Enterprise Products Partners L.P. (“Enterprise”) (NYSE: EPD)
today announced its financial results for the three and nine months
ended September 30, 2017.
Third Quarter 2017
Highlights
Three months endedSeptember 30,
Nine months endedSeptember 30,
2017
2016 2017 2016 ($ in millions, except per unit
amounts) Operating income ((1))
$
879
$ 905 $ 2,850 $ 2,658 Net income ((1) (2))
$
621
$ 643 $ 2,058 $ 1,883 Fully diluted earnings per unit ((1) (2))
$
0.28
$ 0.30 $ 0.94 $ 0.89 Net cash flow provided by operating activities
(1) (3)
$
485
$
814
$
2,820
$
2,659
Total gross operating margin (1) (4)
$
1,313
$ 1,312 $ 4,160 $ 3,891 Adjusted EBITDA (1) (4)
$
1,321
$ 1,259 $ 4,073 $ 3,901 Distributable cash flow (1) (4)
$
1,065
$ 978 $ 3,245 $ 3,072 (1) This
financial measure for the third quarter of 2017 was reduced by
approximately $35 million from the estimated impact of Hurricane
Harvey, which we believe reduced fully diluted earnings per unit
for the quarter by approximately $0.02 per unit. (2) Net income for
the third quarters of 2017 and 2016 included non-cash asset
impairment and related charges of $10 million and $7 million,
respectively, which reduced fully diluted earnings per unit by less
than $0.01 per unit for both quarters. (3) Net cash flow provided
by operating activities includes the impact of timing of cash
receipts and payments related to operations. For the third 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, were reductions of $594 million and $195 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.
- Net income attributable to limited
partners was $611 million, or $0.28 per unit on a fully diluted
basis for the third quarter of 2017 compared to $635 million, or
$0.30 per unit on a fully diluted basis for the third quarter of
2016. After adjusting for the estimated impact of Hurricane Harvey,
net income attributable to limited partners for the third quarter
of 2017 would have been $646 million, or $0.30 per unit.
- Enterprise increased its cash
distribution with respect to the third quarter of 2017 by 4.3
percent to $0.4225 per unit compared to the distribution paid with
respect to the third quarter of 2016. The distribution will be paid
November 7, 2017 to unitholders of record as of the close of
business on October 31, 2017.
- Enterprise reported distributable cash
flow of $1.1 billion for the third quarter of 2017, which provided
approximately 1.2 times coverage of the $0.4225 per unit cash
distribution and resulted in $152 million of retained distributable
cash flow. For the nine months ended September 30, 2017,
distributable cash flow was $3.2 billion, which provided 1.2 times
coverage of the aggregate $1.2575 per unit cash distribution, and
Enterprise retained $533 million of distributable cash flow, which
is available to reinvest in growth capital projects and reduce the
need to issue additional equity.
- Third Quarter
Volume Highlights
Three monthsended Sept. 30,
2017 2016 NGL, crude oil, refined products &
petrochemical pipeline volumes (million BPD)
5.3
5.0
Marine terminal volumes (million BPD) 1.3 1.2 Natural gas pipeline
volumes (TBtu/d) 12.4 12.1 NGL fractionation volumes (MBPD) 815 791
Fee-based natural gas processing volumes (Bcf/d) 4.8 4.6 Equity NGL
production volumes (MBPD) 166 116 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 $1.0 billion
in the third quarter of 2017, and $2.3 billion for the first nine
months of 2017. Included in these investments were sustaining
capital expenditures of $54 million and $164 million for the third
quarter and first nine months of 2017, respectively.
- Affiliates of privately held Enterprise
Products Company (“EPCO”), which collectively own Enterprise’s
general partner and approximately 32 percent of Enterprise’s
outstanding limited partner interests, have indicated to Enterprise
management that they plan to purchase $100 million of Enterprise
common units through the partnership’s distribution reinvestment
plan (“DRIP”) with the November 2017 distribution.
“Enterprise reported solid results in a very challenging third
quarter of 2017,” said Jim Teague, chief executive officer of
Enterprise’s general partner. “I would like to acknowledge and
thank our employees for their remarkable efforts during Hurricane
Harvey and its historic aftermath. Their efforts allowed us to
preserve the reliability of our midstream system, despite over 50
inches of rain at Mont Belvieu, and provide critical services to
both our producing and consuming customers. We had hundreds of
employees impacted by Hurricane Harvey and the associated flooding.
We applaud our employees for their resilience and generosity in
supporting their fellow workers and community on the Texas Gulf
Coast,” stated Teague.
“The partnership’s financial performance was supported by strong
volumes on our pipelines, plants and marine terminals despite
downtime at some of our facilities due to the storm. Many of our
petrochemical and refining customers experienced extended downtime,
which also negatively impacted our pipeline volumes. Highlights for
the quarter included record volumes at our ethane export marine
terminal, record volumes on our ATEX ethane pipeline, and near
record volumes on our Acadian Gas System as a result of the
resurgence of Haynesville shale production. We also had strong
year-over-year performance at our octane enhancement facility, and
from assets put into service in the Permian basin and NGL storage
facility. Altogether, the partnership generated $1.1 billion of
distributable cash flow, providing approximately 1.2 times coverage
of our distribution declared for the third quarter of 2017 and $152
million of retained distributable cash flow to reinvest in the
growth of our partnership,” said Teague.
“We recently completed construction of the pipeline portion of
our Midland-to Sealy crude oil pipeline. We are beginning
commissioning activities and expect the pipeline to be in limited
service later this month. Construction continues on the supporting
pump stations and storage facilities in Midland and Sealy. The
Midland-to-Sealy pipeline is expected to be in full service,
including batching capabilities, during the second quarter of 2018.
Hurricane Harvey delayed the commissioning schedule on the
partnership’s propane dehydrogenation facility (“PDH”) by
approximately four weeks. We are now in the final stages of
commissioning and expect initial production of polymer grade
propylene later this month,” concluded Teague.
Review of Third Quarter 2017
Results
NGL Pipelines & Services – Gross operating margin for
the NGL Pipelines & Services segment increased 10 percent, or
$67 million, to $771 million for the third quarter of 2017 from
$704 million for the third quarter of 2016. We estimate that the
effects of Hurricane Harvey reduced gross operating margin in this
segment by approximately $7 million for the third quarter of 2017
primarily from reduced transportation volumes and lost business
opportunities.
Enterprise’s natural gas processing and related NGL marketing
business generated gross operating margin of $203 million for the
third quarters of both 2017 and 2016. Total fee-based processing
volumes were 4.8 Bcf/d for the third quarter of 2017 compared to
4.6 Bcf/d for the third quarter of 2016, and total equity NGL
production increased to 166 MBPD this quarter from 116 MBPD for the
third quarter of 2016.
Enterprise’s natural gas processing business reported a $10
million increase in gross operating margin for the third quarter of
2017 compared to the same quarter in 2016. In general, gross
operating margin for the natural gas processing business for the
third quarter of 2017 benefited from higher processing margins,
equity NGL production and fee-based volumes, which were partially
offset by a $23 million decrease from hedging activities. The
decrease in gross operating margin from hedging activities was
comprised of approximately $13 million of hedging losses in the
third quarter of 2017 compared to $10 million of hedging gains in
the third quarter of 2016. The processing business incurred
approximately $7 million of costs in the third quarter of 2016
related to a fire at our Pascagoula processing plant in
Mississippi. The Pascagoula facility returned to commercial service
in December 2016.
Gross operating margin from the partnership’s NGL marketing
business for the third quarter of 2017 decreased $10 million
compared to the third quarter of 2016, primarily due to lower
contributions from marketing activities associated with our storage
assets.
Gross operating margin from the partnership’s NGL pipelines and
storage business increased $57 million, or 15 percent, to $435
million for the third quarter of 2017 compared to the third quarter
of 2016. NGL transportation volumes increased 7 percent to 3.1
million BPD for the third quarter of 2017 versus the same quarter
of 2016. NGL marine terminal volumes increased 22 percent to 456
MBPD for the third quarter of 2017 compared to the third quarter of
last year.
Gross operating margin from Enterprise’s NGL marine terminals
and related Houston Ship Channel Pipeline for the third quarter of
2017 increased by a total of $16 million compared to the third
quarter of 2016. The Morgan’s Point ethane export terminal loaded
100 MBPD of cargoes in the third quarter of 2017 and accounted for
$14 million of the increase in gross operating margin.
Enterprise’s ATEX ethane pipeline reported a $15 million
increase in gross operating margin for the third quarter of 2017
compared to the third quarter of 2016 primarily from higher
volumes. ATEX volumes increased by 26 MBPD for the third quarter of
2017 versus the same quarter in 2016. The Mont Belvieu NGL and
related product storage business accounted for $10 million of the
increase in gross operating margin this quarter, primarily due to
higher fees.
Enterprise’s Tri-States, Wilprise, Chaparral and affiliated
pipelines reported an aggregate $16 million increase in gross
operating margin for the third quarter of 2017 compared to the
third quarter of last year, primarily attributable to a 67 MBPD
increase in volumes.
The partnership’s equity investments in the Texas Express and
Front Range pipelines posted a combined $6 million increase in
gross operating margin for the third quarter of 2017 when compared
to the third quarter of last year, primarily due to contractual
increases in committed volumes.
Gross operating margin from the partnership’s NGL fractionation
business increased $10 million to $132 million for the third
quarter of 2017 compared to the third quarter of 2016. Enterprise
benefited from higher fractionation volumes at its Mont Belvieu,
Hobbs and Louisiana plants this quarter, as well as increased
revenues from blending activities. Total fractionation volumes
increased 24 MBPD to 815 MBPD for the third quarter of 2017
compared to the third quarter of 2016.
Crude Oil Pipelines & Services – Gross operating
margin from the partnership’s Crude Oil Pipelines & Services
segment decreased $64 million to $190 million for the third quarter
of 2017 compared to the third quarter of 2016. Approximately $45
million of the decrease in gross operating margin from last year
was attributable to non-cash, mark-to-market losses associated with
financial instruments used in the crude oil marketing business. We
estimate that the effects of Hurricane Harvey reduced gross
operating margin in this segment by approximately $2 million for
the third quarter of 2017 from reduced transportation volumes and
lost business opportunities. Total crude oil pipeline
transportation volumes were 1.5 million BPD for the third quarter
of 2017 compared to 1.4 million BPD for the third quarter of 2016.
Total crude oil marine terminal volumes were 452 MBPD for the third
quarter of 2017 compared to 520 MBPD for the third quarter of
2016.
Gross operating margin from Enterprise’s crude oil marketing and
related activities decreased $83 million in the third quarter of
2017 compared to the third quarter of 2016. The partnership had a
$45 million decrease in mark-to-market valuation of its financial
instruments related to certain marketing activities, which was
comprised of $22 million of mark-to-market losses in the third
quarter of 2017 versus $23 million of mark-to-market gains in the
third quarter of 2016. Also contributing to the reduction in gross
operating margin was a $39 million decrease from other marketing
activities impacted by lower crude oil sales margins.
Gross operating margin from our crude oil marine terminals on
the Houston Ship Channel and Beaumont decreased by a total of $9
million for the third quarter of 2017 compared to the third quarter
of 2016, primarily due to higher maintenance and other operating
costs. Total crude oil unloading and loading volumes at these
marine terminals decreased by 17 MBPD in the third quarter of 2017
compared to the same quarter in 2016 due in part to the effects of
Hurricane Harvey.
Gross operating margin from our South Texas Crude Oil Pipeline
system and equity investment in the Eagle Ford Crude Oil Pipeline
increased by a total of $31 million for the third quarter of 2017
compared to the third quarter of last year, primarily due to higher
deficiency fee revenues and an aggregate 103 MBPD increase in
volumes on the two systems.
Our EFS Midstream System had an $8 million increase in gross
operating margin this quarter compared to the third quarter of
2016, primarily due to higher deficiency fee revenues.
Natural Gas Pipelines & Services – Gross operating
margin from the partnership’s Natural Gas Pipelines & Services
segment was $171 million for the third quarter of 2017 compared to
$179 million for the third quarter of 2016. Total natural gas
transportation volumes were 12.4 TBtu/d for the third quarter of
2017 compared to 12.0 TBtu/d for the same quarter of last year.
The partnership’s Permian, Haynesville, BTA and Piceance natural
gas gathering systems reported an aggregate $7 million increase in
gross operating margin to $22 million for the third quarter of 2017
compared to the third quarter of 2016. Total volumes for these
systems in the third quarter of 2017 increased by 0.6 TBtu/d
compared to the third quarter of last year. We acquired the BTA
system as part of the Azure acquisition that was completed in the
second quarter of 2017.
The Acadian Gas System reported a net $5 million decrease in
gross operating margin for the third quarter of 2017 compared to
the third quarter of 2016, primarily due to lower average capacity
fees and higher operating costs, which more than offset incremental
revenues associated with a 0.3 TBtu/d, or 15 percent, increase in
pipeline volumes. The Texas Intrastate System reported a $3 million
decrease in gross operating margin for the third quarter of 2017
compared to the third quarter of last year, primarily due to lower
fees and volumes from lower production in the Eagle Ford and
Barnett Shale.
Petrochemical & Refined Products Services – Gross
operating margin for the Petrochemical & Refined Products
Services segment was $172 million for the third quarters of both
2017 and 2016. We estimate that the effects of Hurricane Harvey
reduced gross operating margin for the third quarter of 2017 by
approximately $25 million for this segment.
Gross operating margin for Enterprise’s octane enhancement and
high-purity isobutylene business increased $18 million for the
third quarter of 2017 compared to the third quarter of 2016,
primarily due to lower operating costs and higher sales margins.
Total plant production volumes were 24 MBPD this quarter compared
to 27 MBPD for the third quarter of 2016.
The partnership’s propylene fractionation business reported a
$13 million decrease in gross operating margin for the third
quarter of 2017 compared to the third quarter of 2016, primarily
due to higher plant operating and PDH commissioning costs.
Propylene fractionation volumes were 78 MBPD for this quarter
compared to 76 MBPD for the third quarter of last year. Propylene
export volumes increased 5 MBPD to 21 MBPD for the third quarter of
2017 compared to the third quarter of 2016.
Higher transportation volumes on our TE Products Pipeline led to
a $3 million increase in gross operating margin for the third
quarter of 2017 compared to the third quarter of 2016. Related
product terminals reported a $7 million decrease in gross operating
margin for the third quarter of 2017 compared to the third quarter
of 2016, as a result of lower volumes and higher operating
costs.
Capitalization
Total debt principal outstanding at September 30, 2017 was $24.9
billion, including $3.2 billion of junior subordinated notes, of
which $1.7 billion was issued in August 2017. The debt rating
agencies ascribe partial equity content to the junior subordinated
notes. At September 30, 2017, Enterprise had consolidated liquidity
of $3.6 billion, which was comprised of unrestricted cash on hand
and available borrowing capacity under our revolving credit
facilities.
Total capital spending in the third quarter of 2017 was $1.0
billion, which includes $54 million of sustaining capital
expenditures. For the first nine months of 2017, Enterprise’s
capital spending was $2.3 billion including $164 million of
sustaining capital expenditures. For 2017, we currently expect to
invest in the range of approximately $2.9 billion to $3.1 billion,
including $191 million paid for the Azure acquisition. We also
expect to spend approximately $240 million for sustaining capital
expenditures in 2017.
In July 2003, Enterprise implemented the DRIP to provide a
simple, convenient means of investing in Enterprise’s common units.
Through the DRIP, investors can purchase common units by
reinvesting all or a portion of the cash distributions paid on
common units at a discount ranging from 0 percent to 5 percent.
Enterprise has elected to set the discount rate at 2.5 percent
beginning with the distribution declared with respect to the fourth
quarter of 2017 to be paid in February 2018. The discount rate was
previously 5 percent.
Conference Call to Discuss Third
Quarter 2017 Earnings
Today, Enterprise will host a conference call to discuss third
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 MonthsEnded
September 30,
For the Nine Months
Ended September 30,
2017 2016
2017 2016
Revenues
$ 6,886.9 $ 5,920.4 $ 20,814.9 $ 16,543.5
Costs and
expenses:
Operating costs and expenses 6,079.8 5,065.7 18,143.2 14,034.8
General and administrative costs 41.3
42.0 137.4 121.0
Total costs and expenses 6,121.1
5,107.7 18,280.6 14,155.8
Equity in income of
unconsolidated affiliates
113.4 92.3 315.2
269.8
Operating
income
879.2 905.0 2,849.5 2,657.5
Other income
(expense):
Interest expense (243.9 ) (250.9 ) (739.0 ) (735.6 ) Other, net
(8.6 ) (6.2 ) (32.1 )
(25.5 ) Total other expense (252.5 )
(257.1 ) (771.1 ) (761.1 )
Income before income
taxes
626.7 647.9 2,078.4 1,896.4 Provision for income taxes (5.4
) (4.8 ) (20.1 ) (13.1 )
Net
income
621.3 643.1 2,058.3 1,883.3
Net income
attributable to noncontrolling interests
(10.4 ) (8.5 ) (33.0 )
(29.0 )
Net income
attributable to limited partners
$ 610.9 $ 634.6 $ 2,025.3
$ 1,854.3
Per unit data (fully
diluted):
Earnings per unit $ 0.28 $ 0.30 $ 0.94
$ 0.89 Average limited partner units
outstanding (in millions) 2,160.6
2,105.5 2,150.0 2,079.8
Supplemental
financial data:
Net cash flows provided by operating activities $ 485.0
$ 813.8 $ 2,819.9 $ 2,659.0
Total debt principal outstanding at end of period $ 24,934.4
$ 24,163.0 $ 24,934.4 $
24,163.0 Non-GAAP distributable cash flow (1) $
1,064.9 $ 978.4 $ 3,245.4
$ 3,071.7 Non-GAAP Adjusted EBITDA (2) $ 1,320.7
$ 1,258.9 $ 4,073.3 $ 3,900.8
Gross operating margin by segment: NGL Pipelines &
Services $ 770.9 $ 703.5 $ 2,386.8 $ 2,206.3 Crude Oil Pipelines
& Services 190.4 254.0 691.7 633.7 Natural Gas Pipelines &
Services 170.7 178.5 536.0 533.6 Petrochemical & Refined
Products Services 172.4 171.6
542.6 501.9 Total segment
gross operating margin (3) 1,304.4
1,307.6 4,157.1 3,875.5
Net adjustment for shipper make-up rights (4) 8.9
4.4 3.2
15.0 Non-GAAP total gross operating margin (5) $
1,313.3 $ 1,312.0 $ 4,160.3
$ 3,890.5 Capital spending: Capital
expenditures, net (6) $ 1,005.1 $ 553.0 $ 2,118.2 $ 2,409.8 Cash
used for business combinations, net 7.3 1,000.0 198.7 1,000.0
Investments in unconsolidated affiliates 8.7 27.5 32.8 119.9 Other
investing activities -- 0.4
-- 0.4 Total capital
spending, cash and non-cash $ 1,021.1 $ 1,580.9
$ 2,349.7 $ 3,530.1
(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 MonthsEnded
September 30,
For the Nine MonthsEnded
September 30,
2017 2016 2017
2016
Selected operating
data: (1)
NGL Pipelines & Services, net: NGL pipeline
transportation volumes (MBPD) 3,052 2,854 3,131 2,933 NGL marine
terminal volumes (MBPD) 456 373 499 439 NGL fractionation volumes
(MBPD) 815 791 818 822 Equity NGL production (MBPD) (2) 166 116 160
136 Fee-based natural gas processing (MMcf/d) (3) 4,753 4,578 4,650
4,857 Crude Oil Pipelines & Services, net: Crude oil pipeline
transportation volumes (MBPD) 1,458 1,397 1,430 1,383 Crude oil
marine terminal volumes (MBPD) 452 520 472 504 Natural Gas
Pipelines & Services, net: Natural gas pipeline transportation
volumes (BBtus/d) (4) 12,376 12,047 12,084 12,007 Petrochemical
& Refined Products Services, net: Propylene fractionation
volumes (MBPD) 78 76 80 75 Butane isomerization volumes (MBPD) 110
113 106 112 Standalone DIB processing volumes (MBPD) 82 85 82 90
Octane additive and related plant production volumes (MBPD) 24 27
25 19
Pipeline transportation volumes, primarily
refined products and petrochemicals (MBPD)
778 784 801 836
Refined products and petrochemicals marine
terminal volumes (MBPD)
359 354 410 381 Total, net:
NGL, crude oil, petrochemical and refined
products pipeline transportation volumes (MBPD)
5,288 5,035 5,362 5,152 Natural gas pipeline transportation volumes
(BBtus/d) 12,376 12,047 12,084 12,007 Equivalent pipeline
transportation volumes (MBPD) (5) 8,545 8,205 8,542 8,312
NGL, crude oil, refined products and
petrochemical marine terminal volumes (MBPD)
1,267 1,247 1,381 1,324
(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 $ 0.41 $ 0.28 $ 48.28 $
50.31 3rd Quarter $ 2.99 $ 0.26 $ 0.77
$ 0.91 $ 0.92 $ 1.10
$ 0.42 $ 0.28 $ 48.20
$ 51.62
YTD 2017 Averages $ 3.17
$ 0.25 $ 0.70 $ 0.88
$ 0.87 $ 1.09 $ 0.43
$ 0.29 $ 49.46 $ 51.82
(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 $0.68 per
gallon during the third quarter of 2017 versus $0.49 per gallon for
the third quarter of 2016.
Fluctuations in our consolidated revenues and cost of sales
amounts are explained in large part by changes in energy commodity
prices. Energy commodity prices fluctuate for a variety of reasons,
including supply and demand imbalances and geopolitical
tensions.
A change in our consolidated marketing revenues due to higher
energy commodity sales prices may not result in a similar change in
gross operating margin or cash available for distribution, since
our consolidated cost of sales amounts would also change due to
comparable increases in the purchase prices of the underlying
energy commodities.
Enterprise Products Partners
L.P.
Exhibit D Distributable Cash Flow – UNAUDITED
($ in millions)
For the Three MonthsEnded
September 30,
For the Nine MonthsEnded
September 30,
2017 2016
2017 2016 Net
income attributable to limited partners (GAAP) $ 610.9 $
634.6 $ 2,025.3 $ 1,854.3 Adjustments to GAAP net income
attributable to limited partners to derive non-GAAP distributable
cash flow: Add depreciation, amortization and accretion expenses
412.6 391.9 1,221.4 1,155.3 Add distributions received from
unconsolidated affiliates 123.1 99.0 353.0 333.5 Subtract equity in
income of unconsolidated affiliates (113.4 ) (92.3 ) (315.2 )
(269.8 ) Subtract sustaining capital expenditures (1) (53.8 ) (61.7
) (164.1 ) (179.4 ) Subtract net gains attributable to asset sales
(1.1 ) (8.9 ) (1.1 ) (2.3 ) Add cash proceeds from asset sales 3.0
16.0 6.2 43.9
Add non-cash expense attributable to
changes in fair value of the Liquidity Option Agreement
8.9 6.9 33.0 28.0
Add non-cash expense or subtract benefit
attributable to changes in fair value of derivative instruments
29.7 (26.2 ) (14.2 ) 42.1 Add monetization of interest rate
derivative instruments 30.6 -- 30.6 -- Add deferred income tax
expense 0.4 1.0 1.1 5.3 Add non-cash asset impairment and related
charges 10.0 6.8 35.2 29.1
Add other miscellaneous adjustments to
derive non-GAAP distributable cash flow, as applicable
4.0 11.3 34.2
31.7
Distributable cash flow
(non-GAAP) 1,064.9 978.4 3,245.4 3,071.7 Adjustments to
non-GAAP distributable cash flow to derive GAAP net cash flow
provided by operating activities: Add sustaining capital
expenditures reflected in distributable cash flow 53.8 61.7 164.1
179.4 Subtract cash proceeds from asset sales reflected in
distributable cash flow (3.0 ) (16.0 ) (6.2 ) (43.9 ) Subtract
monetization of interest rate derivative instruments (30.6 ) --
(30.6 ) -- Add or subtract the net effect of changes in operating
accounts, as applicable (594.2 ) (195.1 ) (512.1 ) (489.7 )
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 (5.9 )
(15.2 ) (40.7 ) (58.5 )
Net cash
flow provided by operating activities (GAAP) $ 485.0
$ 813.8 $ 2,819.9 $ 2,659.0
(1) Sustaining capital expenditures are capital
expenditures (as defined by GAAP) resulting from improvements to
and major renewals of existing assets. Such expenditures serve to
maintain existing operations but do not generate additional
revenues.
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
EndedSeptember 30,
For the Three MonthsEnded
September 30,
For the Nine MonthsEnded
September 30,
2017 2016
2017 2016
2017 Net income (GAAP) $ 621.3 $
643.1 $ 2,058.3 $ 1,883.3 $ 2,728.0 Adjustments to GAAP net
income to derive non-GAAP Adjusted EBITDA: Subtract equity in
income of unconsolidated affiliates (113.4 ) (92.3 ) (315.2 )
(269.8 ) (407.4 ) Add distributions received from unconsolidated
affiliates 123.1 99.0 353.0 333.5 471.0 Add interest expense,
including related amortization 243.9 250.9 739.0 735.6 986.0 Add
provision for income taxes 5.4 4.8 20.1 13.1 30.4 Add depreciation,
amortization and accretion in costs and expenses 393.0 374.8
1,165.1 1,108.2 1,543.8 Add non-cash asset impairment and related
charges 10.0 6.8 35.2 29.1 59.6 Subtract net gains attributable to
asset sales (1.1 ) (8.9 ) (1.1 ) (2.3 ) (1.3 )
Add non-cash expense attributable to
changes in fair value of the Liquidity Option Agreement
8.9 6.9 33.0 28.0 29.5
Add losses or subtract gains attributable
to unrealized changes in the fair market value of commodity
derivative instruments
29.6 (26.2 ) (14.1 )
42.1 (11.2 )
Adjusted EBITDA
(non-GAAP) 1,320.7 1,258.9 4,073.3 3,900.8 5,428.4 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
(243.9 ) (250.9 ) (739.0 ) (735.6 ) (986.0 )
Subtract provision for income taxes
reflected in Adjusted EBITDA
(5.4 ) (4.8 ) (20.1 ) (13.1 ) (30.4 )
Subtract distributions received for return
of capital from unconsolidated affiliates
(12.0 ) (12.5 ) (36.8 ) (51.9 ) (55.9 ) Add deferred income tax
expense 0.4 1.0 1.1 5.3 2.4 Add or subtract the net effect of
changes in operating accounts, as applicable (594.2 ) (195.1 )
(512.1 ) (489.7 ) (203.3 ) Add miscellaneous non-cash and other
amounts to reconcile non-GAAP Adjusted EBITDA with GAAP net cash
flow provided by operating activities 19.4
17.2 53.5 43.2
72.5
Net cash flow provided by
operating activities (GAAP) $ 485.0 $ 813.8
$ 2,819.9 $ 2,659.0 $
4,227.7
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 MonthsEnded
September 30,
For the Nine MonthsEnded
September 30,
2017 2016
2017 2016 Total
gross operating margin (non-GAAP) $ 1,313.3 $ 1,312.0 $
4,160.3 $ 3,890.5
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
(383.9 ) (367.1 ) (1,139.3 ) (1,085.6 )
Subtract non-cash asset impairment charges
not reflected in gross operating margin
(10.0 ) (6.8 ) (35.2 ) (28.7 )
Add net gains attributable to asset sales
not reflected in gross operating margin
1.1 8.9 1.1 2.3
Subtract general and administrative costs
not reflected in gross operating margin
(41.3 ) (42.0 ) (137.4 )
(121.0 )
Total operating income (GAAP) $ 879.2
$ 905.0 $ 2,849.5 $ 2,657.5
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/20171102005380/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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