Enterprise Products Partners L.P. (“Enterprise”) (NYSE: EPD)
today announced its financial results for the three and six months
ended June 30, 2017.
Second Quarter 2017
Highlights
Three months
ended
Six months
ended
June 30, June 30, 2017 2016
2017 2016 ($ in millions, except per unit
amounts) Operating income $ 939 $ 837 $
1,970 $ 1,753
Net income (1)
$ 666 $ 570 $ 1,437 $ 1,240
Fully diluted earnings per unit (1)
$ 0.30 $ 0.27 $ 0.66 $ 0.59 Net cash flow provided by operating
activities (2)
$
1,459
$
946
$
2,335
$
1,845
Total gross operating margin (3) $ 1,378 $ 1,254 $ 2,847 $ 2,579
Adjusted EBITDA (3) $ 1,338 $ 1,315 $ 2,753 $ 2,642 Distributable
cash flow (3) $ 1,052 $ 1,040 $ 2,181 $ 2,093
(1) Net income and fully diluted earnings per unit for the
second quarters of 2017 and 2016 included non-cash asset impairment
and related charges of $14 million, or $0.01 per unit, and $21
million, or $0.01 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 second
quarters of 2017 and 2016, the net effect of changes in operating
accounts, which are a component of net cash flow provided by
operating activities, was an increase of $371 million and a
reduction of $108 million, respectively. (3) 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.
- Net income for the second quarter of
2017 was $666 million compared to $570 million for the second
quarter of 2016. Net income attributable to limited partners was
$654 million, or $0.30 per unit on a fully diluted basis for the
second quarter of 2017 compared to $559 million, or $0.27 per unit
on a fully diluted basis for the second quarter of 2016.
- Enterprise increased its cash
distribution with respect to the second quarter of 2017 by 5.0
percent to $0.42 per unit compared to the distribution paid with
respect to the second quarter of 2016. The distribution will be
paid August 7, 2017 to unitholders of record as of the close of
business on July 31, 2017.
- Enterprise reported distributable cash
flow of $1.1 billion for the second quarter of 2017, which provided
1.2 times coverage of the $0.42 per unit cash distribution and
resulted in $145 million of retained distributable cash flow. For
the first six months of 2017, distributable cash flow of $2.2
billion provided 1.2 times coverage of the aggregate $0.835 per
unit cash distribution, and Enterprise retained $381 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, 2017 2016 NGL, crude oil, refined products
& petrochemical pipeline volumes (million BPD)
5.4
5.2
Marine terminal volumes (million BPD) 1.4 1.4 Natural gas pipeline
volumes (TBtu/d) 12.2 12.1 NGL fractionation volumes (MBPD) 841 840
Fee-based natural gas processing volumes (Bcf/d) 4.7 5.0 Equity NGL
production volumes (MBPD) 164 143 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 $869 million
in the second quarter of 2017, and $1.3 billion for the first six
months of 2017. Included in these investments were sustaining
capital expenditures of $62 million in the second quarter of 2017
and $110 million in the first six months of 2017.
“Enterprise reported increases in all of our primary financial
measures and most operational metrics for the second quarter of
2017 compared to the second quarter of 2016,” said Jim Teague,
chief executive officer of Enterprise’s general partner. “Our
second quarter reflected the strength of our business
diversification. The partnership’s businesses at its Mont Belvieu
complex, processing plants and pipelines handling Permian, Rockies
and Marcellus production generated strong growth in the second
quarter of 2017 compared to the same quarter last year. This more
than offset the effects of lower Eagle Ford production and a
challenging crude oil marketing environment. This diversification
and the stability of our fee-based businesses enabled us to
generate $1.1 billion of distributable cash flow that provided 1.2
times coverage of the cash distribution paid with respect to the
second quarter of 2017.”
“Looking forward, we believe the increase in rig counts and
drilled, uncompleted wells will result in higher levels of
production flowing into our system later in 2017. We are already
seeing a volume response to producer activities in the Permian and
Haynesville regions,” stated Teague.
“On the demand side, we believe the U.S. petrochemical
industry’s demand for low cost ethane reached the much anticipated
inflection point during the first quarter of 2017. The industry’s
demand for ethane had been essentially flat, averaging 1.05 million
barrels per day since the end of 2013. Ethane demand grew by
approximately 80,000 barrels per day by the end of the first
quarter of 2017. In May, domestic petrochemical demand for ethane
reached a record 1.2 million barrels per day according to the
latest industry data available. Construction of four new ethylene
crackers is scheduled to be completed in 2017. The first, and
smallest of these crackers was commissioned during the first half
of 2017. The remaining three crackers to be completed this year are
expected to have aggregate ethane demand of 270,000 barrels per
day, which represents a further 22 percent increase in demand,”
continued Teague.
“We are also seeing new global markets develop for low cost U.S.
liquefied petroleum gas, or LPG. For example consumption of LPG in
India and China is estimated to be 2.3 million barrels per day in
2017 or approximately a 65% increase since 2013. This increase in
LPG demand is being driven by residential consumption that is
replacing traditional sources of energy such as burning wood and
coal,” said Teague.
“During the quarter, we had success in sanctioning two new
midstream projects: a second processing unit at our Orla natural
gas processing plant and the Shin Oak NGL pipeline, both supported
by volume growth in the Permian Basin. We also executed additional
long-term contracts for the Midland-to-ECHO crude oil pipeline to
bring total commitments to 83 percent of the pipeline’s 405,000
barrels per day of committed capacity. Our commercial teams are
continuing efforts to develop an ethylene export facility on the
Houston Ship Channel and several other fee-based facilities to
support petrochemical and refining customers,” continued
Teague.
“Our engineering and operating teams are diligently progressing
through the commissioning phase of the PDH facility. We currently
expect the PDH plant to begin initial operations in September 2017.
The Midland-to-ECHO pipeline is expected to begin limited
commercial activities during the fourth quarter of this year with
full capabilities available during the first quarter of 2018,”
stated Teague.
Review of Second Quarter 2017
Results
NGL Pipelines & Services – Gross operating margin for
the NGL Pipelines & Services segment increased 6 percent, or
$41 million, to $760 million for the second quarter of 2017 from
$719 million for the second quarter of 2016.
Enterprise’s natural gas processing and related NGL marketing
business generated a $24 million increase in gross operating margin
to $205 million for the second quarter of 2017 compared to $181
million for the second quarter of 2016. Total fee-based processing
volumes were 4.7 Bcf/d in the second quarter of 2017 compared to
5.0 Bcf/d for the second quarter of last year. The partnership’s
equity NGL production increased to 164 MBPD this quarter from 143
MBPD for the second quarter of 2016. Enterprise’s natural gas
processing plants in the Rocky Mountains, Louisiana and Mississippi
accounted for $12 million of this increase as a result of higher
processing margins, including hedging activities, and lower
operating costs. Processing plants in South Texas reported a $6
million decrease in gross operating margin for the second quarter
of 2017 compared to the second quarter of 2016 due to a 0.3 Bcf/d
decrease in fee-based processing volumes from the Eagle Ford shale
region and higher operating expenses. Gross operating margin from
NGL marketing activities increased $19 million due to higher sales
margins, partially offset by lower sales volumes.
Gross operating margin from the partnership’s NGL pipelines and
storage business increased $28 million to $436 million for the
second quarter of 2017 compared to the second quarter of 2016. NGL
pipeline transportation volumes were 3.1 million BPD for the second
quarter of 2017 compared to 3.0 million BPD for the same quarter of
2016.
The Mont Belvieu NGL and related product storage business
accounted for $13 million of the increase in gross operating margin
this quarter, primarily due to higher fees. Enterprise’s ATEX
ethane pipeline reported an $11 million increase in gross operating
margin for the second quarter of 2017 from contractual increases in
committed volumes and higher volumes from walk-up shippers. The
partnership’s equity investments in the Texas Express and Front
Range pipelines posted a combined $7 million increase in gross
operating margin, also primarily due to contractual increases in
committed volumes. The Dixie Pipeline and related terminals
generated a $6 million increase in gross operating margin primarily
due to a 35 MBPD increase in volume.
Partially offsetting these increases in gross operating margin
was a $13 million decrease on the Mid-America and Seminole
Pipelines and terminals, and the South Texas NGL Pipeline System
primarily due to lower fees and volumes. Gross operating margin
from Enterprise’s LPG and ethane export terminals and related
pipeline decreased by $2 million. LPG export volumes decreased by
43 MBPD, while ethane export volumes were 67 MBPD in the second
quarter of 2017. Volumes continue to ramp up on our ethane export
terminal that went into service in September 2016.
Gross operating margin from the partnership’s NGL fractionation
business was $119 million for the second quarter of 2017 compared
to $130 million for the second quarter of 2016. The decrease was
primarily due to higher operating expenses at Enterprise’s Mont
Belvieu fractionators, partially offset by increased revenues from
higher fees and fractionation volumes. Total fractionation volumes
were 841 MBPD for the second quarter of 2017 compared to 840 MBPD
for the second quarter of 2016.
Crude Oil Pipelines & Services – Gross operating
margin from the partnership’s Crude Oil Pipelines & Services
segment increased to $237 million for the second quarter of 2017
from $177 million for the second quarter of 2016. Total crude oil
pipeline transportation volumes were 1.5 million BPD for the second
quarter of 2017 compared to 1.4 million BPD for the second quarter
of 2016. Total crude oil marine terminal volumes were 488 MBPD for
the second quarter of 2017 compared to 514 MBPD for the second
quarter of 2016.
Gross operating margin from Enterprise’s crude oil marketing and
related activities increased $33 million in the second quarter of
2017 compared to the second quarter of 2016. Comparing these two
periods, the partnership had a $62 million increase in the
non-cash, mark-to-market valuation of financial instruments related
to certain marketing activities, which was comprised of $15 million
of mark-to-market gains in the second quarter of 2017 versus $47
million of mark-to-market losses in the second quarter last year.
Partially offsetting this increase in gross operating margin was a
$29 million decrease from other marketing activities impacted by
lower crude oil sales margins.
Gross operating margin from our West Texas Pipeline and equity
investment in the Eagle Ford Crude Oil Pipeline increased a
combined $15 million, primarily due to an aggregate 121 MBPD
increase in volumes on the two systems as a result of increased
production from the Permian Basin.
Enterprise had an $8 million increase in gross operating margin
from its equity investment in the Seaway Pipeline System, primarily
from higher firm capacity fees and a 35 MBPD increase in
transportation volumes (net to our interest).
Natural Gas Pipelines & Services – Enterprise’s
Natural Gas Pipelines & Services segment reported gross
operating margin of $194 million for the second quarter of 2017
compared to $177 million for the second quarter of 2016. Total
natural gas transportation volumes were 12.2 TBtu/d for the second
quarter of 2017 compared to 12.1 TBtu/d for the same quarter of
last year.
The Acadian Gas System reported a $16 million increase in gross
operating margin for the second quarter of 2017 compared to the
second quarter of 2016, primarily due to $17 million of proceeds
received in a legal settlement in the second quarter of 2017 for
lost revenues and damages associated with the Bayou Corne sinkhole
incident caused by third parties in 2012. Natural gas pipeline
volumes for this system were 2.2 TBtu/d for the second quarter of
this year compared to 1.9 TBtu/d for the same quarter of 2016.
Increased transportation volumes on our Permian Basin Gathering
System led to a $3 million increase in gross operating margin.
Transportation volumes were 501 million British thermal units per
day (“MMBtu/d”) for the second quarter of this year versus 272
MMBtu/d for the second quarter of last year. This system delivers
natural gas to our two new gas processing facilities in the
Delaware Basin that were placed into service in May and August
2016.
The Texas Intrastate System reported a $7 million decrease in
gross operating margin to $76 million for the second quarter of
2017 compared to the second quarter of 2016, primarily due to
higher operating costs and lower Eagle Ford production volumes and
fees. Natural gas pipeline volumes for this system were 4.5 TBtu/d
for the second quarter of 2017 compared to 5.0 TBtu/d for the same
quarter of last year.
Petrochemical & Refined Products Services – Gross
operating margin for the Petrochemical & Refined Products
Services segment increased $12 million to $188 million for the
second quarter of 2017 from $176 million for the second quarter of
2016. Total segment pipeline transportation volumes were 800 MBPD
for the second quarter of 2017 compared to 874 MBPD for the same
quarter of 2016. Refined products and petrochemical marine terminal
volumes increased 15 percent to 471 MBPD for the second quarter of
2017.
Gross operating margin for Enterprise’s octane enhancement and
high-purity isobutylene business increased $17 million for the
second quarter of 2017 compared to the second quarter of 2016,
primarily due to lower operating costs and an increase in sales
volumes and margins. Total plant production volumes were 30 MBPD
this quarter compared to 22 MBPD for the second quarter of last
year.
The partnership’s propylene business reported a $9 million
increase in gross operating margin to $62 million for the second
quarter of 2017 from $53 million for the second quarter of 2016.
This increase in gross operating margin was primarily due to higher
propylene sales margins and volumes. Propylene fractionation
volumes were 81 MBPD for this quarter compared to 80 MBPD for the
second quarter of last year. Propylene export volumes increased 6
MBPD this quarter compared to the second quarter of 2016.
Refined products marketing reported a $13 million decrease in
gross operating margin to $4 million for the second quarter of 2017
compared to $17 million for the second quarter of last year. This
decrease was due to a $21 million decrease in gross operating
margin from lower sales margins, which was partially offset by an
$8 million increase in non-cash, mark-to-market activities between
the two quarters. Gross operating margin from our TE Products
Pipeline and related terminals increased $7 million
quarter-to-quarter primarily due lower operating costs.
Transportation volumes for the TE Products Pipeline decreased 43
MBPD during the second quarter of 2017 compared to the same quarter
of last year.
Capitalization
Total debt principal outstanding at June 30, 2017 was $23.6
billion, including $1.5 billion of junior subordinated notes to
which the nationally recognized debt rating agencies ascribe
partial equity content. At June 30, 2017, Enterprise had
consolidated liquidity of $4.1 billion, which was comprised of
available borrowing capacity under our revolving credit facilities
and unrestricted cash on hand.
Total capital spending in the second quarter of 2017 was $869
million, which includes $62 million of sustaining capital
expenditures. For the first six months of 2017, Enterprise’s
capital spending was $1.3 billion including $110 million of
sustaining capital expenditures. For 2017, we currently expect to
invest in the range of $2.8 billion to $3.0 billion for growth
capital projects, including $191 million paid for the Azure
acquisition. We expect to spend approximately $250 million for
sustaining capital expenditures in 2017.
Conference Call to Discuss Second
Quarter 2017 Earnings
Today, Enterprise will host a conference call to discuss second
quarter 2017 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 export and import terminals; crude oil gathering,
transportation, storage and export and import terminals;
petrochemical and refined products transportation, storage, export
and import terminals and related services; and a marine
transportation business that operates primarily on the United
States inland and Intracoastal Waterway systems. The partnership’s
assets include approximately 50,000 miles of pipelines; 260 million
barrels of storage capacity for NGLs, crude oil, refined products
and petrochemicals; and 14 Bcf 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, 2017 2016
2017 2016
Revenues
$ 6,607.6 $ 5,617.8 $ 13,928.0 $
10,623.1
Costs and
expenses:
Operating costs and expenses 5,730.2 4,822.2 12,063.4 8,969.1
General and administrative costs 45.7
35.1 96.1 79.0 Total
costs and expenses 5,775.9 4,857.3
12,159.5 9,048.1
Equity in income of
unconsolidated affiliates
107.0 76.4 201.8
177.5
Operating
income
938.7 836.9 1,970.3 1,752.5
Other income
(expense):
Interest expense (245.8) (244.1) (495.1) (484.7) Other, net
(18.2) (22.9) (23.5)
(19.3) Total other expense (264.0)
(267.0) (518.6)
(504.0)
Income before income
taxes
674.7 569.9 1,451.7 1,248.5 Benefit from (provision for) income
taxes (8.7) 0.1
(14.7) (8.3)
Net
income
666.0 570.0 1,437.0 1,240.2
Net income
attributable to noncontrolling interests
(12.3) (11.5)
(22.6) (20.5)
Net income
attributable to limited partners
$ 653.7 $ 558.5 $ 1,414.4
$ 1,219.7
Per unit data (fully
diluted):
Earnings per unit $ 0.30 $ 0.27 $ 0.66
$ 0.59 Average limited partner units outstanding (in
millions) 2,154.3 2,093.2
2,144.7 2,066.8
Supplemental
financial data:
Net cash flows provided by operating activities $ 1,459.3
$ 945.5 $ 2,334.9 $ 1,845.2
Total debt principal outstanding at end of period $ 23,579.6
$ 22,999.9 $ 23,579.6 $ 22,999.9
Non-GAAP distributable cash flow (1) $ 1,051.9
$ 1,039.7 $ 2,180.5 $ 2,093.3 Non-GAAP
Adjusted EBITDA (2) $ 1,338.2 $ 1,314.7
$ 2,752.6 $ 2,641.9 Gross operating margin by
segment: NGL Pipelines & Services $ 759.9 $ 719.1 $ 1,615.9 $
1,502.8 Crude Oil Pipelines & Services 236.7 177.4 501.3 379.7
Natural Gas Pipelines & Services 194.4 177.4 365.3 355.1
Petrochemical & Refined Products Services 188.4
175.5 370.2
330.3 Total segment gross operating margin (3) 1,379.4
1,249.4 2,852.7
2,567.9 Net adjustment for shipper make-up rights (4)
(1.5) 4.8 (5.7)
10.6 Non-GAAP total gross operating margin (5)
$ 1,377.9 $ 1,254.2 $ 2,847.0
$ 2,578.5 Capital spending: Capital expenditures, net
(6) $ 682.7 $ 861.8 $ 1,113.1 $ 1,856.8 Cash used for business
combinations, net 175.4 -- 191.4 -- Investments in unconsolidated
affiliates 10.4 22.0
24.1 92.4 Total capital spending, cash
and non-cash $ 868.5 $ 883.8 $ 1,328.6
$ 1,949.2
(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) 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,
2017 2016 2017
2016
Selected operating
data: (1)
NGL Pipelines & Services, net: NGL
pipeline transportation volumes (MBPD) 3,083 2,992 3,160 2,973 NGL
marine terminal volumes (MBPD) 474 450 521 453 NGL fractionation
volumes (MBPD) 841 840 820 838 Equity NGL production (MBPD) (2) 164
143 157 145 Fee-based natural gas processing (MMcf/d) (3) 4,660
4,995 4,598 4,939 Crude Oil Pipelines & Services, net: Crude
oil pipeline transportation volumes (MBPD) 1,475 1,358 1,416 1,376
Crude oil marine terminal volumes (MBPD) 488 514 482 497 Natural
Gas Pipelines & Services, net: Natural gas pipeline
transportation volumes (BBtus/d) (4) 12,232 12,079 11,934 11,987
Petrochemical & Refined Products Services, net: Propylene
fractionation volumes (MBPD) 81 80 81 75 Butane isomerization
volumes (MBPD) 116 114 104 112 Standalone DIB processing volumes
(MBPD) 81 90 82 93 Octane additive and related plant production
volumes (MBPD) 30 22 25 16
Pipeline transportation volumes, primarily
refined products and petrochemicals (MBPD)
800 874 813 863
Refined products and petrochemicals marine
terminal volumes (MBPD)
471 410 435 379 Total, net:
NGL, crude oil, petrochemical and refined
products pipeline transportation volumes (MBPD)
5,358 5,224 5,389 5,212 Natural gas pipeline transportation volumes
(BBtus/d) 12,232 12,079 11,934 11,987 Equivalent pipeline
transportation volumes (MBPD) (5) 8,577 8,403 8,530 8,366
NGL, crude oil, refined products and
petrochemical marine terminal volumes (MBPD)
1,433 1,374 1,438 1,329
(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) “BBtus/d”
means billion British thermal units per day. (5) Represents total
NGL, crude oil, refined products and petrochemical transportation
volumes plus equivalent energy volumes where 3.8 million British
thermal units (“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)
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 3rd Quarter
$2.81 $0.19 $0.47 $0.63 $0.67 $0.98 $0.38 $0.24 $44.94 $46.52 4th
Quarter $2.98 $0.24 $0.58
$0.83 $0.90 $1.08 $0.36
$0.24 $49.29 $50.53
YTD 2016 Averages $2.46 $0.20
$0.48 $0.65 $0.68 $0.94
$0.34 $0.21 $43.32
$44.88
2017 by quarter: 1st Quarter $3.32
$0.23 $0.71 $0.98 $0.94 $1.10 $0.47 $0.32 $51.91 $53.52 2nd Quarter
$3.19 $0.25 $0.63 $0.76
$0.75 $1.07 $0.42
$0.28 $48.28 $50.31
YTD 2017
Averages $3.25 $0.24 $0.67
$0.87 $0.84 $1.08
$0.45 $0.30 $50.10 $51.92
(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 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 $0.60 per
gallon during the second quarter of 2017 versus $0.50 per gallon
for the second quarter of 2016.
Fluctuations in our consolidated revenues and cost of sales
amounts are explained in large part by changes in energy commodity
prices. Energy commodity prices fluctuate for a variety of reasons,
including supply and demand imbalances and geopolitical
tensions.
A change in our consolidated marketing revenues due to higher
energy commodity sales prices may not result in a similar change in
gross operating margin or cash available for distribution, since
our consolidated cost of sales amounts would also change due to
comparable increases in the purchase prices of the underlying
energy commodities.
Enterprise Products Partners
L.P.
Exhibit D
Distributable Cash Flow – UNAUDITED ($
in millions)
For the Three
Months
For the Six
Months
Ended June 30, Ended June 30,
2017 2016 2017
2016 Net income attributable to limited
partners (GAAP) $ 653.7 $ 558.5 $ 1,414.4
$ 1,219.7 Adjustments to GAAP net income attributable to
limited partners to derive non-GAAP distributable cash flow: Add
depreciation, amortization and accretion expenses 406.5 381.3 808.8
763.4 Add distributions received from unconsolidated affiliates
127.4 118.7 229.9 234.5 Subtract equity in income of unconsolidated
affiliates (107.0) (76.4) (201.8) (177.5) Subtract sustaining
capital expenditures (1) (62.3) (58.4) (110.3) (117.7) Add net
losses attributable to asset sales 0.3 1.7 -- 6.6 Add cash proceeds
from asset sales 1.2 14.5 3.2 27.9
Add non-cash expense attributable to
changes in fair value of the Liquidity Option Agreement
18.6 23.3 24.1 21.1
Add non-cash expense or subtract benefit
attributable to changes in fair value of derivative instruments
(23.6) 48.2 (43.9) 68.3 Add deferred income tax expense 0.6 0.2 0.7
4.3 Add non-cash asset impairment and related charges 14.0 20.6
25.2 22.3
Add other miscellaneous adjustments to
derive non-GAAP distributable cash flow, as applicable
22.5 7.5 30.2
20.4
Distributable cash flow (non-GAAP)
1,051.9 1,039.7 2,180.5 2,093.3 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 62.3 58.4 110.3 117.7 Subtract cash
proceeds from asset sales reflected in distributable cash flow
(1.2) (14.5) (3.2) (27.9) Add or subtract the net effect of changes
in operating accounts, as applicable 370.9 (108.2) 82.1 (294.6) Add
miscellaneous non-cash and other amounts to reconcile non-GAAP
distributable cash flow with GAAP net cash flow provided by
operating activities, as applicable (24.6)
(29.9) (34.8)
(43.3)
Net cash flow provided by operating activities (GAAP)
$ 1,459.3 $ 945.5 $ 2,334.9
$ 1,845.2
(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 flowOur
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
Twelve Months EndedJune 30,
For the Three
Months Ended June 30,
For the Six
Months Ended June 30,
2017 2016 2017
2016 2017 Net income
(GAAP) $ 666.0 $ 570.0 $ 1,437.0 $
1,240.2 $ 2,749.8 Adjustments to GAAP net income to derive non-GAAP
Adjusted EBITDA: Subtract equity in income of unconsolidated
affiliates (107.0) (76.4) (201.8) (177.5) (386.3) Add distributions
received from unconsolidated affiliates 127.4 118.7 229.9 234.5
446.9 Add interest expense, including related amortization 245.8
244.1 495.1 484.7 993.0 Add provision for or subtract benefit from
income taxes 8.7 (0.1) 14.7 8.3 29.8 Add depreciation, amortization
and accretion in costs and expenses 387.8 366.3 772.1 733.4 1,525.6
Add non-cash asset impairment and related charges 14.0 20.6 25.2
22.3 56.4 Add non-cash net losses or subtract net gains
attributable to asset sales 0.3 -- -- 6.6 (9.1)
Add non-cash expense attributable to
changes in fair value of the Liquidity Option Agreement
18.6 23.3 24.1 21.1 27.5
Add losses or subtract gains attributable
to unrealized changes in the fair market value of commodity
derivative instruments
(23.4) 48.2 (43.7)
68.3 (67.0)
Adjusted
EBITDA (non-GAAP) 1,338.2 1,314.7 2,752.6 2,641.9 5,366.6
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
(245.8) (244.1) (495.1) (484.7) (993.0)
Add benefit or subtract provision for
income taxes reflected in Adjusted EBITDA
(8.7) 0.1 (14.7) (8.3) (29.8)
Subtract distributions received for return
of capital from unconsolidated affiliates
(12.8) (30.3) (24.8) (39.4) (56.4) Add deferred income tax expense
or subtract benefit 0.6 0.2 0.7 4.3 3.0 Add or subtract the net
effect of changes in operating accounts, as applicable 370.9
(108.2) 82.1 (294.6) 195.8 Add miscellaneous non-cash and other
amounts to reconcile non-GAAP Adjusted EBITDA with GAAP net cash
flow provided by operating activities 16.9
13.1 34.1 26.0
70.3
Net cash flow provided by operating
activities (GAAP) $ 1,459.3 $ 945.5
$ 2,334.9 $ 1,845.2 $ 4,556.5
Adjusted EBITDAAdjusted 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,
2017 2016 2017
2016 Total gross operating margin
(non-GAAP) $ 1,377.9 $ 1,254.2 $ 2,847.0
$ 2,578.5
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
(379.2) (360.3) (755.4) (718.5)
Subtract non-cash asset impairment charges
not reflected in gross operating margin
(14.0) (20.2) (25.2) (21.9)
Subtract net losses attributable to asset
sales not reflected in gross operating margin
(0.3) (1.7) -- (6.6)
Subtract general and administrative costs
not reflected in gross operating margin
(45.7) (35.1)
(96.1) (79.0)
Total operating income
(GAAP) $ 938.7 $ 836.9 $ 1,970.3
$ 1,752.5
Total gross operating marginWe
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/20170803005188/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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