Enterprise Reports 2020 Results
Enterprise Products Partners L.P. reported a net income of $3.8 billion for 2020, down from $4.6 billion in 2019, with a fully diluted earnings per unit of $1.71. The company faced $891 million in asset impairment charges primarily affecting its Natural Gas Pipelines segment. Cash flow from operations was $5.9 billion, while free cash flow rose 8% to $2.7 billion. Distributable cash flow was $6.4 billion, covering distributions at a ratio of 1.6 times. Growth projects for 2021 are anticipated to enhance cash flow, despite ongoing uncertainties in the energy sector due to the pandemic.
- Free cash flow increased 8% to $2.7 billion in 2020.
- Distributable cash flow of $6.4 billion covered distributions at a ratio of 1.6 times.
- Enterprise declared a 1.1% increase in distributions to $1.785 per unit for 2020.
- Successful execution of growth capital expenditures funded over 75% by cash flow.
- Net income decreased to $3.8 billion from $4.6 billion in 2019.
- Significant asset impairment charges of approximately $891 million impacted earnings.
- Decline in cash flow from operations, down to $5.9 billion from $6.5 billion in 2019.
- Lower natural gas processing volumes and margins due to hurricanes' impact.
Enterprise Products Partners L.P. (“Enterprise”) (NYSE: EPD) today announced its financial results for the three months and year ended December 31, 2020.
Year Ended 2020 Results
Enterprise reported net income attributable to common unitholders for 2020 of
Net cash flow provided by operating activities, or cash flow from operations (“CFFO”), for 2020 was
Distributable cash flow (“DCF”) was
Distributions declared with respect to 2020 increased 1.1 percent to
“We are extremely thankful and proud of Enterprise’s employees for their dedication and perseverance in responding to the challenges and opportunities during 2020 caused by the effects of the pandemic,” stated A. J. “Jim” Teague, co-chief executive officer of Enterprise’s general partner. “The diversification of Enterprise’s fee-based businesses, storage assets, marketing activities and cost control enabled us to generate
“We are optimistic that the combination of the vaccines, significant government stimulus and shorter economic cycles associated with pandemics and natural disasters will lead to the world emerging from this economic sudden stop in 2021. We are encouraged by the early signs of a rebound in the global economy that we see through strong domestic and international demand for NGLs, ethylene and propylene and the continuing recovery in the demand for refined products,” said Teague.
“There are still numerous uncertainties and headwinds for the U.S. energy industry as we begin 2021. The world, with its growing population of almost 8 billion people, including 3 billion living in energy poverty, is evolving and we will evolve with it. We have a successful track record of using technology to become more efficient and repurposing assets to adapt to changes in energy market fundamentals. We believe we are in a position of financial strength to manage through this period. Our financial objectives today are consistent with those when we went public in 1998: building a company that is sustainable for the long-term by maintaining financial flexibility and preserving a strong balance sheet; investing in organic growth projects and acquisitions with attractive returns on capital; and prudently returning capital to our limited partners,” stated Teague.
“In 2021, Enterprise has three major growth capital projects scheduled to begin commercial operations: an expansion of one of the partnership’s ethane pipelines serving the petrochemical industry on the U.S. Gulf Coast (first quarter 2021); our Gillis natural gas pipeline that will deliver Haynesville production to LNG markets in southwestern Louisiana (fourth quarter of 2021); and a hydrotreater in Mont Belvieu that will remove sulfur in natural gasoline (second half of 2021). These projects will provide new sources of cash flow to the partnership,” continued Teague.
“We continue to look at opportunities to increase our use of renewable power and to economically reduce emissions. We estimate by 2025 that 25 percent of our power will be from renewable sources. In addition, several of our growth capital projects in the early stages of development are consistent with the theme of energy evolution,” said Teague.
Fourth Quarter and Full Year 2020 Financial Highlights
|
Three Months Ended
|
Year Ended
|
||||||||||
|
2020 |
2019 |
2020 |
2019 |
||||||||
($ in millions, except per unit amounts) |
|
|
|
|
||||||||
Operating income |
$ |
708 |
$ |
1,418 |
$ |
5,035 |
$ |
6,079 |
||||
Net income (1) |
$ |
366 |
$ |
1,125 |
$ |
3,886 |
$ |
4,687 |
||||
Fully diluted earnings per unit (1) |
$ |
0.15 |
$ |
0.50 |
$ |
1.71 |
$ |
2.09 |
||||
CFFO (2) |
$ |
1,600 |
$ |
1,694 |
$ |
5,892 |
$ |
6,521 |
||||
Total gross operating margin (3) |
$ |
2,063 |
$ |
2,015 |
$ |
8,102 |
$ |
8,266 |
||||
Adjusted EBITDA (3) |
$ |
2,056 |
$ |
2,019 |
$ |
8,056 |
$ |
8,117 |
||||
FCF (3) |
$ |
1,020 |
$ |
497 |
$ |
2,670 |
$ |
2,472 |
||||
DCF (3) |
$ |
1,629 |
$ |
1,634 |
$ |
6,407 |
$ |
6,624 |
||||
(1) |
Net income and fully diluted earnings per common unit for the fourth quarters of 2020 and 2019 include non-cash asset impairment and related charges of approximately |
|
(2) |
CFFO includes the impact of timing of cash receipts and payments related to operations. For the fourth quarter of 2020, the net effect of changes in operating accounts, which are a component of CFFO, was a net decrease of |
|
(3) |
Total gross operating margin, adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), FCF and DCF are non-generally accepted accounting principle (“non-GAAP”) financial measures that are defined and reconciled later in this press release. |
-
Enterprise increased its cash distribution to
$0.45 per common unit with respect to the fourth quarter of 2020, which was a 1.1 percent increase compared to the distribution declared with respect to the fourth quarter of 2019. The distribution will be paid on February 11, 2021 to common unitholders of record as of the close of business on January 29, 2021. -
CFFO and FCF for the fourth quarter of 2020 was
$1.6 billion and$1.0 billion , respectively. -
DCF for the fourth quarter of 2020 was
$1.6 billion , which provided 1.6 times coverage of the$0.45 per common unit cash distribution. Enterprise retained$640 million of distributable cash flow in the fourth quarter of 2020. -
Capital investments in the fourth quarter of 2020 were
$624 million , which included$556 million of investments in growth capital projects and$68 million of sustaining capital expenditures. Total capital investments for 2020 were$3.3 billion , which included$3.0 billion of investments in growth capital projects and$294 million of sustaining capital expenditures.
Fourth Quarter 2020 Volume Highlights
|
Three Months Ended
|
|||
|
2020 |
2019 |
||
NGL, crude oil, refined products & petrochemical pipeline volumes (million BPD) |
6.5 |
6.9 |
||
Marine terminal volumes (million BPD) |
1.6 |
1.9 |
||
Natural gas pipeline volumes (TBtus/d) |
13.7 |
13.8 |
||
NGL fractionation volumes (MBPD) |
1,316 |
1,097 |
||
Propylene plant production volumes (MBPD) |
104 |
89 |
||
Fee-based natural gas processing volumes (Bcf/d) |
4.2 |
4.8 |
||
Equity NGL production volumes (MBPD) |
143 |
162 |
||
As used in this press release, “NGL” means natural gas liquids, “LPG” means liquefied petroleum gas, “BPD” means barrels per day, “MBPD” means thousand barrels per day, “MMcf/d” means million cubic feet per day, “Bcf/d” means billion cubic feet per day, “BBtus/d” means billion British thermal units per day and “TBtus/d” means trillion British thermal units per day.
“Enterprise reported a resilient fourth quarter of 2020 generating
Review of Fourth Quarter 2020 Segment Performance
Enterprise reported total gross operating margin of
NGL Pipelines & Services – Gross operating margin for the NGL Pipelines & Services segment was
Enterprise’s natural gas processing and related NGL marketing business reported gross operating margin of
Gross operating margin from the partnership’s NGL pipelines and storage business was
Gross operating margin from EHT, the related Channel Pipeline and Morgan’s Point ethane marine terminal increased
Enterprise’s NGL pipelines in South Louisiana, including the South Louisiana NGL pipeline system, Lou-Tex, Tri-State, and Wilprise NGL pipelines and the Aegis ethane pipeline, reported an aggregate
Gross operating margin from the partnership’s NGL fractionation business increased
Crude Oil Pipelines & Services – Gross operating margin from the Crude Oil Pipelines & Services segment increased
Aggregate gross operating margin from Enterprise’s Midland-to-ECHO Pipeline System and related activities increased
Gross operating margin from the South Texas Crude Oil Pipeline System decreased
Gross operating margin from crude oil export activities at marine terminals on the Houston Ship Channel and Beaumont increased
Gross operating margin from the partnership’s crude oil marketing activities increased
Natural Gas Pipelines & Services – Gross operating margin for the Natural Gas Pipelines & Services segment was
Enterprise’s Permian Basin gathering system reported an
Gross operating margin from the Texas Intrastate System increased
Enterprise’s East Texas and Haynesville gathering pipeline systems reported an aggregate
Aggregate gross operating margin from the Jonah, San Juan and Piceance gathering systems decreased by
Gross operating margin from natural gas marketing activities decreased
Petrochemical & Refined Products Services – Gross operating margin for the Petrochemical & Refined Products Services segment increased 27 percent, or
The partnership’s propylene business reported a
Gross operating margin from ethylene exports, pipelines, and related services increased
Enterprise’s refined products pipeline and related activities reported a
Gross operating margin from Enterprise’s octane enhancement, isobutane dehydrogenation (“iBDH”) and related operations for the fourth quarter of 2020 decreased
The partnership’s PDH and octane enhancement facilities are scheduled for planned turnarounds during the first quarter of 2021. We expect these plants to be out of service for approximately 45 days and 24 days, respectively, during the first quarter, with completion of the octane enhancement turnaround expected in April 2021. In addition, we expect to incur approximately
Capitalization
Total debt principal outstanding at December 31, 2020 was
Capital Investments
Total capital investments in the fourth quarter of 2020 were
For 2021 and 2022, we currently expect growth capital investments on sanctioned projects to be approximately
2020 K-1 Tax Packages
The Enterprise K-1 tax packages are expected to be made available online through our website at www.enterpriseproducts.com on or before February 25, 2021. The mailing of the tax packages is expected to be completed by March 5, 2021.
Conference Call to Discuss Fourth Quarter 2020 Earnings
Enterprise will host a conference call today to discuss fourth quarter 2020 earnings. The call will be broadcast live over the Internet beginning at 9:00 a.m. (CT) and may be accessed by visiting the partnership’s website at www.enterpriseproducts.com.
Use of Non-GAAP Financial Measures
This press release and accompanying schedules include the non-GAAP financial measures of total gross operating margin, FCF, DCF and Adjusted EBITDA. The accompanying schedules provide definitions of these non-GAAP financial measures and reconciliations to their most directly comparable financial measure calculated and presented in accordance with GAAP. Our non-GAAP financial measures should not be considered as alternatives to GAAP measures such as net income, operating income, net cash flow provided by operating activities or any other measure of financial performance calculated and presented in accordance with GAAP. Our non-GAAP financial measures may not be comparable to similarly-titled measures of other companies because they may not calculate such measures in the same manner as we do.
Company Information and Use of Forward-Looking Statements
Enterprise Products Partners L.P. is one of the largest publicly traded partnerships and a leading North American provider of midstream energy services to producers and consumers of natural gas, NGLs, crude oil, refined products and petrochemicals. Services include: natural gas gathering, treating, processing, transportation and storage; NGL transportation, fractionation, storage and export and import terminals; crude oil gathering, transportation, storage and export and import terminals; petrochemical and refined products transportation, storage, export and import terminals and related services; and a marine transportation business that operates primarily on the United States inland and Intracoastal Waterway systems. The partnership’s assets include approximately 50,000 miles of pipelines; 260 million barrels of storage capacity for NGLs, crude oil, refined products and petrochemicals; and 14 billion cubic feet of natural gas storage capacity.
This press release includes forward-looking statements. Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements that involve certain risks and uncertainties, such as the partnership’s expectations regarding future results, capital expenditures, project completions, liquidity and financial market conditions. These risks and uncertainties include, among other things, direct and indirect effects of the COVID-19 pandemic, insufficient cash from operations, adverse market conditions, governmental regulations and other factors discussed in Enterprise’s filings with the U.S. Securities and Exchange Commission. If any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those expected. The partnership disclaims any intention or obligation to update publicly or reverse such statements, whether as a result of new information, future events or otherwise.
Enterprise Products Partners L.P. |
Exhibit A |
|||||||||||
Condensed Statements of Consolidated Operations – UNAUDITED |
||||||||||||
($ in millions, except per unit amounts) |
|
|
||||||||||
|
For the Three Months
|
For the Year
|
||||||||||
|
2020 |
2019 |
2020 |
2019 |
||||||||
Revenues |
$ |
7,044.2 |
$ |
8,005.3 |
$ |
27,199.7 |
$ |
32,789.2 |
||||
Costs and expenses: |
|
|
|
|
||||||||
Operating costs and expenses |
|
6,369.2 |
|
6,667.5 |
|
22,371.1 |
|
27,061.8 |
||||
General and administrative costs |
|
56.8 |
|
51.5 |
|
219.6 |
|
211.7 |
||||
Total costs and expenses |
|
6,426.0 |
|
6,719.0 |
|
22,590.7 |
|
27,273.5 |
||||
Equity in income of unconsolidated affiliates |
|
90.0 |
|
131.7 |
|
426.1 |
|
563.0 |
||||
Operating income |
|
708.2 |
|
1,418.0 |
|
5,035.1 |
|
6,078.7 |
||||
Other income (expense): |
|
|
|
|
||||||||
Interest expense |
|
(329.2) |
|
(292.8) |
|
(1,287.4) |
|
(1,243.0) |
||||
Other, net |
|
1.2 |
|
8.4 |
|
13.7 |
|
(103.0) |
||||
Total other expense |
|
(328.0) |
|
(284.4) |
|
(1,273.7) |
|
(1,346.0) |
||||
Income before income taxes |
|
380.2 |
|
1,133.6 |
|
3,761.4 |
|
4,732.7 |
||||
Benefit from (provision for) income taxes |
|
(14.3) |
|
(8.2) |
|
124.3 |
|
(45.6) |
||||
Net income |
|
365.9 |
|
1,125.4 |
|
3,885.7 |
|
4,687.1 |
||||
Net income attributable to noncontrolling interests |
|
(27.7) |
|
(28.5) |
|
(110.1) |
|
(95.8) |
||||
Net income attributable to preferred units |
|
(0.9) |
|
– |
|
(0.9) |
|
– |
||||
Net income attributable to common unitholders |
$ |
337.3 |
$ |
1,096.9 |
$ |
3,774.7 |
$ |
4,591.3 |
||||
Per common unit data (fully diluted): |
|
|
|
|
||||||||
Earnings per common unit |
$ |
0.15 |
$ |
0.50 |
$ |
1.71 |
$ |
2.09 |
||||
Average common units outstanding (in millions) |
|
2,201.4 |
|
2,202.2 |
|
2,202.2 |
|
2,201.7 |
||||
|
|
|
|
|
||||||||
Supplemental financial data: |
|
|
|
|
||||||||
Net cash flow provided by operating activities |
$ |
1,599.9 |
$ |
1,694.3 |
$ |
5,891.5 |
$ |
6,520.5 |
||||
Cash flows used in investing activities |
$ |
556.5 |
$ |
1,202.7 |
$ |
3,120.7 |
$ |
4,575.5 |
||||
Cash flows used in financing activities |
$ |
1,016.4 |
$ |
1,289.4 |
$ |
2,022.7 |
$ |
1,945.1 |
||||
Total debt principal outstanding at end of period |
$ |
30,146.4 |
$ |
27,878.4 |
$ |
30,146.4 |
$ |
27,878.4 |
||||
|
|
|
|
|
||||||||
Non-GAAP Distributable Cash Flow (1) |
$ |
1,628.8 |
$ |
1,633.6 |
$ |
6,406.7 |
$ |
6,623.9 |
||||
Non-GAAP Adjusted EBITDA (2) |
$ |
2,055.6 |
$ |
2,019.4 |
$ |
8,055.7 |
$ |
8,117.3 |
||||
Non-GAAP Free Cash Flow (3) |
$ |
1,019.6 |
$ |
497.1 |
$ |
2,670.4 |
$ |
2,471.6 |
||||
Gross operating margin by segment: |
|
|
|
|
||||||||
NGL Pipelines & Services |
$ |
1,144.2 |
$ |
1,136.0 |
$ |
4,182.4 |
$ |
4,069.8 |
||||
Crude Oil Pipelines & Services |
|
428.2 |
|
416.1 |
|
1,997.3 |
|
2,087.8 |
||||
Natural Gas Pipelines & Services |
|
225.5 |
|
238.0 |
|
926.6 |
|
1,062.6 |
||||
Petrochemical & Refined Products Services |
|
296.8 |
|
233.7 |
|
1,081.8 |
|
1,069.6 |
||||
Total segment gross operating margin (4) |
|
2,094.7 |
|
2,023.8 |
|
8,188.1 |
|
8,289.8 |
||||
Net adjustment for shipper make-up rights (5) |
|
(31.6) |
|
(8.4) |
|
(85.7) |
|
(24.1) |
||||
Non-GAAP total gross operating margin (6) |
$ |
2,063.1 |
$ |
2,015.4 |
$ |
8,102.4 |
$ |
8,265.7 |
||||
(1) |
See Exhibit E for reconciliation to GAAP net cash flow provided by operating activities. |
|
(2) |
See Exhibit F for reconciliation to GAAP net cash flow provided by operating activities. |
|
(3) |
See Exhibit D for reconciliation to GAAP net cash flow provided by operating activities. |
|
(4) |
Within the context of this table, total segment gross operating margin represents a subtotal and corresponds to measures similarly titled within the financial statement footnotes provided in our quarterly and annual filings with the U.S. Securities and Exchange Commission (“SEC”). |
|
(5) |
Gross operating margin by segment for NGL Pipelines & Services and Crude Oil Pipelines & Services reflects adjustments for non-refundable deferred transportation revenues relating to the make-up rights of committed shippers on certain major pipeline projects. These adjustments are included in managements’ evaluation of segment results. However, these adjustments are excluded from non-GAAP total gross operating margin in compliance with guidance from the SEC. |
|
(6) |
See Exhibit G for reconciliation to GAAP total operating income. |
Enterprise Products Partners L.P. |
|
Exhibit B |
||||||
Selected Operating Data – UNAUDITED |
|
|
||||||
|
|
|
||||||
|
For the Three Months
|
For the Year
|
||||||
|
2020 |
2019 |
2020 |
2019 |
||||
Selected operating data: (1) |
|
|
|
|
||||
NGL Pipelines & Services, net: |
|
|
|
|
||||
NGL pipeline transportation volumes (MBPD) |
3,654 |
3,870 |
3,589 |
3,615 |
||||
NGL marine terminal volumes (MBPD) |
800 |
732 |
722 |
626 |
||||
NGL fractionation volumes (MBPD) |
1,316 |
1,097 |
1,359 |
1,017 |
||||
Equity NGL production volumes (MBPD) (2) |
143 |
162 |
151 |
144 |
||||
Fee-based natural gas processing volumes (MMcf/d) (3,4) |
4,238 |
4,763 |
4,285 |
4,738 |
||||
Crude Oil Pipelines & Services, net: |
|
|
|
|
||||
Crude oil pipeline transportation volumes (MBPD) |
2,005 |
2,273 |
2,166 |
2,304 |
||||
Crude oil marine terminal volumes (MBPD) |
529 |
926 |
724 |
964 |
||||
Natural Gas Pipelines & Services, net: |
|
|
|
|
||||
Natural gas pipeline transportation volumes (BBtus/d) (5) |
13,715 |
13,773 |
13,421 |
14,198 |
||||
Petrochemical & Refined Products Services, net: |
|
|
|
|
||||
Propylene production volumes (MBPD) |
104 |
89 |
89 |
97 |
||||
Butane isomerization volumes (MBPD) |
109 |
109 |
96 |
109 |
||||
Standalone DIB processing volumes (MBPD) |
151 |
106 |
127 |
99 |
||||
Octane enhancement and related plant sales volumes (MBPD) (6) |
41 |
29 |
35 |
32 |
||||
Pipeline transportation volumes, primarily refined products and petrochemicals (MBPD) |
867 |
729 |
802 |
739 |
||||
Refined products and petrochemicals marine terminal volumes (MBPD) (7) |
297 |
247 |
262 |
325 |
||||
Total, net: |
|
|
|
|
||||
NGL, crude oil, petrochemical and refined products pipeline transportation volumes (MBPD) |
6,526 |
6,872 |
6,557 |
6,658 |
||||
Natural gas pipeline transportation volumes (BBtus/d) |
13,715 |
13,773 |
13,421 |
14,198 |
||||
Equivalent pipeline transportation volumes (MBPD) (8) |
10,135 |
10,496 |
10,089 |
10,394 |
||||
NGL, crude oil, refined products and petrochemical marine terminal volumes (MBPD) |
1,626 |
1,905 |
1,708 |
1,915 |
||||
(1) |
Operating rates are reported on a net basis, which takes into account our ownership interests in certain joint ventures, and include volumes for newly constructed assets from the related in-service dates and for recently purchased assets from the related acquisition dates. |
|
(2) |
Represents the NGL volumes we earn and take title to in connection with our processing activities. |
|
(3) |
Volumes reported correspond to the revenue streams earned by our gas plants. “MMcf/d” means million cubic feet per day. |
|
(4) |
Fee-based natural gas processing volumes are measured at either the wellhead or plant inlet in MMcf/d. |
|
(5) |
“BBtus/d” means billion British thermal units per day. |
|
(6) |
Reflects aggregate sales volumes for our octane additive and iBDH facilities located at our Mont Belvieu complex and our high-purity isobutylene production facility located adjacent to the Houston Ship Channel. |
|
(7) |
In addition to exports of refined products, these amounts include loading volumes at our ethylene export terminal |
|
(8) |
Represents total NGL, crude oil, refined products and petrochemical transportation volumes plus equivalent energy volumes where 3.8 million British thermal units (“MMBtus”) of natural gas transportation volumes are equivalent to one barrel of NGLs transported. |
Enterprise Products Partners L.P. |
Exhibit C |
|||||||||||||||
Selected Commodity Price Information – UNAUDITED |
||||||||||||||||
|
|
|
|
|
|
|
Polymer |
Refinery |
||||||||
|
Natural |
|
|
Normal |
|
Natural |
Grade |
Grade |
||||||||
|
Gas, |
Ethane, |
Propane, |
Butane, |
Isobutane, |
Gasoline, |
Propylene, |
Propylene, |
||||||||
|
$/MMBtu (1) |
$/gallon (2) |
$/gallon (2) |
$/gallon (2) |
$/gallon (2) |
$/gallon (2) |
$/pound (3) |
$/pound (3) |
||||||||
2019 by quarter: |
|
|
|
|
|
|
|
|
||||||||
First Quarter |
|
|
|
|
|
|
|
|
||||||||
Second Quarter |
|
|
|
|
|
|
|
|
||||||||
Third Quarter |
|
|
|
|
|
|
|
|
||||||||
Fourth Quarter |
|
|
|
|
|
|
|
|
||||||||
2019 Averages |
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
2020 by quarter: |
|
|
|
|
|
|
|
|
||||||||
First Quarter |
|
|
|
|
|
|
|
|
||||||||
Second Quarter |
|
|
|
|
|
|
|
|
||||||||
Third Quarter |
|
|
|
|
|
|
|
|
||||||||
Fourth Quarter |
|
|
|
|
|
|
|
|
||||||||
2020 Averages |
|
|
|
|
|
|
|
|
||||||||
(1) |
Natural gas prices are based on Henry-Hub Inside FERC commercial index prices as reported by Platts, which is a division of McGraw Hill Financial, Inc. |
|
(2) |
NGL prices for ethane, propane, normal butane, isobutane and natural gasoline are based on Mont Belvieu Non-TET commercial index prices as reported by Oil Price Information Service. |
|
(3) |
Polymer grade propylene prices represent average contract pricing for such product as reported by IHS Chemical, a division of IHS Inc. (“IHS Chemical”). Refinery grade propylene prices represent weighted-average spot prices for such product as reported by IHS Chemical. |
|
WTI |
Midland |
Houston |
LLS |
||||
|
Crude Oil, |
Crude Oil, |
Crude Oil |
Crude Oil, |
||||
|
$/barrel (1) |
$/barrel (2) |
$/barrel (2) |
$/barrel (3) |
||||
2019 by quarter: |
|
|
|
|
||||
First Quarter |
|
|
|
|
||||
Second Quarter |
|
|
|
|
||||
Third Quarter |
|
|
|
|
||||
Fourth Quarter |
|
|
|
|
||||
2019 Averages |
|
|
|
|
||||
|
|
|
|
|
||||
2020 by quarter: |
|
|
|
|
||||
First Quarter |
|
|
|
|
||||
Second Quarter |
|
|
|
|
||||
Third Quarter |
|
|
|
|
||||
Fourth Quarter |
|
|
|
|
||||
2020 Averages |
|
|
|
|
(1) |
West Texas Intermediate (“WTI”) prices are based on commercial index prices at Cushing, Oklahoma as measured by the NYMEX. |
|
(2) |
Midland and Houston crude oil prices are based on commercial index prices as reported by Argus. |
|
(3) |
Light Louisiana Sweet (“LLS”) prices are based on commercial index prices as reported by Platts. |
The weighted-average indicative market price for NGLs (based on prices for such products at Mont Belvieu, Texas, which is the primary industry hub for domestic NGL production) was
| Enterprise Products Partners L.P. |
|
Exhibit D |
||||||||||
Free Cash Flow – UNAUDITED |
||||||||||||
($ in millions) |
|
|
|
|
||||||||
|
For the Three Months
|
For the Year
|
||||||||||
|
2020 |
2019 |
2020 |
2019 |
||||||||
Free Cash Flow (“FCF”) |
|
|
|
|
||||||||
Net cash flow provided by operating activities (GAAP) |
$ |
1,599.9 |
$ |
1,694.3 |
$ |
5,891.5 |
$ |
6,520.5 |
||||
Adjustments to reconcile net cash flow provided by operating activities to FCF (addition or subtraction indicated by sign): |
|
|
|
|
||||||||
Cash used in investing activities |
|
(556.5) |
|
(1,202.7) |
|
(3,120.7) |
|
(4,575.5) |
||||
Cash contributions from noncontrolling interests |
|
9.7 |
|
42.0 |
|
30.9 |
|
632.8 |
||||
Cash distributions paid to noncontrolling interests |
|
(33.5) |
|
(36.5) |
|
(131.3) |
|
(106.2) |
||||
FCF (non-GAAP) |
$ |
1,019.6 |
$ |
497.1 |
$ |
2,670.4 |
$ |
2,471.6 |
||||
FCF is a measure of how much cash a business generates after accounting for capital expenditures such as plants or pipelines. We believe that FCF is important to traditional investors since it reflects the amount of cash available for reducing debt, investing in additional capital projects and/or paying distributions. Since we partner with other companies to fund certain capital projects of our consolidated subsidiaries, our determination of FCF appropriately reflects the amount of cash contributed from and distributed to noncontrolling interests.
| Enterprise Products Partners L.P. | Exhibit E |
|||||||||||
Distributable Cash Flow – UNAUDITED |
||||||||||||
($ in millions) |
|
|
||||||||||
|
For the Three Months
|
For the Year
|
||||||||||
|
2020 |
2019 |
2020 |
2019 |
||||||||
Distributable Cash Flow (“DCF”) |
|
|
|
|
||||||||
Net income attributable to common unitholders (GAAP) |
$ |
337.3 |
$ |
1,096.9 |
$ |
3,774.7 |
$ |
4,591.3 |
||||
Adjustments to net income attributable to common unitholders to derive DCF (addition or subtraction indicated by sign): |
|
|
|
|
||||||||
Depreciation, amortization and accretion expenses |
|
526.8 |
|
492.6 |
|
2,071.9 |
|
1,949.3 |
||||
Cash distributions received from unconsolidated affiliates |
|
151.8 |
|
146.2 |
|
614.1 |
|
631.3 |
||||
Equity in income of unconsolidated affiliates |
|
(90.0) |
|
(131.7) |
|
(426.1) |
|
(563.0) |
||||
Asset impairment and related charges |
|
800.2 |
|
81.5 |
|
890.6 |
|
132.8 |
||||
Change in fair market value of derivative instruments |
|
(25.6) |
|
25.2 |
|
(79.3) |
|
27.2 |
||||
Change in fair value of Liquidity Option Agreement |
|
– |
|
(3.5) |
|
2.3 |
|
119.6 |
||||
Deferred income tax expense (benefit) |
|
1.4 |
|
9.1 |
|
(147.6) |
|
20.0 |
||||
Sustaining capital expenditures (1) |
|
(67.6) |
|
(92.7) |
|
(293.6) |
|
(325.2) |
||||
Other, net |
|
(9.9) |
|
6.2 |
|
20.2 |
|
20.0 |
||||
Operational DCF |
|
1,624.4 |
|
1,629.8 |
|
6,427.2 |
|
6,603.3 |
||||
Proceeds from asset sales |
|
4.4 |
|
3.8 |
|
12.8 |
|
20.6 |
||||
Monetization of interest rate derivative instruments accounted for as cash flow hedges |
|
– |
|
– |
|
(33.3) |
|
– |
||||
DCF (non-GAAP) |
|
1,628.8 |
|
1,633.6 |
|
6,406.7 |
|
6,623.9 |
||||
Adjustments to reconcile DCF with net cash flow provided by operating activities (addition or subtraction indicated by sign): |
|
|
|
|
||||||||
Net effect of changes in operating accounts, as applicable |
|
(75.5) |
|
(48.4) |
|
(767.5) |
|
(457.4) |
||||
Sustaining capital expenditures |
|
67.6 |
|
92.7 |
|
293.6 |
|
325.2 |
||||
Other, net |
|
(21.0) |
|
16.4 |
|
(41.3) |
|
28.8 |
||||
Net cash flow provided by operating activities (GAAP) |
$ |
1,599.9 |
$ |
1,694.3 |
$ |
5,891.5 |
$ |
6,520.5 |
||||
(1) |
Sustaining capital expenditures are capital expenditures (as defined by GAAP) resulting from improvements to and major renewals of existing assets. Such expenditures serve to maintain existing operations but do not generate additional revenues. |
DCF is an important non-GAAP liquidity measure for our common unitholders since it serves as an indicator of our success in providing a cash return on investment. Specifically, this liquidity measure indicates to investors whether or not we are generating cash flows at a level that can sustain or support an increase in our quarterly cash distributions. DCF is also a quantitative standard used by the investment community with respect to publicly traded partnerships because the value of a partnership unit is, in part, measured by its yield, which is based on the amount of cash distributions a partnership can pay to a common unitholder.
| Enterprise Products Partners L.P. |
|
|
Exhibit F |
|||||||||
Adjusted EBITDA - UNAUDITED |
||||||||||||
($ in millions) |
|
|
|
|||||||||
|
For the Three Months
|
For the Year
|
||||||||||
|
2020 |
2019 |
2020 |
2019 |
||||||||
Net income (GAAP) |
$ |
365.9 |
$ |
1,125.4 |
$ |
3,885.7 |
$ |
4,687.1 |
||||
Adjustments to net income to derive Adjusted EBITDA (addition or subtraction indicated by sign): |
|
|
|
|
||||||||
Depreciation, amortization and accretion in costs and expenses |
|
512.1 |
|
478.4 |
|
2,009.7 |
|
1,894.3 |
||||
Interest expense, including related amortization |
|
329.2 |
|
292.8 |
|
1,287.4 |
|
1,243.0 |
||||
Cash distributions received from unconsolidated affiliates |
|
151.8 |
|
146.2 |
|
614.1 |
|
631.3 |
||||
Equity in income of unconsolidated affiliates |
|
(90.0) |
|
(131.7) |
|
(426.1) |
|
(563.0) |
||||
Asset impairment and related charges |
|
800.2 |
|
81.5 |
|
890.6 |
|
132.8 |
||||
Provision for (benefit from) income taxes |
|
14.3 |
|
8.2 |
|
(124.3) |
|
45.6 |
||||
Change in fair market value of commodity derivative instruments |
|
(25.6) |
|
25.2 |
|
(79.3) |
|
(67.7) |
||||
Change in fair value of Liquidity Option Agreement |
|
– |
|
(3.5) |
|
2.3 |
|
119.6 |
||||
Other, net |
|
(2.3) |
|
(3.1) |
|
(4.4) |
|
(5.7) |
||||
Adjusted EBITDA (non-GAAP) |
|
2,055.6 |
|
2,019.4 |
|
8,055.7 |
|
8,117.3 |
||||
Adjustments to reconcile Adjusted EBITDA to net cash flow provided by operating activities (addition or subtraction indicated by sign): |
|
|
|
|
||||||||
Interest expense, including related amortization |
|
(329.2) |
|
(292.8) |
|
(1,287.4) |
|
(1,243.0) |
||||
Deferred income tax expense (benefit) |
|
1.4 |
|
9.1 |
|
(147.6) |
|
20.0 |
||||
Net effect of changes in operating accounts, as applicable |
|
(75.5) |
|
(48.4) |
|
(767.5) |
|
(457.4) |
||||
Other, net |
|
(52.4) |
|
7.0 |
|
38.3 |
|
83.6 |
||||
Net cash flow provided by operating activities (GAAP) |
$ |
1,599.9 |
$ |
1,694.3 |
$ |
5,891.5 |
$ |
6,520.5 |
||||
Adjusted EBITDA is commonly used as a supplemental financial measure by our management and external users of our financial statements, such as investors, commercial banks, research analysts and rating agencies, to assess the financial performance of our assets without regard to financing methods, capital structures or historical cost basis; the ability of our assets to generate cash sufficient to pay interest and support our indebtedness; and the viability of projects and the overall rates of return on alternative investment opportunities.
Since Adjusted EBITDA excludes some, but not all, items that affect net income or loss and because these measures may vary among other companies, the Adjusted EBITDA data presented in this press release may not be comparable to similarly titled measures of other companies. The GAAP measure most directly comparable to Adjusted EBITDA is net cash flow provided by operating activities.
| Enterprise Products Partners L.P. |
|
|
Exhibit G |
|||||||||
Gross Operating Margin – UNAUDITED |
||||||||||||
($ in millions) |
|
|
|
|||||||||
|
For the Three Months
|
For the Year
|
||||||||||
|
2020 |
2019 |
2020 |
2019 |
||||||||
Total gross operating margin (non-GAAP) |
$ |
2,063.1 |
$ |
2,015.4 |
$ |
8,102.4 |
$ |
8,265.7 |
||||
Adjustments to reconcile total gross operating margin to total operating income (addition or subtraction indicated by sign): |
|
|
|
|
||||||||
Depreciation, amortization and accretion expense in operating costs and expenses |
|
(500.2) |
|
(467.5) |
|
(1,961.5) |
|
(1,848.3) |
||||
Asset impairment and related charges in operating costs and expenses |
|
(800.2) |
|
(81.5) |
|
(890.6) |
|
(132.7) |
||||
Net gains attributable to asset sales in operating costs and expenses |
|
2.3 |
|
3.1 |
|
4.4 |
|
5.7 |
||||
General and administrative costs |
|
(56.8) |
|
(51.5) |
|
(219.6) |
|
(211.7) |
||||
Total operating income (GAAP) |
$ |
708.2 |
$ |
1,418.0 |
$ |
5,035.1 |
$ |
6,078.7 |
||||
We evaluate segment performance based on our financial measure of gross operating margin. Gross operating margin is an important performance measure of the core profitability of our operations and forms the basis of our internal financial reporting. We believe that investors benefit from having access to the same financial measures that our management uses in evaluating segment results.
The term “total gross operating margin” represents GAAP operating income exclusive of (i) depreciation, amortization and accretion expenses, (ii) impairment charges, (iii) gains and losses attributable to asset sales, and (iv) general and administrative costs. Total gross operating margin includes equity in the earnings of unconsolidated affiliates, but is exclusive of other income and expense transactions, income taxes, the cumulative effect of changes in accounting principles and extraordinary charges. Total gross operating margin is presented on a 100 percent basis before any allocation of earnings to noncontrolling interests. The GAAP financial measure most directly comparable to total gross operating margin is operating income.
Total gross operating margin excludes amounts attributable to shipper make-up rights as described in footnote (5) to Exhibit A of this press release.
| Enterprise Products Partners L.P. | Exhibit H |
|||||||||||
Other Information – UNAUDITED |
||||||||||||
($ in millions) |
|
|
||||||||||
|
For the Three Months
|
For the Year
|
||||||||||
|
2020 |
2019 |
2020 |
2019 |
||||||||
Capital investments: |
|
|
|
|
||||||||
Capital expenditures |
$ |
616.3 |
$ |
1,229.6 |
$ |
3,287.9 |
$ |
4,531.7 |
||||
Investments in unconsolidated affiliates |
|
5.7 |
|
11.5 |
|
15.6 |
|
111.6 |
||||
Other investing activities |
|
1.6 |
|
4.8 |
|
20.6 |
|
16.1 |
||||
Total capital investments |
$ |
623.6 |
$ |
1,245.9 |
$ |
3,324.1 |
$ |
4,659.4 |
||||
The following table summarizes the non-cash mark-to-market gains (losses) for the periods indicated:
|
For the Three Months
|
For the Year
|
||||||||||
|
2020 |
2019 |
2020 |
2019 |
||||||||
Mark-to-market gains (losses) in gross operating margin: |
|
|
|
|
||||||||
NGL Pipelines & Services |
$ |
37.0 |
$ |
(5.4) |
$ |
48.4 |
$ |
(5.5) |
||||
Crude Oil Pipelines & Services |
|
(8.8) |
|
(14.4) |
|
20.1 |
|
80.6 |
||||
Natural Gas Pipelines & Services |
|
(3.7) |
|
(1.5) |
|
6.3 |
|
(0.2) |
||||
Petrochemical & Refined Products Services |
|
1.1 |
|
(3.9) |
|
4.5 |
|
(7.2) |
||||
Total mark-to-market impact on gross operating margin |
|
25.6 |
|
(25.2) |
|
79.3 |
|
67.7 |
||||
Mark-to-market loss in interest expense |
|
– |
|
– |
|
– |
|
(94.9) |
||||
Total |
$ |
25.6 |
$ |
(25.2) |
$ |
79.3 |
$ |
(27.2) |
||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20210203005280/en/
FAQ
What was Enterprise Products Partners' net income for 2020?
How much was the decline in earnings per unit for EPD in 2020?
What was the free cash flow for Enterprise Products in 2020?
How did Enterprise Products' distributable cash flow perform in 2020?
What are the growth projects for Enterprise Products in 2021?
