Enterprise Products Partners L.P. (“Enterprise”) (NYSE: EPD)
today announced its financial results for the three and nine months
ended September 30, 2015.
Third Quarter 2015
Highlights
Three months endedSeptember 30,
Nine months endedSeptember 30,
2015 2014 2015 2014 ($ in millions, except per
unit amounts) Gross operating margin (1) $
1,341 $ 1,335 $ 3,979 $ 3,928 Net income (2) (3) $ 658 $ 699 $
1,865 $ 2,152 Fully diluted earnings per unit (2) (3) $ 0.32 $ 0.37
$ 0.92 $ 1.13 Adjusted EBITDA (1) $ 1,310 $ 1,309 $ 3,932 $ 3,923
Distributable cash flow (1) (4)
$ 2,501 $ 975 $ 4,519 $ 3,016 (1) Gross
operating margin, adjusted earnings before interest, taxes,
depreciation and amortization (“Adjusted EBITDA”) and distributable
cash flow are non-generally accepted accounting principle
(“non-GAAP”) financial measures that are defined and reconciled
later in this press release. (2) Net income and fully diluted
earnings per unit for the third quarters of 2015 and 2014 included
non-cash impairment charges of approximately $27 million, or $0.01
per unit, and $6 million, or less than $0.01 per unit,
respectively. Non-cash impairment and related charges for the nine
months ended September 30, 2015 and 2014 were $179 million, or
$0.09 per unit, and $18 million, or $0.01 per unit, respectively.
(3) Net income and fully diluted earnings per unit included net
losses attributable to asset sales and insurance recoveries of $12
million, or $0.01 per unit, for the third quarter of 2015, and $15
million, or $0.01 per unit, for the nine months ended September 30,
2015, which was primarily from the sale of the partnership’s
offshore business in July 2015. Net income and fully diluted
earnings per unit included net gains of approximately $3 million,
or less than $0.01 per unit for the third quarter of 2014, and $99
million, or $0.05 per unit, for the nine months ended September 30,
2014. (4) Distributable cash flow included proceeds from asset
sales and insurance recoveries of $1.5 billion and $8 million for
the third quarters of 2015 and 2014, respectively, and $1.5 billion
and $122 million for the nine months ended September 30, 2015 and
2014, respectively.
- Enterprise announced an increase in its
cash distribution with respect to the third quarter of 2015 by 5.5
percent to $0.385 per unit compared to the third quarter of
2014;
- Enterprise reported distributable cash
flow of $2.5 billion for the third quarter of 2015, which included
$1.5 billion of proceeds from the sale of its offshore Gulf of
Mexico business. After adjusting for these sales proceeds,
distributable cash flow was $970 million, which provided 1.3 times
coverage of the $0.385 per unit cash distribution and resulted in
$209 million of retained distributable cash flow; and
- Affiliates of privately held Enterprise
Products Company (“EPCO”), which collectively own Enterprise’s
general partner and approximately 34 percent of Enterprise’s
outstanding limited partner interests, have indicated to Enterprise
management that they intend to purchase $50 million of common units
through Enterprise’s distribution reinvestment plan in November
2015. This would bring EPCO’s privately held affiliates’ total
investment made in 2015 in Enterprise common units to $200
million.
Review of Third Quarter 2015
Results
Fluctuations in consolidated revenues and cost of sales are
explained in large part by changes in energy commodity prices. In
addition, a decrease in our consolidated marketing revenues due to
lower energy commodity sales prices may not result in a decrease in
gross operating margin or cash available for distribution, since
our consolidated cost of sales amounts would also be lower due to
comparable decreases in the purchase prices of the underlying
energy commodities. The same correlation would be true in the case
of higher energy commodity sales prices and purchase costs.
Net income for the third quarter of 2015 was $658 million
compared to $699 million for the third quarter of 2014. On a fully
diluted basis, net income attributable to limited partners for the
third quarter of 2015 was $0.32 per unit compared to $0.37 per unit
for the third quarter of 2014. Net income and earnings per unit for
the third quarter of 2015 include non-cash asset impairment charges
of $27 million, or $0.01 per unit, and net losses from asset sales
of $12 million, or $0.01 per unit.
“Enterprise reported a 13 percent increase in liquid
transportation volumes to a record 5.9 million barrels per day,
which led to solid third quarter 2015 results,” said Michael A.
Creel, chief executive officer of Enterprise’s general partner. “We
benefited from consistent performance from our fee-based
businesses, contributions from the acquisitions of Oiltanking
Partners, L.P. and EFS Midstream LLC, the expansion of our LPG
export facility and lower operating expenses, which more than
offset the effect of lower commodity prices and margins in certain
of our businesses and the sale of our offshore business effective
July 24, 2015. We reported increases in both gross operating margin
and distributable cash flow compared to a strong third quarter in
2014. Excluding proceeds from asset sales, we generated $970
million of distributable cash flow in the third quarter of 2015,
which provided 1.3 times coverage of our distribution with respect
to the quarter, our 45th consecutive quarterly increase in the
distribution rate.”
Creel continued, “We have a model that includes a simple company
structure, a supportive general partner, no incentive distribution
rights, a focus on fee-based cash flows and a willingness to sell
non-core assets to reinvest in capital opportunities that generate
higher returns and integrate with our value chain. We believe our
business model provides us with higher expected potential for
future growth, the expectation of consistent distribution
increases, along with solid distribution coverage metrics, and a
reasonable use of financial leverage. We believe this approach
provides our partnership with a durable financial model during any
business cycle. This approach provides us the ability to increase
distributions to our partners during challenging times and reduce
our reliance on expensive capital markets during periods of market
disruption and volatility. Sometimes, our disciplined approach is
under appreciated. It is during challenging times, such as these,
that the benefits of the Enterprise business model are
apparent.”
On October 1, 2015, Enterprise announced an increase in the
partnership’s quarterly cash distribution with respect to the third
quarter of 2015 to $0.385 per unit, representing a 5.5 percent
increase over the distribution paid with respect to the third
quarter of 2014. The distribution with respect to the third quarter
of 2015 will be paid November 6, 2015 to unitholders of record at
the close of business on October 30, 2015. Excluding proceeds from
asset sales, Enterprise generated distributable cash flow of $970
million for the third quarter of 2015 compared to $967 million for
the third quarter of 2014. As adjusted, the partnership’s
distributable cash flow for the third quarter of 2015 provided 1.3
times coverage of the cash distribution that will be paid on
November 6, 2015.
Including the $1.5 billion of proceeds from the sale of
Enterprise’s offshore Gulf of Mexico business, the partnership
retained $1.7 billion of distributable cash flow for the third
quarter of 2015, which is available to reinvest in growth capital
projects, reduce debt and decrease the need to issue additional
equity. For the first nine months of 2015, Enterprise has retained
$2.3 billion of distributable cash flow, including proceeds from
asset sales.
For the nine months ended September 30, 2015, Enterprise
completed construction and began commercial operations of assets
totaling approximately $900 million of capital investment. These
assets include the completion of the Rancho II crude oil and
condensate pipeline, the second segment of the partnership’s Aegis
ethane pipeline, crude oil storage tanks at the partnership’s ECHO
facility and a 1.5 million barrel per month expansion of the
liquefied petroleum gas (“LPG”) export facility on the Houston Ship
Channel.
Currently, the partnership has $7.8 billion of major capital
projects under construction that will begin commercial operations
by the end of 2017. This includes $1.8 billion of capital projects
expected to be completed in the fourth quarter of 2015, including
an additional expansion of the LPG export facility and the last
phase of the Aegis ethane pipeline.
Review of Third Quarter 2015 Segment
Performance
NGL Pipelines & Services – Gross operating margin for
the NGL Pipelines & Services segment was $696 million for the
third quarter of 2015 compared to $712 million for the third
quarter of 2014.
Enterprise’s natural gas processing and related natural gas
liquids (“NGLs”) marketing business generated gross operating
margin of $203 million for the third quarter of 2015 compared to
$291 million for the third quarter of 2014. Gross operating margin
from the partnership’s natural gas processing plants decreased $99
million primarily due to lower processing margins. Partially
offsetting this decline was a $12 million increase in gross
operating margin from Enterprise’s NGL marketing activities, which
benefited from increased LPG loadings. Enterprise’s natural gas
processing plants reported fee-based processing volumes of 5.0
billion cubic feet per day (“Bcf/d”) in the third quarters of 2015
and 2014. Enterprise’s equity NGL production increased to 129
thousand barrels per day (“MBPD”) for the third quarter of 2015
compared to 103 MBPD for the third quarter of 2014 on higher
recoveries of ethane at certain processing plants in South Texas
and Louisiana.
Gross operating margin from the partnership’s NGL pipelines and
storage business increased $88 million, or 32 percent, to $366
million for the third quarter of 2015 from $278 million for the
third quarter of 2014. NGL transportation volumes were a record 3.2
million barrels per day (“BPD”) for the third quarter of 2015
compared to 2.9 million BPD for the same quarter of 2014.
Gross operating margin from the partnership’s NGL import/export
terminal on the Houston Ship Channel and a related pipeline
increased by $33 million for the third quarter of 2015 compared to
the third quarter of 2014. This increase includes a $17 million
contribution from assets acquired in the Oiltanking acquisition in
October 2014. LPG export volumes increased by 79 MBPD as a result
of the expansion of the partnership’s LPG export facility that was
completed in April 2015 and higher dock utilization.
Collectively, the Mid-America, Seminole and Chaparral NGL
pipeline systems reported a $24 million increase in gross operating
margin in the third quarter of 2015 compared to the same quarter of
2014, primarily due to higher pipeline tariffs and fees, and lower
operating expenses on the Mid-America and Seminole pipelines.
Transportation volumes for the Mid-America, Seminole and Chaparral
pipelines combined were 1.0 million BPD in the third quarters of
2015 and 2014.
Gross operating margin from the partnership’s ATEX and Aegis
ethane pipelines increased $8 million in the third quarter of 2015
compared to the same quarter of 2014 primarily due to a combined 42
MBPD increase in transportation volumes. The first two segments of
the Aegis Ethane Pipeline were completed in September 2014 and
2015, respectively, with the final segment scheduled to be
completed in the fourth quarter of 2015.
Enterprise’s South Texas NGL Pipeline System had a $6 million
increase in gross operating margin this quarter compared to the
same quarter last year due to a 68 MBPD increase in transportation
volumes as a result of higher Eagle Ford Shale production.
Enterprise’s NGL fractionation business reported gross operating
margin of $126 million for the third quarter of 2015, a $17 million
decrease from $143 million reported for the third quarter of last
year, primarily due to lower product blending and other fee
revenues impacted by lower energy commodity prices at our Mont
Belvieu NGL fractionation facility. Total fractionation volumes
increased to 837 MBPD for the third quarter of 2015 from 823 MBPD
in the third quarter of 2014, primarily due to higher volumes
fractionated at our facilities in Louisiana partially offset by
lower volumes fractionated at our Mont Belvieu facility.
Crude Oil Pipelines & Services – Gross operating
margin from the partnership’s Crude Oil Pipelines & Services
segment increased 33 percent, or $64 million, to a record $255
million for the third quarter of 2015 from $191 million for the
third quarter of 2014. Total crude oil transportation volumes
increased 21 percent to a record 1.5 million BPD for the third
quarter of 2015 compared to 1.3 million BPD for the same quarter of
2014.
The EFS Midstream assets, which we acquired effective July 1,
2015, contributed $41 million of gross operating margin this
quarter, and crude oil operations at the partnership’s Houston Ship
Channel terminal, which was part of the Oiltanking acquisition,
contributed $36 million of gross operating margin this quarter.
Gross operating margin attributable to Enterprise’s ownership in
the Seaway pipeline increased $17 million in the third quarter of
2015 compared to the same quarter of 2014, primarily due to
contributions from the new Seaway Loop pipeline, which began
commercial service in December 2014. Net to our interest, volumes
on the Seaway Pipeline increased 161 MBPD in the third quarter of
2015 compared to the same quarter of 2014. The West Texas crude oil
pipeline system reported a $10 million increase in gross operating
margin on higher volumes of 38 MBPD during the third quarter of
2015 compared to the third quarter of 2014.
The South Texas crude oil pipeline system reported an $18
million decrease in gross operating margin this quarter compared to
the same quarter last year primarily due to a 32 MBPD decrease in
transportation volumes. The decrease in transportation volumes was
primarily due to lower volumes from legacy fields in South Texas
and the abandonment of certain segments of pipeline. Our crude oil
marketing and related activities had a $23 million decrease in
gross operating margin this quarter compared to the third quarter
last year, primarily due to lower margins and higher operating
expenses.
Natural Gas Pipelines & Services – Enterprise’s
Natural Gas Pipelines & Services segment reported gross
operating margin of $192 million for the third quarter of 2015
compared to $195 million for the third quarter of 2014. Total
natural gas transportation volumes were 12,387 billion British
thermal units per day (“BBtus/d”) for the third quarter of 2015
compared to 12,486 BBtus/d for the third quarter of last year.
The Texas Intrastate system reported gross operating margin of
$93 million for the third quarter of 2015 compared to $95 million
for the third quarter of last year. Natural gas pipeline volumes
for the Texas Intrastate system were 5,021 BBtus/d in the third
quarter of 2015 compared to 4,797 BBtus/d for the third quarter of
2014. The Acadian Gas System reported gross operating margin of $43
million for the third quarter of this year, compared to $45 million
for the third quarter last year. Natural gas pipeline volumes for
the Acadian Gas System were 1,912 BBtus/d this quarter compared to
2,050 BBtus/d for the same quarter last year.
Petrochemical & Refined Products Services – Gross
operating margin for the Petrochemical & Refined Products
Services segment was $192 million for the third quarter of 2015
compared to $190 million for the third quarter of 2014. Total
refined products and petrochemical transportation volumes increased
12 percent to a record 904 MBPD for the third quarter of 2015
compared to 809 MBPD for the third quarter of 2014.
Enterprise’s refined products pipelines and related services
business reported gross operating margin of $53 million for the
third quarter of 2015 compared to $48 million for the third quarter
of 2014. Included in gross operating margin for the third quarter
of 2015 is an aggregate $14 million contribution from refined
products terminaling services provided at our Beaumont Marine West
Terminal and Houston Ship Channel Terminal, which were part of the
Oiltanking acquisition.
Gross operating margin for Enterprise’s octane enhancement and
high-purity isobutylene business increased to $58 million in the
third quarter of 2015 from $48 million for the third quarter of
2014, primarily due to higher sales margins. Total plant production
volumes were 20 MBPD for the third quarters of 2015 and 2014.
The partnership’s propylene business reported gross operating
margin of $47 million for the third quarter of 2015 compared to $65
million for the third quarter of 2014. The decrease was primarily
due to lower sales margins and volumes, and increased maintenance
expense at our Mont Belvieu propylene plants. Propylene
fractionation volumes were 72 MBPD for the third quarter of 2015
compared to 73 MBPD for the third quarter of 2014.
Gross operating margin from Enterprise’s butane isomerization
and related operations increased to $18 million for the third
quarter of 2015 from $12 million in the third quarter of 2014. The
increase was primarily due to higher isomerization volumes and
lower maintenance and other expenses, partially offset by lower
by-products sales revenue attributable to lower energy commodity
prices. Butane isomerization volumes were 108 MBPD for the third
quarter of 2015 compared to 95 MBPD for the third quarter of
2014.
Offshore Pipelines & Services – Gross operating
margin for the Offshore Pipelines & Services segment was $7
million for the third quarter of 2015 compared to $47 million for
the same quarter of 2014. Gross operating margin this quarter
reflects results for 23 days of July prior to Enterprise closing on
the sale of its offshore Gulf of Mexico business on July 24,
2015.
Capitalization
Total debt principal outstanding at September 30, 2015 was $22.5
billion, including $1.5 billion of junior subordinated notes to
which the nationally recognized debt rating agencies ascribe
partial equity content. At September 30, 2015, Enterprise had
consolidated liquidity of $4.7 billion, which was comprised of
unrestricted cash on hand and available borrowing capacity under
our $4.0 billion multi-year revolving credit facility and $1.5
billion 364-day credit facility.
Total capital spending in the third quarter of 2015 was $2.1
billion, which includes approximately $1.0 billion of cash used,
net of cash received, for the acquisition of EFS Midstream and $84
million of sustaining capital expenditures. For the first nine
months of 2015, Enterprise’s sustaining capital expenditures were
$196 million.
Conference Call to Discuss Third
Quarter 2015 Earnings
Today, Enterprise will host a conference call to discuss third
quarter 2015 earnings. The call will be broadcast live over the
Internet beginning at 9:00 a.m. CT and may be accessed by visiting
the partnership’s website at www.enterpriseproducts.com.
Use of Non-GAAP Financial
Measures
This press release and accompanying schedules include the
non-GAAP financial measures of gross operating margin,
distributable cash flow and Adjusted EBITDA. The accompanying
schedules provide definitions of these non-GAAP financial measures
and reconciliations to their most directly comparable financial
measure calculated and presented in accordance with GAAP. Our
non-GAAP financial measures should not be considered as
alternatives to GAAP measures such as net income, operating income,
net cash flows provided by operating activities or any other
measure of financial performance calculated and presented in
accordance with GAAP. Our non-GAAP financial measures may not be
comparable to similarly-titled measures of other companies because
they may not calculate such measures in the same manner as we
do.
Company Information and Use of
Forward-Looking Statements
Enterprise Products Partners L.P. is one of the largest publicly
traded partnerships and a leading North American provider of
midstream energy services to producers and consumers of natural
gas, NGLs, crude oil, refined products and petrochemicals. Our
services include: natural gas gathering, treating, processing,
transportation and storage; NGL transportation, fractionation,
storage and import and export terminals; crude oil gathering,
transportation, storage and terminals; petrochemical and refined
products transportation, storage and terminals; and a marine
transportation business that operates primarily on the United
States inland and Intracoastal Waterway systems. The partnership’s
assets include approximately 49,000 miles of pipelines; 225 million
barrels of storage capacity for NGLs, crude oil, refined products
and petrochemicals; and 14 billion cubic feet of natural gas
storage capacity.
This press release includes forward-looking statements. Except
for the historical information contained herein, the matters
discussed in this press release are forward-looking statements that
involve certain risks and uncertainties, such as the partnership’s
expectations regarding future results, capital expenditures,
project completions, liquidity and financial market conditions.
These risks and uncertainties include, among other things,
insufficient cash from operations, adverse market conditions,
governmental regulations and other factors discussed in
Enterprise’s filings with the U.S. Securities and Exchange
Commission. If any of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results or
outcomes may vary materially from those expected. The partnership
disclaims any intention or obligation to update publicly or reverse
such statements, whether as a result of new information, future
events or otherwise.
Enterprise Products Partners L.P.
Exhibit A Condensed Statements of
Consolidated Operations – UNAUDITED ($ in
millions, except per unit amounts)
For the
Three Months
Ended September 30,
For the Nine Months
Ended September 30,
2015 2014 2015 2014
Revenues
$ 6,307.9 $ 12,330.2 $ 20,872.9 $ 37,760.9
Costs and
expenses:
Operating costs and expenses 5,452.6 11,414.8 18,426.5 34,934.4
General and administrative costs 49.0 50.0
143.2 150.9 Total
costs and expenses 5,501.6 11,464.8
18,569.7 35,085.3
Equity in income of
unconsolidated affiliates
103.1 72.3 302.5
179.1
Operating
income
909.4 937.7 2,605.7 2,854.7
Other income
(expense):
Interest expense (243.7 ) (229.8 ) (723.2 ) (679.6 ) Other, net
(2.5 ) (1.0 ) (13.2 )
(0.2 ) Total other expense (246.2 ) (230.8 )
(736.4 ) (679.8 )
Income before income
taxes
663.2 706.9 1,869.3 2,174.9 Provision for income taxes (5.5
) (7.7 ) (4.4 ) (22.5 )
Net
income
657.7 699.2 1,864.9 2,152.4
Net income
attributable to noncontrolling interests
(8.4 ) (8.1 ) (28.5 )
(24.8 )
Net income
attributable to limited partners
$ 649.3 $ 691.1 $ 1,836.4 $
2,127.6
Per unit data (fully
diluted):
Earnings per unit $ 0.32 $ 0.37 $ 0.92
$ 1.13 Average limited partner units outstanding (in
millions) 2,010.5 1,883.4
1,993.3 1,880.0
Supplemental
financial data:
Non-GAAP distributable cash flow (1) $ 2,501.3 $ 974.8
$ 4,518.5 $ 3,015.6 Non-GAAP
Adjusted EBITDA (2) $ 1,309.9 $ 1,309.0
$ 3,932.2 $ 3,923.0 Non-GAAP gross operating margin
by segment: (3) NGL Pipelines & Services $ 695.5 $ 711.5 $
2,041.3 $ 2,172.4 Crude Oil Pipelines & Services 254.6 190.8
704.2 534.5 Natural Gas Pipelines & Services 192.4 195.4 588.3
618.8 Petrochemical & Refined Products Services 191.5 190.3
547.4 482.4 Offshore Pipelines & Services 7.1
47.1 97.5 120.0
Total gross operating margin
$ 1,341.1 $ 1,335.1 $ 3,978.7 $
3,928.1 Net cash flows provided by operating
activities $ 689.6 $ 832.5 $ 2,591.2
$ 2,704.4 Total debt principal outstanding at end of
period $ 22,497.8 $ 19,672.7 $ 22,497.8
$ 19,672.7 Capital spending: Capital
expenditures, net (4) $ 988.9 $ 687.0 $ 2,619.1 $ 1,859.5 Equity
consideration issued for Oiltanking acquisition -- -- 1,408.7 --
Cash used for business combinations, net of cash received 1,045.1
-- 1,045.1 -- Investments in unconsolidated affiliates 16.6 84.5
130.7 583.3 Other investing activities -- --
5.3 6.0 Total
capital spending, cash and non-cash $ 2,050.6 $ 771.5
$ 5,208.9 $ 2,448.8
(1)
See Exhibit D for reconciliation to GAAP net cash
flows provided by operating activities. (2) See Exhibit E for
reconciliation to GAAP net cash flows provided by operating
activities. (3) See Exhibit F for reconciliation to GAAP operating
income. (4) Capital expenditures for property, plant and equipment
are presented net of contributions in aid of construction cost.
Enterprise Products Partners L.P.
Exhibit B Selected Operating
Data – UNAUDITED
For the Three Months
Ended September 30,
For the Nine Months
Ended September 30,
2015 2014 2015
2014
Selected operating
data: (1)
NGL Pipelines & Services, net: NGL transportation
volumes (MBPD) 3,156 2,866 2,942 2,862 NGL fractionation volumes
(MBPD) 837 823 819 820 Equity NGL production (MBPD) (2) 129 103 129
125 Fee-based natural gas processing (MMcf/d) (3) 5,035 4,958 4,911
4,872 Crude Oil Pipelines & Services, net: Crude oil
transportation volumes (MBPD) 1,535 1,266 1,507 1,274 Natural Gas
Pipelines & Services, net: Natural gas transportation volumes
(BBtus/d) 12,387 12,486 12,459 12,541 Petrochemical & Refined
Products Services, net: Butane isomerization and deisobutanizer
volumes (MBPD) 197 181 169 174 Propylene fractionation volumes
(MBPD) 72 73 71 72 Octane additive and related plant production
volumes (MBPD) 20 20 17 15 Transportation volumes, primarily
refined products and petrochemicals (MBPD) 904 809 862 782 Offshore
Pipelines & Services, net: Natural gas transportation volumes
(BBtus/d) 565 683 587 621 Crude oil transportation volumes (MBPD)
344 335 357 329 Platform natural gas processing (MMcf/d) 82 152 101
150 Platform crude oil processing (MBPD) 9 16 13 14 Total, net:
NGL, crude oil, refined products and petrochemical transportation
volumes (MBPD) 5,939 5,276 5,668 5,247 Natural gas transportation
volumes (BBtus/d) 12,952 13,169 13,046 13,162 Equivalent
transportation volumes (MBPD) (4) 9,347 8,742 9,101 8,711
(1) Operating rates are reported on a
net basis, which takes into account our ownership interests in
certain joint ventures, and include volumes for newly constructed
assets from the related in-service dates and for recently purchased
assets from the related acquisition dates. (2) Represents the NGL
volumes we earn and take title to in connection with our processing
activities. (3) Volumes reported correspond to the revenue streams
earned by our gas plants. “MMcf/d” means million cubic feet per
day. (4) Represents total NGL, crude oil, refined products and
petrochemical transportation volumes plus equivalent energy volumes
where 3.8 MMBtus of natural gas transportation volumes are
equivalent to one barrel of NGLs transported.
Enterprise
Products Partners L.P. Exhibit C Selected
Commodity Price Information
Polymer Refinery Natural
Normal Natural Grade Grade WTI
LLS Gas, Ethane, Propane,
Butane, Isobutane, Gasoline, Propylene,
Propylene, Crude Oil, Crude Oil,
$/MMBtu $/gallon $/gallon
$/gallon $/gallon $/gallon
$/pound $/pound $/barrel
$/barrel (1) (2) (2) (2) (2) (2) (3) (3) (4) (4)
2014 by quarter: 1st Quarter $ 4.95 $ 0.34 $ 1.30 $ 1.39 $
1.42 $ 2.12 $ 0.73 $ 0.61 $ 98.68 $ 104.43 2nd Quarter $ 4.68 $
0.29 $ 1.06 $ 1.25 $ 1.30 $ 2.21 $ 0.70 $ 0.57 $ 102.99 $ 105.55
3rd Quarter $ 4.07 $ 0.24 $ 1.04 $ 1.25 $ 1.28 $ 2.11 $ 0.71 $ 0.58
$ 97.21 $ 100.94 4th Quarter $ 4.04 $ 0.21
$ 0.76 $ 0.98 $ 0.99
$ 1.49 $ 0.69 $ 0.52
$ 73.15 $ 76.08
YTD 2014
Averages $ 4.43 $ 0.27 $ 1.04
$ 1.22 $ 1.25 $ 1.98
$ 0.71 $ 0.57 $ 93.01
$ 96.75
2015 by quarter: 1st Quarter $
2.99 $ 0.19 $ 0.53 $ 0.68 $ 0.68 $ 1.10 $ 0.50 $ 0.37 $ 48.63 $
52.83 2nd Quarter $ 2.65 $ 0.18 $ 0.46 $ 0.59 $ 0.60 $ 1.26 $ 0.42
$ 0.29 $ 57.94 $ 62.97 3rd Quarter $ 2.77 $ 0.19
$ 0.40 $ 0.55 $ 0.55
$ 0.98 $ 0.33 $ 0.21
$ 46.43 $ 50.17
YTD 2015
Averages $ 2.80 $ 0.19 $ 0.46
$ 0.61 $ 0.61 $ 1.11
$ 0.42 $ 0.29 $ 51.00
$ 55.32
(1) Natural gas prices are based
on Henry-Hub Inside FERC commercial index prices as reported by
Platts, which is a division of McGraw Hill Financial, Inc. (2) NGL
prices for ethane, propane, normal butane, isobutane and natural
gasoline are based on Mont Belvieu Non-TET commercial index prices
as reported by Oil Price Information Service. (3) Polymer-grade
propylene prices represent average contract pricing for such
product as reported by Chemical Market Associates, Inc. (“CMAI”).
Refinery grade propylene prices represent weighted-average spot
prices for such product as reported by CMAI. (4) Crude oil prices
are based on commercial index prices for West Texas Intermediate
(“WTI”) as measured on the New York Mercantile Exchange (“NYMEX”)
and for Louisiana Light Sweet (“LLS”) as reported by Platts.
The weighted-average indicative market price for NGLs (based on
prices for such products at Mont Belvieu, Texas, which is the
primary industry hub for domestic NGL production) was $0.45 per
gallon during the third quarter of 2015 versus $0.99 per gallon for
the third quarter of 2014.
Fluctuations in our consolidated revenues and cost of sales
amounts are explained in large part by changes in energy commodity
prices. Energy commodity prices fluctuate for a variety of reasons,
including supply and demand imbalances and geopolitical
tensions.
A decrease in our consolidated marketing revenues due to lower
energy commodity sales prices may not result in a decrease in gross
operating margin or cash available for distribution, since our
consolidated cost of sales amounts would also be lower due to
comparable decreases in the purchase prices of the underlying
energy commodities. The same correlation would be true in the case
of higher energy commodity sales prices and purchase costs.
Enterprise Products Partners L.P. Exhibit
D Distributable Cash Flow - UNAUDITED
($ in millions)
For the Three
Months
Ended September 30,
For the Nine Months
Ended September 30,
2015 2014 2015 2014
Net income attributable to limited partners (GAAP) $ 649.3 $
691.1 $ 1,836.4 $ 2,127.6
Adjustments to GAAP net income
attributable to limited partners to derive non-
GAAP distributable cash flow:
Add depreciation, amortization and accretion expenses 372.8 341.4
1,147.7 992.4 Add distributions received from unconsolidated
affiliates 96.9 103.6 362.4 260.7 Subtract equity in income of
unconsolidated affiliates (103.1 ) (72.3 ) (302.5 ) (179.1 )
Subtract sustaining capital expenditures (1) (84.3 ) (106.8 )
(195.8 ) (262.0 ) Add net losses or subtract net gains attributable
to asset sales and insurance recoveries 12.3 (2.6 ) 14.7 (99.0 )
Add cash proceeds from asset sales and insurance recoveries 1,531.4
8.3 1,537.3 121.5 Add non-cash expense attributable to changes in
fair value of the Liquidity Option Agreement 4.3 -- 15.8 -- Add
deferred income tax expense or subtract benefit (1.6 ) 2.0 (13.3 )
2.6 Add non-cash impairment charges 26.8 5.7 139.1 18.2 Add or
subtract other miscellaneous adjustments to derive non-GAAP
distributable cash flow, as applicable (3.5 ) 4.4
(23.3 ) 32.7
Distributable cash flow (non-GAAP) 2,501.3 974.8 4,518.5
3,015.6
Adjustments to non-GAAP distributable cash
flow to derive GAAP net cash flows
provided by operating activities:
Add sustaining capital expenditures reflected in distributable cash
flow 84.3 106.8 195.8 262.0 Subtract cash proceeds from asset sales
and insurance recoveries reflected in distributable cash flow
(1,531.4 ) (8.3 ) (1,537.3 ) (121.5 ) Add or subtract the net
effect of changes in operating accounts, as applicable (377.2 )
(237.2 ) (627.9 ) (435.8 ) Add or subtract miscellaneous non-cash
and other amounts to reconcile non- GAAP distributable cash flow
with GAAP net cash flows provided by
operating activities, as applicable
12.6 (3.6 ) 42.1
(15.9 )
Net cash flows provided by operating activities
(GAAP) $ 689.6 $ 832.5 $ 2,591.2
$ 2,704.4
(1) Sustaining
capital expenditures are capital expenditures (as defined by GAAP)
resulting from improvements to and major renewals of existing
assets. Such expenditures serve to maintain existing operations but
do not generate additional revenues.
Our management compares the distributable cash flow we generate
to the cash distributions we expect to pay our partners. Using this
metric, management computes our distribution coverage ratio.
Distributable cash flow is an important non-GAAP financial measure
for our limited partners since it serves as an indicator of our
success in providing a cash return on investment. Specifically,
this financial measure indicates to investors whether or not we are
generating cash flows at a level that can sustain or support an
increase in our quarterly cash distributions. Distributable cash
flow is also a quantitative standard used by the investment
community with respect to publicly traded partnerships because the
value of a partnership unit is, in part, measured by its yield,
which is based on the amount of cash distributions a partnership
can pay to a unitholder. The GAAP measure most directly comparable
to distributable cash flow is net cash flows provided by operating
activities.
Enterprise Products Partners L.P.
Exhibit E Adjusted EBITDA - UNAUDITED
($ in millions)
For the Twelve Months
EndedSeptember 30,
For the Three Months
Ended September 30,
For the Nine Months
Ended September 30,
2015 2014 2015 2014 2015
Net income (GAAP) $ 657.7 $ 699.2 $ 1,864.9 $ 2,152.4 $
2,546.0 Adjustments to GAAP net income to derive non-GAAP Adjusted
EBITDA: Subtract equity in income of unconsolidated affiliates
(103.1 ) (72.3 ) (302.5 ) (179.1 ) (382.9 ) Add distributions
received from unconsolidated affiliates 96.9 103.6 362.4 260.7
476.8 Add interest expense, including related amortization 243.7
229.8 723.2 679.6 964.6 Add provision for income taxes 5.5 7.7 4.4
22.5 5.0 Add depreciation, amortization and accretion in costs and
expenses 362.3 332.7 1,115.1 966.2 1,474.0 Add non-cash asset
impairment charges 26.8 5.7 139.1 18.2 154.9 Add non-cash losses
attributable to asset sales 13.6 0.2 17.5 6.3 18.9 Add non-cash
expense attributable to changes in fair value of the Liquidity
Option Agreement 4.3 -- 15.8 -- 15.8 Add losses or subtract gains
attributable to unrealized changes in the fair market value of
derivative instruments 2.2 2.4
(7.7 ) (3.8 ) 26.7
Adjusted EBITDA
(non-GAAP) 1,309.9 1,309.0 3,932.2 3,923.0 5,299.8
Adjustments to non-GAAP Adjusted EBITDA to
derive GAAP net cash flows
provided by operating activities:
Subtract interest expense, including related amortization,
reflected in Adjusted EBITDA (243.7 ) (229.8 ) (723.2 ) (679.6 )
(964.6 ) Subtract provision for income taxes reflected in Adjusted
EBITDA (5.5 ) (7.7 ) (4.4 ) (22.5 ) (5.0 ) Subtract gains
attributable to asset sales and insurance recoveries (1.3 ) (2.8 )
(2.8 ) (105.3 ) (7.3 ) Add deferred income tax expense or subtract
benefit (1.6 ) 2.0 (13.3 ) 2.6 (9.8 ) Add or subtract the net
effect of changes in operating accounts, as applicable (377.2 )
(237.2 ) (627.9 ) (435.8 ) (300.3 ) Add or subtract miscellaneous
non-cash and other amounts to reconcile non-GAAP Adjusted EBITDA
with GAAP net cash flows provided by operating activities
9.0 (1.0 ) 30.6 22.0
36.2
Net cash flows provided by operating
activities (GAAP) $ 689.6 $ 832.5 $
2,591.2 $ 2,704.4 $ 4,049.0
Adjusted EBITDA is commonly used as a supplemental financial
measure by our management and external users of our financial
statements, such as investors, commercial banks, research analysts
and rating agencies, to assess the financial performance of our
assets without regard to financing methods, capital structures or
historical cost basis; the ability of our assets to generate cash
sufficient to pay interest and support our indebtedness; and the
viability of projects and the overall rates of return on
alternative investment opportunities.
Since adjusted EBITDA excludes some, but not all, items that
affect net income or loss and because these measures may vary among
other companies, the adjusted EBITDA data presented in this press
release may not be comparable to similarly titled measures of other
companies. The GAAP measure most directly comparable to adjusted
EBITDA is net cash flows provided by operating activities.
Enterprise Products Partners L.P.
Exhibit F Gross Operating Margin – UNAUDITED
($ in millions)
For the Three
Months
Ended September 30,
For the Nine Months
Ended September 30,
2015 2014 2015 2014 Total
gross operating margin (non-GAAP) $ 1,341.1 $ 1,335.1 $ 3,978.7
$ 3,928.1
Adjustments to reconcile non-GAAP gross
operating margin to
GAAP operating income:
Subtract depreciation, amortization and accretion expense amounts
not reflected in gross operating margin (351.1 ) (322.7 ) (1,082.0
) (936.5 ) Subtract non-cash impairment charges not reflected in
gross operating margin (26.8 ) (5.7 ) (139.1 ) (18.2 ) Add net
gains or subtract net losses attributable to asset sales and
insurance recoveries not reflected in gross operating margin (12.3
) 2.6 (14.7 ) 99.0 Subtract non-refundable deferred revenues
attributable to shipper make-up rights on new pipeline projects
reflected in gross operating margin (3.4 ) (21.6 ) (39.3 ) (66.8 )
Add subsequent recognition of deferred revenues attributable to
make-up rights 10.9 -- 45.3 -- Subtract general and administrative
costs not reflected in gross operating margin (49.0 )
(50.0 ) (143.2 ) (150.9 )
Operating income
(GAAP) $ 909.4 $ 937.7 $ 2,605.7 $
2,854.7
We evaluate segment performance based on the non-GAAP financial
measure of gross operating margin. Gross operating margin (either
in total or by individual segment) is an important performance
measure of the core profitability of our operations. This measure
forms the basis of our internal financial reporting and is used by
our executive management in deciding how to allocate capital
resources among business segments. We believe that investors
benefit from having access to the same financial measures that our
management uses in evaluating segment results. The GAAP financial
measure most directly comparable to total segment gross operating
margin is operating income.
In total, gross operating margin represents operating income
exclusive of (1) depreciation, amortization and accretion expenses,
(2) impairment charges, (3) gains and losses attributable to asset
sales and insurance recoveries and (4) general and administrative
costs. In addition, gross operating margin includes equity in
income of unconsolidated affiliates and non-refundable deferred
transportation revenues relating to the make-up rights of committed
shippers associated with certain pipelines. Gross operating margin
by segment is calculated by subtracting segment operating costs and
expenses (net of the adjustments noted above) from segment
revenues, with both segment totals before the elimination of
intercompany transactions. In accordance with GAAP, intercompany
accounts and transactions are eliminated in consolidation. Gross
operating margin is exclusive of other income and expense
transactions, income taxes, the cumulative effect of changes in
accounting principles and extraordinary charges. Gross operating
margin is presented on a 100 percent basis before any allocation of
earnings to noncontrolling interests.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151029005305/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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