, including anticipated benefits and other aspects of
such activities, events, developments or transactions, are
forward-looking statements. These forward-looking statements are
subject to risks and uncertainties that may cause actual results to
differ materially, including required board approvals or approvals
by regulatory agencies, the possibility that the anticipated
benefits from such activities, events, developments or transactions
cannot be fully realized, the possibility that costs or
difficulties related thereto will be greater than expected, the
impact of competition and other risk factors included in the
reports filed with the Securities and Exchange Commission by
Enterprise. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of their
dates. Except as required by law, Enterprise does not intend to
update or revise its forward-looking statements, whether as a
result of new information, future events or otherwise.
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version on businesswire.com: http://www.businesswire.com/news/home/20160104005298/en/
Enterprise Products Partners L.P.Randy Burkhalter, 713-381-6812
or 866-230-0745Investor RelationsorRick Rainey, 713-381-3635Media
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