Enterprise Products Partners L.P. (“Enterprise”) (NYSE:EPD)
today announced its financial results for the three months and year
ended December 31, 2014.
For the year ended 2014, Enterprise reported a record $5.3
billion in gross operating margin, a 9.7 percent increase over
2013. Distributable cash flow increased to $4.1 billion for 2014,
an 8.8 percent increase compared to 2013. Distributions declared
with respect to 2014 were $1.45 per unit, a 5.8 percent increase
compared to 2013. Distributable cash flow for 2014 provided 1.5
times coverage of the distributions declared with respect to 2014
and enabled Enterprise to retain $1.4 billion of distributable cash
flow to reinvest in the growth of the partnership.
“Enterprise reported another record year in 2014,” stated
Michael A. Creel, chief executive officer of Enterprise’s general
partner. “Our results were driven by volume growth in our fee-based
businesses. Enterprise reported record volumes of 5.3 million
barrels per day for its NGL, crude oil, refined products and
petrochemical pipelines, 824 thousand barrels per day for its NGL
fractionators and 4.8 billion cubic feet per day of fee-based
natural gas processing volumes for 2014.”
“Our successes included the completion of $4.1 billion of
organic growth projects that began commercial operations and
contributed new sources of cash flow during 2014. These projects
include our ATEX, Front Range and Seaway loop pipelines, as well as
the first segment of our Aegis ethane pipeline. We also developed
new projects that are currently under construction such as our
ethane export terminal and South Eddy natural gas gathering and
processing facilities,” said Creel.
“Another significant accomplishment was our $4.6 billion
acquisition of general partner and limited partner interests in
Oiltanking Partners, L.P. This transaction extends and broadens
Enterprise’s midstream services business by enhancing the
partnership’s access to waterborne markets and increases its crude
oil and petroleum products storage capacity. Our ownership in
Oiltanking Partners provides new avenues for growth and secures
marine terminal assets that are important to several of our
businesses,” stated Creel.
“As we begin 2015, the energy sector is entering another
commodity price cycle. We believe that Enterprise is well
positioned to manage, adapt and prosper through this cycle. Our
businesses are diversified and primarily fee-based. We enter 2015
with financial flexibility: $4.2 billion of liquidity; leverage
consistent with our BBB+/Baa1 investment grade debt ratings; and
healthy distribution coverage. We have over $6 billion of projects
that will begin operations over the next two years and support
continued distribution growth,” concluded Creel.
Fourth Quarter and Full Year 2014
Highlights
In August 2014, Enterprise completed a two-for-one split of its
common units. All comparative earnings per unit and other
unit-related information contained in this press release are
presented on a post-split basis. Enterprise acquired the general
partner and approximately 66 percent of the limited partner
interests in Oiltanking Partners, L.P. (“Oiltanking Partners”,
NYSE:OILT) on October 1, 2014. As a result of our acquisition of
the general partner of Oiltanking Partners, Enterprise’s
consolidated results for the fourth quarter of 2014 include those
of Oiltanking Partners.
Three months ended
Year ended
December 31,
December 31,
2014 2013 2014 2013 ($ in millions, except per
unit amounts) Gross operating margin (1) (2) $ 1,358 $ 1,291 $
5,287 $ 4,818 Net income (3) (4) (5) $ 681 $ 706 $ 2,834 $ 2,607
Fully diluted earnings per unit (3) (4) (5) $ 0.34 $ 0.37 $ 1.47 $
1.41 Adjusted EBITDA (1) $ 1,316 $ 1,244 $ 5,218 $ 4,737
Distributable cash flow (1) $ 1,063 $ 1,021 $ 4,079 $ 3,750
(1) 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. (2) Gross operating margin
for the fourth quarter of 2014 and year ended December 31, 2014
includes approximately $63 million of gross operating margin from
Oiltanking Partners. (3) For the three months ended December 31,
2014 and 2013, net income and fully diluted earnings per unit
included net gains of $3 million, or less than $0.01 per unit, and
$15 million, or $0.01 per unit, respectively, attributable to asset
sales and insurance recoveries. For the year ended December 31,
2014 and 2013, net income and fully diluted earnings per unit
included net gains of $102 million, or $0.05 per unit, and $83
million, or $0.05 per unit, respectively, attributable to asset
sales and insurance recoveries. (4) Net income and fully diluted
earnings per unit included non-cash asset impairment charges for
the three months ended December 31, 2014 and 2013 of $16 million,
or $0.01 per unit, and $44 million, or $0.02 per unit,
respectively. Non-cash asset impairment charges for the year ended
December 31, 2014 and 2013 were $34 million, or $0.02 per unit, and
$93 million, or $0.05 per unit, respectively. (5) Net income
included charges for severance costs and costs related to the
purchase of interests in Oiltanking Partners for the three months
and year ended December 31, 2014 of $21 million, or $0.01 per unit
on a fully diluted basis.
- Enterprise increased its cash
distribution with respect to the fourth quarter of 2014 by 5.7
percent over the fourth quarter of 2013 to $0.37 per unit, or $1.48
per unit on an annualized basis. This is the 42nd consecutive
quarterly increase and the 51st increase since the partnership’s
initial public offering in 1998. This distribution will be paid on
February 6, 2015 to unitholders of record as of the close of
business on January 30, 2015;
- Enterprise reported distributable cash
flow of $1.1 billion for the fourth quarter of 2014, which provided
1.5 times coverage of the $0.37 per unit cash distribution.
Enterprise retained $358 million of distributable cash flow for the
fourth quarter of 2014;
- Enterprise’s natural gas liquid
(“NGL”), crude oil, refined products and petrochemical pipeline
volumes for the fourth quarter of 2014 increased 4 percent to a
record 5.4 million barrels per day (“BPD”) compared to the fourth
quarter of 2013. Total natural gas pipeline volumes decreased
slightly to 12.9 trillion British thermal units per day (“TBtud”)
for the fourth quarter of 2014 compared to 13.0 TBtud in the fourth
quarter of 2013. NGL fractionation volumes for the fourth quarter
of 2014 increased 7 percent to 837 thousand barrels per day
(“MBPD”). Fee-based natural gas processing volumes for the fourth
quarter of 2014 were 4.5 billion cubic feet per day (“Bcfd”)
compared to 4.7 Bcfd in the fourth quarter of 2013, while equity
NGL production for the fourth quarter of 2014 decreased 38 percent
to 90 MBPD; and
- Enterprise made capital investments of
approximately $5.7 billion during the fourth quarter of 2014,
including $4.6 billion in consideration to acquire general partner
and limited partner interests in Oiltanking Partners and $107
million of sustaining capital expenditures.
Review of Fourth Quarter 2014
Results
Net income for the fourth quarter of 2014 was $681 million
compared to $706 million for the fourth quarter of 2013. On a fully
diluted basis, net income attributable to limited partners for the
fourth quarter of 2014 was $0.34 per unit compared to $0.37 per
unit for the fourth quarter of 2013. Net income for the fourth
quarters of 2014 and 2013 were reduced by non-cash impairment
charges of $16 million, or $0.01 per unit, and $44 million, or
$0.02 per unit, respectively, on a fully diluted basis. Net income
for the fourth quarter of 2014 was also reduced by $21 million, or
$0.01 per unit on a fully diluted basis for severance costs and
costs related to the acquisition of ownership interests in
Oiltanking Partners.
On January 6, 2015, Enterprise announced an increase in the
partnership’s quarterly cash distribution with respect to the
fourth quarter of 2014 to $0.37 per unit, representing a 5.7
percent increase over the $0.35 per unit that was paid with respect
to the fourth quarter of 2013. Enterprise generated distributable
cash flow of $1.1 billion for the fourth quarter of 2014 compared
to $1.0 billion for the fourth quarter of 2013. Distributable cash
flow for the fourth quarters of 2014 and 2013 each included
proceeds from the sales of assets and insurance recoveries of $24
million. Distributable cash flow for the fourth quarter of 2014
also included $28 million of proceeds from the monetization of
financial instruments used to hedge interest rates.
Enterprise’s distributable cash flow for the fourth quarter of
2014 provided 1.5 times coverage of the cash distribution that will
be paid on February 6, 2015 to unitholders of record on January 30,
2015. The partnership retained $358 million of distributable cash
flow for the fourth quarter of 2014, which is available to reinvest
in growth capital projects, reduce debt and decrease the need to
issue additional equity.
The contribution from the consolidated results of Oiltanking
Partners for the fourth quarter of 2014 and year ended December 31,
2014 was approximately $63 million of gross operating margin and,
after taking into account additional depreciation and amortization
expenses resulting from purchase accounting, $27 million of
operating income, $25 million of net income and $11 million of net
income allocated to the limited partners of Enterprise.
“Enterprise had a solid fourth quarter of 2014. Earnings from
Oiltanking Partners and growth in our fee-based businesses more
than offset the effects of lower commodity prices and lower demand
for natural gas and propane due to milder winter weather. The
Seaway loop pipeline began commercial operations and generated cash
flow in December 2014. We generated $1.1 billion of distributable
cash flow for the fourth quarter of 2014, which provided 1.5 times
coverage of the distribution declared with respect to the quarter
and allowed us to retain $358 million of distributable cash flow to
reinvest in the partnership,” said Creel.
Review of Fourth Quarter 2014 Segment
Performance
NGL Pipelines & Services – Gross operating margin for
the NGL Pipelines & Services segment was $705 million for the
fourth quarter of 2014 compared to $737 million for the same
quarter of 2013.
Enterprise’s natural gas processing and related NGL marketing
business generated gross operating margin of $257 million for the
fourth quarter of 2014 compared to $339 million for the fourth
quarter of 2013. Gross operating margin from the partnership’s
natural gas processing plants decreased by $43 million primarily
due to lower processing margins and equity NGL production at
certain plants. Enterprise’s equity NGL production decreased to 90
MBPD for the fourth quarter of 2014 compared to 145 MBPD for the
fourth quarter of 2013 primarily due to lower recoveries of ethane.
Enterprise’s natural gas processing plants reported fee-based
processing volumes of 4.5 Bcfd in the fourth quarter of 2014
compared to 4.7 Bcfd in the fourth quarter of 2013. Gross operating
margin from Enterprise’s NGL marketing activities decreased $39
million primarily due to lower margins. In the fourth quarter of
2014, more volume in the NGL export business was associated with
long-term, fee-based contracts compared to higher margin spot
business in the fourth quarter of 2013.
Gross operating margin from the partnership’s NGL pipelines and
storage business increased $68 million, or 27 percent, to $317
million for the fourth quarter of 2014 from $249 million for the
fourth quarter of 2013. NGL pipeline volumes were 2.9 million BPD
for the fourth quarters of both 2014 and 2013. The partnership’s
ATEX ethane pipeline, which began commercial service in January
2014, generated gross operating margin of $35 million for the
fourth quarter of 2014. ATEX transported approximately 72 MBPD of
ethane during the fourth quarter of 2014.
Gross operating margin for the fourth quarter of 2014 includes
$19 million from Oiltanking Partners attributable to fees it
charges Enterprise for use of Oiltanking Partners’ Houston Ship
Channel docks and related infrastructure to load and unload NGLs.
Enterprise’s Houston Ship Channel NGL export and import marine
terminal are located on land owned by Oiltanking Partners at its
Jacintoport facility.
The Mid-America and Seminole NGL pipeline systems reported an
$11 million increase in gross operating margin to $115 million in
the fourth quarter of 2014 compared to the same quarter of 2013
primarily due to higher revenues from deficiency fees and an
increase in tariffs. Volumes on the Mid-America and Seminole
pipelines decreased to 882 MBPD in the fourth quarter of 2014
compared to 1.0 million BPD in the fourth quarter of last year due
in part to lower recoveries of ethane by natural gas processing
plants.
The Texas Express pipeline and gathering system and the Front
Range NGL pipeline contributed an aggregate $9 million increase in
gross operating margin and total volumes of 74 MBPD in the fourth
quarter of 2014. The Texas Express pipeline began service in
November 2013 and the Front Range pipeline began service in
February 2014.
Enterprise’s NGL fractionation business reported gross operating
margin of $132 million for the fourth quarter of 2014 compared to
$150 million reported for the fourth quarter of last year. Total
fractionation volumes for the fourth quarter of 2014 increased 7
percent to 837 MBPD compared to the same quarter in 2013. Increases
in gross operating margin from higher volumes were more than offset
by the combined effects of lower revenues from product blending due
to the lower relative prices of NGL components and higher operating
expenses.
Onshore Natural Gas Pipelines & Services –
Enterprise’s Onshore Natural Gas Pipelines & Services segment
reported gross operating margin of $185 million for the fourth
quarter of 2014 compared to $187 million for the fourth quarter of
2013. Total onshore natural gas pipeline volumes were 12.3 TBtud in
the fourth quarter of 2014 compared to 12.4 TBtud in the fourth
quarter of 2013.
Onshore Crude Oil Pipelines & Services – Gross
operating margin from the partnership’s Onshore Crude Oil Pipelines
& Services segment increased by 40 percent, or $65 million, to
$228 million for the fourth quarter of 2014 from $163 million for
the fourth quarter of 2013. Total onshore crude oil pipeline
volumes were 1.3 million BPD for the fourth quarters of both 2014
and 2013.
Gross operating margin for the fourth quarter of 2014 included
$35 million from the consolidated results of crude oil and related
services provided at Oiltanking Partners’ Houston Ship Channel
facility.
Gross operating margin attributable to Enterprise’s ownership in
the Seaway Crude Pipeline increased $12 million in the fourth
quarter of 2014 compared to the same quarter in 2013 primarily due
to an increase in revenues associated with the 512-mile Seaway loop
pipeline that began commercial activities in December 2014. The
Seaway loop pipeline had originally been scheduled to begin
operations during the third quarter of 2014. Enterprise’s West
Texas and South Texas crude oil pipeline systems, Eagle Ford joint
venture pipeline and ECHO terminal reported an aggregate $19
million increase in gross operating margin in the fourth quarter of
2014 compared to the fourth quarter of 2013 on a 62 MBPD increase
in pipeline volumes.
Petrochemical & Refined Products Services – Gross
operating margin for the Petrochemical & Refined Products
Services segment increased 13 percent to $199 million for the
fourth quarter of 2014 compared to $175 million for the fourth
quarter of 2013.
The partnership’s propylene business reported gross operating
margin of $71 million for the fourth quarter of 2014 compared to
$46 million for the fourth quarter of 2013 primarily due to higher
sales margins and sales volumes. Propylene fractionation volumes
were 81 MBPD for the fourth quarter of 2014 compared to 82 MBPD for
the fourth quarter of 2013.
Gross operating margin for Enterprise’s octane enhancement and
high-purity isobutylene business was $28 million in the fourth
quarter of 2014 compared to $33 million for the same quarter in
2013 primarily due to lower sales margins and volumes. Total plant
production volumes were 22 MBPD for the fourth quarter of 2014
compared to 24 MBPD for the same quarter of 2013.
Enterprise’s refined products pipelines and related services
business reported gross operating margin of $73 million for the
fourth quarter of 2014 compared to $56 million for the fourth
quarter of 2013. Gross operating margin for the fourth quarter of
2014 included $7 million from the consolidated results of refined
products and related services provided at Oiltanking Partners’
Beaumont terminal. Gross operating margin for the fourth quarter of
2014 also included $6 million from Enterprise’s reactivated
Beaumont marine terminal. Total volumes for this business were 694
MBPD for the fourth quarter of 2014 compared to 590 MBPD for the
fourth quarter of 2013.
Enterprise’s butane isomerization business reported gross
operating margin of $9 million in the fourth quarter of 2014
compared to $21 million in the fourth quarter of 2013. This
decrease in gross operating margin was primarily due to lower
by-product sales revenue due to lower commodity prices in the
fourth quarter of 2014. Butane isomerization volumes were 90 MBPD
for the fourth quarter of 2014 compared to 93 MBPD for the fourth
quarter of 2013.
Enterprise’s marine transportation and other services business
reported $18 million of gross operating margin for the fourth
quarter of 2014 compared to $19 million for the same quarter of
2013.
Offshore Pipelines & Services – Gross operating
margin for the Offshore Pipelines & Services segment was $42
million for the fourth quarter of 2014 compared to $28 million for
the same quarter of 2013.
Gross operating margin from Enterprise’s offshore crude oil
pipeline business was $32 million for the fourth quarter of 2014
compared to $22 million for the fourth quarter of 2013. The SEKCO
Oil Pipeline, which began operations in July 2014, reported $8
million of gross operating margin for the fourth quarter of 2014.
Total offshore crude oil pipeline volumes increased 7 percent to
331 MBPD in the fourth quarter of 2014 compared to the fourth
quarter of 2013.
The Independence Hub platform and Independence Trail pipeline
reported aggregate gross operating margin of $7 million for the
fourth quarter of 2014 compared to $9 million for the fourth
quarter of 2013 attributable to lower volumes. Natural gas volumes
on the Independence Trail pipeline were 160 billion British thermal
units per day (“BBtud”) for the fourth quarter of 2014 compared to
212 BBtud in the fourth quarter of 2013. Total offshore natural gas
pipeline volumes (including those for Independence Trail) were 644
BBtud for the fourth quarter of 2014 compared to 594 BBtud in the
fourth quarter of 2013.
Capitalization
Total debt principal outstanding at December 31, 2014 was
approximately $21.4 billion, including $1.5 billion of junior
subordinated notes to which the nationally recognized debt rating
agencies ascribe partial equity content. At December 31, 2014,
Enterprise had consolidated liquidity of approximately $4.2
billion, which was comprised of unrestricted cash on hand and
available borrowing capacity under our revolving credit
facilities.
On October 1, 2014, Enterprise acquired the general partner and
related incentive distribution rights, approximately 15.9 million
common units and 38.9 million subordinated units in Oiltanking
Partners. Enterprise paid total consideration of approximately $4.6
billion comprised of $2.4 billion of cash, which included $228
million to assume notes receivable issued by Oiltanking Partners
and its subsidiaries, and 54.8 million Enterprise common units
valued at $2.2 billion. Enterprise funded the cash consideration
for this transaction using borrowings under its new $1.5 billion
364-day credit facility, borrowings under its commercial paper
program and cash on hand.
On October 2, 2014, Enterprise priced $2.75 billion of senior
notes. These notes were issued on October 14, 2014. The partnership
used the net proceeds to repay amounts then outstanding under its
364-day credit facility, commercial paper program and $650 million
of senior notes that matured on October 15, 2014.
Total capital investments in the fourth quarter of 2014 were
$5.7 billion, which includes $4.6 billion of consideration related
to the Oiltanking Partners acquisition and $107 million of
sustaining capital expenditures.
For 2015, we currently expect growth capital expenditures of
approximately $3.5 billion and sustaining capital expenditures of
approximately $380 million.
Conference Call to Discuss Fourth
Quarter 2014 Earnings
Enterprise will host a conference call today to discuss fourth
quarter 2014 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 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 flows 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
midstream energy operations 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; offshore production platforms; petrochemical and refined
products transportation and services; and a marine transportation
business that operates primarily on the U.S. inland and
Intracoastal Waterway systems and in the Gulf of Mexico. Additional
information regarding Enterprise can be found on its website,
www.enterpriseproducts.com.
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 Year
Ended December 31, Ended December 31,
2014 2013 2014
2013
Revenues
$ 10,190.3 $ 13,101.3 $ 47,951.2 $ 47,727.0
Costs and
expenses:
Operating costs and expenses 9,286.1 12,177.6 44,220.5 44,238.7
General and administrative costs 63.6
49.4 214.5 188.3
Total costs and expenses 9,349.7
12,227.0 44,435.0
44,427.0
Equity in income of
unconsolidated affiliates
80.4 41.2 259.5
167.3
Operating
income
921.0 915.5 3,775.7 3,467.3
Other income
(expense):
Interest expense (241.4 ) (198.1 ) (921.0 ) (802.5 ) Other, net
2.1 (0.4 ) 1.9
(0.2 ) Total other expense (239.3 )
(198.5 ) (919.1 ) (802.7 )
Income before income
taxes
681.7 717.0 2,856.6 2,664.6 Provision for income taxes (0.6
) (11.3 ) (23.1 ) (57.5 )
Net
income
681.1 705.7 2,833.5 2,607.1
Net income
attributable to noncontrolling interests
(21.3 ) (6.8 ) (46.1 )
(10.2 )
Net income
attributable to limited partners
$ 659.8 $ 698.9 $ 2,787.4
$ 2,596.9
Per unit data (fully
diluted): (1)
Earnings per unit $ 0.34 $ 0.37 $ 1.47
$ 1.41 Average limited partner units
outstanding (in millions) 1,940.5
1,865.0 1,895.2 1,842.6
Supplemental
financial data:
Non-GAAP distributable cash flow (2) $ 1,063.0 $
1,021.1 $ 4,078.6 $ 3,750.4
Non-GAAP Adjusted EBITDA (3) $ 1,316.0 $ 1,244.2
$ 5,218.3 $ 4,736.8 Non-GAAP
gross operating margin by segment: (4) NGL Pipelines & Services
$ 705.3 $ 737.4 $ 2,877.7 $ 2,514.4 Onshore Natural Gas Pipelines
& Services 184.5 187.1 803.3 789.0 Onshore Crude Oil Pipelines
& Services 228.0 163.1 762.5 742.7 Offshore Pipelines &
Services 42.0 28.0 162.0 146.1 Petrochemical & Refined Products
Services 198.6 175.2
681.0 625.9 Total gross
operating margin $ 1,358.4 $ 1,290.8 $
5,286.5 $ 4,818.1 Net cash flows
provided by operating activities $ 1,457.8 $ 1,499.3
$ 4,162.2 $ 3,865.5 Total debt
principal outstanding at end of period $ 21,389.2 $
17,357.7 $ 21,389.2 $ 17,357.7
Capital spending: Capital expenditures, net (5) $ 1,004.5 $
988.9 $ 2,864.0 $ 3,382.2 Cash used for Oiltanking acquisition, net
of cash received 2,416.8 -- 2,416.8 -- Equity consideration issued
for Oiltanking acquisition 2,171.5 -- 2,171.5 -- Investments in
unconsolidated affiliates 139.1 325.7 722.4 1,094.1 Other investing
activities (0.2 ) -- 5.8
1.0 Total capital spending, cash and
non-cash $ 5,731.7 $ 1,314.6 $ 8,180.5
$ 4,477.3
(1) The additional common
units were distributed on August 21, 2014. All per unit amounts and
number of units outstanding presented on this Exhibit A are on a
post-split basis. (2) See Exhibit D for reconciliation to GAAP net
cash flows provided by operating activities. (3) See Exhibit E for
reconciliation to GAAP net cash flows provided by operating
activities. (4) See Exhibit F for reconciliation to GAAP operating
income. (5) 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
Year Ended December 31, Ended December 31,
2014 2013 2014
2013
Selected operating
data: (1)
NGL Pipelines & Services, net: NGL transportation
volumes (MBPD) 2,944 2,914 2,892 2,787 NGL fractionation volumes
(MBPD) 837 781 824 726 Equity NGL production (MBPD) (2) 90 145 116
126 Fee-based natural gas processing (MMcf/d) (3) 4,532 4,679 4,786
4,612 Onshore Natural Gas Pipelines & Services, net: Natural
gas transportation volumes (BBtus/d) 12,284 12,403 12,476 12,936
Onshore Crude Oil Pipelines & Services, net: Crude oil
transportation volumes (MBPD) 1,288 1,270 1,278 1,175 Offshore
Pipelines & Services, net: Natural gas transportation volumes
(BBtus/d) 644 594 627 678 Crude oil transportation volumes (MBPD)
331 309 330 307 Platform natural gas processing (MMcf/d) 129 155
145 202 Platform crude oil processing (MBPD) 15 17 14 16
Petrochemical & Refined Products Services, net: Butane
isomerization and deisobutanizer volumes (MBPD) 176 162 175 160
Propylene fractionation volumes (MBPD) 81 82 75 74 Octane additive
and related plant production volumes (MBPD) 22 24 17 20
Transportation volumes, primarily refined
products and petrochemicals (MBPD)
849 727 802 702 Total, net:
NGL, crude oil, refined products and
petrochemical transportation volumes (MBPD)
5,412 5,220 5,302 4,971 Natural gas transportation volumes
(BBtus/d) 12,928 12,997 13,103 13,614 Equivalent transportation
volumes (MBPD) (4) 8,814 8,640 8,750 8,554
(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. (4)
Represents total NGL, crude oil, refined products and petrochemical
transportation volumes plus equivalent energy volumes where 3.8
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)
2013 by quarter: 1st Quarter $3.34 $0.26
$0.86 $1.58 $1.65 $2.23 $0.75 $0.65 $94.37 $113.93 2nd Quarter
$4.10 $0.27 $0.91 $1.24 $1.27 $2.04 $0.63 $0.53 $94.22 $104.63 3rd
Quarter $3.58 $0.25 $1.03 $1.33 $1.35 $2.15 $0.68 $0.58 $105.82
$109.89 4th Quarter $3.60 $0.26 $1.20 $1.43
$1.45 $2.10 $0.68 $0.56 $97.46
$100.94
YTD 2013 Averages $3.65 $0.26
$1.00 $1.39 $1.43 $2.13 $0.69
$0.58 $97.97 $107.34
2014 by quarter: 1st
Quarter $4.95 $0.34 $1.30 $1.39 $1.42 $2.12 $0.73 $0.61 $98.68
$104.43 2nd Quarter $4.68 $0.29 $1.06 $1.25 $1.30 $2.21 $0.70 $0.57
$102.99 $105.55 3rd Quarter $4.07 $0.24 $1.04 $1.25 $1.28 $2.11
$0.71 $0.58 $97.21 $100.94 4th Quarter $4.04 $0.21
$0.76 $0.98 $0.99 $1.49 $0.69
$0.52 $73.15 $76.08
YTD 2014 Averages $4.43
$0.27 $1.04 $1.22 $1.25 $1.98
$0.71 $0.57 $93.01 $96.75
(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 Chemical Market Associates, Inc.
(“CMAI”). Refinery grade propylene prices represent
weighted-average spot prices for such product as reported by CMAI.
(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 $0.74 per
gallon during the fourth quarter of 2014 versus $1.08 per gallon
for the fourth quarter of 2013.
Period-to-period fluctuations in our consolidated revenues and
cost of sales amounts are explained in large part by changes in
energy commodity prices. Energy commodity prices fluctuate for a
variety of reasons, including supply and demand imbalances and
geopolitical tensions.
A decrease in our consolidated marketing revenues due to lower
energy commodity sales prices may not result in a decrease in gross
operating margin or cash available for distribution, since our
consolidated cost of sales amounts would also be lower due to
comparable decreases in the purchase prices of the underlying
energy commodities. The same correlation would be true in the case
of higher energy commodity sales prices and purchase costs.
Enterprise Products Partners L.P. Exhibit D
Distributable Cash Flow – UNAUDITED ($
in millions)
For the Three Months For the Year
Ended December 31, Ended December 31,
2014 2013 2014
2013 Net income attributable to limited partners
(GAAP) $ 659.8 $ 698.9 $ 2,787.4 $ 2,596.9
Adjustments to GAAP net income attributable to limited partners to
derive non-GAAP distributable cash flow: Add depreciation,
amortization and accretion expenses 368.1 315.3 1,360.5 1,217.6 Add
distributions received from unconsolidated affiliates 114.4 64.0
375.1 251.6 Subtract equity in income of unconsolidated affiliates
(80.4 ) (41.2 ) (259.5 ) (167.3 ) Subtract sustaining capital
expenditures (107.0 ) (77.8 ) (369.0 ) (291.7 )
Subtract net gains attributable to asset
sales and insurance recoveries
(3.1 ) (14.9 ) (102.1 ) (83.3 ) Add cash proceeds from asset sales
and insurance recoveries 23.8 24.3 145.3 280.6
Add gains or subtract losses from the
monetization of interest rate derivative instruments
27.6 -- 27.6 (168.8 ) Add deferred income tax expense or subtract
benefit, as applicable 3.5 5.8 6.1 37.9 Add impairment charges 15.8
39.3 34.0 92.6
Add or subtract other miscellaneous
adjustments to derive non-GAAP distributable cash flow, as
applicable
40.5 7.4 73.2
(15.7 )
Distributable cash flow
(non-GAAP) 1,063.0 1,021.1 4,078.6 3,750.4 Adjustments to
non-GAAP distributable cash flow to derive GAAP net cash flows
provided by operating activities: Add sustaining capital
expenditures reflected in distributable cash flow 107.0 77.8 369.0
291.7
Subtract cash proceeds from asset sales
and insurance recoveries reflected in distributable cash flow
(23.8 ) (24.3 ) (145.3 ) (280.6 )
Add losses or subtract gains from the
monetization of interest rate derivative instruments
(27.6 ) -- (27.6 ) 168.8
Add or subtract the net effect of changes
in operating accounts, as applicable
327.6 416.3 (108.2 ) (97.6
)
Add or subtract miscellaneous non-cash and other amounts to
reconcile non-GAAP distributable cash flow with GAAP net cash flows
provided by operating activities, as applicable 11.6
8.4 (4.3 ) 32.8
Net cash flows provided by operating activities
(GAAP) $ 1,457.8 $ 1,499.3 $
4,162.2 $ 3,865.5
(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.
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 financial measure
for our limited partners since it serves as an indicator of our
success in providing a cash return on investment. Specifically,
this financial 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 flows provided by operating
activities.
Enterprise Products Partners
L.P.
Exhibit E Adjusted EBITDA – UNAUDITED
($ in millions)
For the Three Months
For the Year Ended December 31, Ended
December 31, 2014 2013 2014
2013 Net income (GAAP) $ 681.1 $ 705.7
$ 2,833.5 $ 2,607.1 Adjustments to GAAP net income to derive
non-GAAP Adjusted EBITDA: Subtract equity in income of
unconsolidated affiliates (80.4 ) (41.2 ) (259.5 ) (167.3 ) Add
distributions received from unconsolidated affiliates 114.4 64.0
375.1 251.6 Add interest expense, including related amortization
241.4 198.1 921.0 802.5 Add provision for income taxes 0.6 11.3
23.1 57.5 Add depreciation, amortization and accretion in costs and
expenses 358.9 306.3
1,325.1 1,185.4
Adjusted
EBITDA (non-GAAP) 1,316.0 1,244.2 5,218.3 4,736.8 Adjustments
to non-GAAP Adjusted EBITDA to derive GAAP net cash flows provided
by operating activities:
Subtract interest expense, including
related amortization, reflected in Adjusted EBITDA
(241.4 ) (198.1 ) (921.0 ) (802.5 )
Subtract provision for income taxes
reflected in Adjusted EBITDA
(0.6 ) (11.3 ) (23.1 ) (57.5 )
Subtract net gains attributable to asset
sales and insurance recoveries
(3.1 ) (14.9 ) (102.1 ) (83.3 ) Add deferred income tax expense or
subtract benefit, as applicable 3.5 5.8 6.1 37.9 Add impairment
charges 15.8 39.3 34.0 92.6 Add or subtract the net effect of
changes in operating accounts, as applicable 327.6 416.3 (108.2 )
(97.6 ) Add miscellaneous non-cash and other amounts to reconcile
non-GAAP Adjusted EBITDA with GAAP net cash flows provided by
operating activities 40.0 18.0
58.2 39.1
Net cash
flows provided by operating activities (GAAP) $ 1,457.8
$ 1,499.3 $ 4,162.2 $ 3,865.5
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 flows provided by operating activities.
Enterprise Products Partners
L.P.
Exhibit F Gross Operating Margin – UNAUDITED
($ in millions)
For the Three Months
For the Year Ended December 31, Ended
December 31, 2014 2013 2014
2013 Total gross operating margin (non-GAAP) $
1,358.4 $ 1,290.8 $ 5,286.5 $ 4,818.1
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
(346.2 ) (297.2 ) (1,282.7 ) (1,148.9 )
Subtract impairment charges not reflected
in gross operating margin
(15.8 ) (39.3 ) (34.0 ) (92.6 )
Add net gains attributable to asset sales
and insurance recoveries not reflected in gross operating
margin
3.1 15.0 102.1 83.4
Subtract non-refundable deferred revenues
attributable to shipper make-up rights on new pipeline projects
included in gross operating margin
(17.8 ) (4.4 ) (84.6 ) (4.4 )
Add subsequent recognition of deferred
revenues attributable to make-up rights
2.9 -- 2.9 --
Subtract general and administrative costs
not reflected in gross operating margin
(63.6 ) (49.4 ) (214.5 )
(188.3 )
Operating income (GAAP) $ 921.0
$ 915.5 $ 3,775.7 $ 3,467.3
We evaluate segment performance based on the non-GAAP financial
measure of gross operating margin. Gross operating margin (either
in total or by individual segment) is an important performance
measure of the core profitability of our operations. This measure
forms the basis of our internal financial reporting and is used by
our executive management in deciding how to allocate capital
resources among business segments. We believe that investors
benefit from having access to the same financial measures that our
management uses in evaluating segment results. The GAAP financial
measure most directly comparable to total segment gross operating
margin is operating income.
In total, gross operating margin represents operating income
exclusive of (1) depreciation, amortization and accretion expenses,
(2) impairment charges, (3) gains and losses attributable to asset
sales and insurance recoveries and (4) general and administrative
costs. In addition, gross operating margin includes equity in
income of unconsolidated affiliates and non-refundable deferred
transportation revenues relating to the make-up rights of committed
shippers associated with certain pipelines. Gross operating margin
by segment is calculated by subtracting segment operating costs and
expenses (net of the adjustments noted above) from segment
revenues, with both segment totals before the elimination of
intercompany transactions. In accordance with GAAP, intercompany
accounts and transactions are eliminated in consolidation. Gross
operating margin is exclusive of other income and expense
transactions, income taxes, the cumulative effect of changes in
accounting principles and extraordinary charges. Gross operating
margin is presented on a 100 percent basis before any allocation of
earnings to noncontrolling interests.
Enterprise Products Partners L.P.Randy Burkhalter,
713-381-6812Vice President, Investor RelationsorRick Rainey,
713-381-3635Vice President, Media Relations
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