Enterprise Products Partners L.P. (“Enterprise”) (NYSE:EPD)
today announced its financial results for the three and six months
ended June 30, 2015.
Second Quarter
2015 Highlights
Three months ended June 30, Six months ended
June 30, 2015 2014 2015 2014 ($ in millions, except
per unit amounts) Gross operating margin (1) $ 1,303 $ 1,263
$ 2,638 $ 2,593 Net income (2) (3) $ 557 $ 647 $ 1,207 $ 1,453
Fully diluted earnings per unit (2) (3) (4) $ 0.28 $ 0.34 $ 0.60 $
0.76 Adjusted EBITDA (1) $ 1,296 $ 1,248 $ 2,622 $ 2,614
Distributable cash flow (1) $ 988 $ 954 $ 2,017 $ 2,041
(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)
Net income and fully diluted earnings per
unit for the second quarter of 2015 included non-cash impairment
and related charges of approximately $119 million, or $0.06 per
unit, which includes $95 million associated with our offshore Gulf
of Mexico business that was classified as held for sale at June 30,
2015. Non-cash impairment charges for the six months ended June 30,
2015 and 2014 were $112 million, or $0.06 per unit, and $13
million, or $0.01 per unit, respectively.
(3)
Net income and fully diluted earnings per
unit included net gains attributable to asset sales and insurance
recoveries of $7 million, or less than $0.01 per unit, for the
second quarter of 2014, and $96 million, or $0.05 per unit, for the
six months ended June 30, 2014.
(4)
All historical 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.
- Enterprise increased its cash
distribution with respect to the second quarter of 2015 by 5.6
percent to $0.38 per unit compared to the second quarter of
2014;
- Enterprise reported distributable cash
flow of $988 million for the second quarter of 2015, which provided
1.3 times coverage of the $0.38 per unit cash distribution and
resulted in $238 million of retained distributable cash flow;
and
- Affiliates of privately held Enterprise
Products Company (“EPCO”), which collectively own our general
partner and approximately 34 percent of our outstanding limited
partner interests, purchased $50 million of common units from
Enterprise in May 2015 through the distribution reinvestment plan.
Including this purchase, EPCO affiliates have purchased $150
million of Enterprise common units in 2015.
Review of Second Quarter 2015
Results
“Enterprise reported record liquid pipeline transportation
volumes and LPG export volumes which led to solid results for the
second quarter of 2015,” said Michael A. Creel, chief executive
officer of Enterprise’s general partner. “We also benefited from
steady performance from our fee-based businesses, contributions
from assets acquired from Oiltanking, the expansion of the Seaway
crude oil pipeline and lower operating expenses. These led to a 3
percent increase in gross operating margin and a 5 percent increase
in distributable cash flow, excluding proceeds from asset sales and
insurance recoveries, which enabled us to increase the quarterly
distribution for the 44th consecutive quarter and provide 1.3 times
coverage of the distribution this quarter.”
Net income for the second quarter of 2015 was $557 million
compared to $647 million for the second quarter of 2014. On a fully
diluted basis, net income attributable to limited partners for the
second quarter of 2015 was $0.28 per unit compared to $0.34 per
unit for the second quarter of 2014. The second quarter of 2015
included non-cash asset impairment and related charges of $119
million, or $0.06 per unit, of which approximately $95 million was
attributable to our offshore Gulf of Mexico business that was
classified as held for sale at June 30, 2015. Enterprise completed
the sale of its offshore business on July 24, 2015 for
approximately $1.5 billion.
On July 7, 2015, Enterprise announced an increase in the
partnership’s quarterly cash distribution with respect to the
second quarter of 2015 to $0.38 per unit, representing a 5.6
percent increase over the distribution paid with respect to the
second quarter of 2014. The distribution with respect to the second
quarter of 2015 will be paid August 7, 2015 to unitholders of
record at the close of business on July 31, 2015. Enterprise
generated distributable cash flow of $988 million for the second
quarter of 2015 compared to $954 million for the second quarter of
2014. Distributable cash flow for the second quarters of 2015 and
2014 included proceeds from asset sales and insurance recoveries of
$5 million and $17 million, respectively.
Enterprise’s distributable cash flow for the second quarter of
2015 provided 1.3 times coverage of the cash distribution that will
be paid August 7, 2015. The partnership retained $238 million of
distributable cash flow for the second quarter of 2015, which is
available to reinvest in growth capital projects, reduce debt and
decrease the need to issue additional equity. For the first six
months of 2015, Enterprise has retained $532 million of
distributable cash flow.
“Since the first quarter of 2015, we completed two transactions
and announced two organic growth projects that increase our
midstream focus to serve the Eagle Ford shale and Permian regions
and strengthen our integrated value chain from the wellhead through
our distribution system and marine terminals. In July 2015, we
completed the acquisition of EFS Midstream, LLC from Pioneer
Natural Resources Company and Reliance Industries Limited for $2.15
billion. This acquisition, which is supported by long-term
contracts, extends and broadens our infrastructure in the Eagle
Ford shale region. Also in July 2015, we completed the sale of our
offshore business for approximately $1.5 billion. The offshore
business accounted for only 3 percent of our gross operating margin
and did not directly integrate with our onshore system,” continued
Creel.
“In April 2015, we announced two organic growth projects in the
Permian region. The first project was a joint venture to build a
natural gas processing facility, while Enterprise would build the
related NGL pipelines to support development in the Delaware basin.
We also announced plans to build a 24-inch diameter crude oil and
condensate pipeline with a capacity of 450,000 MBPD that links
Enterprise’s Midland and Sealy storage facilities. Both of these
projects are supported by long-term agreements and provide
producers with access to domestic and international markets using
our downstream distribution infrastructure,” said Creel.
During the first half of 2015, Enterprise completed construction
and began commercial operations of assets totaling approximately
$300 million of capital investment. These assets include the 1.5
million barrel per month expansion of its liquefied petroleum gas
(“LPG”) export facility on the Houston Ship Channel.
Currently, the partnership has more than $8.3 billion of
projects under construction that will begin commercial operations
between now and the end of 2017, including $2.4 billion of capital
projects expected to be completed in the second half of 2015.
Projects expected to be completed during the second half of 2015
include the additional expansion of the LPG export facility, the
remaining phases of the Aegis ethane pipeline and the Mont Belvieu
brine capacity expansion.
Review of Second Quarter 2015 Segment
Performance
NGL Pipelines & Services – Gross operating margin for
the NGL Pipelines & Services segment was $651 million for the
second quarter of 2015 compared to $681 million for the second
quarter of 2014.
Enterprise’s natural gas processing and related natural gas
liquids (“NGL”) marketing business generated gross operating margin
of $220 million for the second quarter of 2015 compared to $266
million for the second quarter of 2014. Gross operating margin from
the partnership’s natural gas processing plants decreased $57
million primarily due to lower processing margins. Partially
offsetting this decline was a $12 million increase in gross
operating margin from Enterprise’s NGL marketing activities.
Enterprise’s natural gas processing plants reported fee-based
processing volumes of 4.9 billion cubic feet per day (“Bcf/d”) in
the second quarters of 2015 and 2014. Enterprise’s equity NGL
production was 123 thousand barrels per day (“MBPD”) for the second
quarter of 2015 compared to 136 MBPD for the second quarter of 2014
primarily due to lower recoveries of ethane.
Gross operating margin from the partnership’s NGL pipelines and
storage business increased $51 million, or 19 percent, to $312
million for the second quarter of 2015 from $261 million for the
second quarter of 2014. NGL transportation volumes were a record
3.0 million barrels per day (“BPD”) for the second quarter of 2015
compared to 2.9 million BPD for the same quarter of 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 second quarter of 2015 compared to
the second quarter of 2014. This increase includes a $14 million
contribution from assets acquired in the Oiltanking transaction in
October 2014. LPG export volumes increased by 43 MBPD as a result
of the expansion of the partnership’s LPG export facility that was
completed in March 2015.
Collectively, the Mid-America, Seminole and Chaparral NGL
pipeline systems reported a $17 million increase in gross operating
margin in the second quarter of 2015 compared to the same quarter
of 2014 primarily due to higher pipeline tariffs and lower
operating expenses, which more than offset lower revenues due to a
79 MBPD decrease in transportation volume due in part to lower
recoveries of ethane. Transportation volumes on the Mid-America,
Seminole and Chaparral pipelines were 1.0 million BPD in the second
quarter of 2015 compared to 1.1 million BPD in the second quarter
of 2014.
Gross operating margin from the partnership’s investments in the
Front Range Pipeline, Texas Express Pipeline and Texas Express
Gathering System increased $3 million in the second quarter of 2015
compared to the same quarter of 2014. Net to our interest, combined
transportation volumes on these pipeline systems were 77 MBPD
during the second quarter of 2015 compared to 51 MBPD during the
second quarter of 2014.
The partnership’s ATEX ethane pipeline generated gross operating
margin of $35 million for the second quarters of 2015 and 2014.
Higher revenues from an increase in volumes were offset by an
increase in operating costs. The ATEX pipeline transported
approximately 70 MBPD of ethane during the second quarter of 2015
compared to 44 MBPD in the second quarter of 2014.
Enterprise’s NGL fractionation business reported gross operating
margin of $119 million for the second quarter of 2015, a $35
million decrease from $154 million reported for the second quarter
of last year primarily due to lower volumes and lower product
blending revenues associated with lower energy commodity prices.
Total fractionation volumes for the second quarter of 2015
decreased to 822 MBPD from 845 MBPD in the second quarter of 2014
primarily due to lower recoveries of ethane by upstream processing
plants.
Crude Oil Pipelines & Services – Gross operating
margin from the partnership’s Crude Oil Pipelines & Services
segment increased 28 percent, or $52 million, to $236 million for
the second quarter of 2015 from $184 million for the second quarter
of 2014. Total crude oil transportation volumes were 1.5 million
BPD for the second quarter of 2015 compared to 1.3 million BPD for
the same quarter of 2014.
Gross operating margin increased by $37 million associated with
crude oil operations at the partnership’s Houston Ship Channel
terminal, which was part of the Oiltanking acquisition. Gross
operating margin attributable to Enterprise’s ownership in the
Seaway pipeline increased $28 million in the second quarter of 2015
compared to the same quarter of 2014 primarily due to revenues from
the new Seaway Loop pipeline, which began commercial service in
December 2014. Net to our interest, volumes on the Seaway Pipeline
increased 153 MBPD in the second quarter of 2015 compared to the
same quarter of 2014. The West Texas crude oil pipeline system
reported a $6 million increase in gross operating margin on higher
volumes of 30 MBPD during the second quarter of 2015 compared to
the second quarter of 2014.
The South Texas crude oil pipeline system reported a $20 million
decrease in gross operating margin this quarter compared to the
same quarter last year due in part to a 34 MBPD decrease in
transportation volumes. The decrease in transportation volumes was
attributable to lower volumes from legacy fields in South Texas and
the abandonment of certain segments of pipeline, which more than
offset an increase in transportation volumes attributable to Eagle
Ford production.
Natural Gas Pipelines & Services – Enterprise’s
Natural Gas Pipelines & Services segment reported gross
operating margin of $191 million for the second quarter of 2015
compared to $203 million for the second quarter of 2014. Total
natural gas transportation volumes were 12,488 billion British
thermal units per day (“BBtus/d”) for the second quarter of 2015
compared to 12,617 BBtus/d for the second quarter of last year.
The Texas Intrastate system reported gross operating margin of
$93 million for the second quarter of 2015, compared to $94 million
for the second quarter of last year. Natural gas pipeline volumes
for the Texas Intrastate system were 4,951 BBtus/d in the second
quarter of 2015 compared to 4,883 BBtus/d for the second quarter of
2014.
The San Juan natural gas gathering system reported an $11
million decrease in gross operating margin to $15 million for the
second quarter of 2015 compared to the second 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 1,228 BBtus/d in the second quarter of 2015 compared to 1,256
BBtus/d in the second quarter of last year.
The Jonah gathering system reported gross operating margin of
$33 million for the second quarter of 2015 compared to $28 million
for the same quarter of 2014. Natural gas gathering volumes on the
Jonah gathering system increased 8 percent to 1,680 BBtus/d for the
second quarter of 2015 compared to 1,559 BBtus/d for the second
quarter of 2014.
Petrochemical & Refined Products Services – Gross
operating margin for the Petrochemical & Refined Products
Services segment increased 12 percent, or $20 million, to $181
million for the second quarter of 2015 compared to the second
quarter of 2014. Total refined products and petrochemical
transportation volumes for this business increased 9 percent to 875
MBPD for the second quarter of 2015 compared to 804 MBPD for the
second quarter of 2014.
Enterprise’s refined products pipelines and related services
business reported a $20 million increase in gross operating margin
to $44 million for the second quarter of 2015 compared to the
second quarter of 2014. Included in gross operating margin for the
second quarter of 2015 is an aggregate $12 million contribution
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 was reactivated in May
2014, had a $6 million increase in gross operating margin for the
second quarter of 2015 compared to the same quarter last year.
Gross operating margin for Enterprise’s octane enhancement and
high-purity isobutylene business increased to $68 million in the
second quarter of 2015 from $46 million for the second quarter of
2014 primarily due to higher sales volumes and margins. Total plant
production volumes were 24 MBPD for the second quarter of 2015
compared to 20 MBPD for the same quarter last year.
The partnership’s propylene business reported gross operating
margin of $34 million for the second quarter of 2015 compared to
$42 million for the second quarter of 2014 primarily due to
increased maintenance expenses. Propylene fractionation volumes
were 68 MBPD for the second quarter of 2015 compared to 71 MBPD for
the second quarter of 2014.
Enterprise’s butane isomerization business reported gross
operating margin of $19 million in the second quarter of 2015
compared to $32 million in the second 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 98 MBPD for the second quarter of 2015 compared to 105
MBPD for the second quarter of 2014.
Offshore Pipelines & Services – Gross operating
margin for the Offshore Pipelines & Services segment was $44
million for the second quarter of 2015 compared to $34 million for
the same quarter of 2014.
Gross operating margin from Enterprise’s offshore crude oil
pipeline business was $36 million for the second quarter of 2015
compared to $22 million for the second quarter of 2014. Equity
earnings from our ownership in the SEKCO Oil Pipeline, which began
operations in July 2014, increased $10 million. Equity earnings
from our ownership in the Poseidon Crude Oil Pipeline System
increased $4 million, primarily due to higher volumes from the
SEKCO Oil Pipeline. Total offshore crude oil pipeline volumes
increased to 372 MBPD in the second quarter of 2015 compared to 318
MBPD for the second quarter of 2014.
Capitalization
Total debt principal outstanding at June 30, 2015 was $22.3
billion, including $1.5 billion of junior subordinated notes to
which the nationally recognized debt rating agencies ascribe
partial equity content. At June 30, 2015, Enterprise had
consolidated liquidity of $5.6 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 second quarter of 2015 was $888
million, which includes $61 million of sustaining capital
expenditures. For the first six months of 2015, Enterprise’s
sustaining capital expenditures were $112 million. We currently
expect sustaining capital expenditures for the full year 2015 to be
in the range of $300 million to $325 million.
Conference Call to Discuss Second
Quarter 2015 Earnings
Today, Enterprise will host a conference call to discuss second
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; petrochemical
transportation and services; and a marine transportation business
that operates primarily on the United States inland and
Intracoastal Waterway systems. The partnership’s assets include
approximately 49,000 miles of onshore pipelines; 225 million
barrels of storage capacity for NGLs, crude oil, refined products
and petrochemicals; and 14 billion cubic feet of natural gas
storage capacity.
This press release includes forward-looking statements. 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 June 30,
For the Six Months
Ended June 30,
2015 2014 2015
2014
Revenues
$ 7,092.5 $ 12,520.8 $ 14,565.0 $ 25,430.7
Costs and
expenses:
Operating costs and expenses 6,357.5 11,639.1 12,973.9 23,519.6
General and administrative costs 44.9 47.7 94.2
100.9 Total costs and expenses 6,402.4 11,686.8
13,068.1 23,620.5
Equity in income of
unconsolidated affiliates
110.2 50.3 199.4 106.8
Operating
income
800.3 884.3 1,696.3 1,917.0
Other income
(expense):
Interest expense (240.4) (228.9) (479.5) (449.8) Other, net (11.2)
1.1 (10.7) 0.8 Total other expense (251.6)
(227.8) (490.2) (449.0)
Income before income
taxes
548.7 656.5 1,206.1 1,468.0 Benefit from (provision for) income
taxes 7.9 (10.0) 1.1 (14.8)
Net
income
556.6 646.5 1,207.2 1,453.2
Net income
attributable to noncontrolling interests
(5.6) (8.8) (20.1) (16.7)
Net income
attributable to limited partners
$ 551.0 $ 637.7 $ 1,187.1 $ 1,436.5
Per unit data (fully
diluted): (1)
Earnings per unit $ 0.28 $ 0.34 $ 0.60 $ 0.76
Average limited partner units outstanding (in millions) 2,002.1
1,880.4 1,984.5 1,878.2
Supplemental
financial data:
Non-GAAP distributable cash flow (2) $ 987.5 $ 953.8
$ 2,017.2 $ 2,040.8 Non-GAAP Adjusted EBITDA (3) $ 1,296.3
$ 1,248.2 $ 2,622.3 $ 2,614.0 Non-GAAP gross
operating margin by segment: (4) NGL Pipelines & Services $
650.6 $ 680.9 $ 1,345.8 $ 1,460.9 Crude Oil Pipelines &
Services 235.6 184.0 449.6 343.7 Natural Gas Pipelines &
Services 191.4 203.0 395.9 423.4 Petrochemical & Refined
Products Services 181.3 161.7 355.9 292.1 Offshore Pipelines &
Services 44.3 33.6 90.4 72.9 Total gross
operating margin $ 1,303.2 $ 1,263.2 $ 2,637.6
$ 2,593.0 Net cash flows provided by operating activities $
947.6 $ 467.8 $ 1,901.6 $ 1,871.9 Total debt
principal outstanding at end of period $ 22,332.7 $ 18,382.7
$ 22,332.7 $ 18,382.7 Capital spending:
Capital expenditures, net (5) $ 837.0 $ 477.1 $ 1,630.2 $ 1,172.5
Equity consideration issued for Oiltanking acquisition -- --
1,408.7 -- Investments in unconsolidated affiliates 45.8 214.1
114.1 498.8 Other investing activities 5.3 6.0 5.3
6.0 Total capital spending, cash and non-cash $ 888.1
$ 697.2 $ 3,158.3 $ 1,677.3
(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 June 30,
For the Six Months
Ended June 30,
2015 2014 2015
2014
Selected operating
data: (1)
NGL Pipelines & Services, net: NGL transportation
volumes (MBPD) 2,974 2,866 2,833 2,855 NGL fractionation volumes
(MBPD) 822 845 810 819 Equity NGL production (MBPD) (2) 123 136 129
136 Fee-based natural gas processing (MMcf/d) (3) 4,912 4,941 4,848
4,829 Crude Oil Pipelines & Services, net: Crude oil
transportation volumes (MBPD) 1,469 1,297 1,427 1,279 Natural Gas
Pipelines & Services, net: Natural gas transportation volumes
(BBtus/d) 12,488 12,617 12,496 12,569 Petrochemical & Refined
Products Services, net: Butane isomerization and deisobutanizer
volumes (MBPD) 180 188 154 172 Propylene fractionation volumes
(MBPD) 68 71 71 72 Octane additive and related plant production
volumes (MBPD) 24 20 16 13
Transportation volumes, primarily refined
products and petrochemicals (MBPD)
875 804 840 778 Offshore Pipelines & Services, net: Natural gas
transportation volumes (BBtus/d) 561 609 590 589 Crude oil
transportation volumes (MBPD) 372 318 358 326 Platform natural gas
processing (MMcf/d) 83 152 103 150 Platform crude oil processing
(MBPD) 13 9 14 13 Total, net:
NGL, crude oil, refined products and
petrochemical transportation volumes (MBPD)
5,690 5,285 5,458 5,238 Natural gas transportation volumes
(BBtus/d) 13,049 13,226 13,086 13,158 Equivalent transportation
volumes (MBPD) (4) 9,124 8,766 8,902 8,701
(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)
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 2nd Quarter $2.65 $0.18 $0.46 $0.59
$0.60 $1.26 $0.42 $0.29 $57.94
$62.97
YTD 2015 Averages $2.82 $0.19
$0.49 $0.64 $0.64 $1.18 $0.46
$0.33 $53.29 $57.90
(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 $0.52 per
gallon during the second quarter of 2015 versus $1.03 per gallon
for the second quarter of 2014.
Fluctuations in our consolidated revenues and cost of sales
amounts are explained in large part by changes in energy commodity
prices. Energy commodity prices fluctuate for a variety of reasons,
including supply and demand imbalances and geopolitical
tensions.
A decrease in our consolidated marketing revenues due to lower
energy commodity sales prices may not result in a decrease in gross
operating margin or cash available for distribution, since our
consolidated cost of sales amounts would also be lower due to
comparable decreases in the purchase prices of the underlying
energy commodities. The same correlation would be true in the case
of higher energy commodity sales prices and purchase costs.
Enterprise Products Partners L.P. Exhibit D
Distributable Cash Flow - UNAUDITED ($ in millions)
For the Three Months
Ended June 30,
For the Six Months
Ended June 30,
2015 2014 2015
2014 Net income attributable to limited partners
(GAAP) $ 551.0 $ 637.7 $ 1,187.1 $ 1,436.5
Adjustments to GAAP net income attributable to limited partners to
derive non-GAAP distributable cash flow: Add depreciation,
amortization and accretion expenses 407.5 331.1 774.9 651.0 Add
distributions received from unconsolidated affiliates 131.1 85.4
265.5 157.1 Subtract equity in income of unconsolidated affiliates
(110.2 ) (50.3 ) (199.4 ) (106.8 ) Subtract sustaining capital
expenditures (1) (60.8 ) (76.9 ) (111.5 ) (155.2 ) Add losses or
subtract gains attributable to asset sales and
insurance recoveries
2.5 (6.8 ) 2.4 (96.4 ) Add cash proceeds from asset sales and
insurance recoveries 5.4 16.9 5.9 113.2 Add non-cash expense
attributable to changes in fair value of the Liquidity Option
Agreement 11.5 -- 11.5 -- Add deferred income tax expense or
subtract benefit (13.2 ) 0.4 (11.7 ) 0.6 Add non-cash impairment
charges 79.0 3.7 112.3 12.5 Add or subtract other miscellaneous
adjustments to derive non-GAAP
distributable cash flow, as applicable
(16.3 ) 12.6 (19.8 )
28.3
Distributable cash flow (non-GAAP)
987.5 953.8 2,017.2 2,040.8 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 60.8 76.9 111.5 155.2 Subtract cash
proceeds from asset sales and insurance recoveries reflected in
distributable cash flow
(5.4 ) (16.9 ) (5.9 ) (113.2 ) Add or subtract the net effect of
changes in operating accounts, as applicable (111.7 ) (541.1 )
(250.7 ) (198.6 ) 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
16.4 (4.9 ) 29.5
(12.3 )
Net cash flows provided by operating activities
(GAAP) $ 947.6 $ 467.8 $ 1,901.6
$ 1,871.9 (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 Twelve
Months Ended
June 30,
For the Three Months
Ended June 30,
For the Six Months
Ended June 30,
2015 2014 2015
2014 2015 Net income (GAAP) $ 556.6
$ 646.5 $ 1,207.2 $ 1,453.2 $ 2,587.5 Adjustments to
GAAP net income to derive non-GAAP Adjusted EBITDA: Subtract equity
in income of unconsolidated affiliates (110.2 ) (50.3 ) (199.4 )
(106.8 ) (352.1 ) Add distributions received from unconsolidated
affiliates 131.1 85.4 265.5 157.1 483.5 Add interest expense,
including related amortization 240.4 228.9 479.5 449.8 950.7 Add
provision for or subtract benefit from income taxes (7.9 ) 10.0
(1.1 ) 14.8 7.2 Add depreciation, amortization and accretion in
costs and expenses 397.2 322.4 752.8 633.5 1,444.4 Add non-cash
asset impairment charges 79.0 3.7 112.3 12.5 133.8 Add non-cash
losses attributable to asset sales 3.9 -- 3.9 6.1 5.5 Add non-cash
expense attributable to changes in fair value of the
Liquidity Option Agreement
11.5 -- 11.5 -- 11.5
Add losses and subtract gains attributable
to unrealized changes in the fair market value of derivative
instruments
(5.3 ) 1.6 (9.9 )
(6.2 ) 26.9
Adjusted EBITDA
(non-GAAP) 1,296.3 1,248.2 2,622.3 2,614.0 5,298.9 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
(240.4 ) (228.9 ) (479.5 ) (449.8 ) (950.7 )
Subtract provision for or add benefit from
income taxes reflected in Adjusted EBITDA
7.9 (10.0 ) 1.1 (14.8 ) (7.2 ) Subtract gains attributable to asset
sales and insurance recoveries (1.4 ) (6.8 ) (1.5 ) (102.5 ) (8.8 )
Add deferred income tax expense or subtract benefit (13.2 ) 0.4
(11.7 ) 0.6 (6.2 ) Add or subtract the net effect of changes in
operating accounts, as applicable (111.7 ) (541.1 ) (250.7 ) (198.6
) (160.3 ) Add miscellaneous non-cash and other amounts to
reconcile non-GAAP Adjusted EBITDA with GAAP net cash flows
provided by operating activities 10.1
6.0 21.6 23.0
26.2
Net cash flows provided by operating
activities (GAAP) $ 947.6 $ 467.8 $
1,901.6 $ 1,871.9 $ 4,191.9
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 June 30,
For the Six Months
Ended June 30,
2015 2014 2015
2014 Total gross operating margin (non-GAAP) $
1,303.2 $ 1,263.2 $ 2,637.6 $ 2,593.0 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
(385.6 ) (312.4 ) (730.9 ) (613.8 )
Subtract non-cash impairment charges not
reflected in gross operating margin
(79.0 ) (3.7 ) (112.3 ) (12.5 )
Add net gains or subtract net losses
attributable to asset sales and insurance recoveries not reflected
in gross operating margin
(2.5 ) 6.8 (2.4 ) 96.4
Subtract non-refundable deferred revenues
attributable to shipper make-up rights on new pipeline projects
reflected in gross operating margin
(5.2 ) (21.9 ) (35.9 ) (45.2 )
Add subsequent recognition of deferred
revenues attributable to make-up rights
14.3 -- 34.4 --
Subtract general and administrative costs
not reflected in gross operating margin
(44.9 ) (47.7 ) (94.2 )
(100.9 )
Operating income (GAAP) $ 800.3
$ 884.3 $ 1,696.3 $ 1,917.0
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 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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150730005334/en/
Enterprise Products Partners L.P.Vice President, Investor
RelationsRandy Burkhalter, 713-381-6812orVice President, Media
RelationsRick Rainey, 713-381-3635
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