Enterprise Products Partners L.P. (“Enterprise”) (NYSE: EPD)
today announced its financial results for the three months and year
ended December 31, 2022.
Year Ended 2022 Results
Enterprise reported net income attributable to common
unitholders of $5.5 billion, or $2.50 per unit on a fully diluted
basis for 2022, compared to $4.6 billion, or $2.10 per unit on a
fully diluted basis for 2021. Net income for 2022 and 2021 was
reduced by non-cash, asset impairment charges of approximately $53
million, or $0.02 per fully diluted unit, and $233 million, or
$0.11 per fully diluted unit, respectively.
Distributable Cash Flow (“DCF”) increased 17 percent to $7.8
billion for 2022 compared to $6.6 billion for 2021. DCF provided
1.9 times coverage of the distributions declared with respect to
2022. Enterprise retained $3.6 billion of DCF in 2022 to reinvest
in the partnership, repurchase partnership units, and reduce debt.
Distributions declared with regard to 2022 increased 5 percent to
$1.905 per common unit, compared to distributions declared for
2021, marking the partnership’s 24th consecutive year of
distribution growth.
Adjusted cash flow provided by operating activities (“Adjusted
CFFO”), increased 13 percent to $8.1 billion for 2022 compared to
$7.1 billion for 2021. Enterprise’s payout ratio of distributions
to common unitholders and partnership unit buybacks was 54 percent
of Adjusted CFFO in 2022. Adjusted Free Cash Flow (“Adjusted FCF”)
was $3.0 billion for 2022. Excluding $3.2 billion used for the
acquisition of Navitas Midstream Partners, LLC (“Navitas
Midstream”) in February 2022, the partnership’s payout ratio of
Adjusted FCF was 71 percent for 2022.
“We are extremely proud and grateful for the teamwork and
contribution of our 7,200 employees to Enterprise’s record
performance in 2022,” said A. J. “Jim” Teague, co-chief executive
officer of Enterprise’s general partner. “We established 25 safety,
operating and financial records in 2022.”
“The partnership’s performance was generated by record volumes
across many of our assets, higher margins in our natural gas
processing and octane enhancement businesses, and contributions
from our acquisition of Navitas Midstream. This acquisition was
immediately accretive to Enterprise’s cash flow per unit and has
exceeded our expectations. We also increased the value of our
partnership in 2022 by investing $1.6 billion in organic growth
projects and asset purchases and strengthened our balance sheet by
repurchasing $250 million of our common units on the open market
while reducing the principal amount of our debt by $1.3 billion,”
continued Teague.
Fourth Quarter and Full Year 2022
Financial Highlights
Three Months Ended December
31,
Year Ended December
31,
($ in millions, except per unit
amounts)
2022
2021
2022
2021
Operating income
$
1,765
$
1,403
$
6,907
$
6,103
Net income (1)
$
1,452
$
1,064
$
5,615
$
4,755
Fully diluted earnings per common unit
(1)
$
0.65
$
0.47
$
2.50
$
2.10
Total gross operating margin (2)
$
2,368
$
2,087
$
9,309
$
8,561
Adjusted EBITDA (2)
$
2,376
$
2,112
$
9,309
$
8,381
Adjusted CFFO (2)
$
2,097
$
1,807
$
8,093
$
7,147
Adjusted FCF (2)
$
1,407
$
1,403
$
2,983
$
4,930
DCF (2)
$
2,028
$
1,659
$
7,751
$
6,608
(1)
Net income and fully diluted earnings per
common unit for the fourth quarters of 2022 and 2021 include
non-cash asset impairment charges of approximately $5 million, or
less than $0.01 per fully diluted unit, and $120 million, or $0.05
per unit, respectively. For the years ended December 31, 2022 and
2021, net income and fully diluted earnings per common unit include
non-cash asset impairment charges of $53 million, or $0.02 per
unit, and $233 million, or $0.11 per unit, respectively.
(2)
Total gross operating margin, adjusted
earnings before interest, taxes, depreciation and amortization
(“Adjusted EBITDA”), Adjusted CFFO, Adjusted 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 5.4 percent to $0.49
per common unit with respect to the fourth quarter of 2022 compared
to the distribution declared with respect to the fourth quarter of
2021. The distribution will be paid on February 14, 2023, to common
unitholders of record as of the close of business on January 31,
2023.
- DCF for the fourth quarter of 2022 was $2.0 billion, which
provided 1.9 times coverage of the $0.49 per common unit cash
distribution. Enterprise retained $956 million of DCF in the fourth
quarter of 2022.
- Adjusted CFFO for the fourth quarter of 2022 was a record $2.1
billion compared to $1.8 billion for the same quarter in 2021.
Adjusted FCF was $1.4 billion for both the fourth quarters of 2022
and 2021.
- Capital investments in the fourth quarter of 2022 were $763
million, which included $160 million for purchases of approximately
580 miles of pipelines and related assets and $138 million of
sustaining capital expenditures. Total capital investments for 2022
were $5.2 billion, including $3.2 billion for the acquisition of
Navitas Midstream, $1.4 billion of investments in growth capital
projects, $160 million for purchases of pipelines and related
assets and $372 million of sustaining capital expenditures.
- During the fourth quarter of 2022, Enterprise purchased $120
million of its common units in the open market, bringing the total
amount of common unit buybacks during 2022 to $250 million.
Including these purchases in 2022, the partnership has utilized 37
percent of its authorized $2.0 billion unit buyback program. In
addition, the partnership’s distribution reinvestment and employee
unit purchase plans purchased $41 million and $164 million of
Enterprise common units on the open market during the fourth
quarter and the full year 2022, respectively.
Fourth Quarter and Full Year 2022
Volume Highlights
Three Months Ended
December 31,
Year Ended
December 31,
2022
2021
2022
2021
NGL, crude oil, refined products &
petrochemical pipeline volumes (million BPD)
6.9
6.5
6.7
6.4
Marine terminal volumes (million BPD)
1.7
1.5
1.7
1.5
Natural gas pipeline volumes (TBtus/d)
17.6
14.6
17.1
14.2
NGL fractionation volumes (MBPD)
1,336
1,327
1,339
1,253
Propylene plant production volumes
(MBPD)
89
105
101
99
Fee-based natural gas processing volumes
(Bcf/d)
5.4
4.0
5.2
4.1
Equity NGL-equivalent production volumes
(MBPD)
173
158
182
167
As used in this press release, “NGL” means
natural gas liquids, “LNG” means liquefied natural gas, “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 finished 2022 with a solid fourth quarter, reporting
record total gross operating margin. Our quarterly results were
driven by record total pipeline transportation volumes of 11.5
million BPD, on a barrel equivalent basis, higher NGL and natural
gas pipeline transportation volumes, higher natural gas processing
margins and increased fee-based gas processing volumes. Our Midland
Basin gathering and processing assets we acquired in February 2022
continued to produce solid results this quarter,” stated
Teague.
“During the quarter, we opportunistically purchased
approximately 580 miles of pipeline and related assets that enables
us to cost effectively optimize and expand our NGL and
petrochemical pipeline systems on the Texas Gulf Coast. The
partnership has $3.6 billion of assets under construction that are
scheduled to be completed and begin commercial operations in 2023.
These major projects include our second facility to convert propane
into polymer grade propylene (PDH 2), two natural gas processing
plants in the Permian basin and a twelfth NGL fractionator at our
Chambers County complex. These projects are underwritten by
long-term agreements and will provide new sources of cash flow for
the partnership,” said Teague.
“We began 2023 by successfully issuing a total of $1.75 billion
of 3-year and 10-year notes, which effectively refinances $1.25
billion of debt maturities and should satisfy our remaining
long-term funding needs for the year. We thank our debt investors
for their consistent support over the years. We also increased our
fourth quarter distribution that will be paid later this month by
5.4 percent compared to the distribution paid a year ago. In July,
Enterprise will celebrate the 25th anniversary of our initial
public offering. The partnership is on track to accomplish another
significant financial milestone in 2023: 25 consecutive years of
distribution growth,” continued Teague.
“We embark on this new year with one of the strongest balance
sheets in our history. This provides Enterprise the financial
flexibility to invest in new growth opportunities and to help
weather unforeseen macro-economic challenges. Since our initial
public offering, our financial goals have remained the same: to
responsibly invest in the growth of the partnership to provide our
partners with a growing and resilient stream of cash distributions
and increase the long-term value of the partnership. With the
support of our employees, customers, suppliers and investors, we
look forward to the year ahead,” concluded Teague.
Review of Fourth Quarter 2022 Segment
Performance
Enterprise reported record total gross operating margin of $2.4
billion for the fourth quarter of 2022, a 13 percent increase over
$2.1 billion of total gross operating margin reported for the
fourth quarter of 2021. Gross operating margin for the fourth
quarter of 2022 included net non-cash, mark-to-market (“MTM”)
losses of $32 million, compared to net non-cash MTM losses of $59
million reported for the fourth quarter of 2021. Below is a summary
review of each business segment’s performance.
NGL Pipelines & Services – Gross operating margin for
the NGL Pipelines & Services segment increased 17 percent to
$1.3 billion for the fourth quarter of 2022 compared to $1.1
billion for the fourth quarter of 2021.
Enterprise’s natural gas processing and related NGL marketing
business reported gross operating margin of $459 million for the
fourth quarter of 2022, a 58 percent increase over gross operating
margin of $291 million for the fourth quarter of 2021. Gross
operating margin for the fourth quarters of 2022 and 2021 included
non-cash, MTM losses of $40 million and $50 million, respectively.
Total fee-based natural gas processing volumes increased to a
record 5.4 Bcf/d in the fourth quarter of 2022 compared to 4.0
Bcf/d for the fourth quarter of 2021. Equity NGL-equivalent
production volumes increased to 173 MBPD this quarter from 158 MBPD
for the same quarter of 2021.
The partnership’s Midland Basin natural gas processing facility,
acquired in February 2022, contributed $76 million of gross
operating margin in the fourth quarter of 2022 on 977 MMcf/d of
fee-based natural gas processing volumes and 53 MBPD of equity
NGL-equivalent production volumes. The partnership’s Delaware Basin
natural gas processing facilities generated $76 million of gross
operating margin this quarter compared to $71 million for the same
quarter of 2021. The $5 million net increase was primarily due to
higher average processing margins, including the impact of hedging
activities, higher average processing fees, and a 208 MMcf/d
increase in fee-based natural gas processing volumes, partially
offset by an 18 MBPD decrease in equity NGL-equivalent volumes and
higher operating costs.
Gross operating margin from Enterprise’s South Texas natural gas
processing facilities increased $14 million for the fourth quarter
of 2022 compared to the fourth quarter of 2021, primarily due to
higher average processing margins, including the impact of hedging
activities. Fee-based natural gas processing volumes at these
facilities increased 208 MMcf/d for the fourth quarter of 2022
compared to the fourth quarter of 2021.
Gross operating margin from Enterprise’s natural gas processing
facilities in Louisiana and Mississippi decreased $18 million this
quarter compared to the same quarter last year, primarily due to
lower average processing margins. Total fee-based natural gas
processing volumes at these facilities increased by 52 MMcf/d for
the fourth quarter of 2022 compared to the fourth quarter of 2021.
The weighted-average indicative NGL price for the fourth quarter of
2022 was $0.69 per gallon compared to $0.89 per gallon for the
fourth quarter of 2021.
Gross operating margin from NGL marketing activities increased
$84 million for the fourth quarter of 2022 compared to the fourth
quarter of 2021, primarily due to higher average sales margins and
higher non-cash, MTM earnings, partially offset by lower sales
volumes.
Gross operating margin from the partnership’s NGL pipelines and
storage business increased to $646 million for the fourth quarter
of 2022 from $572 million for the fourth quarter of 2021. NGL
pipeline transportation volumes increased to 3.9 million BPD this
quarter from 3.5 million BPD for the same quarter in 2021. NGL
marine terminal volumes increased to 751 MBPD for the fourth
quarter of 2022 compared to 651 MBPD for the same quarter of
2021.
Gross operating margin from the partnership’s Eastern ethane
pipelines, which include its ATEX and Aegis pipelines, increased a
combined $34 million for the fourth quarter of 2022 compared to the
fourth quarter of 2021, primarily due to a 22 MBPD increase in
transportation volumes on the ATEX Pipeline and higher average
transportation fees.
A number of Enterprise’s NGL pipelines, including the
Mid-America and Seminole NGL Pipeline Systems, Chaparral NGL
Pipeline, and Shin Oak NGL Pipeline, serve the Permian Basin and
Rocky Mountain regions. On a combined basis, gross operating margin
from these pipelines increased a net $9 million, primarily due to
an 84 MBPD, net to our interest, increase in aggregate
transportation volumes, partially offset by higher utility and
other operating costs.
The partnership’s Dixie NGL pipeline contributed $7 million to
the quarterly increase in gross operating margin, primarily due to
a 33 MBPD increase in transportation volumes for the fourth quarter
of 2022 versus the same quarter in 2021. The partnership’s Morgan’s
Point Ethane Export Terminal reported a $10 million increase in
gross operating margin this quarter compared to the same quarter
last year, primarily due to higher average loading fees.
Enterprise’s NGL fractionation business reported gross operating
margin of $189 million for the fourth quarter of 2022 compared to
$246 million for the fourth quarter of 2021. Total NGL
fractionation volumes were 1.3 million BPD for both the fourth
quarters of 2022 and 2021.
Gross operating margin from Enterprise’s NGL fractionation
complex in Chambers County, Texas decreased $55 million for the
fourth quarter of 2022 compared to the same quarter in 2021,
primarily due to lower average fractionation fees, lower ancillary
service revenues and a 20 MBPD, net to our interest, decrease in
fractionation volumes.
Crude Oil Pipelines & Services – Gross operating
margin from the Crude Oil Pipelines & Services segment was $418
million for the fourth quarter of 2022 versus $438 million for the
fourth quarter of 2021. Included in gross operating margin are
non-cash, MTM gains of $8 million in the fourth quarter of 2022
compared to non-cash, MTM losses of $3 million in the fourth
quarter of 2021. Total crude oil pipeline transportation volumes
were 2.3 million BPD for both the fourth quarters of 2022 and 2021.
Total crude oil marine terminal volumes increased 16 percent to 756
MBPD for the fourth quarter of 2022 from 649 MBPD for the fourth
quarter of 2021.
Gross operating margin from Enterprise’s EFS Midstream System
decreased $70 million for the fourth quarter of 2022 compared to
the fourth quarter of 2021, primarily due to lower deficiency fees
as a result of the expiration of minimum volume commitments
associated with certain long-term gathering agreements entered into
at the time Enterprise acquired the system in July 2015. The EFS
Midstream System will continue to transport volumes produced from
dedicated acreage through the remaining term of these
agreements.
Enterprise’s share of gross operating margin from the Seaway
Pipeline decreased $18 million for the fourth quarter of 2022
compared to the same quarter in 2021, primarily due to lower
transportation revenues and higher utility and other operating
costs.
Gross operating margin from the partnership’s West Texas
Pipeline System increased $31 million this quarter compared to the
same quarter in 2021, primarily due to higher ancillary service and
other revenues. Transportation volumes decreased 7 MBPD for the
fourth quarter of 2022 compared to the fourth quarter of 2021 on
this pipeline system.
Gross operating margin from crude oil activities at the
Enterprise Houston Terminal (“EHT”) and the partnership’s Beaumont
Marine West Terminal increased a combined $13 million for the
fourth quarter of 2022, compared to the fourth quarter of 2021,
primarily due to higher storage and other fee revenues. Loading and
unloading volumes increased a combined 96 MBPD for the fourth
quarter of 2022 compared to the fourth quarter of 2021.
Gross operating margin from crude oil marketing activities,
excluding Midland-to-ECHO activities, increased $32 million,
primarily due to higher average sales margins and higher non-cash,
MTM earnings.
Natural Gas Pipelines & Services – Gross operating
margin for the Natural Gas Pipelines & Services segment
increased to $315 million for the fourth quarter of 2022 compared
to $195 million for the fourth quarter of 2021. Total natural gas
transportation volumes were a record 17.6 TBtus/d for the fourth
quarter of 2022 compared to 14.6 TBtus/d for the same quarter in
2021.
Gross operating margin from the partnership’s Texas Intrastate
System increased $34 million for the fourth quarter of 2022
compared to the fourth quarter of 2021, primarily due to higher
average transportation fees. Transportation volumes for the Texas
Intrastate System increased 407 BBtus/d to 5.6 TBtus/d for the
fourth quarter of 2022.
Enterprise’s Permian Basin natural gas gathering systems
reported a combined $20 million increase in gross operating margin
for the fourth quarter of 2022 compared to the same quarter in
2021. The Midland Basin Gathering System, acquired in February
2022, generated $15 million of gross operating margin in the fourth
quarter of 2022 on gathering volumes of 1.3 TBtus/d. Increased
earnings from condensate sales contributed to a $5 million increase
in gross operating margin from the Delaware Basin Gathering System
for the fourth quarter of 2022 versus the fourth quarter of
2021.
On a combined basis, gross operating margin from the
partnership’s Jonah Gathering System, Piceance Basin Gathering
System, and San Juan Gathering System in the Rocky Mountains
increased $9 million for the fourth quarter of 2022 compared to the
fourth quarter of 2021, primarily due to higher average gathering
fees. Gathering volumes on these systems decreased a combined 94
BBtus/d for the fourth quarter of 2022 compared to the same quarter
of 2021.
Gross operating margin from Enterprise’s natural gas marketing
business increased $60 million during the fourth quarter of 2022
versus the same quarter in 2021, primarily due to higher average
sales margins.
Petrochemical & Refined Products Services – Gross
operating margin for the Petrochemical & Refined Products
Services segment was $339 million for the fourth quarter of 2022
compared to $338 million for the fourth quarter of 2021. Total
segment pipeline transportation volumes were 740 MBPD for the
fourth quarter of 2022 compared to 704 MBPD for the fourth quarter
of 2021. Marine terminal volumes were 215 MBPD for the fourth
quarter of 2022 versus 207 MBPD for the same quarter in 2021.
The partnership’s propylene production and related activities
reported a $99 million decrease in gross operating margin to $90
million for the fourth quarter of 2022. Total propylene production
volumes were 89 MBPD in the fourth quarter of 2022 compared to 105
MBPD in the fourth quarter of 2021. Gross operating margin from
Enterprise’s Chambers County propylene production facilities
decreased $95 million, primarily due to lower average propylene
sales margins and volumes, and lower average processing fees.
Propylene and associated by-product production volumes at these
facilities decreased 17 MBPD this quarter versus the fourth quarter
of 2021. The partnership’s PDH 1 facility was down for
approximately 44 days during the fourth quarter of 2022 for planned
and unplanned maintenance.
Enterprise’s octane enhancement and related businesses reported
a $58 million net increase in gross operating margin for the fourth
quarter of 2022 compared to the fourth quarter of 2021, primarily
due to higher average sales margins and volumes, partially offset
by higher utility and other operating costs.
Enterprise’s refined products pipelines and related activities
reported a $23 million net increase in gross operating margin for
the fourth quarter of 2022 compared to the fourth quarter of 2021,
primarily due to higher average sales margins from refined products
marketing activities and higher transportation revenues on a 37
MBPD increase in transportation volumes, partially offset by higher
operating costs from our refined products pipelines and product
terminals.
Gross operating margin for the marine transportation and other
services business increased $10 million for the fourth quarter of
2022, compared to the fourth quarter of 2021, primarily due to
higher average fees and fleet utilization rates.
Capitalization
Total debt principal outstanding at December 31, 2022 was $28.6
billion, including $2.3 billion of junior subordinated notes, to
which the debt rating agencies ascribe partial equity content. At
December 31, 2022, Enterprise had consolidated liquidity of
approximately $4.1 billion, comprised of available borrowing
capacity under its revolving credit facilities and unrestricted
cash on hand.
Capital Investments
Total capital investments in the fourth quarter of 2022 were
$763 million, which included $465 million for growth capital
projects, $160 million for purchases of 580 miles of pipelines and
related assets and $138 million of sustaining capital expenditures.
Total capital investments in 2022 were $5.2 billion, which included
$3.4 billion for the acquisition of Navitas Midstream and purchases
of assets, $1.4 billion for investments in growth capital projects
and $372 million of sustaining capital expenditures.
For 2023, we expect growth capital investments to be
approximately $2.3 billion to $2.5 billion and sustaining capital
expenditures to be approximately $400 million.
2022 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 28, 2023. The mailing of the tax packages is
currently expected to be completed by March 7, 2023.
Conference Call to Discuss Fourth
Quarter 2022 Earnings
Enterprise will host a conference call today to discuss fourth
quarter 2022 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,
Adjusted CFFO, FCF, Adjusted 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 marine terminals; crude oil gathering, transportation,
storage and marine terminals; petrochemical and refined products
transportation, storage and marine terminals; and a marine
transportation business that operates on key U.S. inland and
intracoastal waterway systems. The partnership’s assets currently
include more than 50,000 miles of pipelines; over 260 million
barrels of storage capacity for NGLs, crude oil, petrochemicals and
refined products; 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,
2022
2021
2022
2021
Revenues
$
13,650
$
11,370
$
58,186
$
40,807
Costs and
expenses:
Operating costs and expenses
11,952
10,049
51,502
35,078
General and administrative costs
62
54
241
209
Total costs and expenses
12,014
10,103
51,743
35,287
Equity in income of
unconsolidated affiliates
129
136
464
583
Operating
income
1,765
1,403
6,907
6,103
Other income
(expense):
Interest expense
(307
)
(328
)
(1,244
)
(1,283
)
Other, net
22
2
34
5
Total other expense, net
(285
)
(326
)
(1,210
)
(1,278
)
Income before income
taxes
1,480
1,077
5,697
4,825
Provision for income taxes
(28
)
(13
)
(82
)
(70
)
Net
income
1,452
1,064
5,615
4,755
Net income
attributable to noncontrolling interests
(32
)
(35
)
(125
)
(117
)
Net income
attributable to preferred units
–
(1
)
(3
)
(4
)
Net income
attributable to common unitholders
$
1,420
$
1,028
$
5,487
$
4,634
Per common unit data
(fully diluted):
Earnings per common unit
$
0.65
$
0.47
$
2.50
$
2.10
Average common units outstanding (in
millions)
2,194
2,200
2,199
2,203
Supplemental
financial data:
Net cash flow provided by operating
activities
$
2,725
$
2,126
$
8,039
$
8,513
Cash flows used in investing
activities
$
645
$
414
$
4,954
$
2,135
Cash flows used in financing
activities
$
2,129
$
1,105
$
5,844
$
4,571
Total debt principal outstanding at end of
period
$
28,566
$
29,821
$
28,566
$
29,821
Non-GAAP Distributable Cash Flow (1)
$
2,028
$
1,659
$
7,751
$
6,608
Non-GAAP Adjusted EBITDA (2)
$
2,376
$
2,112
$
9,309
$
8,381
Non-GAAP Adjusted Cash flow from
operations (3)
$
2,097
$
1,807
$
8,093
$
7,147
Non-GAAP Free Cash Flow (4)
$
2,035
$
1,722
$
2,929
$
6,296
Non-GAAP Adjusted Free Cash Flow (4)
$
1,407
$
1,403
$
2,983
$
4,930
Gross operating margin by segment:
NGL Pipelines & Services
$
1,294
$
1,109
$
5,142
$
4,316
Crude Oil Pipelines & Services
418
438
1,655
1,680
Natural Gas Pipelines & Services
315
195
1,042
1,155
Petrochemical & Refined Products
Services
339
338
1,517
1,357
Total segment gross operating margin
(5)
2,366
2,080
9,356
8,508
Net adjustment for shipper make-up rights
(6)
2
7
(47
)
53
Non-GAAP total gross operating margin
(7)
$
2,368
$
2,087
$
9,309
$
8,561
(1)
See Exhibit F for reconciliation to GAAP
net cash flow provided by operating activities.
(2)
See Exhibit G for reconciliation to GAAP
net cash flow provided by operating activities.
(3)
See Exhibit E for reconciliation to GAAP
net cash flow provided by operating activities.
(4)
See Exhibit D for reconciliation to GAAP
net cash flow provided by operating activities.
(5)
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”).
(6)
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.
(7)
See Exhibit H 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,
2022
2021
2022
2021
Selected operating
data: (1)
NGL Pipelines & Services, net:
NGL pipeline transportation volumes
(MBPD)
3,867
3,484
3,703
3,412
NGL marine terminal volumes (MBPD)
751
651
723
658
NGL fractionation volumes (MBPD)
1,336
1,327
1,339
1,253
Equity NGL-equivalent production volumes
(MBPD) (2)
173
158
182
167
Fee-based natural gas processing volumes
(MMcf/d) (3,4)
5,445
4,029
5,182
4,057
Crude Oil Pipelines & Services,
net:
Crude oil pipeline transportation volumes
(MBPD)
2,278
2,322
2,222
2,088
Crude oil marine terminal volumes
(MBPD)
756
649
788
645
Natural Gas Pipelines & Services,
net:
Natural gas pipeline transportation
volumes (BBtus/d) (5)
17,605
14,564
17,107
14,249
Petrochemical & Refined Products
Services, net:
Propylene production volumes (MBPD)
89
105
101
99
Butane isomerization volumes (MBPD)
105
86
108
85
Standalone DIB processing volumes
(MBPD)
157
151
159
154
Octane enhancement and related plant sales
volumes (MBPD) (6)
38
32
39
33
Pipeline transportation volumes, primarily
refined products and petrochemicals (MBPD)
740
704
747
890
Refined products and petrochemicals marine
terminal volumes (MBPD) (7)
215
207
202
234
Total, net:
NGL, crude oil, petrochemical and refined
products pipeline transportation volumes (MBPD)
6,885
6,510
6,672
6,390
Natural gas pipeline transportation
volumes (BBtus/d)
17,605
14,564
17,107
14,249
Equivalent pipeline transportation volumes
(MBPD) (8)
11,518
10,343
11,174
10,140
NGL, crude oil, refined products and
petrochemical marine terminal volumes (MBPD)
1,722
1,507
1,713
1,537
(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)
Primarily represents the NGL and
condensate volumes we earn and take title to in connection with our
processing activities. The total equity NGL-equivalent production
volumes also include residue natural gas volumes from our natural
gas processing business.
(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 enhancement and isobutane dehydrogenation (“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)
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
Third Quarter
$4.02
$0.35
$1.16
$1.34
$1.34
$1.62
$0.82
$0.36
Fourth Quarter
$5.84
$0.39
$1.24
$1.46
$1.46
$1.82
$0.66
$0.33
2021 Averages
$3.85
$0.31
$1.04
$1.18
$1.18
$1.56
$0.72
$0.35
2022 by quarter:
First Quarter
$4.96
$0.40
$1.30
$1.59
$1.60
$2.21
$0.63
$0.39
Second Quarter
$7.17
$0.59
$1.24
$1.50
$1.68
$2.17
$0.61
$0.40
Third Quarter
$8.20
$0.55
$1.08
$1.19
$1.44
$1.72
$0.47
$0.28
Fourth Quarter
$6.26
$0.39
$0.79
$0.97
$1.03
$1.54
$0.32
$0.18
2022 Averages
$6.65
$0.48
$1.10
$1.31
$1.44
$1.91
$0.51
$0.31
(1)
Natural gas prices are based on Henry-Hub
Inside FERC commercial index prices as reported by Platts, which is
a division of S&P Global, 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, which is a division of Dow Jones.
(3)
Polymer grade propylene prices represent
average contract pricing for such product as reported by IHS Markit
(“IHS”). Refinery grade propylene prices represent weighted-average
spot prices for such product as reported by IHS.
WTI
Midland
Houston
LLS
Crude Oil,
Crude Oil,
Crude Oil
Crude Oil,
$/barrel (1)
$/barrel (2)
$/barrel (2)
$/barrel (3)
2021 by quarter:
First Quarter
$57.84
$59.00
$59.51
$59.99
Second Quarter
$66.07
$66.41
$66.90
$67.95
Third Quarter
$70.56
$70.74
$71.17
$71.51
Fourth Quarter
$77.19
$77.82
$78.27
$78.41
2021 Averages
$67.92
$68.49
$68.96
$69.47
2022 by quarter:
First Quarter
$94.29
$96.43
$96.77
$96.77
Second Quarter
$108.41
$109.66
$109.96
$110.17
Third Quarter
$91.56
$93.41
$93.77
$94.17
Fourth Quarter
$82.64
$83.97
$84.33
$85.50
2022 Averages
$94.23
$95.87
$96.21
$96.65
(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 $0.69 per
gallon during the fourth quarter of 2022 versus $0.89 per gallon
during the fourth quarter of 2021. Fluctuations in our consolidated
revenues and cost of sales amounts are explained in large part by
changes in energy commodity prices. An increase in our consolidated
marketing revenues due to higher energy commodity sales prices may
not result in an increase in gross operating margin or cash
available for distribution, since our consolidated cost of sales
amounts would also be expected to increase due to comparable
increases in the purchase prices of the underlying energy
commodities. The same type of relationship would be true in the
case of lower energy commodity sales prices and purchase costs.
Enterprise Products Partners
L.P.
Exhibit D
Free Cash Flow and Adjusted Free Cash
Flow – UNAUDITED
($ in millions)
For the Three Months
Ended December 31,
For the Year
Ended December 31,
2022
2021
2022
2021
Free
Cash Flow (“FCF”) and Adjusted FCF
Net cash flow provided by operating
activities (GAAP)
$
2,725
$
2,126
$
8,039
$
8,513
Adjustments to reconcile net cash flow
provided by operating activities to FCF and Adjusted FCF (addition
or subtraction indicated by sign):
Cash used in investing activities
(645
)
(414
)
(4,954
)
(2,135
)
Cash contributions from noncontrolling
interests
3
49
7
72
Cash distributions paid to noncontrolling
interests
(48
)
(39
)
(163
)
(154
)
FCF (non-GAAP)
$
2,035
$
1,722
$
2,929
$
6,296
Net effect of changes in operating
accounts, as applicable
(628
)
(319
)
54
(1,366
)
Adjusted FCF (non-GAAP)
$
1,407
$
1,403
$
2,983
$
4,930
FCF is a non-GAAP measure of how much cash a business generates
after accounting for capital expenditures such as plants or
pipelines. Additionally, Adjusted FCF is a non-GAAP measure of how
much cash a business generates, excluding the net effect of changes
in operating accounts, after accounting for capital expenditures.
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. We
believe that Adjusted FCF is also important to traditional
investors for the same reasons as FCF, without regard for
fluctuations caused by timing of when amounts earned or incurred
were collected, received or paid from period to period. Since we
partner with other companies to fund certain capital projects of
our consolidated subsidiaries, our determination of FCF and
Adjusted FCF appropriately reflect the amount of cash contributed
from and distributed to noncontrolling interests.
Enterprise Products Partners
L.P.
Exhibit E
Adjusted Cash flow from operations –
UNAUDITED
($ in millions)
For the Three Months
Ended December 31,
For the Year
Ended December 31,
2022
2021
2022
2021
Adjusted
Cash flow from operations (“Adjusted CFFO”)
Net cash flow provided by operating
activities (GAAP)
$
2,725
$
2,126
$
8,039
$
8,513
Adjustments to reconcile net cash flow
provided by operating activities to
Adjusted Cash flow from operations
(addition or subtraction indicated by sign):
Net effect of changes in operating
accounts, as applicable
(628
)
(319
)
54
(1,366
)
Adjusted CFFO (non-GAAP)
$
2,097
$
1,807
$
8,093
$
7,147
Adjusted CFFO is a non-GAAP measure that represents net cash
flow provided by operating activities before the net effect of
changes in operating accounts, as summarized from the Company’s
Unaudited Condensed Consolidated Statements of Cash Flows. We
believe that it is important to consider this non-GAAP measure as
it can often be a better way to measure the amount of cash
generated from our operations that can be used to fund our capital
investments or return value to our investors through cash
distributions and buybacks, without regard for fluctuations caused
by timing of when amounts earned or incurred were collected,
received or paid from period to period.
Enterprise Products Partners L.P.
Exhibit F
Distributable Cash Flow –
UNAUDITED
($ in millions)
For the Three Months
Ended December 31,
For the Year
Ended December 31,
2022
2021
2022
2021
Distributable Cash Flow (“DCF”)
Net income attributable to common
unitholders (GAAP)
$
1,420
$
1,028
$
5,487
$
4,634
Adjustments to net income attributable to
common unitholders to derive DCF (addition or subtraction indicated
by sign):
Depreciation, amortization and accretion
expenses
570
546
2,245
2,140
Cash distributions received from
unconsolidated affiliates
133
143
544
590
Equity in income of unconsolidated
affiliates
(129
)
(136
)
(464
)
(583
)
Asset impairment charges
5
120
53
233
Change in fair market value of derivative
instruments
32
59
78
(27
)
Deferred income tax expense
36
7
60
40
Sustaining capital expenditures (1)
(138
)
(99
)
(372
)
(430
)
Other, net (2)
(3
)
(15
)
(2
)
(128
)
Operational DCF
1,926
1,653
7,629
6,469
Proceeds from asset sales and other
matters
102
6
122
64
Monetization of interest rate derivative
instruments accounted for as cash flow hedges
–
–
–
75
DCF (non-GAAP)
$
2,028
$
1,659
$
7,751
$
6,608
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
628
319
(54
)
1,366
Sustaining capital expenditures
138
99
372
430
Other, net
(69
)
49
(30
)
109
Net cash flow provided by operating
activities (GAAP)
$
2,725
$
2,126
$
8,039
$
8,513
(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 year ended December 31, 2021 includes
$100 million of accounts receivable that we do not expect to
collect in the normal billing cycle.
DCF is an important non-GAAP liquidity measure for our common
unitholders since it serves as an indicator of our success in
providing a cash return on investment. Specifically, this liquidity
measure indicates to investors whether or not we are generating
cash flows at a level that can sustain or support an increase in
our quarterly cash distributions. DCF is also a quantitative
standard used by the investment community with respect to publicly
traded partnerships because the value of a partnership unit is, in
part, measured by its yield, which is based on the amount of cash
distributions a partnership can pay to a common unitholder.
Enterprise Products Partners
L.P.
Exhibit G
Adjusted EBITDA - UNAUDITED
($ in millions)
For the Three Months
Ended December 31,
For the Year
Ended December 31,
2022
2021
2022
2021
Net income (GAAP)
$
1,452
$
1,064
$
5,615
$
4,755
Adjustments to net income to derive
Adjusted EBITDA (addition or subtraction indicated by sign):
Depreciation, amortization and accretion
in costs and expenses (1)
550
524
2,156
2,055
Interest expense, including related
amortization
307
328
1,244
1,283
Cash distributions received from
unconsolidated affiliates
133
143
544
590
Equity in income of unconsolidated
affiliates
(129
)
(136
)
(464
)
(583
)
Asset impairment charges
5
120
53
233
Provision for income taxes
28
13
82
70
Change in fair market value of commodity
derivative instruments
32
59
78
(27
)
Other, net
(2
)
(3
)
1
5
Adjusted EBITDA (non-GAAP)
2,376
2,112
9,309
8,381
Adjustments to reconcile Adjusted EBITDA
to net cash flow provided by operating activities (addition or
subtraction indicated by sign):
Interest expense, including related
amortization
(307
)
(328
)
(1,244
)
(1,283
)
Deferred income tax expense
36
7
60
40
Provision for income taxes
(28
)
(13
)
(82
)
(70
)
Net effect of changes in operating
accounts, as applicable
628
319
(54
)
1,366
Other, net
20
29
50
79
Net cash flow provided by operating
activities (GAAP)
$
2,725
$
2,126
$
8,039
$
8,513
(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 H
Gross Operating Margin –
UNAUDITED
($ in millions)
For the Three Months
Ended December 31,
For the Year
Ended December 31,
2022
2021
2022
2021
Total gross operating margin
(non-GAAP)
$
2,368
$
2,087
$
9,309
$
8,561
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)
(538
)
(513
)
(2,107
)
(2,011
)
Asset impairment charges in operating
costs and expenses
(5
)
(120
)
(53
)
(233
)
Net gains (losses) attributable to asset
sales and related matters in operating costs and expenses
2
3
(1
)
(5
)
General and administrative costs
(62
)
(54
)
(241
)
(209
)
Total operating income (GAAP)
$
1,765
$
1,403
$
6,907
$
6,103
(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 (6) to Exhibit A of
this press release.
Enterprise Products Partners
L.P.
Exhibit I
Other Information – UNAUDITED
($ in millions)
For the Three Months
Ended December 31,
For the Year
Ended December 31,
2022
2021
2022
2021
Capital investments:
Capital expenditures
$
761
$
417
$
1,964
$
2,223
Cash used for business combinations, net
of cash received
–
–
3,204
–
Investments in unconsolidated
affiliates
–
1
1
2
Other investing activities
2
7
5
20
Total capital investments
$
763
$
425
$
5,174
$
2,245
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,
2022
2021
2022
2021
Mark-to-market gains (losses) in gross
operating margin:
NGL Pipelines & Services
$
(40
)
$
(50
)
$
(52
)
$
40
Crude Oil Pipelines & Services
8
(3
)
(30
)
(3
)
Natural Gas Pipelines & Services
(1
)
(2
)
(3
)
(2
)
Petrochemical & Refined Products
Services
1
(4
)
7
(8
)
Total mark-to-market impact on gross
operating margin
$
(32
)
$
(59
)
$
(78
)
$
27
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230201005301/en/
Randy Burkhalter, Vice President, Investor Relations, (713)
381-6812 Rick Rainey, Vice President, Media Relations, (713)
381-3635
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