Enterprise Products Partners L.P. (“Enterprise”) (NYSE: EPD)
today announced its financial results for the three months ended
March 31, 2016.
First Quarter
2016 Highlights
Three months endedMarch 31,
2016 2015 ($ in millions, except per unit amounts)
Operating income $ 916 $ 896 Net income (1) $ 670 $
651 Fully diluted earnings per unit (1) $ 0.32 $ 0.32 Net cash flow
provided by operating activities (2) $ 900 $ 954 Gross operating
margin (3) $ 1,319 $ 1,334 Adjusted EBITDA (3) $ 1,327 $ 1,326
Distributable cash flow (3) $ 1,054 $ 1,030 (1)
Net income and fully diluted earnings per
unit for the first quarters of 2016 and 2015 included non-cash
impairment charges of approximately $2 million, or less than $0.01
per unit, and $33 million, or $0.02 per unit, respectively.
(2)
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 2016 and
2015, the net effect of changes in operating accounts, which are a
component of net cash flow provided by operating activities, were
reductions of $186 million and $139 million, respectively.
(3)
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
2016 was $670 million compared to $651 million for the first
quarter of 2015. On a fully diluted basis, net income attributable
to limited partners for both the first quarters of 2016 and 2015
was $0.32 per unit. The first quarters of 2016 and 2015 included
non-cash asset impairment charges of $2 million, or less than $0.01
per unit, and $33 million, or $0.02 per unit, respectively.
- Enterprise increased its cash
distribution with respect to the first quarter of 2016 by 5.3
percent to $0.395 per unit compared to the distribution paid with
respect to the first quarter of 2015. This distribution will be
paid on May 6, 2016 to unitholders of record as of the close of
business on April 29, 2016.
- Enterprise generated distributable cash
flow of $1.1 billion for the first quarter of 2016, which provided
1.3 times coverage of the $0.395 per unit distribution. The
partnership retained $229 million of distributable cash flow for
the first quarter of 2016, providing financial flexibility to fund
growth capital projects, reduce debt and decrease the need to issue
additional equity.
- Enterprise’s total onshore natural gas
liquid (“NGL”), crude oil, refined products and petrochemical
pipeline volumes for the first quarter of 2016 increased 14 percent
to a record 5.2 million barrels per day (“BPD”). Total NGL, crude
oil, refined products and petrochemical marine terminal loading and
unloading volumes were 1.3 million BPD for the first quarter of
2016 compared to 1.2 million BPD for the first quarter of 2015.
Total onshore natural gas pipeline volumes were 11.9 trillion
British thermal units per day (“TBtud”) for the first quarter of
2016 compared to 12.5 TBtud for the first quarter of 2015. NGL
fractionation volumes for the first quarter of 2016 increased 5
percent to 836 thousand barrels per day (“MBPD”) from 798 MBPD in
the first quarter of 2015. Fee-based natural gas processing volumes
were 4.8 billion cubic feet per day (“Bcf/d”) for both the first
quarters of 2016 and 2015, while equity NGL production increased 8
percent to 145 MBPD in the first quarter of 2016 compared to the
first quarter of 2015.
- Enterprise made capital investments of
approximately $1.1 billion during the first quarter of 2016,
including $59 million of sustaining capital expenditures.
- Affiliates of Enterprise’s general
partner and Enterprise Products Company (collectively “EPCO”)
purchased $200 million of Enterprise common units in the first
quarter of 2016 comprised of approximately $100 million through the
partnership’s at-the-market equity issuance program in January
2016, and $100 million through the partnership’s distribution
reinvestment program in February 2016. EPCO stated that it will
evaluate the possible purchase of additional common units during
2016 to further support Enterprise’s growth.
“Enterprise’s diversified and integrated business model enabled
us to successfully navigate the ongoing challenges for the energy
industry in the first quarter of 2016,” stated Jim Teague, chief
executive officer of Enterprise’s general partner. “We are pleased
to report gross operating margin of $1.3 billion in the first
quarter of 2016. We generated $1.1 billion of distributable cash
flow, which provided 1.3 times coverage of the distribution
declared with respect to the first quarter of 2016,” continued
Teague. “Our results were driven by increases in gross operating
margin attributable to record NGL pipeline and LPG export volumes,
the EFS Midstream acquisition, and newly constructed assets that
largely offset lower earnings from our commodity and spread
sensitive businesses, the sale of our offshore business and lower
volumes on certain crude oil and natural gas pipelines. Overall,
total onshore liquid pipeline and marine terminal volumes increased
12 percent to a record 6.5 million barrels per day in the first
quarter of 2016 compared to the same quarter of last year.”
“We successfully completed $300 million of organic growth
projects in the first quarter of 2016 and are on schedule to
complete and begin commercial service on another $2.2 billion of
growth projects during the remainder of 2016. This includes two
natural gas processing plants and related infrastructure serving
the Permian basin; our ethane export terminal on the Houston Ship
Channel; and additional crude oil storage infrastructure in the
Houston and Beaumont areas. We have a total of $4.2 billion of
growth projects scheduled to be completed in 2017 and 2018. Our
commercial team continues to progress on several projects that are
still in the development phase,” said Teague.
“Through the first four months of this year, we raised a
substantial amount of the capital required to fund our capital
needs for 2016. We raised approximately $1.6 billion through the
issuance of common units and $1.25 billion through a notes
offering. In the first quarter, we continued to balance our
financial objectives of providing our partners with moderate
distribution growth (a 5.3 percent increase compared to the first
quarter of 2015), while retaining $229 million of distributable
cash flow in the partnership to provide financial flexibility and
partially fund our growth capital program,” stated Teague.
Review of First Quarter 2016
Results
Operating income for the first quarter of 2016 was $916 million
compared to $896 million for the first quarter of 2015. We evaluate
segment performance based on the non-GAAP financial measure of
gross operating margin. In total, gross operating margin was $1.3
billion for both the first quarters of 2016 and 2015.
NGL Pipelines & Services – Gross operating margin for
the NGL Pipelines & Services segment increased 13 percent to
$784 million for the first quarter of 2016 from $695 million for
the first quarter of 2015.
Enterprise’s natural gas processing and related NGL marketing
business generated gross operating margin of $234 million for the
first quarter of 2016 compared to $240 million for the first
quarter of 2015. Gross operating margin from the partnership’s
natural gas processing plants decreased approximately $43 million
primarily due to lower processing margins. Partially offsetting
this decline was a $37 million increase in gross operating margin
from Enterprise’s NGL marketing business, which benefited from an
increase in LPG export terminaling volumes. Enterprise’s natural
gas processing plants reported fee-based processing volumes of 4.8
Bcf/d in both the first quarters of 2016 and 2015. Enterprise’s
equity NGL production increased 8 percent to 145 MBPD for the first
quarter of 2016, primarily due to higher recoveries of ethane by
the partnership’s processing plants in the Rockies.
Gross operating margin from the partnership’s NGL pipelines and
storage business increased $98 million, or 30 percent, to $427
million for the first quarter of 2016 compared to the first quarter
of last year. A combined 313 MBPD increase in NGL transportation
volumes from the partnership’s ATEX and Aegis ethane pipelines;
Mid-America, Seminole and South Texas NGL pipeline systems; Texas
Express & Front Range Pipelines; and Lou-Tex NGL Pipeline led
to an aggregate $55 million increase in gross operating margin from
these pipelines. The third and final segment of the Aegis Ethane
Pipeline was completed in December 2015.
The partnership’s LPG import/export terminal on the Houston Ship
Channel and related pipeline reported a $34 million increase in
gross operating margin for the first quarter of 2016 compared to
the first quarter of 2015 primarily due to a 197 MBPD increase in
export loading volumes. The loading capacity of the LPG export
terminal increased from 7.5 million to 9 million barrels per month
in April 2015, and further to 16 million barrels per month in
January 2016.
NGL pipeline transportation volumes were a record 3.0 million
BPD for the first quarter of 2016 compared to 2.4 million BPD for
the same quarter of 2015. The partnership’s total NGL marine
terminal loading and unloading volumes were a record 456 MBPD for
the first quarter of 2016 compared to 263 MBPD for the first
quarter of 2015.
Enterprise’s NGL fractionation business reported gross operating
margin of $123 million for the first quarter of 2016 compared to
$127 million for the first quarter of 2015. The decrease was
primarily due to lower revenues from product blending and other
fees at the partnership’s Mont Belvieu fractionators. Total
fractionation volumes increased 5 percent to 836 MBPD for the first
quarter of 2016 from 798 MBPD in the first quarter of 2015.
Crude Oil Pipelines & Services – Gross operating
margin from the partnership’s Crude Oil Pipelines & Services
segment was $202 million for the first quarter of 2016 compared to
$214 million for the first quarter of 2015. Total crude oil
pipeline volumes were 1.4 million BPD for both the first quarters
of 2016 and 2015. Total crude oil marine terminal loading and
unloading volumes decreased to 479 MBPD in the first quarter of
2016 from 644 MBPD for the first quarter of 2015, primarily due to
lower imports.
The EFS Midstream assets, which were acquired effective July 1,
2015, contributed $53 million of gross operating margin in the
first quarter of 2016. Gross operating margin attributable to
Enterprise’s ownership in the Seaway Crude Pipeline increased $11
million in the first quarter of 2016 compared to the same quarter
in 2015 primarily due to the recognition of previously deferred
revenues as a result of the Federal Energy Regulatory Commission’s
(“FERC”) rulings in February 2016 regarding Seaway’s uncommitted
rates. Net to our interest, volumes on the Seaway Pipeline System
increased 3 percent to 581 MBPD for the first quarter of 2016.
Gross operating margin from the Houston Ship Channel crude oil
terminal increased $10 million in the first quarter of 2016
compared to the first quarter of 2015, primarily due to a 44 MBPD
increase in loading volumes, and higher revenues from 1.2 million
barrels of new storage capacity placed into service in fourth
quarter 2015. Enterprise’s Eagle Ford joint venture pipeline and
ECHO crude oil terminal reported a combined $13 million increase in
gross operating margin for the first quarter of 2016 compared to
the first quarter of 2015.
Enterprise’s South Texas Crude Oil Pipeline System reported a
$24 million decrease in gross operating margin for the first
quarter of 2016 compared to the first quarter of 2015 due to lower
volumes and fees. Pipeline volumes decreased by 76 MBPD, or 24
percent, to 238 MBPD for the first quarter of 2016 compared to the
same quarter of last year.
Gross operating margin from Enterprise’s crude oil marketing and
related activities decreased $70 million in the first quarter of
2016 compared to the first quarter of 2015, primarily attributable
to lower sales margins as well as $13 million of non-cash,
mark-to-market losses on financial instruments related to blending
activities. As a result of lower crude oil prices, regional price
spreads were less than the costs incurred by our marketing
business, such as transportation costs on the Seaway pipeline.
Enterprise’s crude oil marketing business has contracted for 75
MBPD of firm capacity on Seaway of which 25 MBPD of capacity
terminates June 1, 2017 and the remaining 50 MBPD terminates
February 1, 2018. Sales margins on Seaway-related capacity were $31
million lower in first quarter 2016 compared to first quarter
2015.
Natural Gas Pipelines & Services – Enterprise’s
Natural Gas Pipelines & Services segment reported gross
operating margin of $178 million for the first quarter of 2016
compared to $205 million for the first quarter of 2015. Total
natural gas transportation volumes were 11.9 TBtud for the first
quarter of 2016 compared to 12.5 TBtud for the first quarter of
last year.
The Texas Intrastate system reported gross operating margin of
$85 million for the first quarter of 2016 compared to $94 million
for the first quarter of 2015. Natural gas pipeline volumes for
this system were 4.9 TBtud for the first quarter of 2016 compared
to 5.2 TBtud for the first quarter of last year.
The Acadian Gas and Piceance Basin Gathering systems reported a
combined $7 million decrease in gross operating margin for the
first quarter of 2016 compared to the same quarter of last year,
primarily due to lower fees. Gross operating margin for the San
Juan Gathering system decreased by $6 million for the first quarter
of 2016 compared to the first quarter of 2015 primarily due to a 98
BBtus/d decrease in gathering volumes and lower gathering fees,
which are indexed to regional natural gas prices.
Petrochemical & Refined Products Services – Gross
operating margin for the Petrochemical & Refined Products
Services segment was $155 million for the first quarter of 2016
compared to $175 million for the first quarter of 2015. Total
segment pipeline transportation volumes increased 15 percent to a
record 852 MBPD for the first quarter of 2016 from 738 MBPD for the
same quarter of 2015.
The partnership’s propylene business reported gross operating
margin of $52 million for the first quarter of 2016 compared to $64
million for the first quarter of 2015. The decrease was primarily
due to lower sales margins. Propylene fractionation volumes were 69
MBPD for the first quarter of 2016 compared to 74 MBPD for the same
quarter of 2015.
Enterprise’s refined products pipelines and related services
business reported gross operating margin of $87 million for the
first quarter of 2016 compared to $86 million for the first quarter
of 2015. Total refined products and petrochemical marine terminal
loading and unloading volumes increased 7 percent to 347 MBPD for
the first quarter of 2016 compared to 324 MBPD for the first
quarter of last year.
Gross operating margin for Enterprise’s octane enhancement and
high-purity isobutylene business decreased $11 million to a net
loss of $10 million for the first quarter of 2016, primarily due to
lower sales margins and volumes. The partnership’s octane
enhancement facility was out of service for extended periods during
the first quarters of 2016 and 2015 for major maintenance. Total
plant production volumes were 10 MBPD for the first quarter of 2016
compared to 8 MBPD for the same quarter of 2015.
Gross operating margin for Enterprise’s butane isomerization and
related operations increased to $16 million for the first quarter
of 2016 from $7 million for the first quarter of 2015, primarily
due to higher volumes. Butane isomerization volumes increased 77
percent to 110 MBPD for the first quarter of 2016 from 62 MBPD for
the same quarter of 2015.
Offshore Pipelines & Services – Enterprise closed on
the sale of its offshore Gulf of Mexico business July 24, 2015. As
a result, the partnership had no contribution to gross operating
margin from these assets in the first quarter of 2016 compared to
$46 million for the first quarter of 2015.
Capitalization
Total debt principal outstanding at March 31, 2016 was $22.9
billion, including $1.5 billion of junior subordinated notes to
which the nationally recognized debt rating agencies ascribe
partial equity content. At March 31, 2016, Enterprise had
consolidated liquidity of approximately $3.6 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 2016 was $1.1
billion, which includes $59 million of sustaining capital
expenditures. For 2016, we expect to invest approximately $2.8
billion for growth capital projects, $1 billion for the final
installment payment for the purchase of EFS Midstream and
approximately $275 million for sustaining capital expenditures.
Conference Call to Discuss First
Quarter 2016 Earnings
Enterprise will host a conference call today to discuss first
quarter 2016 earnings. The call will be broadcast live over the
Internet beginning at 9:00 a.m. CT and may be accessed by visiting
the 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 flow provided by operating activities or any other measure
of financial performance calculated and presented in accordance
with GAAP. Our non-GAAP financial measures may not be comparable to
similarly-titled measures of other companies because they may not
calculate such measures in the same manner as we do.
Company Information and Use of
Forward-Looking Statements
Enterprise Products Partners L.P. is one of the largest publicly
traded partnerships and a leading North American provider of
midstream energy services to producers and consumers of natural
gas, NGLs, crude oil, refined products and petrochemicals. Our
services include: natural gas gathering, treating, processing,
transportation and storage; NGL transportation, fractionation,
storage and import and export terminals; crude oil gathering,
transportation, storage and terminals; petrochemical and refined
products transportation, storage and terminals; and a marine
transportation business that operates primarily on the United
States inland and Intracoastal Waterway systems. The partnership’s
assets include approximately 49,000 miles of pipelines; 250 million
barrels of storage capacity for NGLs, crude oil, refined products
and petrochemicals; and 14 billion cubic feet of natural gas
storage capacity.
This press release includes forward-looking statements. Except
for the historical information contained herein, the matters
discussed in this press release are forward-looking statements that
involve certain risks and uncertainties, such as the partnership’s
expectations regarding future results, capital expenditures,
project completions, liquidity and financial market conditions.
These risks and uncertainties include, among other things,
insufficient cash from operations, adverse market conditions,
governmental regulations and other factors discussed in
Enterprise’s filings with the U.S. Securities and Exchange
Commission. If any of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results or
outcomes may vary materially from those expected. The partnership
disclaims any intention or obligation to update publicly or reverse
such statements, whether as a result of new information, future
events or otherwise.
Enterprise Products Partners
L.P.
Exhibit A
Condensed Statements of Consolidated
Operations – UNAUDITED
($ in millions, except per unit amounts)
For the Three MonthsEnded March
31,
2016 2015
Revenues
$ 5,005.3 $ 7,472.5
Costs and
expenses:
Operating costs and expenses 4,146.9 6,616.4
General and administrative costs
43.9 49.3 Total costs and
expenses 4,190.8 6,665.7
Equity in income of
unconsolidated affiliates
101.1 89.2
Operating
income
915.6 896.0
Other income
(expense):
Interest expense (240.6 ) (239.1 )
Other, net
3.6 0.5 Total other expense
(237.0 ) (238.6 )
Income before income
taxes
678.6 657.4 Provision for income taxes (8.4 )
(6.8 )
Net
income
670.2 650.6
Net income
attributable to noncontrolling interests
(9.0 ) (14.5 )
Net income
attributable to limited partners
$ 661.2 $ 636.1
Per unit data (fully
diluted):
Earnings per unit $ 0.32 $ 0.32 Average
limited partner units outstanding (in millions) 2,040.5
1,966.7
Supplemental
financial data:
Net cash flow provided by operating activities $ 899.7
$ 954.0 Total debt principal outstanding at end of
period $ 22,946.4 $ 21,620.7 Non-GAAP
distributable cash flow (1) $ 1,053.6 $ 1,029.7
Non-GAAP Adjusted EBITDA (2) $ 1,327.2 $
1,326.0 Non-GAAP gross operating margin by segment: (3) NGL
Pipelines & Services $ 783.7 $ 695.2 Crude Oil Pipelines &
Services 202.3 214.0 Natural Gas Pipelines & Services 177.7
204.5 Petrochemical & Refined Products Services 154.8 174.6
Offshore Pipelines & Services --
46.1 Total gross operating margin $ 1,318.5 $
1,334.4 Capital spending: Capital expenditures, net
(4) $ 995.0 $ 793.2 Equity consideration issued for Oiltanking
acquisition -- 1,408.7 Investments in unconsolidated affiliates
70.4 68.3 Total capital
spending, cash and non-cash $ 1,065.4 $ 2,270.2
(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) See Exhibit F for
reconciliation to GAAP operating income. (4) 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 MonthsEnded March
31,
2016 2015
Selected operating
data: (1)
NGL Pipelines & Services, net: NGL pipeline
transportation volumes (MBPD) 2,954 2,426 NGL marine terminal
volumes (MBPD) 456 263 NGL fractionation volumes (MBPD) 836 798
Equity NGL production (MBPD) (2) 145 134 Fee-based natural gas
processing (MMcf/d) (3) 4,781 4,784 Crude Oil Pipelines &
Services, net: Crude oil pipeline transportation volumes (MBPD)
1,393 1,384 Crude oil marine terminal volumes (MBPD) 479 644
Natural Gas Pipelines & Services, net: Natural gas pipeline
transportation volumes (BBtus/d) 11,895 12,503 Petrochemical &
Refined Products Services, net: Propylene fractionation volumes
(MBPD) 69 74 Butane isomerization volumes (MBPD) 110 62 Standalone
DIB processing volumes (MBPD) 96 65 Octane additive and related
plant production volumes (MBPD) 10 8
Pipeline transportation volumes, primarily
refined products and petrochemicals (MBPD)
852
738
Refined products and petrochemicals marine
terminal volumes (MBPD)
347 324 Offshore Pipelines & Services, net: Natural gas
pipeline transportation volumes (BBtus/d) -- 619 Crude oil pipeline
transportation volumes (MBPD) -- 340 Platform natural gas
processing (MMcf/d) -- 124 Platform crude oil processing (MBPD) --
15 Total, net:
NGL, crude oil, petrochemical and refined
products pipeline transportation volumes (MBPD)
5,199 4,888 Natural gas pipeline transportation volumes (BBtus/d)
11,895 13,122 Equivalent pipeline transportation volumes (MBPD) (4)
8,329 8,341
NGL, crude oil, refined products and
petrochemical marine terminal volumes (MBPD)
1,282 1,231 (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) 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)
2015 by quarter: 1st
Quarter $ 2.99 $ 0.19 $ 0.53 $ 0.68 $ 0.68 $ 1.10 $ 0.50 $ 0.37 $
48.63 $ 52.83 2nd Quarter $ 2.65 $ 0.18 $ 0.46 $ 0.59 $ 0.60 $ 1.26
$ 0.42 $ 0.29 $ 57.94 $ 62.97 3rd Quarter $ 2.77 $ 0.19 $ 0.40 $
0.55 $ 0.55 $ 0.98 $ 0.33 $ 0.21 $ 46.43 $ 50.17 4th Quarter $ 2.27
$ 0.18 $ 0.42 $ 0.60 $ 0.61 $
0.97 $ 0.31 $ 0.18 $ 42.18 $ 43.54
YTD 2015 Averages $ 2.67 $ 0.18 $ 0.45
$ 0.61 $ 0.61 $ 1.08 $ 0.39 $ 0.26
$ 48.80 $ 52.38
2016 by quarter: 1st Quarter $
2.09 $ 0.16 $ 0.38 $ 0.53 $ 0.53
$ 0.76 $ 0.31 $ 0.18 $ 33.45 $ 35.11
(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 $0.40 per
gallon during the first quarter of 2016 versus $0.54 per gallon for
the first quarter of 2015.
Fluctuations in our consolidated revenues and cost of sales
amounts are explained in large part by changes in energy commodity
prices. Energy commodity prices fluctuate for a variety of reasons,
including supply and demand imbalances and geopolitical
tensions.
A change in our consolidated marketing revenues due to lower
energy commodity sales prices may not result in a similar change in
gross operating margin or cash available for distribution, since
our consolidated cost of sales amounts would also change due to
comparable decreases in the purchase prices of the underlying
energy commodities.
Enterprise Products Partners
L.P.
Exhibit D Distributable Cash Flow – UNAUDITED
($ in millions)
For the Three MonthsEnded March
31,
2016 2015 Net income attributable to
limited partners (GAAP) $ 661.2 $ 636.1 Adjustments to
GAAP net income attributable to limited partners to derive non-GAAP
distributable cash flow: Add depreciation, amortization and
accretion expenses 382.1 367.4 Add distributions received from
unconsolidated affiliates 115.8 134.4 Subtract equity in income of
unconsolidated affiliates (101.1 ) (89.2 ) Subtract sustaining
capital expenditures (1) (59.3 ) (50.7 ) Add net losses or subtract
net gains attributable to asset sales 4.9 (0.1 ) Add cash proceeds
from asset sales 13.4 0.5
Add non-cash benefit attributable to
changes in fair value of the Liquidity Option Agreement
(2.2 ) -- Add deferred income tax expense 4.1 1.5 Add non-cash
asset impairment charges 1.7 33.3
Add or subtract other miscellaneous
adjustments to derive non-GAAP distributable cash flow, as
applicable
33.0 (3.5 )
Distributable cash flow
(non-GAAP) 1,053.6 1,029.7 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 59.3 50.7 Subtract cash proceeds from
asset sales reflected in distributable cash flow (13.4 ) (0.5 ) Add
or subtract the net effect of changes in operating accounts, as
applicable (186.4 ) (139.0 ) 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 (13.4 ) 13.1
Net cash
flow provided by operating activities (GAAP) $ 899.7
$ 954.0 (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 flow provided by operating
activities.
Enterprise Products Partners
L.P.
Exhibit E Adjusted EBITDA - UNAUDITED
($ in millions)
For the TwelveMonths
EndedMarch 31,
For the Three Months
Ended March 31,
2016 2015
2016
Net income (GAAP) $ 670.2 $ 650.6 $ 2,578.0
Adjustments to GAAP net income to derive non-GAAP Adjusted EBITDA:
Subtract equity in income of unconsolidated affiliates (101.1 )
(89.2 ) (385.5 ) Add distributions received from unconsolidated
affiliates 115.8 134.4 443.5 Add interest expense, including
related amortization 240.6 239.1 963.3 Add provision for or
subtract benefit from income taxes 8.4 6.8 (0.9 ) Add depreciation,
amortization and accretion in costs and expenses 367.1 355.6
1,484.1 Add non-cash asset impairment charges 1.7 33.3 131.0 Add
non-cash losses attributable to asset sales 6.6 -- 25.5
Add non-cash expense or subtract benefit
attributable to changes in fair value of the Liquidity Option
Agreement
(2.2 ) -- 23.2
Add losses or subtract gains attributable
to unrealized changes in the fair market value of derivative
instruments
20.1 (4.6 ) 6.3
Adjusted EBITDA (non-GAAP) 1,327.2 1,326.0 5,268.5
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
(240.6 ) (239.1 ) (963.3 )
Add benefit or subtract provision for
income taxes reflected in Adjusted EBITDA
(8.4 ) (6.8 ) 0.9 Subtract gains attributable to asset sales (1.7 )
(0.1 ) (4.9 )
Subtract distributions received for return
of capital from unconsolidated affiliates
(9.1 ) -- (9.1 ) Add deferred income tax expense 4.1 1.5 (18.0 )
Add or subtract the net effect of changes in operating accounts, as
applicable (186.4 ) (139.0 ) (370.7 ) Add or subtract miscellaneous
non-cash and other amounts to reconcile non-GAAP Adjusted EBITDA
with GAAP net cash flow provided by operating activities
14.6 11.5 44.7
Net cash flow provided by operating activities (GAAP) $
899.7 $ 954.0 $ 3,948.1
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 flow provided by operating activities.
Enterprise Products Partners
L.P.
Exhibit F Gross Operating Margin – UNAUDITED
($ in millions)
For the Three MonthsEnded March
31,
2016 2015 Total gross operating margin
(non-GAAP) $ 1,318.5 $ 1,334.4
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
(358.2 ) (345.3 )
Subtract non-cash asset impairment charges
not reflected in gross operating margin
(1.7 ) (33.3 )
Add net gains or subtract net losses
attributable to asset sales not reflected in gross operating
margin
(4.9 ) 0.1
Subtract non-refundable deferred revenues
attributable to shipper make-up rights on new pipeline projects
reflected in gross operating margin
(7.1 ) (30.7 )
Add subsequent recognition of deferred
revenues attributable to make-up rights
12.9 20.1
Subtract general and administrative costs
not reflected in gross operating margin
(43.9 ) (49.3 )
Operating income (GAAP)
$ 915.6 $ 896.0
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 (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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160428005458/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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