moody’s/standard & poor’s baa1/bbb+
TRANSCRIPT
2ND QUARTER 2017 FACT SHEET
DISTRIBUTION REINVESTMENT PLAN
AVAILABLE TO ALL UNITHOLDERS
OFFERS 5% DISCOUNT ON REINVESTED UNITS
VISIT THE INVESTOR RELATIONS SECTION FOR DRIP PROSPECTUS.
ENTERPRISEPRODUCTS.COM
MOODY’S/STANDARD & POOR’S
Baa1/BBB+
Raised cash distribution 52 consecutive quartersBalanced distribution growth while retaining cash flow
Significant insider ownership with management and a�liates owning approximately 32 percent
Investment grade credit rating with focus on financial flexibility
PARTNERSHIP PROFILE
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, petrochemicals and refined products
$26.02
1226.5%
$1.68/UnitEPD UNIT PRICE 8/23/17
FINANCIAL PERFORMANCE
CURRENT ANNUALIZED DISTRIBUTION
YIELD RANKING ON FORTUNE 500
SENIOR UNSECURED DEBT RATINGS
EPD
NYSE
LARGEST GROWTH CAPITAL PROJECTS
Enterprise generated distributable cash flow of $1.1 billion for the second quarter of 2017, which provided 1.2 times coverage of the $0.42 per unit cash distribution declared for the second quarter of 2017 and resulted in $145 million of retained distributable cash flow. For the first six months of 2017, distributable cash flow of $2.2 billion provided 1.2 times coverage of the aggregate $0.835 per unit cash distribution, and Enterprise retained $381 million of distributable cash flow, which is available to reinvest in growth capital projects and reduce the need to issue additional equity.
Enterprise reported increases in all of its primary financial measures and most operational metrics for the second quarter of 2017, reflecting its strength supported by the diversification of its businesses and the geographical reach of its asset footprint. The partner-ship’s businesses at its Mont Belvieu complex, its gas processing facilities and pipelines handling Permian, Rockies and Marcellus production generated strong growth in the second quarter of 2017. Enterprise is seeing a volume response to producer activities in the Permian and Haynesville regions and believes the increase in rig counts and drilled, uncompleted wells will result in higher levels of production flowing into its system later in 2017 and in 2018.
Total capital spending was $869 million in the second quarter of 2017, and $1.3 billion for the first six months of 2017. Included in these investments were sustaining capital expenditures of $62 million in the second quarter of 2017 and $110 million in the first six months of 2017. For 2017, we currently expect to invest in the range of $2.8 billion to $3.0 billion for growth capital projects, including $191 million for the Azure Midstream Partners acquisition, and approximately $250 million for sustaining capital expenditures.
On July 15, 2014, Enterprise announced a two-for-one split of common units representing limited partner interests. The common unit split was accomplished by distributing one additional common unit for each common unit outstanding.
In November 2010, Enterprise amended its partnership agreement to eliminate the general partner’s IDRs.
ELIMINATED GENERAL PARTNER INCENTIVEDISTRIBUTION RIGHTS (“IDRS”)
On July 05, 2017, Enterprise announced an increase in the partnership’s quarterly cash distribution with respect to the second quarter, 2017 to $0.42 per unit, representing a 5.0 percent increase over the distribution paid with respect to the second quarter of 2016. This was the 61st increase since the initial public o�ering in July 1998 and the 52nd consecutive quarterly increase.
DISTRIBUTION ANNOUNCEMENT
TWO–FOR–ONE SPLIT OF COMMON UNITS
SECOND QUARTER 2017 EARNINGS HIGHLIGHTS
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2
3
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Enterprise announced plans to build a 400-mile, 24-inch diameter crude oil and condensate pipeline to transport product (in four segregated batches) from Midland, Texas to the Enterprise Sealy storage facility west of Houston. From Sealy, the new pipeline would link to Enterprise’s ECHO terminal through an interconnect with the Rancho II pipeline. Through ECHO, customers will have direct access to every re�nery in Houston, Texas City, Beaumont and Port Arthur, as well as Enterprise’s dock facilities. Commercial service is expected to begin at the end of 2017, ramping to 450 MBPD through early 2018.
CRUDE OIL AND CONDENSATE PIPELINE
MIDLAND-TO-SEALY PIPELINE.
The new facility, located in Mont Belvieu, Texas, will integrate with the partnership’s existing propylene fractionation facilities, and provide operational reliability and flexibility for both the PDH facility and fractionation facilities. The PDH facility is supported by long-term, fee-based contracts and is expected to be completed and begin commercial service in September-2017.
PDH FACILITY
THE PROPANE DEHYDROGENATION (“PDH”) FACILITY IS DESIGNED TO PRODUCE UP TO 1.65 BILLION POUNDS (25,000 BPD) PER YEAR OF POLYMER GRADE PROPYLENE.
The Shin Oak NGL pipeline will originate at the Hobbs facility in Gaines County, Texas. The 24-inch diameter pipeline is expected to have an initial design capacity of 250 MBPD and be expandable to 600 MBPD. The project is supported by long-term shipper commitments, primarily being fed by the Enterprise processing facilities, and is expected to be placed into service during the second quarter of 2019.
SHIN OAK PIPELINE
IN APRIL 2017, ENTERPRISE ANNOUNCED PLANS TO BUILD A 571-MILE PIPELINE TO TRANSPORT GROWING NGL PRODUCTION FROM THE PERMIAN BASIN TO ITS NGL FRACTIONATION AND STORAGE COMPLEX LOCATED IN MONT BELVIEU, TEXAS.
This will add 300 million cubic feet per day (“MMcf/d”) of incremental processing capacity to the facility and will bring the partnership’s total Permian basin natural gas processing capacity to more than 1 billion cubic feet per day (“Bcf/d”) and more than 150 thousand barrels per day (“MBPD”) of Natural gas liquid (“NGL”) extraction capacity in the Permian Basin. The Orla II capacity is expected to be available in the third quarter of 2018.
ORLA NATURAL GAS PROCESSING PLANT
IN JUNE 2017, ENTERPRISE ANNOUNCED ORLA II, A SECOND TRAIN AT THE NATURAL GAS PROCESSING FACILITY CURRENTLY UNDER CONSTRUCTION IN REEVES COUNTY NEAR ORLA, TEXAS.
5
The new fractionator, which is expected to be completed by mid-2018, will have a nameplate capacity of 85 MBPD. Upon completion of this expansion project, we would have approximately 755 MBPD of total NGL fractionation capacity at the Mont Belvieu complex and a combined 1.2 MMBPD of capacity company wide.
NINTH MONT BELVIEU FRACTIONATOR
IN MARCH 2017, ENTERPRISE RESUMED CONSTRUCTION OF ITS NINTH NGL FRACTIONATOR AT OUR MONT BELVIEU, TEXAS COMPLEX IN ANTICIPATION OF INCREASED NGL PRODUCTION FROM THE PERMIAN BASIN.
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The project, which is underwritten by long-term contracts with investment-grade customers, is expected to be completed in the fourth quarter of 2019. Isobutylene produced by the new plant will provide additional feedstocks for downstream octane enhancement and petrochemical facilities.
ISOBUTANE DEHYDROGENATION UNIT AT MONT BELVIEU
IN JANUARY 2017, ENTERPRISE ANNOUNCED PLANS TO CONSTRUCT A NEW ISOBUTANE DEHYDROGENATION (“IBDH”) UNIT AT ITS MONT BELVIEU COMPLEX THAT IS EXPECTED TO HAVE THE CAPABILITY TO PRODUCE 425,000 TONS PER YEAR OF ISOBUTYLENE.
FINANCIAL HIGHLIGHTS
NOVEMBER 2010: Enterprise GP Holdings L.P.
[“EPE”]. EPE unitholders received 1.5 EPD common
units in exchange for each EPE limited partner unit.
OCTOBER 2009: TEPPCO Partners, L.P.
[“TPP”]. TPP unitholders received 1.24 EPD common
units in exchange for each TPP limited partner unit.
SEPTEMBER 2004: The partnership completed
a $6 billion merger with GulfTerra Energy Partners,
L.P. (“GTM”).
AUGUST 2002: The partnership completed a
$1.2 billion acquisition of the MAPL and Seminole NGL
pipelines from Williams.
SEPTEMBER 1999: The partnership completed a
$529 million acquisition of Shell Oil Company’s Louisiana
and Mississippi Midstream NGL business.
POWDER RIVER
WOODFORD
PERMIAN
BAKKEN
PICEANCE
UINTA
SAN JUAN
MISSISSIPPIAN
GRANITE WASH
BARNETT
EAGLE FORD
HAYNESVILLE
TUSCALOOSAMARINE
GREEN RIVER
NEW ALBANY
FAYETTEVILLE
DJ
ASSET OVERVIEW
27 NATURAL GAS PROCESSING PLANTS
22 NGL AND PROPYLENEFRACTIONATION FACILITIES
≈260 MMBBLS OF NGL, CRUDE OIL & PETROCHEMICAL/REFINED PRODUCTS STORAGE CAPACITY
14 BCF OF NATURAL GAS STORAGE CAPACITY
24,650 MILES OF NGL, PETROCHEMICAL AND REFINED PRODUCTS PIPELINES
19,850 MILES OF NATURAL GAS PIPELINES
5,400 MILES OF CRUDE OIL PIPELINES
116 MBPD OF BUTANEISOMERIZATION CAPACITY(MONT BELVIEU)
18 IMPORT/EXPORT SHIP TERMINALS
11 CONDENSATE DISTILLATION FACILITIES
3,5,6
MAJOR MERGERS & ACQUISITIONS
1
2
4
FEBRUARY 2015: Oiltanking Partners, L.P.
(“OILT”). OILT unitholders received 1.3 EPD common
units in exchange for each OILT limited partner unit.
JULY 1, 2015: The partnership completed a
$2.15 billion acquisition of the Eagle Ford Midstream assets
from Pioneer and Reliance.
SEPTEMBER 2011: Duncan Energy Partners L.P.
[“DEP”]. DEP unitholders received 1.01 EPD common
units in exchange for each DEP limited partner unit.
NOVEMBER 2010: Enterprise GP Holdings L.P.
[“EPE”]. EPE unitholders received 1.5 EPD common
units in exchange for each EPE limited partner unit.
OCTOBER 2009: TEPPCO Partners, L.P.
[“TPP”]. TPP unitholders received 1.24 EPD common
units in exchange for each TPP limited partner unit.
UTICA
MARCELLUS
TEXAS
HOUSTON
SEALY
BEAUMONT
CORPUS CHRISTI
FREEPORT / JONES CREEK
1
HOUSTON-AREA ASSETS
POWER GENERATION
RESIDENTIAL FUEL
INDUSTRIAL FUEL
CRUDE OILREFINING INDUSTRY
PETROCHEMICALS
MOTOR GASOLINE
PETROCHEMICALS AND INDUSTRIAL/RESIDENTIAL FUEL
GASOLINE ADDITIVES AND PETROCHEMICALS
GASOLINE ADDITIVES AND PETROCHEMICALSTo fractionators for separation
into NGL purity products
Dry Natural Gas(principally methane with ethane)
Mixed NGLS
NGL Fractionation
MIDSTREAM ENERGY SERVICES
NATURAL GAS PROCESSING PLANT
NATURAL GASPIPELINES
NATURAL GASSTORAGE
NGL STORAGE
ETHANE
PROPANE
ISOBUTANE
NORMAL BUTANE
NATURAL GASOLINE
NGLPIPELINE
CRUDE OILPIPELINES
BARGES
TRUCKS
CRUDE OIL REFINING
CRUDE OILSTORAGE
REFINED PRODUCTS STORAGE
NATURAL GASPIPELINES
REFINED PRODUCTS PIPELINES
MARINE TERMINALS
MIXED BUTANES
NATURAL GAS STORAGE
NGL/REFINED PRODUCTS STORAGE
NATURAL GAS PIPELINE NGL/REFINED PRODUCTS PIPELINE
CRUDE OIL PIPELINE
IMPORT/EXPORT TERMINAL
MARINE SERVICES
NGL/REFINED PRODUCTS TERMINAL
CRUDE OIL TERMINAL/STORAGE
NGL FRACTIONATIONFACILITY
MAP KEY
OCTANE ENHANCEMENT FACILITY
ISOMERIZATION FACILITY
PROPYLENE FRACTIONATION FACILITY
NATURAL GAS PROCESSING/TREATING PLANT
$5.5 BILLION GROSS OPERATING MARGIN FOR 12 MONTHS ENDED JUNE 30, 2017
2017-2020E(1) ≈ $9 BILLION (PREDOMINANTLY FEE-BASED)
Growth capital projects result in additional revenue from existing assets or from expansion of our asset base through construction of new facilities.
13%PETROCHEMICAL & REFINED PRODUCTS SERVICES
56%NGL PIPELINES & SERVICES
13%NATURAL GAS PIPELINES & SERVICES
(1)
22%
30%
47%
NGL PIPELINES & SERVICES
CRUDE OIL PIPELINES & SERVICES
PETROCHEMICAL & REFINED PRODUCTS SERVICES
18%CRUDE OIL PIPELINES & SERVICES
1% NATURAL GAS PIPELINES & SERVICES
2013
(360.3)
(20.2)
(1.7)
(35.1)
(379.2)
(14.0)
(0.3)
(45.7)
Subtract depreciation, amortization and accretion expense
Subtract asset impairment and related charges
Subtract net losses attributable to asset sales, insurance recoveries and related property damage
Subtract general and administrative costs
1,254.21,377.9TOTAL GROSS OPERATING MARGIN (Non-GAAP)Adjustments to reconcile non-GAAP gross operating margin to GAAP operating income:
5,516.3
(1,493.6)
(56.1)
9.1
(177.2)
$
3 MONTHS ENDEDJUNE 30, 2017
3 MONTHS ENDEDJUNE 30, 2016
12 MONTH ENDEDJUNE 30, 2017
Enterprise evaluates segment performance based on the non-GAAP financial measure of gross operating margin, which is an important performance measure of the core profitability of its operations. This measure forms the basis of Enterprise’s internal financial reporting and is used by its management in deciding how to allocate capital resources among business segments. Operating income is the GAAP financial measure most directly comparable to total segment gross operating margin.
OPERATING INCOME (GAAP) 836.9 $938.7 $ 3,798.5 $
DIVERSIFIED BUSINESS MIX
(AMOUNTS IN MILLIONS)
DEC
LAR
ED P
ER U
NIT
$2.00
$1.00
$0.00
BIL
LIO
NS 25% CAGR
$45.0
$40.0
$35.0
$30.0
$25.0
$20.0
$15.0
$10.0
$5.0
$50.0
QUARTERLY CASH DISTRIBUTIONS
$0
7% CAGR
ASSETS
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
2Q
20
17
A
NN
UA
LIZE
D
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
$0.50
$1.50
$1.75
$1.25
$0.75
$0.25
$55.0 $51.3
6/3
0/2
01
7
$1.68
20
16
INCREASING ASSET FOOTPRINT LEADING TO INCREASED CASH DISTRIBUTIONS
GROWTH CAPITAL ALLOCATIONGROSS OPERATING MARGIN BY SEGMENT
$ $
Significant expansion sinceEnterprise Products Partners’ initialpublic o�ering in 1998
PROVEN TRACK RECORD OF EXECUTINGGROWTH STRATEGY
Balanced distribution growth while retaining cash flow
Raised distribution 52 consecutive quarters
Significant insider ownership with management and a�liates owning approximately 32 percent
HISTORY OF STRONG FUNDAMENTAL AND FINANCIAL DISCIPLINE WHILE EXECUTING GROWTH STRATEGY AND PROVIDING ATTRACTIVE RETURNS
Connected to 100 percent of the ethylene steam crackers in the U.S (largest market for NGLs) and connected to ≈90 percent of the refineries East of the Rockies
STRATEGICALLY LOCATED TO SERVE THE MOST PROLIFIC BASINS FOR NATURAL GAS,CRUDE OIL AND NGLS IN THE UNITED STATES
ENTERPRISE IS A PUBLICLY TRADED PARTNERSHIP WHICH OPERATES IN THE FOLLOWING WAYS THAT ARE DIFFERENT FROM A PUBLICLY TRADED STOCK CORPORATION:
Unitholders own limited partnership units and receive cash distributions instead of owning shares of common stock and receiving dividends
A partnership generally is not a taxable entity and does not pay federal income taxes. All of the annual income, gains, losses, deductions or credits flow through the partnership to the unitholders on a per unit basis
Unitholders are required to report their allocated share of these amounts on their income tax returns whether or not any cash distributions are paid by the partnership
Cash distributions paid by a partnership to a unitholder are generally not taxable, unless the amount of any cash distributed is in excess of the unitholder’s adjusted basis in his partnership interest
Enterprise provides each unitholder a Schedule K-1 tax package that includes each unitholder’s allocated share of reportable partnership items and other partnership information necessary to complete their income tax returns. The K-1 provides a unitholder the required tax information for their ownership interest in the partnership, just as a Form 1099-DIV does for a stockholder’s ownership interest in a corporation
This fact sheet includes “forward-looking statements” as defined by the SEC. All statements, other than statements of historical fact, included herein that address plans, activities, events or developments that Enterprise expects, believes or anticipates will or may occur in the future are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to di�er materially, such as the required approvals by regulatory agencies and the impact of competition, regulation and other risk factors included in the reports filed with the SEC by Enterprise. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. Except as required by law, Enterprise does not intend to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.
FORWARD-LOOKING STATEMENTS
ATTRACTIVE YIELD AND TAX DEFERRAL
Enterprise Plaza1100 Louisiana Street, 10th FloorHouston, TX 77002-5227
713-381-6500
P.O. Box 4324Houston, TX 77210-4324
RANDY BURKHALTERVice President
JACKIE RICHERTDirector
[email protected] [email protected]
INVESTOR RELATIONS E-MAIL CONTACTS
HEADQUARTERS
MAILING ADDRESS
ENTERPRISE PRODUCTS PARTNERS L.P.
KEY INVESTMENT CONSIDERATIONS
PUBLICLY TRADED PARTNERSHIP ATTRIBUTES
58.4
(14.5)
11.5
(41.4)
(108.2)
62.3
(1.2)
12.3
(36.9)
370.9
1,039.71,051.9Adjustments to non-GAAP distributable cash flow to derive GAAP net cash flows provided by operating activities:
945.51,459.3
Distributable cash flow is a non-GAAP financial measure that indicates success in generating cash flows at a level that supports Enterprise’s cash distributions. Distributable cash flow is also a quantitative standard used by the investment community with respect to publicly traded partnerships because the value of a partnership unit is, in part, measured by its yield, which is based on the amount of cash distributions a partnership can pay to a unitholder. The GAAP measure most directly comparable to distributable cash flow is net cash flows provided by operating activities.
$
$
DISTRIBUTABLE CASH FLOW (Non-GAAP)
(AMOUNTS IN MILLIONS)
Add sustaining capital expenditures reflected in distributable cash flow
Subtract cash proceeds from asset sales and insurance recoveries
Add net income attributable to noncontrolling interests
Subtract miscellaneous non-cash and other amounts to reconcile, as applicable
Subtract the net e�ect of changes in operating accounts, as applicable
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES
WHERE YOU CAN
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866-230-0745
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INVESTMENT GRADE CREDIT RATING WITH FOCUS ON FINANCIAL FLEXIBILITY
ELIMINATED GENERAL PARTNER IDRS IN NOVEMBER 2010
EXPECT TO GENERATE ADDITIONAL CASH FLOW IN 2017-2020 FROM APPROXIMATELY ≈$9 BILLION OF PLANNED GROWTH CAPITAL PROJECTS
FOCUS ON LONG-TERM COST OF CAPITAL TO SUPPORT VALUE CREATION
3 MONTHS ENDED2ND QUARTER 2017
3 MONTHS ENDED2ND QUARTER 2016
$
$