Enterprise Products Partners L.P. (“Enterprise”) (NYSE: EPD)
today announced its financial results for the three and six months
ended June 30, 2021.
Enterprise reported net income attributable to common
unitholders of $1.1 billion, or $0.50 per unit on a fully diluted
basis, for the second quarter of 2021, compared to $1.0 billion, or
$0.47 per unit on a fully diluted basis, for the second quarter of
2020. Net income for the second quarters of 2021 and 2020 was
reduced by non-cash, asset impairment charges of $18 million, or
$0.01 per fully diluted unit, and $12 million, or $0.01 per fully
diluted unit, respectively.
Net cash flow provided by operating activities, or cash flow
from operations (“CFFO”), was $2.0 billion for the second quarter
of 2021 compared to $1.2 billion for the second quarter of 2020.
CFFO for the second quarter of 2021 included $300 million of net
cash provided by changes in working capital accounts, while CFFO
for the second quarter of 2020 was reduced by $431 million of net
cash used for working capital. Distributions declared with respect
to the second quarter of 2021 increased 1.1 percent to $0.45 per
unit, or $1.80 per unit annualized, compared to distributions
declared for the second quarter of 2020. Enterprise’s payout ratio
of distributions to common unitholders and partnership unit
buybacks for the twelve months ended June 30, 2021 was 60 percent
of CFFO. For the twelve months ended June 30, 2021, Free Cash Flow
(“FCF”) was $4.2 billion compared to $2.7 billion for the twelve
months ended June 30, 2020.
Distributable Cash Flow (“DCF”) was $1.6 billion for both the
second quarters of 2021 and 2020. DCF provided 1.6 times coverage
of the distribution declared with respect to the second quarter of
2021. Enterprise retained $607 million of DCF for the second
quarter of 2021, and $2.7 billion for the twelve months ended June
30, 2021.
Second Quarter
Highlights
Three Months Ended June 30,
($ in millions, except per unit
amounts)
2021
2020
Operating income
$
1,493
$
1,437
Net income (1)
$
1,146
$
1,061
Fully diluted earnings per common unit
(1)
$
0.50
$
0.47
Net cash provided by operating activities
(CFFO) (2)
$
1,994
$
1,182
Total gross operating margin (3)
$
2,061
$
1,998
Adjusted EBITDA (3)
$
2,008
$
1,961
FCF (3)
$
1,386
$
305
DCF (3)
$
1,599
$
1,577
(1)
Net income and fully diluted earnings per
common unit for the second quarters of 2021 and 2020 include
non-cash, asset impairment charges of $18 million or $0.01 per
unit, and $12 million, or $0.01 per unit, respectively. For
the six months ended June 30, 2021 and 2020, net income and fully
diluted earnings per common unit include $84 million, or $0.04 per
unit, and $13 million, or $0.01 per unit, respectively, of
non-cash, asset impairment charges.
(2)
CFFO reflects the timing of cash receipts
and payments related to operations along with other changes in
working capital accounts. The net effect of changes in operating
accounts, which are a component of CFFO, was a net increase of $300
million in the second quarter of 2021 compared to a net decrease of
$431 million in the second quarter of 2020.
(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 $23 million for the second quarter
of 2021 and $62 million for the second quarter of 2020.
- Capital investments were $634 million in the second quarter of
2021 and $1.3 billion for the first six months of 2021. Included in
these investments were sustaining capital expenditures of $117
million in the second quarter of 2021 and $261 million in the first
six months of 2021.
Second Quarter Volume
Highlights
Three Months Ended June 30,
2021
2020
NGL, crude oil, refined products &
petrochemical
pipeline volumes (million BPD)
6.4
6.2
Marine terminal volumes (million BPD)
1.6
1.7
Natural gas pipeline volumes (TBtus/d)
14.2
13.0
NGL fractionation volumes (million
BPD)
1.2
1.2
Propylene plant production volumes
(MBPD)
113
72
Fee-based natural gas processing volumes
(Bcf/d)
4.2
4.1
Equity NGL production volumes (MBPD)
198
188
As used in this press release, “NGL” means natural gas liquids,
“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’s second quarter results reflected the ongoing
recovery in demand for crude oil, NGLs, primary petrochemicals and
refined products as the global economy continues to reopen from
COVID-related lockdowns,” said A.J. “Jim” Teague, co-chief
executive officer of Enterprise’s general partner. “Our liquids
pipelines transported 6.4 million BPD for the second quarter of
2021, which is within four percent of our 2019 volumes of 6.7
million BPD. Enterprise’s natural gas pipelines transported 14.2
TBtus/d for the second quarter, equaling our 2019 volumes. NGL
fractionation volumes for the second quarter of 2021 remained
strong at near record levels of 1.2 million BPD. Our propylene
production for the second quarter of 2021 was a record 113 MBPD.
Liquid volumes handled by our marine terminals for the second
quarter of this year were 1.6 million BPD, which still lagged 2019
volumes of 1.9 million BPD, primarily due to weakness in crude oil
and refined product exports.”
“The partnership generated $2.1 billion of gross operating
margin for the second quarter of 2021, primarily attributable to
record results for our propylene business, improved natural gas
processing margins and volumes, higher product values across our
system and $66 million of payments received from the Texas Load
Resources Demand Response Program. Cash flow from operations for
the second quarter of 2021 was $2 billion, which more than fully
funded our capital expenditures and cash distributions to common
unitholders for the quarter of $634 million and $991 million,
respectively,” stated Teague.
“Our commercial teams continue to make progress with certain of
our downstream customers regarding growth projects under
development. Enterprise’s newly formed energy evolution technology
team has made remarkable early progress in researching and
identifying areas that are complementary to our existing
competencies and assets such as carbon capture and sequestration,
hydrogen and renewable fuels,” continued Teague.
“Enterprise’s major construction projects remain on-time and
on-budget. The next two growth projects scheduled for completion in
the fourth quarter of 2021 are the Gillis natural gas pipeline that
will connect Haynesville Shale production with the LNG markets in
southwest Louisiana and a natural gasoline treater in Chambers
County, Texas. The partnership completed the quarter with a strong
balance sheet and $5.4 billion in liquidity, which gives us the
flexibility to fund energy evolution-type projects as they develop
and to continue to return capital to our investors,” said
Teague.
Review of Second Quarter 2021
Results
Enterprise reported total gross operating margin of $2.1 billion
for the second quarter of 2021 compared to $2.0 billion for the
second quarter of 2020. Below is a review of each business
segment’s performance for the second quarter of 2021.
NGL Pipelines & Services – Gross operating margin
from the NGL Pipelines & Services segment increased 13 percent
to $1.1 billion for the second quarter of 2021 from $968 million
for the second quarter of 2020. Gross operating margin for the
second quarter of 2021 and 2020 included non-cash, mark-to-market
gains of $15 million and $36 million, respectively, from hedging
activities.
Enterprise’s natural gas processing and related NGL marketing
business reported gross operating margin of $286 million for the
second quarter of 2021 compared to $199 million for the second
quarter of 2020. Higher average gas processing margins, including
contributions from hedging activities, from the partnership’s Rocky
Mountain, South Texas and Louisiana and Mississippi processing
plants accounted for a $79 million increase in gross operating
margin. A 106 percent increase in composite NGL prices contributed
to the improvement in average processing margins. Partially
offsetting these benefits was a $17 million decrease in gross
operating margin attributable to the partnership’s South Texas gas
processing facilities from lower average processing fees and a 49
MMcf/d decrease in fee-based processing volumes.
Total fee-based processing volumes were 4.2 Bcf/d in the second
quarter of 2021 compared to 4.1 Bcf/d in the second quarter of
2020. The partnership’s equity NGL production increased to 198 MBPD
this quarter from 188 MBPD in the second quarter of last year.
Gross operating margin from NGL marketing activities increased
$25 million, primarily due to higher average sales margins,
partially offset by lower sales volumes.
Gross operating margin from the partnership’s NGL pipelines and
storage business decreased $51 million to $555 million for the
second quarter of 2021 from $606 million for the second quarter of
2020. NGL pipeline transportation volumes were 3.4 million BPD in
the second quarter of 2021 compared to 3.5 million BPD in the
second quarter of 2020. NGL marine terminal volumes were 665 MBPD
for the second quarter of 2021 compared to 701 MBPD for the same
quarter last year.
Gross operating margin from Enterprise’s Dixie Pipeline and
related terminals decreased $19 million for the second quarter of
2021 versus the second quarter of 2020, primarily due to lower
transportation volumes of 74 MBPD and higher operating costs
associated with downtime for pipeline assessment and integrity
activities.
Enterprise’s NGL pipelines that serve the Permian Basin and
Rocky Mountain producers, including the Mid-America and Seminole
NGL Pipeline Systems, Shin Oak NGL Pipeline and Chaparral NGL
pipeline, on a combined basis had a $7 million decrease in gross
operating margin for the second quarter of 2021 compared to the
second quarter of last year. The primary reason for the decrease
was higher operating costs, partially offset by higher average
transportation fees on the Mid-America Pipeline System.
Gross operating margin from the partnership’s NGL storage
complex in Chambers County, Texas decreased $15 million for the
second quarter of 2021 compared to the second quarter of last year,
primarily due to higher operating costs and lower throughput fee
revenues. The Enterprise Hydrocarbons Terminal (“EHT”) and related
Channel pipeline had a $12 million decrease in gross operating
margin for the second quarter of this year compared to the second
quarter of 2020, primarily due to a 62 MBPD decrease in export
volumes.
The South Texas NGL Pipeline System had a $14 million increase
in gross operating margin, primarily due to higher pipeline
capacity fees and a 27 MBPD increase in transportation volumes.
Enterprise’s NGL fractionation business reported a $94 million
increase in gross operating margin for the second quarter of 2021
compared to the second quarter of 2020. Total NGL fractionation
volumes were 1.2 million BPD for both the second quarters of 2021
and 2020.
Gross operating margin from the partnership’s Chambers County
NGL fractionation complex reported a $102 million increase in gross
operating margin for the second quarter of 2021 compared to the
second quarter of last year, primarily due to gains from the
optimization of our power supply arrangements and payments received
for voluntarily reducing power consumption in February 2021 under
the Texas Load Resource Demand Response Program (“LaaR”). NGL
fractionation volumes increased 137 MBPD, net to our interest,
primarily due to contributions from Frac XI that began operations
in September 2020.
Enterprise’s Norco fractionator in Louisiana had an $11 million
decrease in gross operating margin for the second quarter of this
year versus the same quarter in 2020, primarily due to 36 days of
downtime and expense associated with planned major maintenance
activities completed in the second quarter of 2021. NGL
fractionation volumes decreased 34 MBPD in the second quarter of
2021 compared to the same quarter in 2020.
Crude Oil Pipelines & Services – Gross operating
margin from the partnership’s Crude Oil Pipelines & Services
segment was $419 million for the second quarter of 2021 compared to
$634 million for the second quarter of 2020. Gross operating margin
for the second quarter of 2021 included $10 million of non-cash,
mark-to-market losses related to hedging activities compared to $8
million of non-cash, mark-to-market gains for the second quarter of
2020. Total crude oil pipeline transportation volumes were 2.0
million BPD for the second quarter of this year compared to 1.9
million BPD for the second quarter of 2020. Total crude oil marine
terminal volumes were 770 MBPD for the second quarter of 2021
compared to 726 MBPD for the second quarter of 2020.
Gross operating margin from crude oil marketing activities for
the second quarter of 2021 decreased $219 million compared to the
second quarter of 2020, primarily due to lower average sales
margins, including the impact of hedging activities. Results for
the second quarter of 2020 benefited from higher margins
attributable to strategies that optimized our crude oil storage and
transportation assets.
The partnership’s West Texas Pipeline System had an $8 million
decrease in gross operating margin for the second quarter of 2021
compared to the second quarter of last year, primarily due to lower
average transportation fees. Volumes transported on this pipeline
for the second quarter of 2021 increased by 20 MBPD compared to the
same quarter of last year. An 18 MBPD decrease in transportation
volumes for the second quarter of 2021 versus the second quarter of
2020 led to a $6 million decrease in gross operating margin from
the South Texas Crude Oil Pipeline System.
Gross operating margin from crude oil activities at EHT
decreased $8 million for the second quarter of 2021 compared to the
same quarter of 2020 due to lower storage revenues and other
fees.
Enterprise’s share of gross operating margin associated with the
Seaway Pipeline increased $23 million for the second quarter of
this year compared to the same quarter in 2020, primarily due to
our share of payments received associated with the LaaR program in
connection with the winter storms in February 2021. Transportation
volumes decreased 50 MBPD, net to our interest, this quarter
compared to the second quarter of 2020.
Gross operating margin from Enterprise’s Midland-to-ECHO System
increased $4 million for the second quarter of 2021 compared to the
second quarter of 2020, primarily due to higher transportation
volumes of 206 MBPD, net to our interest, partially offset by lower
average sales margins from marketing activities and higher
operating costs. The increase in transportation volumes was
primarily due to the Midland-to-ECHO 3 pipeline, which began
operations in October 2020.
Natural Gas Pipelines & Services – Enterprise’s
Natural Gas Pipelines & Services segment reported gross
operating margin of $202 million for the second quarter of 2021
compared to $209 million for the second quarter of 2020. Total
natural gas transportation volumes were 14.2 TBtus/d for the second
quarter of 2021 compared to 13.0 TBtus/d for the second quarter of
2020.
Gross operating margin from the partnership’s Permian Basin
Gathering System increased $32 million for the second quarter of
2021 compared to the second quarter of 2020, primarily due to
higher average condensate sales prices and volumes, and higher
natural gas gathering volumes of 534 BBtus/d. The increase in
gathering volumes correspond to deliveries to Enterprise’s Orla and
Mentone processing facilities.
Gross operating margin from Enterprise’s natural gas marketing
business decreased $27 million for the second quarter of 2021
compared to the second quarter of 2020, primarily due to lower
average sales margins.
Gross operating margin from the partnership’s Texas Intrastate
System decreased $7 million for the second quarter of this year
compared to the same quarter in 2020. This decrease in gross
operating margin was primarily attributable to lower capacity
reservation fees, which accounted for a $25 million decrease,
partially offset by a combined $18 million increase in gross
operating margin from higher storage and other fees, and higher
transportation volumes. Natural gas pipeline volumes for this
system were 5.1 TBtus/d in the second quarter of 2021 compared to
4.1 TBtus/d in the second quarter of 2020.
Petrochemical & Refined Products Services – Gross
operating margin for the Petrochemical & Refined Products
Services segment increased $134 million to $326 million for the
second quarter of 2021 compared to $192 million for the second
quarter of 2020. Total segment pipeline transportation volumes were
a record 977 MBPD this quarter compared to 786 MBPD for the same
quarter of last year.
Gross operating margin from the partnership’s propylene
production and related activities was a record $204 million for the
second quarter of 2021 compared to $61 million for the second
quarter of 2020. Gross operating margin generated by Enterprise’s
propylene facilities at the Chambers County complex increased $141
million, primarily due to higher average sales margins, propylene
and associated by-product sales volumes, and fractionation fees.
Partially offsetting these increases in gross operating margin was
higher utility and other operating expenses. Total propylene
production and associated by-product volumes for the second quarter
of 2021 increased 41 MBPD to a record 113 MBPD compared to 72 MBPD
for the second quarter of 2020. This includes a 16 MBPD increase
from the partnership’s propane dehydrogenation (“PDH”) facility.
The PDH facility had 46 days of unplanned downtime in the second
quarter of 2020 for major maintenance activities.
Gross operating margin from butane isomerization and related
operations increased $4 million for the second quarter of 2021
compared to the same quarter of last year, primarily due to higher
by-product sales and isomerization and standalone DIB production
volumes, which increased by 16 MBPD and 43 MBPD, respectively.
These increases in revenues were partially offset by higher utility
and maintenance costs.
Gross operating margin from refined products pipelines and
related activities for the second quarter of 2021 increased $3
million compared to the second quarter of last year. Gross
operating margin from the TE Products Pipeline System increased $15
million primarily due to a 52 MBPD increase in interstate refined
product transportation volumes. Total transportation volumes on the
TE Products Pipeline System increased by a net 146 MBPD for the
second quarter of this year compared to the same quarter in 2020,
primarily due to recovering demand for motor fuels. Partially
offsetting this increase was a $12 million decrease in gross
operating margin from refined products marketing activities due to
lower sales volumes and average sales margins.
The partnership’s octane enhancement business and related
operations had a $19 million decrease in gross operating margin
this quarter compared to the second quarter of 2020, primarily due
to higher operating costs and lower sales volumes. Production
volumes at our octane enhancement facility were 4 MBPD lower
primarily due to 30 days of downtime during the second quarter of
2021 related to planned major maintenance activities that were
completed in early May 2021.
Capitalization
Total debt principal outstanding at June 30, 2021 was $28.8
billion, including $2.6 billion of junior subordinated notes, to
which the debt rating agencies ascribe partial equity content. At
June 30, 2021, Enterprise had consolidated liquidity of
approximately $5.4 billion, comprised of unrestricted cash on hand
and available borrowing capacity under its revolving credit
facilities.
Capital Investments
Total capital spending in the second quarter of 2021 was $634
million, which includes $117 million of sustaining capital
expenditures. For the first six months of 2021, Enterprise’s
capital spending was $1.3 billion, including $261 million of
sustaining capital expenditures. Included in sustaining capital
expenditures for the first six months were $97 million associated
with the planned turnarounds of the PDH, octane enhancement and
high-purity isobutylene facilities.
Our current expectation for growth capital investments
associated with sanctioned projects for 2021 and 2022 is $1.7
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 Second
Quarter 2021 Earnings
Today, Enterprise will host a conference call to discuss second
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 June 30,
For the Six Months
Ended June 30,
For the Twelve Months
Ended
June 30,
2021
2020
2021
2020
2021
Revenues
$
9,450.1
$
5,751.0
$
18,605.4
$
13,233.5
$
32,571.6
Costs and
expenses:
Operating costs and expenses
8,066.7
4,370.4
15,620.1
10,430.7
27,560.5
General and administrative costs
51.5
57.0
107.8
112.5
214.9
Total costs and expenses
8,118.2
4,427.4
15,727.9
10,543.2
27,775.4
Equity in income of
unconsolidated affiliates
160.7
113.3
309.6
254.1
481.6
Operating
income
1,492.6
1,436.9
3,187.1
2,944.4
5,277.8
Other income
(expense):
Interest expense
(316.1
)
(320.2
)
(638.9
)
(637.7
)
(1,288.6
)
Other, net
0.7
3.8
1.6
9.6
5.7
Total other expense, net
(315.4
)
(316.4
)
(637.3
)
(628.1
)
(1,282.9
)
Income before income
taxes
1,177.2
1,120.5
2,549.8
2,316.3
3,994.9
Benefit from (provision for) income
taxes
(31.2
)
(59.7
)
(41.2
)
119.5
(36.4
)
Net
income
1,146.0
1,060.8
2,508.6
2,435.8
3,958.5
Net income
attributable to noncontrolling interests
(32.7
)
(26.1
)
(54.0
)
(51.0
)
(113.1
)
Net income
attributable to preferred units
(1.0
)
–
(1.9
)
–
(2.8
)
Net income
attributable to common unitholders
$
1,112.3
$
1,034.7
$
2,452.7
$
2,384.8
$
3,842.6
Per common unit data
(fully diluted):
Earnings per common unit
$
0.50
$
0.47
$
1.11
$
1.08
$
1.75
Average common units outstanding (in
millions)
2,205.5
2,201.9
2,204.3
2,203.0
2,202.7
Supplemental
financial data:
Net cash flow provided by operating
activities
$
1,993.9
$
1,181.6
$
4,017.0
$
3,193.8
$
6,714.7
Cash flows used in investing
activities
$
571.7
$
858.8
$
1,228.7
$
1,930.5
$
2,418.9
Cash flows used in financing
activities
$
1,145.6
$
1,001.8
$
3,335.4
$
236.7
$
5,121.4
Total debt principal outstanding at end of
period
$
28,821.4
$
29,896.4
$
28,821.4
$
29,896.4
$
28,821.4
Non-GAAP Distributable Cash Flow (1)
$
1,598.5
$
1,577.3
$
3,335.8
$
3,130.9
$
6,611.6
Non-GAAP Adjusted EBITDA (2)
$
2,008.1
$
1,961.2
$
4,253.7
$
3,939.9
$
8,369.5
Non-GAAP Free Cash Flow (3)
$
1,385.6
$
305.4
$
2,735.0
$
1,221.2
$
4,184.2
Gross operating margin by segment:
NGL Pipelines & Services
$
1,097.6
$
968.1
$
2,184.0
$
2,010.1
$
4,356.3
Crude Oil Pipelines & Services
418.9
634.4
819.1
1,087.3
1,729.1
Natural Gas Pipelines & Services
202.0
208.9
737.2
492.7
1,171.1
Petrochemical & Refined Products
Services
326.3
191.5
607.8
470.0
1,219.6
Total segment gross operating margin
(4)
2,044.8
2,002.9
4,348.1
4,060.1
8,476.1
Net adjustment for shipper make-up rights
(5)
16.6
(4.5
)
36.6
(14.2
)
(34.9
)
Non-GAAP total gross operating margin
(6)
$
2,061.4
$
1,998.4
$
4,384.7
$
4,045.9
$
8,441.2
(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 June 30,
For the Six Months
Ended June 30,
For the Twelve Months
Ended
June 30,
2021
2020
2021
2020
2021
Selected operating
data: (1)
NGL Pipelines & Services, net:
NGL pipeline transportation volumes
(MBPD)
3,428
3,482
3,377
3,622
3,488
NGL marine terminal volumes (MBPD)
665
701
659
721
691
NGL fractionation volumes (MBPD)
1,245
1,154
1,216
1,186
1,241
Equity NGL production volumes (MBPD)
(2)
198
188
180
164
160
Fee-based natural gas processing volumes
(MMcf/d) (3,4)
4,187
4,136
4,102
4,398
4,318
Crude Oil Pipelines & Services,
net:
Crude oil pipeline transportation volumes
(MBPD)
2,041
1,890
1,988
2,141
1,994
Crude oil marine terminal volumes
(MBPD)
770
726
671
854
633
Natural Gas Pipelines & Services,
net:
Natural gas pipeline transportation
volumes (BBtus/d) (5)
14,161
12,975
13,934
13,419
13,676
Petrochemical & Refined Products
Services, net:
Propylene production volumes (MBPD)
113
72
99
85
95
Butane isomerization volumes (MBPD)
84
68
74
86
90
Standalone DIB processing volumes
(MBPD)
173
130
156
118
146
Octane enhancement and related plant sales
volumes
(MBPD) (6)
31
32
30
33
38
Pipeline transportation volumes, primarily
refined products
and petrochemicals (MBPD)
977
786
859
748
854
Refined products and petrochemicals marine
terminal
volumes (MBPD) (7)
198
250
233
261
247
Total, net:
NGL, crude oil, petrochemical and refined
products
pipeline transportation volumes (MBPD)
6,446
6,158
6,224
6,511
6,336
Natural gas pipeline transportation
volumes (BBtus/d)
14,161
12,975
13,934
13,419
13,676
Equivalent pipeline transportation volumes
(MBPD) (8)
10,173
9,572
9,891
10,042
9,935
NGL, crude oil, refined products and
petrochemical
marine terminal volumes (MBPD)
1,633
1,677
1,563
1,836
1,571
(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 Chambers County
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
Second Quarter
$2.83
$0.26
$0.87
$0.97
$0.98
$1.46
$0.67
$0.27
2021 Averages
$2.77
$0.25
$0.88
$0.96
$0.96
$1.40
$0.70
$0.36
(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
Second Quarter
$66.07
$66.41
$66.90
$67.95
2021 Averages
$61.96
$62.71
$63.21
$63.97
(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 $0.64 per
gallon during the second quarter of 2021 versus $0.31 per gallon
during the second quarter of 2020. Fluctuations in our consolidated
revenues and cost of sales amounts are explained in large part by
changes in energy commodity prices. A change in our consolidated
marketing revenues due to higher energy commodity sales prices may
not result in a similar change in gross operating margin or cash
available for distribution, since our consolidated cost of sales
amounts would also change due to comparable increases in the
purchase prices of the underlying energy commodities.
Enterprise Products Partners L.P.
Exhibit D
Free Cash Flow – UNAUDITED
($ in millions)
For the Three Months
Ended June 30,
For the Six Months
Ended June 30,
2021
2020
2021
2020
Free
Cash Flow (“FCF”)
Net cash flow provided by operating
activities (GAAP)
$
1,993.9
$
1,181.6
$
4,017.0
$
3,193.8
Adjustments to reconcile net cash flow
provided by operating activities to FCF
(addition or subtraction indicated by
sign):
Cash used in investing activities
(571.7
)
(858.8
)
(1,228.7
)
(1,930.5
)
Cash contributions from noncontrolling
interests
5.0
14.5
18.1
19.7
Cash distributions paid to noncontrolling
interests
(41.6
)
(31.9
)
(71.4
)
(61.8
)
FCF (non-GAAP)
$
1,385.6
$
305.4
$
2,735.0
$
1,221.2
For the Twelve Months
Ended June 30,
2021
2020
Net cash flow provided by operating
activities (GAAP)
$
6,714.7
$
6,530.6
Adjustments to reconcile net cash flow
provided by operating activities to FCF
(addition or subtraction indicated by
sign):
Cash used in investing activities
(2,418.9
)
(4,219.5
)
Cash contributions from noncontrolling
interests
29.3
552.9
Cash distributions paid to noncontrolling
interests
(140.9
)
(121.1
)
FCF (non-GAAP)
$
4,184.2
$
2,742.9
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 Twelve Months
Ended
June 30,
For the Three Months
Ended June 30,
For the Six Months
Ended June 30,
2021
2020
2021
2020
2021
Distributable Cash Flow (“DCF”)
Net income attributable to common
unitholders (GAAP)
$
1,112.3
$
1,034.7
$
2,452.7
$
2,384.8
$
3,842.6
Adjustments to net income attributable to
common
unitholders to derive DCF (addition or
subtraction indicated by sign):
Depreciation, amortization and accretion
expenses
533.8
522.7
1,058.8
1,031.7
2,099.0
Cash distributions received from
unconsolidated affiliates
168.8
178.4
299.3
315.6
597.8
Equity in income of unconsolidated
affiliates
(160.7
)
(113.3
)
(309.6
)
(254.1
)
(481.6
)
Asset impairment charges
17.9
11.8
83.5
13.4
960.7
Change in fair market value of derivative
instruments
(23.2
)
(61.9
)
(38.8
)
(91.4
)
(26.7
)
Deferred income tax expense (benefit)
19.5
53.4
24.1
(130.7
)
7.2
Sustaining capital expenditures (1)
(116.8
)
(74.0
)
(260.6
)
(142.9
)
(411.3
)
Other, net (2)
2.8
22.0
(99.1
)
33.7
(110.3
)
Operational DCF
1,554.4
1,573.8
3,210.3
3,160.1
6,477.4
Proceeds from asset sales
44.1
3.5
50.3
4.1
59.0
Monetization of interest rate derivative
instruments accounted
for as cash flow hedges
–
–
75.2
(33.3
)
75.2
DCF (non-GAAP)
1,598.5
1,577.3
3,335.8
3,130.9
6,611.6
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
300.2
(430.7
)
399.2
(89.0
)
(279.3
)
Sustaining capital expenditures
116.8
74.0
260.6
142.9
411.3
Other, net
(21.6
)
(39.0
)
21.4
9.0
(28.9
)
Net cash flow provided by operating
activities (GAAP)
$
1,993.9
$
1,181.6
$
4,017.0
$
3,193.8
$
6,714.7
(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)
The first six months of 2021 include $100
million of accounts receivable that we do not expect to collect in
the normal billing cycle.
DCF is an important non-GAAP liquidity measure for our common
unitholders since it serves as an indicator of our success in
providing a cash return on investment. Specifically, this liquidity
measure indicates to investors whether or not we are generating
cash flows at a level that can sustain or support an increase in
our quarterly cash distributions. DCF is also a quantitative
standard used by the investment community with respect to publicly
traded partnerships because the value of a partnership unit is, in
part, measured by its yield, which is based on the amount of cash
distributions a partnership can pay to a common unitholder.
Enterprise Products Partners L.P.
Exhibit F
Adjusted EBITDA - UNAUDITED
($ in millions)
For the Twelve Months
Ended
June 30,
For the Three Months
Ended June 30,
For the Six Months
Ended June 30,
2021
2020
2021
2020
2021
Net income (GAAP)
$
1,146.0
$
1,060.8
$
2,508.6
$
2,435.8
$
3,958.5
Adjustments to net income to derive
Adjusted EBITDA
(addition or subtraction indicated by
sign):
Depreciation, amortization and accretion
in costs and expenses (1)
511.7
507.1
1,019.4
1,001.6
2,027.5
Interest expense, including related
amortization
316.1
320.2
638.9
637.7
1,288.6
Cash distributions received from
unconsolidated affiliates
168.8
178.4
299.3
315.6
597.8
Equity in income of unconsolidated
affiliates
(160.7
)
(113.3
)
(309.6
)
(254.1
)
(481.6
)
Asset impairment charges
17.9
11.8
83.5
13.4
960.7
Provision for (benefit from) income
taxes
31.2
59.7
41.2
(119.5
)
36.4
Change in fair market value of commodity
derivative instruments
(23.2
)
(61.9
)
(38.8
)
(91.4
)
(26.7
)
Other, net
0.3
(1.6
)
11.2
0.8
8.3
Adjusted EBITDA (non-GAAP)
2,008.1
1,961.2
4,253.7
3,939.9
8,369.5
Adjustments to reconcile Adjusted EBITDA
to net cash flow provided by
operating activities (addition or
subtraction indicated by sign):
Interest expense, including related
amortization
(316.1
)
(320.2
)
(638.9
)
(637.7
)
(1,288.6
)
Deferred income tax expense (benefit)
19.5
53.4
24.1
(130.7
)
7.2
Benefit from (provision for) income
taxes
(31.2
)
(59.7
)
(41.2
)
119.5
(36.4
)
Net effect of changes in operating
accounts, as applicable
300.2
(430.7
)
399.2
(89.0
)
(279.3
)
Other, net
13.4
(22.4
)
20.1
(8.2
)
(57.7
)
Net cash flow provided by operating
activities (GAAP)
$
1,993.9
$
1,181.6
$
4,017.0
$
3,193.8
$
6,714.7
(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
June 30,
For the Three Months
Ended June 30,
For the Six Months
Ended June 30,
2021
2020
2021
2020
2021
Total gross operating margin
(non-GAAP)
$
2,061.4
$
1,998.4
$
4,384.7
$
4,045.9
$
8,441.2
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)
(499.1
)
(494.3
)
(995.2
)
(977.1
)
(1,979.6
)
Asset impairment charges in operating
costs and expenses
(17.9
)
(11.8
)
(83.4
)
(13.4
)
(960.6
)
Net gains (losses) attributable to asset
sales and related matters in operating costs and expenses
(0.3
)
1.6
(11.2
)
1.5
(8.3
)
General and administrative costs
(51.5
)
(57.0
)
(107.8
)
(112.5
)
(214.9
)
Total operating income (GAAP)
$
1,492.6
$
1,436.9
$
3,187.1
$
2,944.4
$
5,277.8
(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
June 30,
For the Three Months
Ended June 30,
For the Six Months
Ended June 30,
2021
2020
2021
2020
2021
Capital investments:
Capital expenditures
$
622.2
$
896.4
$
1,301.2
$
1,975.9
$
2,613.2
Investments in unconsolidated
affiliates
–
4.0
1.3
7.3
9.6
Other investing activities
11.8
9.6
13.4
12.5
21.5
Total capital investments
$
634.0
$
910.0
$
1,315.9
$
1,995.7
$
2,644.3
The following table summarizes the non-cash, mark-to-market
gains (losses) for the periods indicated:
For the Twelve Months
Ended
June 30,
For the Three Months
Ended June 30,
For the Six Months
Ended June 30,
2021
2020
2021
2020
2021
Mark-to-market gains (losses) in gross
operating margin:
NGL Pipelines & Services
$
14.7
$
35.7
$
51.8
$
23.4
$
76.8
Crude Oil Pipelines & Services
(9.8
)
8.1
(11.2
)
18.8
(9.9
)
Natural Gas Pipelines & Services
1.1
(4.0
)
(1.4
)
24.8
(19.9
)
Petrochemical & Refined Products
Services
17.2
22.1
(0.4
)
24.4
(20.3
)
Total mark-to-market impact on gross
operating margin
$
23.2
$
61.9
$
38.8
$
91.4
$
26.7
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210728005225/en/
Randy Burkhalter, Vice President, Investor Relations, (713)
381-6812 Rick Rainey, Vice President, Media Relations, (713)
381-3635
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