Enterprise Products Partners L.P. (“Enterprise”) (NYSE:EPD)
today announced its financial results for the three and six months
ended June 30, 2016.
Second Quarter 2016
Highlights
Three months ended Six months ended June 30,
June 30, 2016 2015 2016 2015
($ in millions, except per unit
amounts)
Operating income $ 837 $ 800 $ 1,753 $ 1,696
Net income (1) (2)
$ 570 $ 557 $ 1,240 $ 1,207
Fully diluted earnings per unit (1)
(2)
$ 0.27 $ 0.28 $ 0.59 $ 0.60
Net cash flows provided by operating
activities (3)
$
946
$
948
$
1,845
$
1,902
Total gross operating margin (4) $ 1,254 $ 1,312 $ 2,579 $ 2,636
Adjusted EBITDA (4) $ 1,315 $ 1,296 $ 2,642 $ 2,622 Distributable
cash flow (4) $ 1,040 $ 988 $ 2,093 $ 2,017
(1) Net income and fully diluted earnings per unit for the
second quarters of 2016 and 2015 included non-cash asset impairment
and related charges of $14 million, or $0.01 per unit, and $119
million, or $0.06 per unit, which included $95 million associated
with our offshore Gulf of Mexico business that was classified as
held for sale at June 30, 2015 and sold in July 2015. Non-cash
impairment and related charges for the six months ended June 30,
2016 and 2015 were $15 million, or $0.01 per unit, and $152
million, or $0.08 per unit, respectively. (2) Net income and fully
diluted earnings per unit for the second quarters of 2016 and 2015
also included net losses attributable to asset sales, insurance
recoveries and related property damage of $9 million, or less than
$0.01 per unit, and $3 million, or less than $0.01 per unit,
respectively. These net losses for the six months ended June 30,
2016 and 2015 were $14 million, or $0.01 per unit, and $2 million,
or less than $0.01 per unit, respectively. (3) Net cash flows
provided by operating activities includes the impact of the timing
of cash receipts and payments related to operations. For the second
quarters of 2016 and 2015, the net effect of changes in operating
accounts, which are a component of net cash flows provided by
operating activities, were reductions of $108 million and $112
million, respectively. (4) Total 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.
- Enterprise increased its cash
distribution with respect to the second quarter of 2016 by 5.3
percent to $0.40 per unit compared to the distribution paid with
respect to the second quarter of 2015. The distribution will be
paid August 5, 2016 to unitholders of record as of the close of
business on July 29, 2016.
- Enterprise reported distributable cash
flow of $1.0 billion for the second quarter of 2016, which provided
1.2 times coverage of the $0.40 per unit cash distribution and
resulted in $200 million of retained distributable cash flow. For
the first six months of 2016, distributable cash flow of $2.1
billion provided 1.3 times coverage of the aggregate $0.795 per
unit cash distribution, and Enterprise retained $428 million of
distributable cash flow, which is available to reinvest in growth
capital projects and reduce the need to issue additional
equity.
- Second Quarter
Volume Highlights
Three months ended June 30, 2016 2015 Onshore NGL,
crude oil, refined products & petrochemical pipeline volumes
(million BPD)
5.2
4.9
Marine terminal volumes (million BPD) 1.4 1.3 Onshore natural gas
pipeline volumes (TBtu/d) 12.1 12.5 NGL fractionation volumes
(MBPD) 840 822 Fee-based natural gas processing volumes (Bcf/d) 5.0
4.9 Equity NGL production volumes (MBPD) 143
123 As used
in this press release, “NGL” means natural gas liquids, “BPD” means
barrels per day, “MBPD” means thousand barrels per day, “Bcf/d”
means billion cubic feet per day; and “TBtu/d” means trillion
British thermal units per day.
- Capital investments were $884 million
in the second quarter of 2016, and $1.9 billion for the first six
months of 2016. Included in these investments were sustaining
capital expenditures of $58 million in the second quarter of 2016
and $118 million in the first six months of 2016.
“Enterprise reported record onshore liquid pipeline volumes and
marine terminal volumes in the second quarter of 2016, which led to
a 5.3 percent increase in distributable cash flow to $1.0 billion
and provided 1.2 times coverage of the distribution to partners
declared for the second quarter,” said Jim Teague, chief executive
officer of Enterprise’s general partner. “Volume growth was
primarily driven by the expansion of our LPG marine terminal, the
ramp up of contracted volumes on our Aegis and ATEX ethane
pipelines, the acquisition of EFS Midstream, as well as higher
volumes on the Mid-America, Seminole and TE Products pipeline
systems. The increase in gross operating margin from our fee-based
businesses largely offset lower earnings from our commodity-
sensitive businesses, the impact of lower crude oil pipeline
volumes and the divestiture of our offshore Gulf of Mexico business
in July 2015.”
“Enterprise successfully completed construction and began
commercial service for $600 million of growth capital projects in
the second quarter. These included the South Eddy natural gas
processing plant in the Delaware Basin and completion of over 2.0
million barrels of additional crude oil storage capacity at our
Houston terminal and Beaumont Marine West terminals. We are on
schedule to complete and begin commercial service on another $1.4
billion of growth projects during the remainder of 2016, including
our ethane export facility on the Houston Ship Channel and the Waha
natural gas processing plant in the Delaware Basin. In addition, we
have $5.2 billion of growth capital projects scheduled to be
completed in 2017 and 2018. These capital projects provide our
investors visibility to continued growth in distributable cash
flow,” continued Teague.
Review of Second Quarter 2016
Results
NGL Pipelines & Services – Gross operating margin for
the NGL Pipelines & Services segment increased 11 percent to
$719 million for the second quarter of 2016 from $651 million for
the second quarter of 2015.
Enterprise’s natural gas processing and related NGL marketing
business generated gross operating margin of $181 million for the
second quarter of 2016 compared to $220 million for the second
quarter of 2015. This decrease in gross operating margin was
primarily due to lower processing margins, including the effect of
hedging activities. Enterprise’s natural gas processing plants
reported fee-based processing volumes of 5.0 Bcf/d in the second
quarter of 2016 compared to 4.9 Bcf/d for the second quarter of
2015. Enterprise’s equity NGL production increased 16 percent to
143 MBPD in the second quarter of 2016 from 123 MBPD in the second
quarter of 2015, primarily due to higher ethane recoveries by the
partnership’s processing plants in the Rockies and South Texas.
Gross operating margin from the partnership’s NGL pipelines and
storage business increased $96 million, or 31 percent, to $408
million for the second quarter of 2016 from $312 million for the
second quarter of 2015. Total NGL transportation volumes were a
record 3.0 million BPD for the second quarter of 2016 compared to
2.7 million BPD for the same quarter of 2015.
Enterprise’s ATEX and Aegis ethane pipelines reported a $32
million increase in gross operating margin for the second quarter
of 2016 compared to the second quarter of last year on a 136 MBPD
increase in volume. The third and final segment of the Aegis ethane
pipeline was completed in December 2015. Gross operating margin for
the partnership’s Mid-America, Seminole, South Texas, Lou-Tex and
Tri-States NGL pipelines increased by a total of $29 million for
the second quarter of 2016 compared to the second quarter of 2015
on an aggregate 92 MBPD increase in NGL transportation volumes.
The partnership’s liquefied petroleum gas (“LPG”) marine
terminal on the Houston Ship Channel and related pipeline reported
a 71 percent, or $33 million, increase in gross operating margin
for the second quarter of 2016 compared to the second quarter of
2015, primarily due to a 162 MBPD increase in export loading
volumes. The loading capacity of the LPG export terminal increased
from 9 million barrels per month in April 2015 to 16 million
barrels per month in December 2015.
Recently, Enterprise had three loadings of LPG exports cancelled
for July 2016 and has received notices from customers cancelling
five LPG loadings for August 2016 at its Houston Ship Channel
marine terminal. In July 2016, Enterprise loaded a record nine
cargoes of polymer grade propylene (“PGP”) from its Houston Ship
Channel facility for export to international markets. Currently,
the partnership expects to load an additional nine cargoes of PGP
in August 2016. We expect that the decrease in total gross
operating margin from the cancelled LPG loadings will be more than
offset by the associated cancellation fees and the additional fees
earned from the PGP export activity.
Gross operating margin from the partnership’s NGL fractionation
business increased 9 percent to $130 million for the second quarter
of 2016 from $119 million for the second quarter of 2015. The
increase was primarily due to higher fractionation volumes and fees
from Enterprise’s Mont Belvieu fractionators. Total fractionation
volumes were 840 MBPD for the second quarter of 2016 compared to
822 MBPD for the second quarter of 2015.
Crude Oil Pipelines & Services – Gross operating
margin from the partnership’s Crude Oil Pipelines & Services
segment was $177 million for the second quarter of 2016 compared to
$236 million for the second quarter of 2015. Total crude oil
pipeline transportation volumes were 1.4 million BPD for the second
quarter of 2016 compared to 1.5 million BPD for the same quarter of
2015. Total crude oil marine terminal volumes were 514 MBPD in the
second quarter of 2016 compared to 591 MBPD for the second quarter
of 2015.
The EFS Midstream assets, which we acquired effective July 1,
2015, contributed $56 million of gross operating margin in the
second quarter of 2016. Enterprise completed construction and put
into service 8.5 million barrels of additional storage capacity at
its ECHO and Enterprise Houston terminals in Houston, and its
Beaumont West Terminal since the second quarter of 2015. These new
storage tanks contributed to an $11 million increase in gross
operating margin in the second quarter of 2016 compared to the
second quarter of last year.
Gross operating margin from Enterprise’s crude oil marketing and
related activities decreased $83 million in the second quarter of
2016 compared to the second quarter of 2015, which includes $47
million of non-cash, mark-to-market losses in the second quarter of
2016 on financial instruments related to blending activities. The
remaining $36 million decrease in gross operating margin from crude
oil marketing activities is primarily due to lower crude oil sales
margins.
Enterprise’s South Texas Crude Oil Pipeline System reported a
$23 million decrease in gross operating margin for the second
quarter of 2016 compared to the second quarter of 2015 due to lower
volumes and fees. Pipeline volumes on this system were 231 MBPD for
the second quarter of 2016 compared to 295 MBPD for the same
quarter of 2015.
Natural Gas Pipelines & Services – Enterprise’s
Natural Gas Pipelines & Services segment reported gross
operating margin of $177 million for the second quarter of 2016
compared to $191 million for the second quarter of 2015. Total
natural gas transportation volumes were 12.1 TBtu/d for the second
quarter of 2016 compared to 12.5 TBtu/d for the same quarter of
last year.
The Texas Intrastate System reported gross operating margin of
$83 million for the second quarter of 2016 compared to $93 million
for the second quarter of 2015. Natural gas pipeline volumes for
this system were 5.0 TBtu/d for the second quarters in both 2016
and 2015.
The Acadian Gas System reported a $4 million decrease in gross
operating margin for the second quarter of 2016 compared to the
second quarter of last year, primarily due to lower fees and
volumes. Natural gas pipeline volumes for this system were 1.9
TBtu/d this quarter compared to 2.0 TBtu/d for the same quarter of
last year.
Petrochemical & Refined Products Services – Gross
operating margin for the Petrochemical & Refined Products
Services segment was $176 million for the second quarter of 2016
compared to $181 million for the second quarter of 2015. Total
segment pipeline transportation volumes increased 12 percent to 874
MBPD for the second quarter of 2016 from 777 MBPD for the same
quarter of 2015.
Enterprise’s refined products pipelines and related services
business reported a 68 percent increase in gross operating margin
for the second quarter of 2016 to $74 million from $44 million for
the second quarter of 2015. Included in these amounts is gross
operating margin from refined products marketing activities, which
increased by $15 million, primarily due to higher sales margins and
volumes. Gross operating margin from the TE Products Pipeline and
related terminals increased $9 million as a result of higher
volumes, and refined products terminaling services at our facility
in Beaumont, Texas contributed $5 million to the increase in gross
operating margin, primarily due to higher demand for storage and
marine vessel loading services.
The partnership’s propylene business reported a 55 percent
increase in gross operating margin to $53 million for the second
quarter of 2016 from $34 million for the second quarter of 2015,
primarily as a result of higher propylene volumes and lower
maintenance expenses. Propylene fractionation volumes were 80 MBPD
for this quarter compared to 68 MBPD for the second quarter of last
year.
Gross operating margin for Enterprise’s octane enhancement and
high-purity isobutylene business was $21 million in the second
quarter of 2016 versus $68 million in the second quarter of last
year. The $47 million quarter-to-quarter decrease was primarily due
to lower sales margins and volumes. Total plant production volumes
were 22 MBPD this quarter compared to 24 MBPD for the second
quarter of last year.
Offshore Pipelines & Services – Enterprise closed on
the sale of its offshore Gulf of Mexico business on July 24, 2015.
As a result, the partnership had no contribution to gross operating
margin from these assets in the second quarter of 2016 compared to
$44 million in the second quarter of 2015.
Capitalization
Total debt principal outstanding at June 30, 2016 was $23.0
billion, including $1.5 billion of junior subordinated notes to
which the nationally recognized debt rating agencies ascribe
partial equity content. At June 30, 2016, Enterprise had
consolidated liquidity of $4.7 billion, which was comprised of
unrestricted cash on hand and available borrowing capacity under
our revolving credit facilities. We used $1.0 billion of liquidity
on July 11, 2016 to fund the second and final installment payment
for the EFS Midstream acquisition.
Total capital spending in the second quarter of 2016 was $884
million, which includes $58 million of sustaining capital
expenditures. For the first six months of 2016, Enterprise’s
capital spending was $1.9 billion including $118 million of
sustaining capital expenditures. For 2016, we currently expect to
invest approximately $2.8 billion for growth projects and
approximately $275 million for sustaining capital expenditures.
Conference Call to Discuss Second
Quarter 2016 Earnings
Today, Enterprise will host a conference call to discuss second
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 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 total 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 Months For the Six Months Ended June 30,
Ended June 30, 2016 2015
2016 2015
Revenues
$ 5,617.8 $ 7,092.5 $ 10,623.1 $ 14,565.0
Costs and
expenses:
Operating costs and expenses 4,822.2 6,357.5 8,969.1 12,973.9
General and administrative costs 35.1
44.9 79.0 94.2
Total costs and expenses 4,857.3
6,402.4 9,048.1 13,068.1
Equity in income of
unconsolidated affiliates
76.4 110.2 177.5
199.4
Operating
income
836.9 800.3 1,752.5 1,696.3
Other income
(expense):
Interest expense (244.1 ) (240.4 ) (484.7 ) (479.5 ) Other, net
(22.9 ) (11.2 ) (19.3 )
(10.7 ) Total other expense (267.0 )
(251.6 ) (504.0 ) (490.2 )
Income before income
taxes
569.9 548.7 1,248.5 1,206.1 Benefit from (provision for) income
taxes 0.1 7.9 (8.3
) 1.1
Net
income
570.0 556.6 1,240.2 1,207.2
Net income
attributable to noncontrolling interests
(11.5 ) (5.6 ) (20.5 )
(20.1 )
Net income
attributable to limited partners
$ 558.5 $ 551.0 $ 1,219.7
$ 1,187.1
Per unit data (fully
diluted):
Earnings per unit $ 0.27 $ 0.28 $ 0.59
$ 0.60 Average limited partner units
outstanding (in millions) 2,093.2
2,002.1 2,066.8 1,984.5
Supplemental
financial data:
Net cash flows provided by operating activities $ 945.5
$ 947.6 $ 1,845.2 $ 1,901.6
Total debt principal outstanding at end of period $ 22,999.9
$ 22,332.7 $ 22,999.9 $
22,332.7 Non-GAAP distributable cash flow (1) $
1,039.7 $ 987.5 $ 2,093.3
$ 2,017.2 Non-GAAP Adjusted EBITDA (2) $ 1,314.7
$ 1,296.3 $ 2,641.9 $ 2,622.3
Gross operating margin by segment: NGL Pipelines &
Services $ 719.1 $ 650.6 $ 1,502.8 $ 1,345.8 Crude Oil Pipelines
& Services 177.4 235.6 379.7 449.6 Natural Gas Pipelines &
Services 177.4 191.4 355.1 395.9 Petrochemical & Refined
Products Services 175.5 181.3 330.3 355.9 Offshore Pipelines &
Services -- 44.3
-- 90.4 Total segment gross operating
margin (3) 1,249.4 1,303.2
2,567.9 2,637.6 Net
adjustment for shipper make-up rights (4) 4.8
9.1 10.6 (1.5 )
Non-GAAP total gross operating margin (5) $ 1,254.2 $
1,312.3 $ 2,578.5 $ 2,636.1
Capital spending: Capital expenditures, net (6) $ 861.8 $
837.0 $ 1,856.8 $ 1,630.2 Equity consideration issued for Step 2 of
Oiltanking acquisition -- -- -- 1,408.7 Investments in
unconsolidated affiliates 22.0 45.8 92.4 114.1 Other investing
activities -- 5.3
-- 5.3 Total capital spending, cash and
non-cash $ 883.8 $ 888.1 $ 1,949.2
$ 3,158.3
(1) See Exhibit D for
reconciliation to GAAP net cash flows provided by operating
activities. (2) See Exhibit E for reconciliation to GAAP net cash
flows provided by operating activities. (3) Within the context of
this table, total segment gross operating margin represents a
subtotal and corresponds to measures similarly titled within the
financial statement footnotes provided in our quarterly and annual
filings with the U.S. Securities and Exchange Commission (“SEC”).
(4) Gross operating margin by segment for NGL Pipelines &
Services and Crude Oil Pipelines & Services reflects
adjustments for non-refundable deferred transportation revenues
relating to the make-up rights of committed shippers on certain
major pipeline projects. These adjustments are included in
managements’ evaluation of segment results. However, these
adjustments are excluded from non-GAAP total gross operating margin
in compliance with recently issued guidance from the SEC. (5) See
Exhibit F for reconciliation to GAAP total operating income. (6)
Capital expenditures for property, plant and equipment are
presented net of contributions in aid of construction cost.
Enterprise Products Partners
L.P. Exhibit B Selected Operating Data –
UNAUDITED For the Three Months For the Six
Months Ended June 30, Ended June 30,
2016 2015 2016
2015
Selected operating
data: (1)
NGL Pipelines & Services, net: NGL pipeline
transportation volumes (MBPD) 2,992 2,679 2,973 2,553 NGL marine
terminal volumes (MBPD) 450 295 453 279 NGL fractionation volumes
(MBPD) 840 822 838 810 Equity NGL production (MBPD) (2) 143 123 145
129 Fee-based natural gas processing (MMcf/d) (3) 4,995 4,912 4,939
4,848 Crude Oil Pipelines & Services, net: Crude oil
transportation volumes (MBPD) 1,358 1,469 1,376 1,427 Crude oil
marine terminal volumes (MBPD) 514 591 497 617 Natural Gas
Pipelines & Services, net: Natural gas transportation volumes
(BBtus/d) 12,134 12,488 12,014 12,496 Petrochemical & Refined
Products Services, net: Propylene fractionation volumes (MBPD) 80
68 75 71 Butane isomerization volumes (MBPD) 114 98 112 80
Standalone DIB processing volumes (MBPD) 90 82 93 74 Octane
additive and related plant production volumes (MBPD) 22 24 16 16
Pipeline transportation volumes, primarily
refined products and petrochemicals (MBPD)
874 777 863 758
Refined products and petrochemicals marine
terminal volumes (MBPD)
410 374 379 349 Offshore Pipelines & Services, net: Natural gas
transportation volumes (BBtus/d) -- 561 -- 590 Crude oil
transportation volumes (MBPD) -- 372 -- 358 Platform natural gas
processing (MMcf/d) -- 83 -- 103 Platform crude oil processing
(MBPD) -- 13 -- 14 Total, net:
NGL, crude oil, refined products and
petrochemical transportation volumes (MBPD)
5,224 5,297 5,212 5,096 Natural gas transportation volumes
(BBtus/d) 12,134 13,049 12,014 13,086 Equivalent transportation
volumes (MBPD) (4) 8,417 8,731 8,374 8,540
NGL, crude oil, refined products and
petrochemical marine terminal volumes (MBPD)
1,374 1,260 1,329 1,245
(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 2nd Quarter $1.95 $0.20 $0.49
$0.62 $0.63 $0.96 $0.33 $0.19
$45.59 $47.35
YTD 2016 Averages $2.02
$0.18 $0.44 $0.58 $0.58 $0.86
$0.32 $0.19 $39.52 $41.23
(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 IHS Chemical, a division of IHS Inc. (“IHS
Chemical”). Refinery grade propylene prices represent
weighted-average spot prices for such product as reported by IHS
Chemical. (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 $0.50 per
gallon during the second quarter of 2016 versus $0.52 per gallon
for the second quarter of 2015.
Fluctuations in our consolidated revenues and cost of sales
amounts are explained in large part by changes in energy commodity
prices. Energy commodity prices fluctuate for a variety of reasons,
including supply and demand imbalances and geopolitical
tensions.
A change in our consolidated marketing revenues due to lower
energy commodity sales prices may not result in a similar change in
gross operating margin or cash available for distribution, since
our consolidated cost of sales amounts would also change due to
comparable decreases in the purchase prices of the underlying
energy commodities.
Enterprise Products Partners L.P. Exhibit D
Distributable Cash Flow – UNAUDITED ($ in millions)
For the Three Months For the Six Months
Ended June 30, Ended June 30, 2016
2015 2016 2015 Net
income attributable to limited partners (GAAP) $ 558.5 $
551.0 $ 1,219.7 $ 1,187.1 Adjustments to GAAP net income
attributable to limited partners to derive non-GAAP distributable
cash flow: Add depreciation, amortization and accretion expenses
381.3 407.5 763.4 774.9 Add distributions received from
unconsolidated affiliates 118.7 131.1 234.5 265.5 Subtract equity
in income of unconsolidated affiliates (76.4) (110.2) (177.5)
(199.4) Subtract sustaining capital expenditures (1) (58.4) (60.8)
(117.7) (111.5)
Add net losses or subtract net gains
attributable to asset sales, insurance recoveries and related
property damage, net
8.8 2.5 13.7 2.4 Add cash proceeds from asset sales and insurance
recoveries 14.5 5.4 27.9 5.9
Add non-cash expense or subtract benefit
attributable to changes in fair value of the Liquidity Option
Agreement
23.3 11.5 21.1 11.5 Add deferred income tax expense (benefit) 0.2
(13.2) 4.3 (11.7) Add non-cash asset impairment charges 13.5 79.0
15.2 112.3
Add or subtract other miscellaneous
adjustments to derive non-GAAP distributable cash flow, as
applicable
55.7 (16.3) 88.7
(19.8)
Distributable cash flow (non-GAAP) 1,039.7 987.5
2,093.3 2,017.2 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 58.4 60.8 117.7 111.5
Subtract cash proceeds from asset sales
and insurance recoveries reflected in distributable cash flow
(14.5) (5.4) (27.9) (5.9) Add or subtract the net effect of changes
in operating accounts, as applicable (108.2) (111.7) (294.6)
(250.7) 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 (29.9)
16.4 (43.3) 29.5
Net
cash flow provided by operating activities (GAAP) $ 945.5
$ 947.6 $ 1,845.2 $ 1,901.6 (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.
Distributable cash flow
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 liquidity measure
for our limited partners since it serves as an indicator of our
success in providing a cash return on investment. Specifically,
this liquidity 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
EndedJune 30,
For the Three MonthsEnded June
30,
For the Six MonthsEnded June
30,
2016 2015 2016
2015 2016 Net income (GAAP) $ 570.0
$ 556.6 $ 1,240.2 $ 1,207.2 $ 2,591.4 Adjustments to
GAAP net income to derive non-GAAP Adjusted EBITDA: Subtract equity
in income of unconsolidated affiliates (76.4) (110.2) (177.5)
(199.4) (351.7) Add distributions received from unconsolidated
affiliates 118.7 131.1 234.5 265.5 431.1 Add interest expense,
including related amortization 244.1 240.4 484.7 479.5 967.0 Add
provision for or subtract benefit from income taxes (0.1) (7.9) 8.3
(1.1) 6.9 Add depreciation, amortization and accretion in costs and
expenses 366.3 397.2 733.4 752.8 1,453.2 Add non-cash asset
impairment charges 13.5 79.0 15.2 112.3 65.5
Add non-cash net losses or subtract net
gains attributable to asset sales, insurance recoveries and related
property damage
7.1 3.9 13.7 3.9 28.7
Add non-cash expense or subtract benefit
attributable to changes in fair value of the Liquidity Option
Agreement
23.3 11.5 21.1 11.5 35.0
Add losses or subtract gains attributable
to unrealized changes in the fair market value of derivative
instruments
48.2 (5.3) 68.3
(9.9) 59.8
Adjusted EBITDA (non-GAAP) 1,314.7
1,296.3 2,641.9 2,622.3 5,286.9
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
(244.1) (240.4) (484.7) (479.5) (967.0)
Add benefit or subtract provision for
income taxes reflected in Adjusted EBITDA
0.1 7.9 (8.3) 1.1 (6.9) Subtract distributions received for return
of capital fromunconsolidated affiliates (30.3) -- (39.4) -- (39.4)
Add deferred income tax expense or subtract benefit 0.2 (13.2) 4.3
(11.7) (4.6) Add or subtract the net effect of changes in operating
accounts, as applicable (108.2) (111.7) (294.6) (250.7) (367.2) Add
miscellaneous non-cash and other amounts to reconcile non-GAAP
Adjusted EBITDA with GAAP net cash flow provided by operating
activities 13.1 8.7 26.0
20.1 44.2
Net cash flow provided by
operating activities (GAAP) $ 945.5 $ 947.6 $
1,845.2 $ 1,901.6 $ 3,946.0
Adjusted EBITDA
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 Total Gross Operating Margin – UNAUDITED
($ in millions)
For the Three Months For the Six
Months Ended June 30, Ended June 30,
2016 2015 2016
2015 Total gross operating margin (non-GAAP) $
1,254.2 $ 1,312.3 $ 2,578.5 $ 2,636.1
Adjustments to reconcile non-GAAP total
gross operating margin to GAAP total operating income:
Subtract depreciation, amortization and
accretion expense amounts not reflected in gross operating
margin
(360.3) (385.6) (718.5) (730.9)
Subtract non-cash asset impairment charges
included in operating expenses not reflected in gross operating
margin
(13.1) (79.0) (14.8) (112.3)
Add net gains or subtract net losses
attributable to asset sales, insurance recoveries and related
property damage not reflected in gross operating margin
(8.8) (2.5) (13.7) (2.4)
Subtract general and administrative costs
not reflected in gross operating margin
(35.1) (44.9) (79.0)
(94.2)
Total operating income (GAAP) $ 836.9 $
800.3 $ 1,752.5 $ 1,696.3
Total gross operating margin
We evaluate segment performance based on our financial measure
of gross operating margin. Gross operating margin is an important
performance measure of the core profitability of our operations and
forms the basis of our internal financial reporting. We believe
that investors benefit from having access to the same financial
measures that our management uses in evaluating segment
results.
The term “total gross operating margin” represents GAAP
operating income exclusive of (i) depreciation, amortization and
accretion expenses, (ii) impairment charges, (iii) gains and losses
attributable to asset sales, insurance recoveries and related
property damage and (iv) general and administrative costs. Total
gross operating margin includes equity in the earnings of
unconsolidated affiliates, but is exclusive of other income and
expense transactions, income taxes, the cumulative effect of
changes in accounting principles and extraordinary charges. Total
gross operating margin is presented on a 100 percent basis before
any allocation of earnings to noncontrolling interests. The GAAP
financial measure most directly comparable to total gross operating
margin is operating income.
Total gross operating margin excludes amounts attributable to
shipper make-up rights as described in footnote (4) to Exhibit A of
this press release.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160728005394/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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