Enterprise Products Partners L.P. (“Enterprise”) (NYSE: EPD)
today announced its financial results for the three months ended
March 31, 2015. All earnings per unit and other unit-related
information contained in this press release reflect a two-for-one
split of Enterprise’s common units in August 2014.
First Quarter 2015
Highlights
Three months ended March 31, 2015
2014 ($ in millions, except per unit amounts)
Gross operating margin (1) $ 1,334 $ 1,330 Net income (2) (3) $ 651
$ 807 Fully diluted earnings per unit (2) (3) $ 0.32 $ 0.43
Adjusted EBITDA (1) $ 1,326 $ 1,366 Distributable cash flow (1) $
1,030 $ 1,087 (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) For the three months ended March 31, 2014, net income
and fully diluted earnings per unit included net gains of $90
million, or $0.05 per unit, attributable to asset sales and
insurance recoveries. (3) For the three months ended March 31, 2015
and 2014, net income and fully diluted earnings per unit included
non-cash asset impairment charges of $33 million, or $0.02 per
unit, and $9 million, or less than $0.01 per unit, respectively.
Three months ended March 31, 2015
2014 NGL, crude oil, refined products
and petrochemical transportation volumes (MBPD) (1)
5,217
5,136
Natural gas transportation volumes (BBtus/d) (2) 13,122 13,089 NGL
fractionation volumes (MBPD) (1) 798 792 Fee-based natural gas
processing volumes (MMcf/d) (3) 4,784 4,715 Equity NGL production
(MBPD) (1) 134 137 (1) “NGL” means
natural gas liquids and “MBPD” means thousand barrels per day. (2)
“BBtus/d” means billion British thermal units per day. (3) “MMcf/d”
means million cubic feet per day.
- Enterprise increased its cash
distribution with respect to the first quarter of 2015 by 5.6
percent to $0.375 per unit compared to the first quarter of
2014;
- Enterprise reported distributable cash
flow of $1.0 billion for the first quarter of 2015, which provided
1.4 times coverage of the $0.375 per unit cash distribution and
resulted in $295 million of retained distributable cash flow;
and
- Affiliates of privately held Enterprise
Products Company (“EPCO”), which collectively own our general
partner and approximately 35 percent of our outstanding limited
partner interests, purchased $100 million of common units from
Enterprise during the first quarter of 2015 and expect to purchase
an additional $50 million of common units through Enterprise’s
distribution reinvestment plan in May 2015.
Review of First Quarter 2015
Results
Net income for the first quarter of 2015 was $651 million
compared to $807 million for the first quarter of 2014. On a fully
diluted basis, net income attributable to limited partners for the
first quarter of 2015 was $0.32 per unit compared to $0.43 per unit
for the first quarter of 2014. Results for the first quarter of
2014 included $90 million, or $0.05 per unit, of net gains from
asset sales and insurance recoveries. The first quarters of 2015
and 2014 included non-cash asset impairment charges of $33 million,
or $0.02 per unit, and $9 million, or less than $0.01 per unit,
respectively.
On April 8, 2015, Enterprise announced an increase in the
partnership’s quarterly cash distribution with respect to the first
quarter of 2015 to $0.375 per unit, representing a 5.6 percent
increase over the distribution paid with respect to the first
quarter of 2014. The distribution with respect to the first quarter
of 2015 will be paid on May 7, 2015 to unitholders of record at the
close of business on April 30, 2015. Enterprise generated
distributable cash flow of $1.0 billion for the first quarter of
2015 compared to $1.1 billion for the first quarter of 2014.
Distributable cash flow for the first quarters of 2015 and 2014
included proceeds from asset sales and insurance recoveries of $1
million and $96 million, respectively.
Enterprise’s distributable cash flow for the first quarter of
2015 provided 1.4 times coverage of the cash distribution that will
be paid on May 7, 2015. The partnership retained $295 million of
distributable cash flow for the first quarter of 2015, which is
available to reinvest in growth capital projects, reduce debt and
decrease the need to issue additional equity.
“Enterprise reported solid results for the first quarter of 2015
highlighted by the stability of our fee-based assets,” said Michael
A. Creel, chief executive officer of Enterprise’s general partner.
“Gross operating margin from assets that began operations since the
beginning of 2014, contributions from the Oiltanking acquisition
and lower operating expenses more than offset the effects of lower
energy commodity prices and a milder winter. Our performance
continues to be driven by robust volumes transported on our liquid
pipelines and across our docks, fee-based natural gas processing
volumes and NGL and propylene fractionation volumes. In the first
quarter of 2015, we generated a near record $1.3 billion of gross
operating margin. Distributable cash flow, excluding proceeds from
asset sales and insurance recoveries, increased 4 percent compared
to the first quarter of last year. Our 1.4 times distribution
coverage and $295 million of retained distributable cash flow give
us a strong start to funding our growth capital expenditures in
2015.
“We completed construction and began commercial operations for
assets totaling $4.4 billion of capital investment since the
beginning of 2014. During the first quarter of 2015, we completed
construction of approximately $300 million of assets, including our
1.5 million barrel per month expansion of our LPG export facility
on the Houston Ship Channel. This is another project that was
delivered on time and on budget. In addition, our Seaway Loop
pipeline, which commenced operations in December 2014, had a full
quarter of operations in the first quarter of 2015. We currently
have over $6.0 billion of projects under construction that will
begin commercial operations between now and the end of 2017,”
continued Creel.
Review of First Quarter 2015 Segment
Performance
NGL Pipelines & Services – Gross operating margin for
the NGL Pipelines & Services segment was $695 million for the
first quarter of 2015 compared to $780 million for the same quarter
of 2014.
Enterprise’s natural gas processing and related NGL marketing
business generated gross operating margin of $240 million for the
first quarter of 2015 compared to $349 million for the first
quarter of 2014. Gross operating margin from Enterprise’s NGL
marketing activities decreased $59 million primarily due to lower
sales margins. In the first quarter of 2015, more volume in the LPG
export business was associated with long-term, fee-based contracts
compared to higher-margin spot business in the first quarter of
2014. Gross operating margin from the partnership’s natural gas
processing plants decreased by $50 million primarily due to lower
natural gas processing margins. Enterprise’s natural gas processing
plants reported fee-based processing volumes of 4.8 billion cubic
feet per day (“Bcf/d”) in the first quarter of 2015 compared to 4.7
Bcf/d in the first quarter of 2014. Enterprise’s equity NGL
production was 134 MBPD for the first quarter of 2015 compared to
137 MBPD for the first quarter of 2014.
Gross operating margin from the partnership’s NGL pipelines and
storage business increased $38 million, or 13 percent, to $328
million for the first quarter of 2015 from $290 million for the
first quarter of 2014. NGL transportation volumes were 2.7 million
barrels per day (“BPD”) for the first quarter of 2015 compared to
2.8 million BPD for the same quarter in 2014. Gross operating
margin from the partnership’s NGL import/export terminal on the
Houston Ship Channel and a related pipeline increased by $21
million for the first quarter of 2015 compared to the first quarter
of 2014, of which $15 million of the increase was attributable to
assets acquired in the Oiltanking transaction.
The partnership’s ATEX ethane pipeline generated gross operating
margin of $36 million for the first quarter of 2015, a $5 million
increase compared to the first quarter of last year. The ATEX
pipeline transported approximately 52 MBPD of ethane during the
first quarter of 2015 compared to 30 MBPD in the first quarter of
2014.
The Texas Express pipeline and gathering system and the Front
Range NGL pipeline reported an $8 million increase in aggregate
gross operating margin for the first quarter of 2015 compared to
the first quarter of 2014. Total volumes on these systems increased
to 76 MBPD in the first quarter of 2015 compared to 28 MBPD in the
first quarter of last year. The Texas Express pipeline and
gathering system commenced operations in November 2013 while the
Front Range pipeline began operations in February 2014.
Enterprise’s NGL fractionation business reported gross operating
margin of $127 million for the first quarter of 2015, a $14 million
decrease compared to $141 million reported for the first quarter of
last year primarily due to lower fractionation and product blending
revenues associated with lower energy commodity prices. Total
fractionation volumes for the first quarter of 2015 were 798 MBPD
compared to 792 MBPD in the first quarter of 2014.
Onshore Natural Gas Pipelines & Services –
Enterprise’s Onshore Natural Gas Pipelines & Services segment
reported gross operating margin of $205 million for the first
quarter of 2015 compared to $220 million for the first quarter of
2014. Total onshore natural gas transportation volumes were 12,503
BBtus/d for the first quarter of 2015 compared to 12,520 BBtus/d
for the first quarter of last year.
The Texas Intrastate system reported gross operating margin of
$94 million for the first quarter of 2015, a $12 million decrease
compared to $106 million for the first quarter of last year
primarily due to higher operating expenses and lower revenue from
the sales of condensate. Natural gas pipeline volumes for the Texas
Intrastate system were 5,184 BBtus/d in the first quarter of 2015
compared to 4,879 BBtus/d for the first quarter of 2014.
The San Juan natural gas gathering system reported an $8 million
decrease in gross operating margin to $16 million for the first
quarter of 2015 compared to the first quarter of 2014 primarily due
to lower average fees from contracts that are indexed to natural
gas prices and lower revenues from the sales of condensate. Natural
gas gathering volumes for the San Juan system were 1,230 BBtus/d in
the first quarter of 2015 compared to 1,253 BBtus/d in the first
quarter of last year.
The Jonah gathering system reported gross operating margin of
$32 million for the first quarter of 2015 compared to $27 million
for the same quarter of 2014. Natural gas pipeline volumes on the
Jonah gathering system increased to 1,653 BBtus/d for the first
quarter of 2015 compared to 1,550 BBtus/d for the first quarter of
2014.
Onshore Crude Oil Pipelines & Services – Gross
operating margin from the partnership’s Onshore Crude Oil Pipelines
& Services segment increased by 34 percent, or $54 million, to
$214 million for the first quarter of 2015 from $160 million for
the first quarter of 2014. Total onshore crude oil transportation
volumes were 1.4 million BPD for the first quarter of 2015 compared
to 1.3 million BPD for the first quarter of 2014.
Gross operating margin for this segment increased by $25 million
associated with the partnership’s Houston Ship Channel oil
terminals that were a part of the Oiltanking acquisition. Gross
operating margin attributable to Enterprise’s ownership in the
Seaway pipeline increased $23 million in the first quarter of 2015
compared to the same quarter in 2014 primarily due to revenues from
the new Seaway Loop pipeline, which began commercial service in
December 2014.
Petrochemical & Refined Products Services – Gross
operating margin for the Petrochemical & Refined Products
Services segment increased 34 percent, or $44 million, to $175
million for the first quarter of 2015 compared to the first quarter
of 2014. Total refined products and petrochemical transportation
volumes for this business increased 14 percent to 803 MBPD for the
first quarter of 2015 compared to 703 MBPD for the first quarter of
2014.
Enterprise’s refined products pipelines and related services
business reported a $44 million increase in gross operating margin
to $86 million for the first quarter of 2015 compared to the first
quarter of 2014. The TE Products Pipeline system and related
terminals reported a $26 million increase in gross operating margin
for the first quarter of 2015 compared to the first quarter of last
year due to lower operating expenses and higher revenues. Gross
operating margin for the first quarter of 2015 includes an
aggregate contribution of $13 million from refined products
terminaling services provided at our Beaumont Marine West Terminal
and Houston Ship Channel Terminal, which were part of the
Oiltanking acquisition. In addition, our Beaumont refined products
export terminal, which we reactivated in May 2014, contributed $6
million of gross operating margin for the first quarter of
2015.
The partnership’s propylene business reported gross operating
margin of $64 million for the first quarter of 2015 compared to $49
million for the first quarter of 2014 primarily due to higher sales
margins and volumes. Propylene fractionation volumes were 74 MBPD
for the first quarter of 2015 compared to 73 MBPD for the first
quarter of 2014.
Enterprise’s butane isomerization business reported gross
operating margin of $7 million in the first quarter of 2015
compared to $22 million in the first quarter of 2014. This decrease
in gross operating margin was primarily due to lower by-products
sales revenue attributable to lower energy commodity prices and
lower isomerization volumes. Butane isomerization volumes were 62
MBPD for the first quarter of 2015 compared to 80 MBPD for the
first quarter of 2014.
Offshore Pipelines & Services – Gross operating
margin for the Offshore Pipelines & Services segment was $46
million for the first quarter of 2015 compared to $39 million for
the same quarter of 2014.
Gross operating margin from Enterprise’s offshore crude oil
pipeline business was $34 million for the first quarter of 2015
compared to $26 million for the first quarter of 2014. The SEKCO
Oil Pipeline, which began operations in July 2014, reported $9
million of gross operating margin for the first quarter of 2015.
Total offshore crude oil pipeline volumes increased to 340 MBPD in
the first quarter of 2015 compared to 335 MBPD for the first
quarter of 2014.
Capitalization
Total debt principal outstanding at March 31, 2015 was $21.6
billion, including $1.5 billion of junior subordinated notes to
which the nationally recognized debt rating agencies ascribe
partial equity content. At March 31, 2015, Enterprise had
consolidated liquidity of $3.7 billion, which was comprised of
unrestricted cash on hand and available borrowing capacity under
our $3.5 billion multi-year revolving credit facility and $1.5
billion 364-day credit facility.
Total capital spending in the first quarter of 2015 was $2.3
billion, which includes $1.4 billion of equity consideration issued
to complete the acquisition and merger of Oiltanking and $51
million of sustaining capital expenditures.
Conference Call to Discuss First
Quarter 2015 Earnings
Today, Enterprise will host a conference call to discuss first
quarter 2015 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 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
services include: natural gas gathering, treating, processing,
transportation and storage; NGL transportation, fractionation,
storage and import and export terminals; crude oil and refined
products transportation, storage and terminals; offshore production
platforms; petrochemical transportation and services; and a marine
transportation business that operates primarily on the United
States inland and Intracoastal Waterway systems and in the Gulf of
Mexico. The partnership’s assets include approximately 51,000 miles
of onshore and offshore 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.
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 Ended March 31,
2015 2014
Revenues
$ 7,472.5 $ 12,909.9
Costs and
expenses:
Operating costs and expenses 6,616.4 11,880.5 General and
administrative costs 49.3 53.2
Total costs and expenses 6,665.7
11,933.7
Equity in income of
unconsolidated affiliates
89.2 56.5
Operating
income
896.0 1,032.7
Other income
(expense):
Interest expense (239.1 ) (220.9 ) Other, net 0.5
(0.3 ) Total other expense, net (238.6
) (221.2 )
Income before income
taxes
657.4 811.5 Provision for income taxes (6.8 )
(4.8 )
Net
income
650.6 806.7
Net income
attributable to noncontrolling interests
(14.5 ) (7.9 )
Net income
attributable to limited partners
$ 636.1 $ 798.8
Per unit data (fully
diluted): (1)
Earnings per unit $ 0.32 $ 0.43 Average
limited partner units outstanding (in millions) 1,966.7
1,875.9
Supplemental
financial data:
Non-GAAP distributable cash flow (2) $ 1,029.7
$ 1,087.0 Non-GAAP Adjusted EBITDA (3) $ 1,326.0
$ 1,365.8 Non-GAAP gross operating margin by
segment: (4) NGL Pipelines & Services $ 695.2 $ 780.0 Onshore
Natural Gas Pipelines & Services 204.5 220.4 Onshore Crude Oil
Pipelines & Services 214.0 159.7 Offshore Pipelines &
Services 46.1 39.3 Petrochemical & Refined Products Services
174.6 130.4 Total gross
operating margin $ 1,334.4 $ 1,329.8
Net cash flows provided by operating activities $ 954.0
$ 1,404.1 Total debt principal
outstanding at end of period $ 21,620.7 $
18,382.7 Capital spending: Capital expenditures, net
(5) $ 793.2 $ 695.4 Equity consideration issued for Oiltanking
acquisition 1,408.7 -- Investments in unconsolidated affiliates
68.3 284.7 Total capital
spending, cash and non-cash $ 2,270.2 $ 980.1
(1)
On July 15, 2014, the partnership announced
that its general partner had approved a two-for-one unit split. 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 Ended March 31,
2015 2014
Selected operating
data: (1)
NGL Pipelines & Services, net: NGL transportation
volumes (MBPD) 2,690 2,838 NGL fractionation volumes (MBPD) 798 792
Equity NGL production (MBPD) (2) 134 137 Fee-based natural gas
processing (MMcf/d) (3) 4,784 4,715 Onshore Natural Gas Pipelines
& Services, net: Natural gas transportation volumes (BBtus/d)
12,503 12,520 Onshore Crude Oil Pipelines & Services, net:
Crude oil transportation volumes (MBPD) 1,384 1,260 Offshore
Pipelines & Services, net: Natural gas transportation volumes
(BBtus/d) 619 569 Crude oil transportation volumes (MBPD) 340 335
Platform natural gas processing (MMcf/d) 124 147 Platform crude oil
processing (MBPD) 15 17 Petrochemical & Refined Products
Services, net: Butane isomerization and deisobutanizer volumes
(MBPD) 127 154 Propylene fractionation volumes (MBPD) 74 73 Octane
additive and related plant production volumes (MBPD) 8 6
Transportation volumes, primarily refined
products and petrochemicals (MBPD)
803 703 Total, net:
NGL, crude oil, refined products and
petrochemical transportation volumes (MBPD)
5,217 5,136 Natural gas transportation volumes (BBtus/d) 13,122
13,089 Equivalent transportation volumes (MBPD) (4) 8,670 8,580
(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)
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
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
(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 $0.54 per
gallon during the first quarter of 2015 versus $1.13 per gallon for
the first quarter of 2014.
Fluctuations in our consolidated revenues and cost of sales
amounts are explained in large part by changes in energy commodity
prices. Energy commodity prices fluctuate for a variety of reasons,
including supply and demand imbalances and geopolitical
tensions.
A decrease in our consolidated marketing revenues due to lower
energy commodity sales prices may not result in a decrease in gross
operating margin or cash available for distribution, since our
consolidated cost of sales amounts would also be lower due to
comparable decreases in the purchase prices of the underlying
energy commodities. The same correlation would be true in the case
of higher energy commodity sales prices and purchase costs.
Enterprise Products Partners
L.P.
Exhibit D Distributable Cash Flow – UNAUDITED
($ in millions)
For the Three Months
Ended March 31, 2015 2014 Net
income attributable to limited partners (GAAP) $ 636.1
$ 798.8 Adjustments to GAAP net income attributable to
limited partners to derive non-GAAP distributable cash flow: Add
depreciation, amortization and accretion expenses 367.4 319.9 Add
distributions received from unconsolidated affiliates 134.4 71.7
Subtract equity in income of unconsolidated affiliates (89.2 )
(56.5 ) Subtract sustaining capital expenditures (1) (50.7 ) (78.3
)
Subtract net gains attributable to asset
sales and insurance recoveries
(0.1 ) (89.6 ) Add cash proceeds from asset sales and insurance
recoveries 0.5 96.3 Add deferred income tax expense or subtract
benefit, as applicable 1.5 0.2 Add impairment charges 33.3 8.8
Add or subtract other miscellaneous
adjustments to derive non-GAAP distributable cash flow, as
applicable
(3.5 ) 15.7
Distributable
cash flow (non-GAAP) 1,029.7 1,087.0 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 50.7 78.3
Subtract cash proceeds from asset sales
and insurance recoveries reflected in distributable cash flow
(0.5 ) (96.3 ) Add or subtract the net effect of changes in
operating accounts, as applicable (139.0 ) 342.5
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
13.1 (7.4 )
Net cash flows
provided by operating activities (GAAP) $ 954.0
$ 1,404.1
(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 Twelve Months
Ended March 31, Ended March 31, 2015
2014 2015 Net income
(GAAP) $ 650.6 $ 806.7 $ 2,677.4 Adjustments to
GAAP net income to derive non-GAAP Adjusted EBITDA: Subtract equity
in income of unconsolidated affiliates (89.2 ) (56.5 ) (292.2 ) Add
distributions received from unconsolidated affiliates 134.4 71.7
437.8 Add interest expense, including related amortization 239.1
220.9 939.2 Add provision for income taxes 6.8 4.8 25.1 Add
depreciation, amortization and accretion in costs and expenses
355.6 311.1 1,369.6 Add non-cash losses attributable to asset sales
-- 6.1 1.6
Add losses and subtract gains attributable
to unrealized changes in the fair market value of derivative
instruments
(4.6 ) (7.8 ) 33.8 Add non-cash asset impairment charges
33.3 8.8
58.5
Adjusted EBITDA (non-GAAP) 1,326.0 1,365.8
5,250.8 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
(239.1 ) (220.9 ) (939.2 )
Subtract provision for income taxes
reflected in Adjusted EBITDA
(6.8 ) (4.8 ) (25.1 ) Subtract gains attributable to asset sales
and insurance recoveries (0.1 ) (95.7 ) (14.2 ) Add deferred income
tax expense or subtract benefit, as applicable 1.5 0.2 7.4 Add or
subtract the net effect of changes in operating accounts, as
applicable (139.0 ) 342.5 (589.7 ) Add miscellaneous non-cash and
other amounts to reconcile non-GAAP Adjusted EBITDA with GAAP net
cash flows provided by operating activities 11.5
17.0 22.1
Net cash flows provided by operating activities (GAAP) $
954.0 $ 1,404.1 $ 3,712.1
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
Ended March 31, 2015 2014
Total gross operating margin (non-GAAP) $ 1,334.4
$ 1,329.8
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
(345.3 ) (301.4 )
Subtract impairment charges not reflected
in gross operating margin
(33.3 ) (8.8 )
Add net gains attributable to asset sales
and insurance recoveries not reflected in gross operating
margin
0.1 89.6
Subtract non-refundable deferred revenues
attributable to shipper make-up rights on major new pipeline
projects included in gross operating margin
(30.7 ) (23.3 )
Add subsequent recognition of deferred
revenues attributable to make-up rights
20.1 --
Subtract general and administrative costs
not reflected in gross operating margin
(49.3 ) (53.2 )
Operating income
(GAAP) $ 896.0 $ 1,032.7
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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