Enterprise Products Partners L.P. (“Enterprise”) (NYSE: EPD)
today announced its financial results for the three months and year
ended December 31, 2020.
Year Ended 2020 Results
Enterprise reported net income attributable to common
unitholders for 2020 of $3.8 billion, or $1.71 per unit on a fully
diluted basis, compared to $4.6 billion, or $2.09 per unit on a
fully diluted basis for 2019. Net income for 2020 and 2019 was
reduced by non-cash, asset impairment and related charges of
approximately $891 million, or $0.40 per fully diluted unit, and
$133 million, or $0.06 per fully diluted unit, respectively. The
impairment charges recorded in 2020 were primarily for goodwill
associated with the partnership’s Natural Gas Pipelines &
Services segment and for certain long-lived assets, including those
associated with our marine transportation business and natural gas
gathering and processing facilities.
Net cash flow provided by operating activities, or cash flow
from operations (“CFFO”), for 2020 was $5.9 billion compared to
$6.5 billion for 2019. CFFO for 2020 and 2019 was reduced by $768
million and $457 million, respectively, for the net effect of
changes in operating, or working capital, accounts. Free cash flow
(“FCF”), which is defined as CFFO less cash used in investing
activities plus net cash contributions from non-controlling
interests, increased 8 percent to $2.7 billion for 2020 from $2.5
billion for 2019.
Distributable cash flow (“DCF”) was $6.4 billion for 2020
compared to $6.6 billion for 2019. DCF provided 1.6 times coverage
of the distributions declared with respect to 2020. Enterprise
retained $2.5 billion of DCF in 2020 to reinvest in the partnership
and provide additional financial flexibility.
Distributions declared with respect to 2020 increased 1.1
percent to $1.785 per common unit compared to 2019. The total
payout ratio of CFFO to common unitholders with respect to 2020 was
70 percent, which includes distributions declared of $3.9 billion
and $200 million of common unit buybacks. In addition, the
partnership’s distribution reinvestment and employee unit purchase
plans purchased $137 million of Enterprise common units on the open
market in 2020.
“We are extremely thankful and proud of Enterprise’s employees
for their dedication and perseverance in responding to the
challenges and opportunities during 2020 caused by the effects of
the pandemic,” stated A. J. “Jim” Teague, co-chief executive
officer of Enterprise’s general partner. “The diversification of
Enterprise’s fee-based businesses, storage assets, marketing
activities and cost control enabled us to generate $6.4 billion of
distributable cash flow for 2020, which was just 3 percent shy of
the record distributable cash flow we earned in 2019. This level of
cash flow provided 1.6 times coverage of the $3.9 billion in
distributions to limited partners with respect to 2020, covered
$200 million of unit buybacks and enabled us to self-fund over 75
percent of our $3 billion of growth capital expenditures for the
year. This performance supported our 22nd consecutive year of
distribution growth. We also preserved our strong balance
sheet.”
“We are optimistic that the combination of the vaccines,
significant government stimulus and shorter economic cycles
associated with pandemics and natural disasters will lead to the
world emerging from this economic sudden stop in 2021. We are
encouraged by the early signs of a rebound in the global economy
that we see through strong domestic and international demand for
NGLs, ethylene and propylene and the continuing recovery in the
demand for refined products,” said Teague.
“There are still numerous uncertainties and headwinds for the
U.S. energy industry as we begin 2021. The world, with its growing
population of almost 8 billion people, including 3 billion living
in energy poverty, is evolving and we will evolve with it. We have
a successful track record of using technology to become more
efficient and repurposing assets to adapt to changes in energy
market fundamentals. We believe we are in a position of financial
strength to manage through this period. Our financial objectives
today are consistent with those when we went public in 1998:
building a company that is sustainable for the long-term by
maintaining financial flexibility and preserving a strong balance
sheet; investing in organic growth projects and acquisitions with
attractive returns on capital; and prudently returning capital to
our limited partners,” stated Teague.
“In 2021, Enterprise has three major growth capital projects
scheduled to begin commercial operations: an expansion of one of
the partnership’s ethane pipelines serving the petrochemical
industry on the U.S. Gulf Coast (first quarter 2021); our Gillis
natural gas pipeline that will deliver Haynesville production to
LNG markets in southwestern Louisiana (fourth quarter of 2021); and
a hydrotreater in Mont Belvieu that will remove sulfur in natural
gasoline (second half of 2021). These projects will provide new
sources of cash flow to the partnership,” continued Teague.
“We continue to look at opportunities to increase our use of
renewable power and to economically reduce emissions. We estimate
by 2025 that 25 percent of our power will be from renewable
sources. In addition, several of our growth capital projects in the
early stages of development are consistent with the theme of energy
evolution,” said Teague.
Fourth Quarter and Full Year 2020
Financial Highlights
Three Months Ended December
31,
Year Ended December
31,
2020
2019
2020
2019
($ in millions, except per unit
amounts)
Operating income
$
708
$
1,418
$
5,035
$
6,079
Net income (1)
$
366
$
1,125
$
3,886
$
4,687
Fully diluted earnings per unit (1)
$
0.15
$
0.50
$
1.71
$
2.09
CFFO (2)
$
1,600
$
1,694
$
5,892
$
6,521
Total gross operating margin (3)
$
2,063
$
2,015
$
8,102
$
8,266
Adjusted EBITDA (3)
$
2,056
$
2,019
$
8,056
$
8,117
FCF (3)
$
1,020
$
497
$
2,670
$
2,472
DCF (3)
$
1,629
$
1,634
$
6,407
$
6,624
(1)
Net income and fully diluted
earnings per common unit for the fourth quarters of 2020 and 2019
include non-cash asset impairment and related charges of
approximately $800 million, or $0.36 per unit, and $82 million, or
$0.04 per unit, respectively. For the years ended December 31, 2020
and 2019, net income and fully diluted earnings per common unit
include non-cash asset impairment and related charges of $891
million, or $0.40 per unit, and $133 million, or $0.06 per unit,
respectively.
(2)
CFFO includes the impact of
timing of cash receipts and payments related to operations. For the
fourth quarter of 2020, the net effect of changes in operating
accounts, which are a component of CFFO, was a net decrease of $76
million, compared to a net decrease of $48 million for the fourth
quarter of 2019. For the year ended December 31, 2020, the net
effect of changes in operating accounts was a net decrease of $768
million, compared to a net decrease of $457 million for 2019.
(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.
- Enterprise increased its cash distribution to $0.45 per common
unit with respect to the fourth quarter of 2020, which was a 1.1
percent increase compared to the distribution declared with respect
to the fourth quarter of 2019. The distribution will be paid on
February 11, 2021 to common unitholders of record as of the close
of business on January 29, 2021.
- CFFO and FCF for the fourth quarter of 2020 was $1.6 billion
and $1.0 billion, respectively.
- DCF for the fourth quarter of 2020 was $1.6 billion, which
provided 1.6 times coverage of the $0.45 per common unit cash
distribution. Enterprise retained $640 million of distributable
cash flow in the fourth quarter of 2020.
- Capital investments in the fourth quarter of 2020 were $624
million, which included $556 million of investments in growth
capital projects and $68 million of sustaining capital
expenditures. Total capital investments for 2020 were $3.3 billion,
which included $3.0 billion of investments in growth capital
projects and $294 million of sustaining capital expenditures.
Fourth Quarter 2020 Volume
Highlights
Three Months Ended December
31,
2020
2019
NGL, crude oil, refined products &
petrochemical pipeline volumes (million BPD)
6.5
6.9
Marine terminal volumes (million BPD)
1.6
1.9
Natural gas pipeline volumes (TBtus/d)
13.7
13.8
NGL fractionation volumes (MBPD)
1,316
1,097
Propylene plant production volumes
(MBPD)
104
89
Fee-based natural gas processing volumes
(Bcf/d)
4.2
4.8
Equity NGL production volumes (MBPD)
143
162
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.
“Enterprise reported a resilient fourth quarter of 2020
generating $2.1 billion of gross operating margin and $1.6 billion
of distributable cash flow compared to $2.0 billion and $1.6
billion, respectively, for the fourth quarter of 2019. The
partnership reported record operational or financial performance
for our NGL fractionation, propylene, NGL export, and octane
enhancement businesses. This was partially offset by lower gross
operating margin in our natural gas gathering, processing and
marketing businesses; South Texas and Seaway crude oil pipelines
and our refined products-related businesses,” stated Teague.
Review of Fourth Quarter 2020 Segment
Performance
Enterprise reported total gross operating margin of $2.1 billion
for the fourth quarter of 2020 compared to $2.0 billion for the
fourth quarter of 2019. Gross operating margin for the fourth
quarters of 2020 and 2019 included net non-cash, mark-to-market
activity, which were net gains of $26 million and net losses of $25
million, respectively. Below is a summary review of each business
segment’s performance.
NGL Pipelines & Services – Gross operating margin for
the NGL Pipelines & Services segment was $1.1 billion for both
fourth quarters of 2020 and 2019.
Enterprise’s natural gas processing and related NGL marketing
business reported gross operating margin of $289 million for the
fourth quarter of 2020 compared to $330 million of gross operating
margin for the fourth quarter of 2019. Enterprise’s natural gas
processing plants reported a $48 million decrease in gross
operating margin for the fourth quarter of 2020 compared to the
fourth quarter of 2019, primarily attributable to lower processing
margins and volumes, including $20 million of losses related to
hedging activities. Certain plants in Louisiana and Mississippi
were also impacted by lower production from the Gulf of Mexico as a
result of producer shut-ins associated with two hurricanes in early
October. Total fee-based processing volumes were 4.2 Bcf/d in the
fourth quarter of 2020 compared to 4.8 Bcf/d in the fourth quarter
of 2019. Equity NGL production this quarter was 143 MBPD compared
to 162 MBPD in the same quarter of 2019. Gross operating margin
from Enterprise’s NGL marketing activities increased $6 million for
the fourth quarter of 2020 compared to the same quarter in
2019.
Gross operating margin from the partnership’s NGL pipelines and
storage business was $662 million for the fourth quarter of 2020
compared to $663 million for the fourth quarter of 2019. NGL
pipeline transportation volumes decreased to 3.7 million BPD in the
fourth quarter of 2020 from 3.9 million BPD in the fourth quarter
of 2019. NGL marine terminal volumes increased 9 percent to a
record 800 MBPD for the fourth quarter of 2020 from 732 MBPD
reported for the same quarter of 2019, primarily due to higher LPG
exports from the Enterprise Hydrocarbons Terminal (“EHT”) on the
Houston Ship Channel.
Gross operating margin from EHT, the related Channel Pipeline
and Morgan’s Point ethane marine terminal increased $20 million,
primarily due to a 73 MBPD increase in LPG exports and a 68 MBPD
increase in transportation volumes on the related Channel Pipeline.
EHT loaded record LPG volumes of 668 MBPD during the fourth quarter
of 2020.
Enterprise’s NGL pipelines in South Louisiana, including the
South Louisiana NGL pipeline system, Lou-Tex, Tri-State, and
Wilprise NGL pipelines and the Aegis ethane pipeline, reported an
aggregate $17 million decrease in gross operating margin for the
fourth quarter of 2020 compared to the same quarter in 2019,
primarily due to the effects of the hurricanes.
Gross operating margin from the partnership’s NGL fractionation
business increased $51 million, or 35 percent, to a record $193
million for the fourth quarter of 2020. NGL fractionation volumes
increased 20 percent to 1.3 million BPD in the fourth quarter of
2020, compared to 1.1 million BPD in the fourth quarter of 2019.
Enterprise’s Mont Belvieu NGL fractionators reported a $58 million
increase in gross operating margin due to a net 331 MBPD increase
in fractionation volumes. The partnership’s tenth and eleventh NGL
fractionators in the Mont Belvieu area were put into service in
March and September of 2020, respectively.
Crude Oil Pipelines & Services – Gross operating
margin from the Crude Oil Pipelines & Services segment
increased $12 million to $428 million for the fourth quarter of
2020 from $416 million for the fourth quarter of 2019. Gross
operating margin included non-cash, mark-to-market losses of $9
million in the fourth quarter of 2020 compared to losses of $14
million in the fourth quarter of 2019. Total crude oil pipeline
transportation volumes were 2.0 million BPD for the fourth quarter
of 2020 compared to 2.3 million BPD for the fourth quarter of 2019.
Total crude oil marine terminal volumes were 529 MBPD for the
fourth quarter of 2020 compared to 926 MBPD for the same quarter in
2019.
Aggregate gross operating margin from Enterprise’s
Midland-to-ECHO Pipeline System and related activities increased $5
million for the fourth quarter of 2020 versus the fourth quarter of
2019. Total system transportation volumes increased 32 MBPD, net to
the partnership’s interest. The partnership’s West Texas pipeline
system reported a $13 million decrease in gross operating margin
for the fourth quarter of 2020 compared to the same quarter of
2019, primarily due to a 28 MBPD decrease in volumes and lower
average fees between the two periods.
Gross operating margin from the South Texas Crude Oil Pipeline
System decreased $17 million in the fourth quarter of 2020 compared
to the same quarter in 2019, due to lower transportation volumes of
54 MBPD and lower blending revenues. Enterprise’s share of gross
operating margin associated with the Seaway Pipeline decreased $9
million, primarily due to lower average transportation fees and
volumes. Transportation and marine volumes on the Seaway Pipeline
decreased 142 MBPD and 58 MBPD, respectively, on a net basis.
Gross operating margin from crude oil export activities at
marine terminals on the Houston Ship Channel and Beaumont increased
$8 million over the fourth quarter of 2019, primarily due to higher
average fees and storage and other revenues, partially offset by
decreased revenues from lower loading volumes of 316 MBPD.
Gross operating margin from the partnership’s crude oil
marketing activities increased $33 million over the fourth quarter
of 2019, primarily due to higher average sales margins, including a
$4 million benefit from non-cash, mark-to-market activities.
Natural Gas Pipelines & Services – Gross operating
margin for the Natural Gas Pipelines & Services segment was
$226 million for the fourth quarter of 2020 compared to $238
million for the fourth quarter of 2019. Total natural gas
transportation volumes were 13.7 TBtus/d this quarter compared to
13.8 TBtus/d for the same quarter of 2019.
Enterprise’s Permian Basin gathering system reported an $11
million increase in gross operating margin for the fourth quarter
of 2020 compared to the same quarter in 2019. This increase was
primarily attributable to an 809 BBtus/d increase in gathering
volumes and higher condensate sales that were partially offset by
lower gathering fees. The increase in volumes on the Permian Basin
gathering system was associated with the expansion of the Orla
natural gas processing facility and the start-up of the Mentone
natural gas processing plant in December 2019.
Gross operating margin from the Texas Intrastate System
increased $9 million for the fourth quarter of 2020 compared to the
same quarter of 2019, primarily due to higher capacity reservation
fees, an increase in transportation volumes and lower maintenance
costs. Natural gas pipeline volumes for this system were 4.6
TBtus/d for the fourth quarter of 2020 versus 4.5 TBtus/d for the
fourth quarter of 2019.
Enterprise’s East Texas and Haynesville gathering pipeline
systems reported an aggregate $13 million decrease in gross
operating margin on a combined 313 BBtus/d decrease in gathering
volumes compared to the fourth quarter of 2019. Gross operating
margin for the Acadian Gas System decreased by $3 million for the
fourth quarter of 2020 compared to the same quarter of 2019,
primarily due to lower capacity reservation fees and a 94 BBtus/d
decrease in transportation volumes on the Haynesville Extension
Pipeline.
Aggregate gross operating margin from the Jonah, San Juan and
Piceance gathering systems decreased by $4 million for the fourth
quarter of 2020 versus the fourth quarter of 2019. Aggregate
volumes on these systems decreased by 519 BBtus/d for the fourth
quarter of 2020 compared to the fourth quarter of the prior
year.
Gross operating margin from natural gas marketing activities
decreased $12 million for the fourth quarter of 2020 compared to
the same quarter in 2019 primarily due to lower marketing volumes
and average sales margins, and a decrease in non-cash,
mark-to-market activity.
Petrochemical & Refined Products Services – Gross
operating margin for the Petrochemical & Refined Products
Services segment increased 27 percent, or $63 million to $297
million for the fourth quarter of 2020 from $234 million for the
fourth quarter of 2019. Total segment pipeline transportation
volumes were up 19 percent to 867 MBPD this quarter versus 729 MBPD
for the same quarter in 2019, and marine terminal volumes were up
20 percent to 297 MBPD this quarter compared to the same quarter of
2019.
The partnership’s propylene business reported a $91 million
increase in gross operating margin to a record $169 million for the
fourth quarter of 2020. Total propylene production volumes
increased 17 percent to 104 MBPD for the fourth quarter of 2020
from 89 MBPD in the fourth quarter of 2019. Enterprise’s propylene
production facilities located at Mont Belvieu, which includes its
propylene fractionators and propane dehydrogenation (“PDH”) unit,
contributed $85 million to the quarterly increase in gross
operating margin, including $30 million from the PDH facility. This
increase was primarily due to higher sales margins, higher average
fees, lower maintenance expenses related to the propylene
fractionation facilities and an 8 MBPD increase in propylene
production from the PDH facility, which on average operated at its
nameplate capacity of 25 MBPD for the fourth quarter of 2020.
Higher average export fees led to a $3 million increase in gross
operating margin from the propylene export terminals, which
benefited from a 26 percent increase in export volumes to 24 MBPD
in the fourth quarter of 2020 as compared to the fourth quarter of
2019.
Gross operating margin from ethylene exports, pipelines, and
related services increased $11 million this quarter compared to the
fourth quarter of 2019. The partnership’s ethylene export marine
terminal, which was placed into partial service in December 2019
and full service in December 2020, had gross operating margin of $5
million in the fourth quarter of 2020 on loading volumes of 12 MBPD
net to our 50 percent interest at the terminal.
Enterprise’s refined products pipeline and related activities
reported a $14 million decrease in gross operating margin for the
fourth quarter of 2020 compared to the fourth quarter of 2019,
primarily due to an $18 million decrease in gross operating margin
from our TE Products Pipeline System, primarily due to a 22 MBPD
reduction in NGL transportation volumes and lower deficiency fees
that were partially offset by higher refined products fees.
Gross operating margin from Enterprise’s octane enhancement,
isobutane dehydrogenation (“iBDH”) and related operations for the
fourth quarter of 2020 decreased $19 million as a result of lower
average sales margins, partially offset by higher sales volumes and
lower maintenance expenses.
The partnership’s PDH and octane enhancement facilities are
scheduled for planned turnarounds during the first quarter of 2021.
We expect these plants to be out of service for approximately 45
days and 24 days, respectively, during the first quarter, with
completion of the octane enhancement turnaround expected in April
2021. In addition, we expect to incur approximately $115 million of
sustaining capital expenditures associated with these turnarounds
in 2021.
Capitalization
Total debt principal outstanding at December 31, 2020 was $30.1
billion, including $2.6 billion of junior subordinated notes, to
which the debt rating agencies ascribe partial equity content. At
December 31, 2020, Enterprise had consolidated liquidity of
approximately $6.1 billion, comprised of $5 billion of available
borrowing capacity under its revolving credit facilities and $1.1
billion of unrestricted cash on hand.
Capital Investments
Total capital investments in the fourth quarter of 2020 were
$624 million, which included investments in growth capital projects
of $556 million and $68 million of sustaining capital expenditures.
Total capital investments in 2020 were $3.3 billion, which included
investments in growth capital projects of $3.0 billion and $294
million of sustaining capital expenditures.
For 2021 and 2022, we currently expect growth capital
investments on sanctioned projects to be approximately $1.6 billion
and $800 million, respectively. These estimates do not include
capital investments associated with the partnership’s proposed
deepwater Seaport Oil Terminal (“SPOT”), which remains subject to
governmental approval. We currently expect sustaining capital
expenditures for 2021 to be approximately $440 million, which
includes $115 million of expenditures associated with the
turnarounds of our PDH and octane enhancement facilities.
2020 K-1 Tax Packages
The Enterprise K-1 tax packages are expected to be made
available online through our website at www.enterpriseproducts.com
on or before February 25, 2021. The mailing of the tax packages is
expected to be completed by March 5, 2021.
Conference Call to Discuss Fourth
Quarter 2020 Earnings
Enterprise will host a conference call today to discuss fourth
quarter 2020 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 December 31,
For the Year Ended December
31,
2020
2019
2020
2019
Revenues
$
7,044.2
$
8,005.3
$
27,199.7
$
32,789.2
Costs and
expenses:
Operating costs and expenses
6,369.2
6,667.5
22,371.1
27,061.8
General and administrative costs
56.8
51.5
219.6
211.7
Total costs and expenses
6,426.0
6,719.0
22,590.7
27,273.5
Equity in income of
unconsolidated affiliates
90.0
131.7
426.1
563.0
Operating
income
708.2
1,418.0
5,035.1
6,078.7
Other income
(expense):
Interest expense
(329.2)
(292.8)
(1,287.4)
(1,243.0)
Other, net
1.2
8.4
13.7
(103.0)
Total other expense
(328.0)
(284.4)
(1,273.7)
(1,346.0)
Income before income
taxes
380.2
1,133.6
3,761.4
4,732.7
Benefit from (provision for) income
taxes
(14.3)
(8.2)
124.3
(45.6)
Net
income
365.9
1,125.4
3,885.7
4,687.1
Net income
attributable to noncontrolling interests
(27.7)
(28.5)
(110.1)
(95.8)
Net income
attributable to preferred units
(0.9)
–
(0.9)
–
Net income
attributable to common unitholders
$
337.3
$
1,096.9
$
3,774.7
$
4,591.3
Per common unit data
(fully diluted):
Earnings per common unit
$
0.15
$
0.50
$
1.71
$
2.09
Average common units outstanding (in
millions)
2,201.4
2,202.2
2,202.2
2,201.7
Supplemental
financial data:
Net cash flow provided by operating
activities
$
1,599.9
$
1,694.3
$
5,891.5
$
6,520.5
Cash flows used in investing
activities
$
556.5
$
1,202.7
$
3,120.7
$
4,575.5
Cash flows used in financing
activities
$
1,016.4
$
1,289.4
$
2,022.7
$
1,945.1
Total debt principal outstanding at end of
period
$
30,146.4
$
27,878.4
$
30,146.4
$
27,878.4
Non-GAAP Distributable Cash Flow (1)
$
1,628.8
$
1,633.6
$
6,406.7
$
6,623.9
Non-GAAP Adjusted EBITDA (2)
$
2,055.6
$
2,019.4
$
8,055.7
$
8,117.3
Non-GAAP Free Cash Flow (3)
$
1,019.6
$
497.1
$
2,670.4
$
2,471.6
Gross operating margin by segment:
NGL Pipelines & Services
$
1,144.2
$
1,136.0
$
4,182.4
$
4,069.8
Crude Oil Pipelines & Services
428.2
416.1
1,997.3
2,087.8
Natural Gas Pipelines & Services
225.5
238.0
926.6
1,062.6
Petrochemical & Refined Products
Services
296.8
233.7
1,081.8
1,069.6
Total segment gross operating margin
(4)
2,094.7
2,023.8
8,188.1
8,289.8
Net adjustment for shipper make-up rights
(5)
(31.6)
(8.4)
(85.7)
(24.1)
Non-GAAP total gross operating margin
(6)
$
2,063.1
$
2,015.4
$
8,102.4
$
8,265.7
(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
December 31,
For the Year Ended December
31,
2020
2019
2020
2019
Selected operating
data: (1)
NGL Pipelines & Services, net:
NGL pipeline transportation volumes
(MBPD)
3,654
3,870
3,589
3,615
NGL marine terminal volumes (MBPD)
800
732
722
626
NGL fractionation volumes (MBPD)
1,316
1,097
1,359
1,017
Equity NGL production volumes (MBPD)
(2)
143
162
151
144
Fee-based natural gas processing volumes
(MMcf/d) (3,4)
4,238
4,763
4,285
4,738
Crude Oil Pipelines & Services,
net:
Crude oil pipeline transportation volumes
(MBPD)
2,005
2,273
2,166
2,304
Crude oil marine terminal volumes
(MBPD)
529
926
724
964
Natural Gas Pipelines & Services,
net:
Natural gas pipeline transportation
volumes (BBtus/d) (5)
13,715
13,773
13,421
14,198
Petrochemical & Refined Products
Services, net:
Propylene production volumes (MBPD)
104
89
89
97
Butane isomerization volumes (MBPD)
109
109
96
109
Standalone DIB processing volumes
(MBPD)
151
106
127
99
Octane enhancement and related plant sales
volumes (MBPD) (6)
41
29
35
32
Pipeline transportation volumes, primarily
refined products
and petrochemicals (MBPD)
867
729
802
739
Refined products and petrochemicals marine
terminal volumes (MBPD) (7)
297
247
262
325
Total, net:
NGL, crude oil, petrochemical and refined
products
pipeline transportation volumes (MBPD)
6,526
6,872
6,557
6,658
Natural gas pipeline transportation
volumes (BBtus/d)
13,715
13,773
13,421
14,198
Equivalent pipeline transportation volumes
(MBPD) (8)
10,135
10,496
10,089
10,394
NGL, crude oil, refined products and
petrochemical
marine terminal volumes (MBPD)
1,626
1,905
1,708
1,915
(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)
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)
2019 by quarter:
First Quarter
$3.15
$0.30
$0.67
$0.82
$0.85
$1.16
$0.38
$0.24
Second Quarter
$2.64
$0.21
$0.55
$0.63
$0.65
$1.21
$0.37
$0.24
Third Quarter
$2.23
$0.17
$0.44
$0.51
$0.66
$1.06
$0.38
$0.23
Fourth Quarter
$2.50
$0.19
$0.50
$0.68
$0.82
$1.20
$0.35
$0.21
2019 Averages
$2.63
$0.22
$0.54
$0.66
$0.75
$1.16
$0.37
$0.23
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
(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)
2019 by quarter:
First Quarter
$54.90
$53.70
$61.19
$62.35
Second Quarter
$59.81
$57.62
$66.47
$67.07
Third Quarter
$56.45
$56.12
$59.75
$60.64
Fourth Quarter
$56.96
$57.80
$60.04
$60.76
2019 Averages
$57.03
$56.31
$61.86
$62.71
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
(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 $0.45 per
gallon during the fourth quarter of 2020 versus $0.46 per gallon
during the fourth quarter of 2019. Fluctuations in our consolidated
revenues and cost of sales amounts are explained in large part by
changes in energy commodity prices. A change in our consolidated
marketing revenues due to lower energy commodity sales prices may
not result in a similar change in gross operating margin or cash
available for distribution, since our consolidated cost of sales
amounts would also change due to comparable decreases in the
purchase prices of the underlying energy commodities.
Enterprise Products Partners L.P.
Exhibit D
Free Cash Flow – UNAUDITED
($ in millions)
For the Three Months
Ended December 31,
For the Year Ended December
31,
2020
2019
2020
2019
Free
Cash Flow (“FCF”)
Net cash flow provided by operating
activities (GAAP)
$
1,599.9
$
1,694.3
$
5,891.5
$
6,520.5
Adjustments to reconcile net cash flow
provided by operating activities to FCF
(addition or subtraction indicated by
sign):
Cash used in investing activities
(556.5)
(1,202.7)
(3,120.7)
(4,575.5)
Cash contributions from noncontrolling
interests
9.7
42.0
30.9
632.8
Cash distributions paid to noncontrolling
interests
(33.5)
(36.5)
(131.3)
(106.2)
FCF (non-GAAP)
$
1,019.6
$
497.1
$
2,670.4
$
2,471.6
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 December 31,
For the Year Ended
December 31,
2020
2019
2020
2019
Distributable Cash Flow (“DCF”)
Net income attributable to common
unitholders (GAAP)
$
337.3
$
1,096.9
$
3,774.7
$
4,591.3
Adjustments to net income attributable to
common
unitholders to derive DCF (addition or
subtraction indicated by sign):
Depreciation, amortization and accretion
expenses
526.8
492.6
2,071.9
1,949.3
Cash distributions received from
unconsolidated affiliates
151.8
146.2
614.1
631.3
Equity in income of unconsolidated
affiliates
(90.0)
(131.7)
(426.1)
(563.0)
Asset impairment and related charges
800.2
81.5
890.6
132.8
Change in fair market value of derivative
instruments
(25.6)
25.2
(79.3)
27.2
Change in fair value of Liquidity Option
Agreement
–
(3.5)
2.3
119.6
Deferred income tax expense (benefit)
1.4
9.1
(147.6)
20.0
Sustaining capital expenditures (1)
(67.6)
(92.7)
(293.6)
(325.2)
Other, net
(9.9)
6.2
20.2
20.0
Operational DCF
1,624.4
1,629.8
6,427.2
6,603.3
Proceeds from asset sales
4.4
3.8
12.8
20.6
Monetization of interest rate derivative
instruments accounted
for as cash flow hedges
–
–
(33.3)
–
DCF (non-GAAP)
1,628.8
1,633.6
6,406.7
6,623.9
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
(75.5)
(48.4)
(767.5)
(457.4)
Sustaining capital expenditures
67.6
92.7
293.6
325.2
Other, net
(21.0)
16.4
(41.3)
28.8
Net cash flow provided by operating
activities (GAAP)
$
1,599.9
$
1,694.3
$
5,891.5
$
6,520.5
(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.
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 Three Months
Ended December 31,
For the Year Ended
December 31,
2020
2019
2020
2019
Net income (GAAP)
$
365.9
$
1,125.4
$
3,885.7
$
4,687.1
Adjustments to net income to derive
Adjusted EBITDA
(addition or subtraction indicated by
sign):
Depreciation, amortization and accretion
in costs and expenses
512.1
478.4
2,009.7
1,894.3
Interest expense, including related
amortization
329.2
292.8
1,287.4
1,243.0
Cash distributions received from
unconsolidated affiliates
151.8
146.2
614.1
631.3
Equity in income of unconsolidated
affiliates
(90.0)
(131.7)
(426.1)
(563.0)
Asset impairment and related charges
800.2
81.5
890.6
132.8
Provision for (benefit from) income
taxes
14.3
8.2
(124.3)
45.6
Change in fair market value of commodity
derivative instruments
(25.6)
25.2
(79.3)
(67.7)
Change in fair value of Liquidity Option
Agreement
–
(3.5)
2.3
119.6
Other, net
(2.3)
(3.1)
(4.4)
(5.7)
Adjusted EBITDA (non-GAAP)
2,055.6
2,019.4
8,055.7
8,117.3
Adjustments to reconcile Adjusted EBITDA
to net cash flow provided by
operating activities (addition or
subtraction indicated by sign):
Interest expense, including related
amortization
(329.2)
(292.8)
(1,287.4)
(1,243.0)
Deferred income tax expense (benefit)
1.4
9.1
(147.6)
20.0
Net effect of changes in operating
accounts, as applicable
(75.5)
(48.4)
(767.5)
(457.4)
Other, net
(52.4)
7.0
38.3
83.6
Net cash flow provided by operating
activities (GAAP)
$
1,599.9
$
1,694.3
$
5,891.5
$
6,520.5
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 Three Months
Ended December 31,
For the Year Ended
December 31,
2020
2019
2020
2019
Total gross operating margin
(non-GAAP)
$
2,063.1
$
2,015.4
$
8,102.4
$
8,265.7
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
(500.2)
(467.5)
(1,961.5)
(1,848.3)
Asset impairment and related charges in
operating costs and expenses
(800.2)
(81.5)
(890.6)
(132.7)
Net gains attributable to asset sales in
operating costs and expenses
2.3
3.1
4.4
5.7
General and administrative costs
(56.8)
(51.5)
(219.6)
(211.7)
Total operating income (GAAP)
$
708.2
$
1,418.0
$
5,035.1
$
6,078.7
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 (5) to Exhibit A of
this press release.
Enterprise Products Partners L.P.
Exhibit H
Other Information – UNAUDITED
($ in millions)
For the Three Months
Ended December 31,
For the Year Ended
December 31,
2020
2019
2020
2019
Capital investments:
Capital expenditures
$
616.3
$
1,229.6
$
3,287.9
$
4,531.7
Investments in unconsolidated
affiliates
5.7
11.5
15.6
111.6
Other investing activities
1.6
4.8
20.6
16.1
Total capital investments
$
623.6
$
1,245.9
$
3,324.1
$
4,659.4
The following table summarizes the non-cash mark-to-market gains
(losses) for the periods indicated:
For the Three Months Ended
December 31,
For the Year Ended
December 31,
2020
2019
2020
2019
Mark-to-market gains (losses) in gross
operating margin:
NGL Pipelines & Services
$
37.0
$
(5.4)
$
48.4
$
(5.5)
Crude Oil Pipelines & Services
(8.8)
(14.4)
20.1
80.6
Natural Gas Pipelines & Services
(3.7)
(1.5)
6.3
(0.2)
Petrochemical & Refined Products
Services
1.1
(3.9)
4.5
(7.2)
Total mark-to-market impact on gross
operating margin
25.6
(25.2)
79.3
67.7
Mark-to-market loss in interest
expense
–
–
–
(94.9)
Total
$
25.6
$
(25.2)
$
79.3
$
(27.2)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210203005280/en/
Randy Burkhalter, Vice President, Investor Relations, (713)
381-6812 Rick Rainey, Vice President, Media Relations, (713)
381-3635
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