Enterprise Products Partners L.P. (“Enterprise”) (NYSE: EPD)
today announced its financial results for the three months and
twelve months ended December 31, 2017.
Enterprise reported a 10 percent increase in operating income to
$3.9 billion for 2017 compared to $3.6 billion for 2016. Total
gross operating margin for 2017 increased 8 percent to a record
$5.7 billion from $5.2 billion in 2016. Net cash flow provided by
operating activities for 2017 increased 14 percent to $4.6 billion
from $4.1 billion in 2016. Distributable cash flow, excluding
proceeds from asset sales, increased 10 percent to a record $4.5
billion in 2017 from $4.1 billion in 2016. Total gross operating
margin 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 declared distributions with respect to 2017
representing a 4.5 percent increase compared to those declared with
respect to 2016. Distributable cash flow provided 1.2 times
coverage of the distributions declared with respect to 2017.
Enterprise retained $867 million of distributable cash flow in 2017
to reinvest in the growth of the partnership.
“Enterprise reported record operating and financial results in
2017 as the energy industry began to emerge from a challenging
three-year commodity cycle,” stated Jim Teague, chief executive
officer of Enterprise’s general partner. “We posted record liquid
pipeline volumes and marine terminal volumes. Our strong financial
performance in 2017 provided us the financial flexibility to
provide our partners with 4.5 percent distribution growth and 1.2
times distribution coverage for the year while self-funding
approximately 55 percent of the equity portion of our $3.1 billion
of investments in organic growth capital projects and acquisitions
during the year. Based on expected distributable cash flow growth
from new projects and our existing assets, we believe we can
deliver on our goal of providing our partners moderate distribution
growth and fully self-funding the equity portion of our growth
capital investments in 2019, assuming $2.5 billion to $3.0 billion
in growth capital expenditures. We believe we can accomplish this
while maintaining one of the strongest investment grade balance
sheets in the midstream sector.”
Teague added, “During 2017, Enterprise completed construction
and either began service or commissioning activities on projects
representing $4.5 billion of capital investment. In the fourth
quarter, we began limited service on our Midland-to-ECHO pipeline
moving a single grade of crude oil from the Permian Basin to the
Houston refining and export market. We expect to be in full service
on this pipeline early in the second quarter of 2018. Also during
the quarter, we began commissioning activities at our new propane
dehydrogenation, or PDH, facility. This plant has been running near
full capacity and is in the latter stages of the commissioning
phase. During 2017, other major growth projects completed include
an expansion of our ATEX ethane pipeline; expansion of our
propylene pipeline infrastructure on the U.S. Gulf Coast; and
expansion of our refined products and crude oil marine terminals in
Beaumont.”
“Enterprise currently has another $5.5 billion of growth
projects under construction. In 2018, we expect to complete
projects representing $2.7 billion of capital investment. These
major projects include: completing the Midland-to-ECHO crude oil
pipeline system and bringing it into full commercial service; our
ninth NGL fractionator at Mont Belvieu; two natural gas processing
plants at our Orla Complex in the Delaware Basin; and expansion of
Enterprise’s NGL, crude oil and refined products storage
facilities,” said Teague.
“Our success in 2017 would not have been possible without the
daily creativity and hustle by our team of over 6,700 employees.
This success included the best year in our history in terms of
safety achievement. Our employees are the foundation of our safe
and reliable operations and the heart of our customer service.
Looking ahead, we are excited about the potential for 2018. We are
actively working to develop and underwrite growth capital projects
in all four of our business segments. I would also like to thank
our debt and equity investors for their continued support as we
invest to expand Enterprise’s integrated midstream energy system,”
Teague concluded.
Fourth Quarter
and Full Year Financial Highlights
Three months ended
December 31,
Twelve months ended
December 31,
2017 2016 2017 2016 ($ in
millions, except per unit amounts)
Operating income $ 1,079 $ 923 $ 3,929 $ 3,581
Net income(1)
$ 797 $ 670 $ 2,856 $ 2,553
Fully diluted earnings per unit(1)
$ 0.36 $ 0.31 $ 1.30 $ 1.20
Net cash flow provided by operating
activities(2)
$
1,820
$
1,408
$
4,640
$
4,067
Total gross operating margin(3)
$ 1,520 $ 1,357 $ 5,680 $ 5,248
Adjusted EBITDA(3)
$ 1,542 $ 1,355 $ 5,615 $ 5,256
Distributable cash flow(3)(4)
$ 1,257 $ 1,031 $ 4,502 $ 4,103 (1) Net income and
fully diluted earnings per unit for the fourth quarters of 2017 and
2016 include non-cash impairment charges of approximately $15
million, or $0.01 per unit, and $24 million, or $0.01 per unit,
respectively. For the years ended December 31, 2017 and 2016, net
income and fully diluted earnings per unit include non-cash
impairment and related charges of $50 million, or $0.02 per unit,
and $54 million, or $0.03 per unit, respectively. (2) Net cash flow
provided by operating activities includes the impact of timing of
cash receipts and payments related to operations. For the fourth
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 net increases of $518 million and $309
million, respectively. For the years ended December 31, 2017 and
2016, the net effect of changes in operating accounts were a net
increase of $6 million and a net decrease of $181 million,
respectively. (3) Total gross operating margin, adjusted earnings
before interest, taxes, depreciation and amortization (“Adjusted
EBITDA”) and distributable cash flow are non-GAAP financial
measures that are defined and reconciled later in this press
release. (4) Distributable cash flow included proceeds from asset
sales of $34 million and $3 million for the fourth quarters of 2017
and 2016, respectively, and $40 million and $47 million for the
years ended December 31, 2017 and 2016, respectively.
- Enterprise increased its cash
distribution with respect to the fourth quarter of 2017 by 3.7
percent over the fourth quarter of 2016 to $0.425 per unit, or
$1.70 per unit on an annualized basis. This is the 54th consecutive
quarterly increase and the 63rd increase since the partnership’s
initial public offering in 1998. This distribution will be paid on
February 7, 2018 to unitholders of record as of the close of
business on January 31, 2018;
- Excluding proceeds from asset sales,
Enterprise reported a 19 percent increase in distributable cash
flow to a record $1.2 billion for the fourth quarter of 2017
compared to the fourth quarter of 2016, which provided 1.3 times
coverage of the $0.425 per unit cash distribution. Enterprise
retained $335 million of distributable cash flow in the fourth
quarter of 2017.
Fourth Quarter
Volume Highlights
Three months ended
December 31,
2017 2016
NGL, crude oil, refined products &
petrochemical
pipeline volumes (million
BPD)
6.0
5.3
Marine terminal volumes (million BPD) 1.7 1.3 Natural gas pipeline
volumes (TBtu/d) 12.9 11.5 NGL fractionation volumes (MBPD) 863 846
Fee-based natural gas processing volumes (Bcf/d) 4.3 4.4 Equity NGL
production volumes (MBPD) 153
156
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 fourth quarter of 2017, including $80 million of sustaining
capital expenditures. Total capital investments for 2017 was $3.4
billion, which included $244 million of sustaining capital
expenditures.
- 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 February 2018 distribution.
Teague said, “Enterprise completed 2017 with a record fourth
quarter. Operationally, our record performance included liquids
pipeline volumes of 6.0 million barrels per day; marine terminal
volumes of 1.7 million barrels per day; NGL fractionation volumes
of 863,000 barrels per day; as well as near record onshore natural
gas pipeline volumes of 12.9 trillion Btus per day. In NGLs, this
performance was largely attributable to an increase in NGL volumes
on our pipelines serving the Permian and Marcellus shale plays and
record ethane export volumes of 135,000 barrels per day. In our
crude oil business, our Midland-to-ECHO crude oil pipeline began
commissioning and limited service in November 2017. We also
benefited from record crude oil export volumes of 451,000 barrels
per day during the fourth quarter. In our natural gas business, we
had record volumes on our gathering and Acadian Gas systems serving
the Haynesville shale and a resurgence of volume in the
Jonah/Pinedale and Piceance regions.
“This operational performance, coupled with higher natural gas
processing margins and lower turnaround expenses in our
petrochemical segment, led to record quarterly financial
performance in terms of operating income, gross operating margin,
Adjusted EBITDA, and distributable cash flow excluding proceeds
from asset sales,” stated Teague.
Review of Fourth Quarter 2017 Segment
Performance
NGL Pipelines & Services – Gross operating margin for
the NGL Pipelines & Services segment increased 11 percent to
$872 million for the fourth quarter of 2017 from $784 million for
the fourth quarter of 2016.
Enterprise’s natural gas processing and related NGL marketing
business reported gross operating margin of $225 million for the
fourth quarter of 2017 compared to $228 million for the fourth
quarter of 2016. Gross operating margin from our natural gas
processing business increased $41 million primarily due to higher
average processing margins from our Rocky Mountain and Louisiana
gas plants and the receipt of $19 million of business interruption
insurance proceeds related to an event and resulting downtime at
our Pascagoula processing plant in June 2016. Total fee-based
processing volumes were 4.3 Bcf/d for the fourth quarter of 2017
compared to 4.4 Bcf/d for the fourth quarter of 2016, while total
equity NGL production decreased to 153 MBPD this quarter from 156
MBPD for the fourth quarter of 2016.
Gross operating margin from Enterprise’s NGL marketing
activities decreased $44 million for the fourth quarter of 2017
compared to the same quarter in 2016 due to lower average sales
margins and volumes. Approximately $14 million of this decrease is
attributable to higher non-cash, mark-to-market loss activity in
the fourth quarter of 2017 compared to the fourth quarter of
2016.
Gross operating margin from the partnership’s NGL pipelines and
storage business increased 20 percent, to $495 million for the
fourth quarter of 2017 from $413 million for the fourth quarter of
2016. NGL pipeline volumes were a record 3.3 million BPD for the
fourth quarter of 2017 compared to 3.1 million BPD for the same
quarter of 2016. Total NGL marine terminal volumes increased 28
percent to 564 MBPD for the fourth quarter of 2017 compared to 440
MBPD for the fourth quarter of 2016.
Enterprise’s ATEX ethane pipeline reported a $22 million
increase in gross operating margin for the fourth quarter of 2017
compared to the fourth quarter of 2016, primarily due to a 31 MBPD
increase in volume. Average transportation volumes on the ATEX
pipeline were 144 MBPD for the fourth quarter of 2017 versus 113
MBPD for the same quarter of 2016. Gross operating margin from the
partnership’s ethane export terminal at Morgan’s Point and related
Houston Ship Channel pipeline increased $24 million, primarily due
to a 121 MBPD increase in ethane loadings during the fourth quarter
of 2017 compared to the fourth quarter of 2016.
Gross operating margin from the Mid-America and Seminole
pipelines, and related assets increased by $16 million to $143
million for the fourth quarter of 2017 compared to the same quarter
in 2016. Aggregate volumes on these pipelines increased 60 MBPD to
1.0 million BPD for the fourth quarter of 2017. Enterprise’s NGL
storage business reported a $14 million increase in gross operating
margin for the fourth quarter of 2017 compared to the fourth
quarter of 2016, primarily due to higher storage fees.
Gross operating margin from the partnership’s NGL fractionation
business increased 6 percent to $152 million for the fourth quarter
of 2017 compared to the fourth quarter of 2016. This increase was
primarily due to higher fees, product blending, and higher
fractionation volumes from Enterprise’s Mont Belvieu and Hobbs NGL
fractionators. Total NGL fractionation volumes were a record 863
MBPD for the fourth quarter of 2017 compared to 846 MBPD for the
fourth quarter of 2016.
Crude Oil Pipelines & Services – Gross operating
margin for the Crude Oil Pipelines & Services segment increased
34 percent to $296 million for the fourth quarter of 2017 from $221
million for the fourth quarter of 2016. Total crude oil pipeline
volumes were a record 2.0 million BPD for the fourth quarter of
2017 compared to 1.4 million BPD for the fourth quarter of 2016.
Total crude oil marine terminal volumes increased to 703 MBPD for
the fourth quarter of 2017 from 468 MBPD for the fourth quarter of
2016.
Enterprise’s Midland-to-ECHO crude oil pipeline, which began
commissioning and providing limited services in November 2017,
contributed $63 million in gross operating margin on average
volumes of 333 MBPD for the quarter. This pipeline is expected to
begin full commercial service with committed shippers after
construction of all pump stations, connections and related storage
facilities are completed in the second quarter of 2018.
Enterprise’s South Texas and Eagle Ford Crude Oil Pipeline
Systems reported an aggregate $36 million increase in gross
operating margin for the fourth quarter of 2017 compared to the
fourth quarter of 2016, primarily due to higher volumes. The South
Texas system includes the Rancho II pipeline, which benefited from
volumes delivered on the Midland-to-ECHO pipeline. Total volumes on
the South Texas and Eagle Ford pipelines, net to our interest,
increased 144 MBPD this quarter to 504 MBPD compared to the fourth
quarter of 2016. Gross operating margin from the EFS Midstream
assets increased $10 million for the fourth quarter of 2017
compared to the fourth quarter of 2016, primarily due to higher
fees.
Gross operating margin from Enterprise’s terminal on the Houston
Ship Channel and its Beaumont terminals increased $6 million on an
increase in crude oil loadings. Average loading volumes increased
to 389 MBPD in the fourth quarter of 2017 from 90 MBPD in the
fourth quarter of 2016.
Gross operating margin from Enterprise’s crude oil marketing and
related activities decreased $50 million for the fourth quarter of
2017 compared to the same quarter in 2016. This decrease was
primarily due to lower sales margins and a $14 million increase in
non-cash, mark-to-market losses compared to the fourth quarter of
2016.
Natural Gas Pipelines & Services –The Natural Gas
Pipelines & Services segment reported gross operating margin of
$179 million for the fourth quarter of 2017 compared to $201
million for the fourth quarter of 2016. Total natural gas
transportation volumes were 12.9 TBtu/d for the fourth quarter of
2017 compared to 11.5 TBtu/d for the fourth quarter of 2016.
The partnership’s Texas Intrastate system reported a $31 million
decrease in gross operating margin this quarter compared to the
fourth quarter of 2016. Gross operating margin for the fourth
quarter of 2016 included the benefit of a $28 million lump sum
payment associated with the termination of certain transportation
contracts. Natural gas pipeline volumes for the Texas Intrastate
system were 4.4 TBtu/d for both of the fourth quarters of 2017 and
2016.
The partnership’s Haynesville and BTA natural gas gathering
systems reported an aggregate $11 million increase in gross
operating margin for the fourth quarter of 2017 compared to the
same quarter in 2016 due to higher volumes. Total volumes for these
systems increased 0.6 TBtu/d to a record 0.8 TBtu/d in the fourth
quarter of 2017 compared to the fourth quarter of 2016. We acquired
the BTA gathering system as part of the Azure acquisition in April
2017.
Petrochemical & Refined Products Services – Gross
operating margin for the Petrochemical & Refined Products
Services segment increased 16 percent to $172 million for the
fourth quarter of 2017 compared to the fourth quarter of 2016.
Total petrochemical and refined products transportation volumes for
the fourth quarter of 2017 were 766 MBPD compared to 840 MBPD
reported for the fourth quarter of 2016.
Gross operating margin for Enterprise’s butane isomerization and
related operations increased $21 million for the fourth quarter of
2017 compared to the fourth quarter of 2016, primarily due to
downtime and costs associated with the turnaround of two processing
units in the fourth quarter of 2016. Butane isomerization volumes
were 108 MBPD for the fourth quarter of 2017 compared to 94 MBPD
for the same quarter of 2016.
Gross operating margin for Enterprise’s octane enhancement and
high-purity isobutylene business increased $16 million for the
fourth quarter of 2017 compared to the fourth quarter of 2016,
primarily due to lower operating costs and higher sales volumes.
Total plant production volumes were 27 MBPD for the fourth quarter
of 2017 compared to 26 MBPD for the fourth quarter of 2016.
Higher transportation fees on our TE Products pipeline and
related terminals led to a $7 million increase in gross operating
margin for the fourth quarter of 2017 compared to the fourth
quarter of 2016. Enterprise’s Houston and Beaumont products
terminals and related marketing activities reported a $13 million
decrease in gross operating margin for the fourth quarter of 2017
compared to the same quarter of 2016, primarily due to higher
maintenance expenses as a result of Hurricane Harvey.
The partnership’s propylene fractionation business reported a $3
million decrease in gross operating margin for the fourth quarter
of 2017 compared to the fourth quarter of 2016, primarily due to
higher PDH commissioning costs. Propylene fractionation volumes
were 81 MBPD for the fourth quarter of 2017 compared to 67 MBPD for
the fourth quarter of last year.
Capitalization
Total debt principal outstanding at December 31, 2017 was $24.8
billion, including $3.2 billion of junior subordinated notes, to
which the debt rating agencies ascribe partial equity content. At
December 31, 2017, Enterprise had consolidated liquidity of
approximately $3.7 billion, which was comprised of unrestricted
cash on hand and available borrowing capacity under our revolving
credit facilities.
Total capital spending in the fourth quarter of 2017 was $1.0
billion, which includes $80 million of sustaining capital
expenditures. Capital spending for the year was $3.4 billion, which
included $244 million of sustaining capital expenditures. For 2018,
we currently expect to invest approximately $3 billion for growth
capital projects and approximately $325 million for sustaining
capital expenditures.
2017 K-1 Tax Packages
The Enterprise K-1 tax packages are expected to be made
available online through our website at www.enterpriseproducts.com
by noon (CT) on February 23, 2018 and will be mailed beginning that
day as well.
Conference Call to Discuss Fourth
Quarter 2017 Earnings
Enterprise will host a conference call today to discuss fourth
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.
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
Ended December 31,
For the Year
Ended December 31,
2017 2016 2017
2016
Revenues
$ 8,426.6 $ 6,478.8 $ 29,241.5 $
23,022.3
Costs and
expenses:
Operating costs and expenses 7,414.3 5,608.7 25,557.5 19,643.5
General and administrative costs 43.7
39.1 181.1
160.1 Total costs and expenses 7,458.0
5,647.8 25,738.6
19,803.6
Equity in income of
unconsolidated affiliates
110.8 92.2
426.0 362.0
Operating
income
1,079.4 923.2 3,928.9 3,580.7
Other income
(expense):
Interest expense (245.6 ) (247.0 ) (984.6 ) (982.6 ) Other, net
(30.9 ) 3.8
(63.0 ) (21.7 ) Total other expense
(276.5 ) (243.2 )
(1,047.6 ) (1,004.3 )
Income before income
taxes
802.9 680.0 2,881.3 2,576.4 Provision for income taxes (5.6
) (10.3 ) (25.7 )
(23.4 )
Net
income
797.3 669.7 2,855.6 2,553.0
Net income
attributable to noncontrolling interests
(23.3 ) (10.9 )
(56.3 ) (39.9 )
Net income
attributable to limited partners
$ 774.0 $ 658.8 $ 2,799.3
$ 2,513.1
Per unit data (fully
diluted):
Earnings per unit $ 0.36 $ 0.31
$ 1.30 $ 1.20 Average limited
partner units outstanding (in millions) 2,167.0
2,116.6 2,154.3
2,089.1
Supplemental
financial data:
Net cash flows provided by operating activities $ 1,819.7
$ 1,407.8 $ 4,639.6
$ 4,066.8 Total debt principal outstanding at
end of period $ 24,780.1 $ 23,901.6
$ 24,780.1 $ 23,901.6
Non-GAAP distributable cash flow (1) $ 1,256.9
$ 1,031.1 $ 4,502.3
$ 4,102.8 Non-GAAP Adjusted EBITDA (2) $ 1,542.0
$ 1,355.1 $ 5,615.3
$ 5,255.9 Gross operating margin by
segment: NGL Pipelines & Services $ 871.5 $ 784.3 $ 3,258.3 $
2,990.6 Crude Oil Pipelines & Services 295.5 220.9 987.2 854.6
Natural Gas Pipelines & Services 178.5 201.3 714.5 734.9
Petrochemical & Refined Products Services 172.0
148.7 714.6
650.6 Total segment gross operating
margin (3) 1,517.5 1,355.2
5,674.6
5,230.7 Net adjustment for shipper make-up rights (4)
2.6 2.1 5.8
17.1 Non-GAAP total gross
operating margin (5) $ 1,520.1 $ 1,357.3
$ 5,680.4 $ 5,247.8
Capital spending: Capital expenditures $ 983.6 $
574.3 $ 3,101.8 $ 2,984.1 Cash used for business combinations, net
-- -- 198.7 1,000.0 Investments in unconsolidated affiliates 17.7
18.9 50.5 138.8 Other investing activities --
-- --
0.4 Total capital spending, cash and non-cash
$ 1,001.3 $ 593.2 $
3,351.0 $ 4,123.3
(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 guidance
from the SEC. (5) See Exhibit F for reconciliation to GAAP total
operating income.
Enterprise Products Partners
L.P.
Exhibit B
Selected Operating Data – UNAUDITED
For the Three
Months
Ended December 31,
For the Year
Ended December 31,
2017 2016 2017
2016
Selected operating
data: (1)
NGL Pipelines & Services, net: NGL
pipeline transportation volumes (MBPD) 3,287 3,062 3,168 2,965 NGL
marine terminal volumes (MBPD) 564 440 516 436 NGL fractionation
volumes (MBPD) 863 846 831 828 Equity NGL production (MBPD) (2) 153
156 158 141 Fee-based natural gas processing (MMcf/d) (3) 4,341
4,384 4,572 4,736 Crude Oil Pipelines & Services, net: Crude
oil pipeline transportation volumes (MBPD) 1,987 1,402 1,820 1,388
Crude oil marine terminal volumes (MBPD) 703 468 531 495 Natural
Gas Pipelines & Services, net: Natural gas pipeline
transportation volumes (BBtus/d) (4) 12,943 11,476 12,305 11,874
Petrochemical & Refined Products Services, net: Propylene
fractionation volumes (MBPD) 81 67 80 73 Butane isomerization
volumes (MBPD) 108 94 107 108 Standalone DIB processing volumes
(MBPD) 81 84 82 89 Octane additive and related plant production
volumes (MBPD) 27 26 26 22
Pipeline transportation volumes, primarily
refined products
and petrochemicals (MBPD)
766 840 792 837
Refined products and petrochemicals marine
terminal volumes
(MBPD)
394 417 406 389 Total, net:
NGL, crude oil, petrochemical and refined
products
pipeline transportation
volumes (MBPD)
6,040 5,304 5,780 5,190 Natural gas pipeline transportation volumes
(BBtus/d) 12,943 11,476 12,305 11,874 Equivalent pipeline
transportation volumes (MBPD) (5) 9,446 8,324 9,018 8,315
NGL, crude oil, refined products and
petrochemical
marine terminal volumes
(MBPD)
1,661 1,325 1,453 1,320 (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 4th Quarter $2.93 $0.25 $0.96
$1.04 $1.04 $1.32
$0.49 $0.35 $55.40
$61.07
YTD 2017 Averages $3.11 $0.25
$0.77 $0.92 $0.91
$1.15 $0.45 $0.31 $50.95
$54.13 (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 $0.80 per
gallon during the fourth quarter of 2017 versus $0.60 per gallon
for the fourth quarter of 2016.
Fluctuations in our consolidated revenues and cost of sales
amounts are explained in large part by changes in energy commodity
prices. Energy commodity prices fluctuate for a variety of reasons,
including supply and demand imbalances and geopolitical
tensions.
A change in our consolidated marketing revenues due to higher
energy commodity sales prices may not result in a similar change in
gross operating margin or cash available for distribution, since
our consolidated cost of sales amounts would also change due to
comparable increases in the purchase prices of the underlying
energy commodities.
Enterprise Products Partners
L.P.
Exhibit D
Distributable Cash Flow – UNAUDITED ($
in millions)
For the Three
Months
Ended December 31,
For the Year
Ended December 31,
2017 2016 2017
2016 Net income attributable to limited
partners (GAAP) $ 774.0 $ 658.8 $ 2,799.3
$ 2,513.1
Adjustments to GAAP net income
attributable to limited partners to derive non-
GAAP distributable cash
flow:
Add depreciation, amortization and accretion expenses 422.6 396.7
1,644.0 1,552.0 Add distributions received from unconsolidated
affiliates 130.0 118.0 483.0 451.5 Subtract equity in income of
unconsolidated affiliates (110.8 ) (92.2 ) (426.0 ) (362.0 )
Subtract sustaining capital expenditures (1) (79.8 ) (72.6 ) (243.9
) (252.0 ) Subtract net gains attributable to asset sales (9.6 )
(0.2 ) (10.7 ) (2.5 ) Add cash proceeds from asset sales 33.9 2.6
40.1 46.5
Add non-cash expense or subtract benefit
attributable to changes in fair
value of the Liquidity Option
Agreement
31.3 (3.5 ) 64.3 24.5
Add non-cash expense attributable to
changes in
fair value of derivative
instruments
37.0 2.9 22.8 45.0 Add monetization of interest rate derivative
instruments -- 6.1 30.6 6.1 Add deferred income tax expense 5.0 1.3
6.1 6.6 Add non-cash asset impairment and related charges 14.6 24.4
49.8 53.5
Add or subtract other miscellaneous
adjustments to derive non-GAAP
distributable cash flow, as
applicable
8.7 (11.2 )
42.9 20.5
Distributable cash
flow (non-GAAP) 1,256.9 1,031.1 4,502.3 4,102.8
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 79.8 72.6 243.9 252.0 Subtract cash proceeds from asset sales
reflected in distributable cash flow (33.9 ) (2.6 ) (40.1 ) (46.5 )
Subtract monetization of interest rate derivative instruments --
(6.1 ) (30.6 ) (6.1 ) Add or subtract the net effect of changes in
operating accounts, as applicable 517.6 308.8 5.5 (180.9 )
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
(0.7 ) 4.0
(41.4 ) (54.5 )
Net cash flow provided by
operating activities (GAAP) $ 1,819.7 $
1,407.8 $ 4,639.6 $
4,066.8 (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 Three Months
Ended December 31,
For the Year
Ended December 31,
2017 2016 2017
2016 Net income (GAAP) $ 797.3
$ 669.7 $ 2,855.6 $ 2,553.0 Adjustments to
GAAP net income to derive non-GAAP Adjusted EBITDA: Subtract equity
in income of unconsolidated affiliates (110.8 ) (92.2 ) (426.0 )
(362.0 ) Add distributions received from unconsolidated affiliates
130.0 118.0 483.0 451.5 Add interest expense, including related
amortization 245.6 247.0 984.6 982.6 Add provision for income taxes
5.6 10.3 25.7 23.4 Add depreciation, amortization and accretion in
costs and expenses 400.8 378.7 1,565.9 1,486.9 Add non-cash asset
impairment and related charges 14.6 24.4 49.8 53.5 Subtract net
gains attributable to asset sales (9.6 ) (0.2 ) (10.7 ) (2.5 )
Add non-cash expense or subtract benefit
attributable to changes in fair
value of the Liquidity Option
Agreement
31.3 (3.5 ) 64.3 24.5
Add losses attributable to unrealized
changes in the fair market
value of commodity derivative
instruments
37.2 2.9
23.1 45.0
Adjusted
EBITDA (non-GAAP) 1,542.0 1,355.1 5,615.3 5,255.9
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
(245.6 ) (247.0 ) (984.6 ) (982.6 )
Subtract provision for income taxes
reflected in
Adjusted EBITDA
(5.6 ) (10.3 ) (25.7 ) (23.4 )
Subtract distributions received for return
of capital from
unconsolidated affiliates
(12.5 ) (19.1 ) (49.3 ) (71.0 ) Add deferred income tax expense 5.0
1.3 6.1 6.6
Add or subtract the net effect of changes
in operating accounts, as applicable
517.6 308.8 5.5 (180.9 )
Add miscellaneous non-cash and other
amounts to reconcile non-GAAP
Adjusted EBITDA with GAAP net
cash flow provided by operating
activities
18.8 19.0
72.3 62.2
Net cash
flow provided by operating activities (GAAP) $ 1,819.7
$ 1,407.8 $ 4,639.6
$ 4,066.8
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
Ended December 31,
For the Year
Ended December 31,
2017 2016 2017
2016 Total gross operating margin
(non-GAAP) $ 1,520.1 $ 1,357.3 $ 5,680.4
$ 5,247.8
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
(392.0 ) (371.1 ) (1,531.3 ) (1,456.7 )
Subtract non-cash asset impairment and
related charges not
reflected in gross operating
margin
(14.6 ) (24.1 ) (49.8 ) (52.8 )
Add net gains attributable to asset
sales
not reflected in gross
operating margin
9.6 0.2 10.7 2.5
Subtract general and administrative costs
not reflected in
gross operating margin
(43.7 ) (39.1 )
(181.1 ) (160.1 )
Total operating income
(GAAP) $ 1,079.4 $ 923.2
$ 3,928.9 $ 3,580.7
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, 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/20180131005321/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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