Enterprise Products Partners L.P. (“Enterprise”) (NYSE: EPD)
today announced its financial results for the three months ended
March 31, 2021.
Enterprise reported net income attributable to common
unitholders of $1.3 billion, or $0.61 per unit on a fully diluted
basis, for the first quarter of 2021, compared to $1.4 billion, or
$0.61 per unit on a fully diluted basis, for the first quarter of
2020. Net income for the first quarter of 2021 was reduced by
non-cash, asset impairment charges of approximately $66 million, or
$0.03 per fully diluted unit. The impairment charges include $43
million related to our coal bed natural gas gathering system and
Val Verde treating facility in the San Juan Basin that was
held-for-sale at March 31, 2021. Net income for the first quarter
of 2020 included an aggregate $187 million, or $0.08 per fully
diluted unit, of deferred income tax benefits associated with the
settlement of the Liquidity Option Agreement on March 5, 2020, and
the subsequent accounting for the related deferred tax
liability.
Net cash flow provided by operating activities, or cash flow
from operations (“CFFO”), was $2.0 billion for both the first
quarters of 2021 and 2020. Distributions declared with respect to
the first quarter of 2021 increased 1.1 percent to $0.45 per unit,
or $1.80 per unit annualized, compared to distributions declared
for the first quarter of 2020. Enterprise’s payout ratio to common
unitholders of distributions and partnership unit buybacks for the
twelve months ended March 31, 2021 was 68% of CFFO. For the twelve
months ended March 31, 2021, Free Cash Flow (CFFO less capital
investments, or “FCF”) was $3.1 billion compared to $3.4 billion
for the twelve months ended March 31, 2020.
Distributable Cash Flow (“DCF”) was $1.7 billion for the first
quarter of 2021 compared to $1.6 billion for the first quarter of
2020. DCF for the first quarter of 2021 included $81 million of
cash proceeds from the monetization of interest rate hedging
instruments and asset sales. Excluding these non-operating amounts,
DCF provided 1.7 times coverage of the distribution declared with
respect to the first quarter of 2021. Enterprise retained $746
million of DCF for the first quarter of 2021, and $2.7 billion for
the twelve months ended March 31, 2021.
First Quarter 2021
Highlights
Three Months Ended March 31,
2021
2020
($ in millions, except per unit
amounts)
Operating income
$
1,695
$
1,508
Net income (1)
$
1,363
$
1,375
Fully diluted earnings per common unit
(1)
$
0.61
$
0.61
Net cash provided by operating activities
(CFFO) (2)
$
2,023
$
2,012
Total gross operating margin (3)
$
2,323
$
2,048
Adjusted EBITDA (3)
Free cash flow (FCF) (3)
$
$
2,246
1,349
$
$
1,979
916
Distributable cash flow (DCF) (3)
$
1,737
$
1,554
(1)
Net income and fully diluted
earnings per common unit for the first quarter of 2021 includes
non-cash asset impairment and related charges of approximately $66
million, or $0.03 per unit. Net income and fully diluted earnings
per common unit for the first quarter of 2020 includes $187
million, or $0.08 per unit, of deferred income tax benefits
associated with the settlement of the Liquidity Option Agreement on
March 5, 2020, and the subsequent accounting for the related
deferred tax liability.
(2)
CFFO includes the impact of the
timing of cash receipts and payments related to operations. For the
first quarters of 2021 and 2020, the net effect of changes in
operating accounts, which are a component of CFFO, were net
increases of $99 million and $342 million, respectively.
(3)
Total gross operating margin,
adjusted earnings before interest, taxes, depreciation and
amortization (“Adjusted EBITDA”), FCF and DCF are non-generally
accepted accounting principle (“non-GAAP”) financial measures that
are defined and reconciled later in this press release.
- Gross operating margin, operating income and net income
attributable to common unitholders included non-cash,
mark-to-market (“MTM”) gains on financial instruments used in our
commodity hedging activities of $16 million for the first quarter
of 2021 and $30 million for the first quarter of 2020.
- Capital investments were $682 million during the first quarter
of 2021, including $144 million of sustaining capital expenditures.
Sustaining capital expenditures for the first quarter of 2021
included approximately $81 million of expenditures related to the
turnaround of the partnership’s Propane Dehydrogenation Unit
(“PDH”) and Octane Enhancement facilities.
First Quarter Volume Highlights
Three Months Ended
March 31,
2021
2020
NGL, crude oil, refined products
& petrochemical pipeline volumes (million BPD)
6.0
6.9
Marine terminal volumes (million BPD)
1.5
2.0
Natural gas pipeline volumes (TBtus/d)
13.7
13.9
NGL fractionation volumes (MBPD)
1,190
1,133
Propylene plant production volumes
(MBPD)
83
98
Fee-based natural gas processing volumes
(Bcf/d)
4.0
4.7
Equity NGL production volumes (MBPD)
162
140
As used in this press release, “NGL” means natural gas liquids,
“LPG” means liquefied petroleum gas, “BPD” means barrels per day,
“MBPD” means thousand barrels per day, “MMcf/d” means million cubic
feet per day, “Bcf/d” means billion cubic feet per day, “BBtus/d”
means billion British thermal units per day and “TBtus/d” means
trillion British thermal units per day.
“The value of Enterprise’s diversified and integrated midstream
system was exhibited again during a volatile first quarter of
2021,” said A. J. “Jim” Teague, co-chief executive officer on
Enterprise’s general partner. “Our propylene, NGL, refined products
and natural gas businesses benefited from greater demand associated
with the early stages of an economic recovery, winter demand and
higher commodity prices. This was offset by plant and pipeline
disruptions and lower volumes attributable to the impacts of two
back-to-back major winter storms, Uri and Viola, and turnarounds at
our PDH and octane enhancement facilities.”
“During the winter storms, from February 15 through February 19,
most of our Texas assets went offline at some point either from us
voluntarily reducing our power requirements by shutting down
certain facilities, our participation in ERCOT’s Load Resources
program, which redeploys industrial power supplies to human need,
or from power blackouts. In addition, our Texas Intrastate natural
gas pipeline, natural gas processing plants and storage facilities
were impacted by rolling blackouts. The economic impact of lost
revenues from these disruptions, higher power and natural gas
costs, as well as losses on natural gas hedges, were mitigated by
sales of natural gas to electricity generators, natural gas
utilities and industrial customers to assist them in meeting their
needs. Our system was also impacted by lower volumes due to many of
our producer, petrochemical and refinery customers experiencing
disruptions both during and following the storms as repairs were
made to freeze-damaged facilities. I want to thank our employees
for their tireless, around-the-clock actions to schedule and keep
natural gas flowing on our pipeline system and troubleshooting and
restarting assets during the historic frigid conditions,” stated
Teague.
“We continue to see stronger demand for crude oil, NGLs, primary
petrochemicals and refined products as the United States and the
rest of the world begin to unevenly emerge from COVID-related
lockdowns, restart manufacturing facilities and as excess
inventories of crude oil, NGLs and refined products are reduced. On
the Texas and Louisiana gulf coast, petrochemical plants and
refineries are increasing utilization rates after completing
repairs due to damage from the winter storms and in response to
better indicative profit margins. This has led to higher commodity
prices, which has supported an increase in producer drilling and
completion activities, especially in the Permian Basin. At the
current level of activities, we are more confident in our most
recent forecasts of U.S. crude oil and NGL production,” continued
Teague.
“We continue to be ‘on schedule’ to complete the expansion of
our Acadian Gas system to Gillis, Louisiana to serve LNG markets,
the expansion of our ethylene and propylene pipeline systems and
the construction of our natural gasoline hydrotreater during the
second half of 2021,” said Teague.
Review of First Quarter 2021
Results
Enterprise reported total gross operating margin of $2.3 billion
for the first quarter of 2021 compared to $2.0 billion for the
first quarter of 2020. Below is a review of each business segment’s
performance for the first quarter of 2021.
NGL Pipelines & Services – Gross operating margin
from the NGL Pipelines & Services segment increased to $1.1
billion for the first quarter of 2021 from $1.0 billion for the
first quarter of 2020.
Gross operating margin from Enterprise’s natural gas processing
business and related NGL marketing activities increased 17 percent
to $294 million for the first quarter of 2021 compared to $252
million for the first quarter of 2020. Included in gross operating
margin for the first quarters of 2021 and 2020 were non-cash, MTM
gains of $37 million, and net noncash, MTM losses of $12 million,
respectively. Gross operating margin for the first quarter of 2021
from Enterprise’s NGL marketing activities increased $97 million
compared to the same quarter last year, primarily due to higher
average sales margins and volumes.
Gross operating margin from the partnership’s processing plants
for the first quarter of this year decreased $55 million compared
to the same quarter in 2020. The South Texas processing plants had
a $41 million decrease in gross operating margin, primarily due to
lower equity NGL production, lower average processing fees and
volumes and higher operating costs. Partially offsetting these
negative impacts was a $10 million increase in gross operating
margin due to higher processing margins, including the impact of
hedging activities. Fee-based processing volumes at our South Texas
processing plants decreased 213 MMcf/d.
Lower average gas processing margins and decreased fee-based
volumes, partially offset by lower operating costs, contributed to
a $22 million decrease in gross operating margin for the first
quarter of 2021 from Enterprise’s Rockies processing facilities,
which includes the Meeker, Pioneer and Chaco plants. On a combined
basis, fee-based gas processing volumes decreased 402 MMcf/d. Gross
operating margin from Enterprise’s Permian Basin processing
facilities for the first quarter of this year increased $10
million, primarily due to higher average processing margins and a
193 MMcf/d increase in fee-based processing volumes.
Our Texas facilities were impacted by well freeze offs and power
blackouts during the first quarter of 2021 due to winter storms Uri
and Viola. In addition, upstream drilling activity remains below
pre-COVID levels at this point in the economic recovery. Total
fee-based processing volumes from Enterprise’s gas processing
facilities were 4.0 Bcf/d for the first quarter of 2021 compared to
4.7 Bcf/d for the first quarter of 2020. Total equity NGL
production increased 22 MBPD to 162 MBPD this quarter compared to
the first quarter of last year.
Gross operating margin from the partnership’s NGL pipelines and
storage business was $627 million for the first quarter of 2021
compared to $653 million for the first quarter of 2020. NGL
pipeline transportation volumes were 3.3 million BPD this quarter
compared to 3.8 million BPD in the first quarter of last year.
A number of Enterprise’s NGL pipelines, including the
Mid-America and Seminole NGL Pipeline Systems, Chaparral NGL
Pipeline, Shin Oak NGL Pipeline, Texas Express and the Front Range
Pipelines serve the Permian Basin and Rocky Mountain regions. On a
combined basis, gross operating margin for the first quarter of
2021 from these pipelines decreased a net $22 million compared to
the first quarter of 2020, primarily due to a 213 MBPD reduction in
transportation volumes that was partially offset by higher average
transportation fees. The partnership’s South Texas NGL Pipeline
System had a $5 million decrease in gross operating margin
primarily due to lower transportation volumes of 55 MBPD.
Gross operating margin from Enterprise Hydrocarbons Terminal
(“EHT”) and the related Channel pipeline for the first quarter of
2021 decreased a combined $19 million compared to the same quarter
last year, primarily due to a 95 MBPD decrease in LPG export
volumes at EHT and a 144 MBPD decrease in transportation volumes on
the Channel pipeline. The partnership’s marine terminal operations
on the Houston Ship Channel were halted for 3 days due to the
closure of the ship channel as a result of the winter storms. In
total, the partnership’s NGL marine terminal volumes were 652 MBPD
for the first quarter of 2021 compared to 742 MBPD for the first
quarter of 2020.
Enterprise’s NGL fractionation business reported a $29 million
increase in gross operating margin for the first quarter of 2021
compared to the first quarter of 2020. The partnership’s Mont
Belvieu-area NGL fractionators generated a $41 million increase in
gross operating margin for the first quarter of 2021 compared to
the same quarter last year, primarily due to a 159 MBPD increase in
fractionation volumes. Enterprise’s 10th and 11th NGL fractionation
facilities in Chambers County, Texas began operations in March and
September 2020, respectively. Total NGL fractionation volumes
increased to 1.2 million BPD this quarter from 1.1 million BPD in
the same quarter of 2020.
Crude Oil Pipelines & Services – Gross operating
margin from the partnership’s Crude Oil Pipelines & Services
segment was $400 million for the first quarter of 2021 compared to
$453 million for the first quarter of 2020. Gross operating margin
includes non-cash, MTM losses related to hedging activities of $1
million in the first quarter of 2021 compared to non-cash MTM gains
of $11 million in the first quarter of 2020. Total crude oil
pipeline transportation volumes were 1.9 million BPD for the first
quarter of 2021 compared to 2.4 million BPD for the first quarter
of 2020. Total crude oil marine terminal volumes were 572 MBPD this
quarter compared to 985 MBPD for the first quarter of last
year.
The South Texas Crude Oil Pipeline System had a $26 million
decrease in gross operating margin for the first quarter of 2021
compared to the first quarter of 2020, primarily due to lower
transportation and other fees, and a 49 MBPD decrease in
transportation volumes. Gross operating margin from our equity
investment in the Eagle Ford Crude Oil Pipeline decreased $11
million for the first quarter of 2021 versus the same quarter last
year due to a 93 MBPD decrease in transportation volumes.
Gross operating margin from the partnership’s West Texas Crude
Oil Pipeline System for the first quarter of 2021 decreased $20
million compared to the first quarter of 2020, primarily due to a
57 MBPD decrease in transportation volumes, and lower average fees.
Gross operating margin from Enterprise’s Midland-to-ECHO Pipeline
System and related business activities decreased $11 million for
the first quarter of 2021 versus the same quarter last year,
primarily due to lower average sales margins (including the impact
of hedging activities), partially offset by lower operating costs.
Transportation volumes on the Midland-to-ECHO Pipeline System
decreased 6 MBPD.
Gross operating margin from other crude oil marketing activities
for the first quarter of 2021 increased $17 million compared to the
first quarter of 2020, primarily due to higher average sales
margins, including the impact of hedging activities. EHT had a $9
million increase in gross operating margin due to lower operating
costs. Terminal loading volumes at EHT decreased 380 MBPD during
the first quarter of 2021 compared to the first quarter of 2020 due
to lower export activity. Gross operating margin from our ECHO
terminal decreased $5 million as a result of lower terminaling and
storage revenue.
Natural Gas Pipelines & Services – Gross operating
margin for the Natural Gas Pipelines & Services segment for the
first quarter of 2021 increased to $535 million compared to $284
million for the first quarter of 2020. Gross operating margin for
the first quarter of 2021 includes non-cash, MTM losses related to
hedging activities of $3 million compared to $29 million of
non-cash, MTM gains in the first quarter of 2020. Total natural gas
transportation volumes were 13.7 TBtus/d for the first quarter of
2021 compared to 13.9 TBtus/d for the first quarter of 2020.
Gross operating margin from natural gas marketing activities for
the first quarter of 2021 increased $266 million compared to the
first quarter of last year primarily due to the resale of natural
gas, including natural gas made available due to the temporary
closures of our Texas-based facilities during the February 2021
winter storms. Enterprise’s Permian Basin natural gas gathering
system had a $14 million increase in gross operating margin for the
first quarter of 2021 due to higher condensate sales prices and
volumes. This system also benefited from a 361 BBtus/d increase in
gathering volumes, primarily related to deliveries to the Mentone
and Orla natural gas processing facilities.
Gross operating margin from the Acadian Gas System for the first
quarter of 2021 decreased $14 million, primarily due to a one-time
producer payment received in the first quarter of 2020 and lower
capacity reservation fees. Transportation volumes for the Acadian
Gas System decreased 60 BBtus/d. The Texas Intrastate System had a
$12 million reduction in gross operating margin this quarter
compared to the first quarter of 2020, primarily due to lower
capacity reservation fees. Transportation volumes for the Texas
Intrastate System decreased 11 BBtus/d in the first quarter of 2021
compared to the first quarter of 2020.
Petrochemical & Refined Products Services – Gross
operating margin for the Petrochemical & Refined Products
Services segment was $282 million for the first quarter of 2021
compared to $279 million for the first quarter of 2020. Total
segment pipeline transportation volumes were 749 MBPD this quarter
compared to 712 MBPD for the first quarter of last year. Refined
products and petrochemical marine terminal volumes were 266 MBPD
for the first quarter of 2021 compared to 271 MBPD for the same
quarter in 2020.
Gross operating margin for the first quarter of 2021 from
propylene production and related activities increased $37 million,
primarily due to higher fractionation fees and lower operating
expenses. Total propylene production volumes decreased to 83 MBPD
this quarter from 98 MBPD for the first quarter of 2020, due to the
PDH facility being down for 46 days for a planned turnaround during
the first quarter of 2021. Our PDH facility returned to service
during the second half of March 2021.
Enterprise’s refined products pipelines and related activities
reported a $27 million increase in gross operating margin for the
first quarter of 2021 compared to the first quarter of last year
primarily due to higher sales volumes withdrawn from storage. Gross
operating margin includes $18 million of non-cash, MTM losses in
the first quarter of 2021 compared to $2 million of non-cash MTM
gains in the first quarter of 2020.
Gross operating margin from the partnership’s octane enhancement
and related plant operations decreased $54 million for the first
quarter of 2021 compared to the same quarter in 2020 due to lower
average sales margins, including the impact of hedging activities,
and lower sales volumes. Scheduled plant turnarounds resulted in
the octane enhancement facility and the associated high-purity
isobutylene facility being down for 16 days and 21 days,
respectively, during the first quarter of 2021. These facilities
returned to service at the beginning of May 2021 and the last week
of January 2021, respectively.
Capitalization
Total debt principal outstanding at March 31, 2021 was $28.9
billion, including $2.6 billion of junior subordinated notes, to
which the debt rating agencies ascribe partial equity content. At
March 31, 2021, Enterprise had consolidated liquidity of
approximately $5.1 billion, comprised of unrestricted cash on hand
and available borrowing capacity under its revolving credit
facilities.
Capital Investments
Total capital investments were $682 million in the first quarter
of 2021, which included $144 million of sustaining capital
expenditures. Included in sustaining capital expenditures for the
first quarter of 2021 were $81 million associated with the planned
turnarounds of the PDH and octane enhancement facilities.
Our current expectation for growth capital investments for 2021
and 2022 continue to be $1.6 billion and $800 million,
respectively. These estimates do not include capital investments
associated with Enterprise’s proposed deepwater Seaport Oil
Terminal (“SPOT”), which remains subject to governmental approval.
We currently expect sustaining capital expenditures to be
approximately $440 million for 2021.
Conference Call to Discuss First
Quarter 2021 Earnings
Enterprise will host a conference call today to discuss first
quarter 2021 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, FCF,
DCF 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. 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 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, direct
and indirect effects of the COVID-19 pandemic, 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 March 31,
For the Twelve Months
Ended
March 31,
2021
2020
2021
Revenues
$
9,155.3
$
7,482.5
$
28,872.5
Costs and
expenses:
Operating costs and expenses
7,553.4
6,060.3
23,864.2
General and administrative costs
56.3
55.5
220.4
Total costs and expenses
7,609.7
6,115.8
24,084.6
Equity in income of unconsolidated
affiliates
148.9
140.8
434.2
Operating
income
1,694.5
1,507.5
5,222.1
Other income
(expense):
Interest expense
(322.8
)
(317.5
)
(1,292.7
)
Other, net
0.9
5.8
8.8
Total other expense, net
(321.9
)
(311.7
)
(1,283.9
)
Income before income
taxes
1,372.6
1,195.8
3,938.2
Benefit from (provision for) income
taxes
(10.0
)
179.2
(64.9
)
Net
income
1,362.6
1,375.0
3,873.3
Net income
attributable to noncontrolling interests
(21.3
)
(24.9
)
(106.5
)
Net income
attributable to preferred units
(0.9
)
--
(1.8
)
Net income attributable to common
unitholders
$
1,340.4
$
1,350.1
$
3,765.0
Per common unit data (fully diluted):
Earnings per common unit
$
0.61
$
0.61
$
1.71
Average common units outstanding (in
millions)
2,203.3
2,204.0
2,201.9
Supplemental
financial data:
Net cash flow provided by operating
activities
$
2,023.1
$
2,012.2
$
5,902.4
Cash flows used in investing
activities
$
657.0
$
1,071.7
$
2,706.0
Cash flows provided by (used in) financing
activities
$
(2,189.8
)
$
765.1
$
(4,977.6
)
Total debt principal outstanding at end of
period
$
28,936.4
$
29,896.4
$
28,936.4
Non-GAAP Distributable Cash Flow (1)
$
1,737.3
$
1,553.6
$
6,590.4
Non-GAAP Adjusted EBITDA (2)
$
2,245.6
$
1,978.7
$
8,322.6
Non-GAAP Free Cash Flow (3)
$
1,349.4
$
915.8
$
3,104.0
Gross operating margin by segment:
NGL Pipelines & Services
$
1,086.4
$
1,042.0
$
4,226.8
Crude Oil Pipelines & Services
400.2
452.9
1,944.6
Natural Gas Pipelines & Services
535.2
283.8
1,178.0
Petrochemical & Refined Products
Services
281.5
278.5
1,084.8
Total segment gross operating margin
(4)
2,303.3
2,057.2
8,434.2
Net adjustment for shipper make-up rights
(5)
20.0
(9.7
)
(56.0
)
Non-GAAP total gross operating margin
(6)
$
2,323.3
$
2,047.5
$
8,378.2
(1)
See Exhibit E for reconciliation to GAAP
net cash flow provided by operating activities.
(2)
See Exhibit F for reconciliation to GAAP
net cash flow provided by operating activities.
(3)
See Exhibit D for reconciliation to GAAP
net cash flow provided by operating activities.
(4)
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”).
(5)
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.
(6)
See Exhibit G for reconciliation to GAAP
total operating income.
Enterprise Products Partners L.P.
Exhibit B
Selected Operating Data –
UNAUDITED
For the Three Months
Ended March 31,
For the Twelve Months
Ended
March 31,
2021
2020
2021
Selected operating data: (1)
NGL Pipelines & Services, net:
NGL pipeline transportation volumes
(MBPD)
3,271
3,762
3,465
NGL marine terminal volumes (MBPD)
652
742
699
NGL fractionation volumes (MBPD)
1,190
1,133
1,467
Equity NGL production volumes (MBPD)
(2)
162
140
158
Fee-based natural gas processing volumes
(MMcf/d) (3,4)
4,018
4,659
4,125
Crude Oil Pipelines & Services,
net:
Crude oil pipeline transportation volumes
(MBPD)
1,935
2,393
2,008
Crude oil marine terminal volumes
(MBPD)
572
985
621
Natural Gas Pipelines & Services,
net:
Natural gas pipeline transportation
volumes (BBtus/d) (5)
13,704
13,854
13,380
Petrochemical & Refined Products
Services, net:
Propylene production volumes (MBPD)
83
98
86
Butane isomerization volumes (MBPD)
63
105
86
Standalone DIB processing volumes
(MBPD)
139
105
135
Octane enhancement and related plant sales
volumes (MBPD) (6)
29
34
39
Pipeline transportation volumes, primarily
refined products
and petrochemicals (MBPD)
749
712
814
Refined products and petrochemicals marine
terminal volumes (MBPD) (7)
266
271
261
Total, net:
NGL, crude oil, petrochemical and refined
products
pipeline transportation volumes (MBPD)
5,955
6,867
6,287
Natural gas pipeline transportation
volumes (BBtus/d)
13,704
13,854
13,380
Equivalent pipeline transportation volumes
(MBPD) (8)
9,561
10,513
9,808
NGL, crude oil, refined products and
petrochemical
marine terminal volumes (MBPD)
1,490
1,998
1,581
(1)
Operating rates are reported on a net
basis, which take 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)
Fee-based natural gas processing volumes
are measured at either the wellhead or plant inlet in MMcf/d.
(5)
“BBtus/d” means billion British thermal
units per day.
(6)
Reflects aggregate sales volumes for our
octane additive and iBDH facilities located at our Mont Belvieu
complex and our high-purity isobutylene production facility located
adjacent to the Houston Ship Channel.
(7)
In addition to exports of refined
products, these amounts include loading volumes at our ethylene
export terminal
(8)
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 –
UNAUDITED
Polymer
Refinery
Natural
Normal
Natural
Grade
Grade
Gas,
Ethane,
Propane,
Butane,
Isobutane,
Gasoline,
Propylene,
Propylene,
$/MMBtu (1)
$/gallon (2)
$/gallon (2)
$/gallon (2)
$/gallon (2)
$/gallon (2)
$/pound (3)
$/pound (3)
2020 by quarter:
First Quarter
$1.95
$0.14
$0.37
$0.57
$0.63
$0.93
$0.31
$0.18
Second Quarter
$1.71
$0.19
$0.41
$0.43
$0.44
$0.41
$0.26
$0.11
Third Quarter
$1.98
$0.22
$0.50
$0.58
$0.60
$0.80
$0.35
$0.17
Fourth Quarter
$2.67
$0.21
$0.57
$0.76
$0.68
$0.92
$0.41
$0.24
2020 Averages
$2.08
$0.19
$0.46
$0.59
$0.59
$0.77
$0.33
$0.18
2021 by quarter:
First Quarter
$2.71
$0.24
$0.89
$0.94
$0.93
$1.33
$0.73
$0.44
(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.
WTI
Midland
Houston
LLS
Crude Oil,
Crude Oil,
Crude Oil
Crude Oil,
$/barrel (1)
$/barrel (2)
$/barrel (2)
$/barrel (3)
2020 by quarter:
First Quarter
$46.17
$45.51
$47.81
$48.15
Second Quarter
$27.85
$28.22
$29.68
$30.12
Third Quarter
$40.93
$41.05
$41.77
$42.47
Fourth Quarter
$42.66
$43.07
$43.63
$44.08
2020 Averages
$39.40
$39.46
$40.72
$41.21
2021 by quarter:
First Quarter
$57.84
$59.00
$59.51
$59.99
(1)
West Texas Intermediate (“WTI”) prices are
based on commercial index prices at Cushing, Oklahoma as measured
by the NYMEX.
(2)
Midland and Houston crude oil prices are
based on commercial index prices as reported by Argus.
(3)
Light Louisiana Sweet (“LLS”) prices are
based on commercial index prices 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 $0.61 per
gallon during the first quarter of 2021 versus $0.35 per gallon
during the first quarter of 2020. Fluctuations in our consolidated
revenues and cost of sales amounts are explained in large part by
changes in energy commodity prices. A change in our consolidated
marketing revenues due to higher energy commodity sales prices may
not result in a similar change in gross operating margin or cash
available for distribution, since our consolidated cost of sales
amounts would also change due to comparable increases in the
purchase prices of the underlying energy commodities.
Enterprise Products Partners L.P.
Exhibit D
Free Cash Flow – UNAUDITED
($ in millions)
For the Three Months Ended
March 31,
2021
2020
Free
Cash Flow (“FCF”)
Net cash flow provided by operating
activities (GAAP)
$
2,023.1
$
2,012.2
Adjustments to reconcile net cash flow
provided by operating activities to FCF
(addition or subtraction indicated by
sign):
Cash used in investing activities
(657.0
)
(1,071.7
)
Cash contributions from noncontrolling
interests
13.1
5.2
Cash distributions paid to noncontrolling
interests
(29.8
)
(29.9
)
FCF (non-GAAP)
$
1,349.4
$
915.8
For the Twelve Months Ended
March 31,
2021
2020
Net cash flow provided by operating
activities (GAAP)
$
5,902.4
$
7,372.3
Adjustments to reconcile net cash flow
provided by operating activities to FCF
(addition or subtraction indicated by
sign):
Cash used in investing activities
(2,706.0
)
(4,472.7
)
Cash contributions from noncontrolling
interests
38.8
603.2
Cash distributions paid to noncontrolling
interests
(131.2
)
(118.1
)
FCF (non-GAAP)
$
3,104.0
$
3,384.7
FCF is a measure of how much cash a business generates after
accounting for capital expenditures such as plants or pipelines. We
believe that FCF is important to traditional investors since it
reflects the amount of cash available for reducing debt, investing
in additional capital projects and/or paying distributions. Since
we partner with other companies to fund certain capital projects of
our consolidated subsidiaries, our determination of FCF
appropriately reflects the amount of cash contributed from and
distributed to noncontrolling interests.
Enterprise Products Partners L.P.
Exhibit E
Distributable Cash Flow –
UNAUDITED
($ in millions)
For the Three Months
Ended March 31,
For the Twelve Months
Ended
March 31,
2021
2020
2021
Distributable Cash Flow (“DCF”)
Net income attributable to common
unitholders (GAAP)
$
1,340.4
$
1,350.1
$
3,765.0
Adjustments to net income attributable to
common
unitholders to derive DCF (addition or
subtraction indicated by sign):
Depreciation, amortization and accretion
expenses
525.0
509.0
2,087.9
Cash distributions received from
unconsolidated affiliates
130.5
137.2
607.4
Equity in income of unconsolidated
affiliates
(148.9
)
(140.8
)
(434.2
)
Asset impairment charges
65.6
1.6
954.6
Change in fair market value of derivative
instruments
(15.6
)
(29.5
)
(65.4
)
Deferred income tax expense (benefit)
4.6
(184.1
)
41.1
Sustaining capital expenditures (1)
(143.8
)
(68.9
)
(368.5
)
Other, net (2)
(101.9
)
11.7
(91.1
)
Operational DCF
1,655.9
1,586.3
6,496.8
Proceeds from asset sales
6.2
0.6
18.4
Monetization of interest rate derivative
instruments accounted
for as cash flow hedges
75.2
(33.3
)
75.2
DCF (non-GAAP)
$
1,737.3
$
1,553.6
$
6,590.4
Adjustments to reconcile DCF with net cash
flow provided by operating
activities (addition or subtraction
indicated by sign):
Net effect of changes in operating
accounts, as applicable
99.0
341.7
(1,010.2
)
Sustaining capital expenditures
143.8
68.9
368.5
Other, net
43.0
48.0
(46.3
)
Net cash flow provided by operating
activities (GAAP)
$
2,023.1
$
2,012.2
$
5,902.4
(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.
(2)
First quarter of 2021 includes $107
million of accounts receivable that we do not expect to collect in
the normal billing cycle.
DCF is an important non-GAAP liquidity measure for our common
unitholders since it serves as an indicator of our success in
providing a cash return on investment. Specifically, this liquidity
measure indicates to investors whether or not we are generating
cash flows at a level that can sustain or support an increase in
our quarterly cash distributions. DCF is also a quantitative
standard used by the investment community with respect to publicly
traded partnerships because the value of a partnership unit is, in
part, measured by its yield, which is based on the amount of cash
distributions a partnership can pay to a common unitholder.
Enterprise Products Partners L.P.
Exhibit F
Adjusted EBITDA - UNAUDITED
($ in millions)
For the Twelve Months
Ended
March 31,
For the Three Months
Ended March 31,
2021
2020
2021
Net income (GAAP)
$
1,362.6
$
1,375.0
$
3,873.3
Adjustments to net income to derive
Adjusted EBITDA
(addition or subtraction indicated by
sign):
Depreciation, amortization and accretion
in costs and expenses (1)
507.7
494.5
2,022.9
Interest expense, including related
amortization
322.8
317.5
1,292.7
Cash distributions received from
unconsolidated affiliates
130.5
137.2
607.4
Equity in income of unconsolidated
affiliates
(148.9
)
(140.8
)
(434.2
)
Asset impairment charges
65.6
1.6
954.6
Provision for (benefit from) income
taxes
10.0
(179.2
)
64.9
Change in fair market value of commodity
derivative instruments
(15.6
)
(29.5
)
(65.4
)
Other, net
10.9
2.4
6.4
Adjusted EBITDA (non-GAAP)
2,245.6
1,978.7
8,322.6
Adjustments to reconcile Adjusted EBITDA
to net cash flow provided by
operating activities (addition or
subtraction indicated by sign):
Interest expense, including related
amortization
(322.8
)
(317.5
)
(1,292.7
)
Deferred income tax expense (benefit)
4.6
(184.1
)
41.1
Benefit from (provision for) income
taxes
(10.0
)
179.2
(64.9
)
Net effect of changes in operating
accounts, as applicable
99.0
341.7
(1,010.2
)
Other, net
6.7
14.2
(93.5
)
Net cash flow provided by operating
activities (GAAP)
$
2,023.1
$
2,012.2
$
5,902.4
(1)
Excludes amortization of major maintenance
costs for reaction-based plants, which are a component of 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 G
Gross Operating Margin –
UNAUDITED
($ in millions)
For the Twelve Months
Ended
March 31,
For the Three Months
Ended March 31,
2021
2020
2021
Total gross operating margin
(non-GAAP)
$
2,323.3
$
2,047.5
$
8,378.2
Adjustments to reconcile total gross
operating margin to total operating
income (addition or subtraction indicated
by sign):
Depreciation, amortization and accretion
expense in operating
costs and expenses (1)
(496.1
)
(482.8
)
(1,974.8
)
Asset impairment charges in operating
costs and expenses
(65.5
)
(1.6
)
(954.5
)
Net losses attributable to asset sales and
related matters in operating costs and expenses
(10.9
)
(0.1
)
(6.4
)
General and administrative costs
(56.3
)
(55.5
)
(220.4
)
Total operating income (GAAP)
$
1,694.5
$
1,507.5
$
5,222.1
(1)
Excludes amortization of major maintenance
costs for reaction-based plants, which are a component of 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 (excluding amortization of major maintenance
costs for reaction-based plants), (ii) impairment charges, (iii)
gains and losses attributable to asset sales and related matters,
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 (5) to Exhibit A of
this press release.
Enterprise Products Partners L.P.
Exhibit H
Other Information – UNAUDITED
($ in millions)
For the Twelve Months
Ended
March 31,
For the Three Months
Ended March 31,
2021
2020
2021
Capital investments:
Capital expenditures
$
679.0
$
1,079.5
$
2,887.4
Investments in unconsolidated
affiliates
1.3
3.3
13.6
Other investing activities
1.6
2.9
19.3
Total capital investments
$
681.9
$
1,085.7
$
2,920.3
The following table summarizes the non-cash mark-to-market gains
(losses) for the periods indicated:
For the Twelve Months
Ended
March 31,
For the Three Months
Ended March 31,
2021
2020
2021
Mark-to-market gains (losses) in gross
operating margin:
NGL Pipelines & Services
$
37.1
$
(12.3
)
$
97.8
Crude Oil Pipelines & Services
(1.4
)
10.7
8.0
Natural Gas Pipelines & Services
(2.5
)
28.8
(25.0
)
Petrochemical & Refined Products
Services
(17.6
)
2.3
(15.4
)
Total mark-to-market impact on gross
operating margin
$
15.6
$
29.5
$
65.4
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210503005320/en/
Randy Burkhalter, Vice President, Investor Relations, (713)
381-6812 Rick Rainey, Vice President, Media Relations, (713)
381-3635
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