Enterprise Reports Results for Second Quarter 2023
- Enterprise reported net income of $1.3 billion for Q2 2023, a decrease from $1.4 billion in Q2 2022.
- Distributable Cash Flow (DCF) for Q2 2023 was $1.7 billion.
- Distributions declared for Q2 2023 increased by 5.3% to $0.50 per common unit.
- Adjusted cash flow provided by operating activities was $1.9 billion for Q2 2023.
- NGL, crude oil, refined products & petrochemical pipeline volumes reached 7.1 million BPD in Q2 2023.
- Natural gas pipeline volumes were at a record 18.3 TBtus/d in Q2 2023.
- None.
Enterprise reported net income attributable to common unitholders of
Distributable Cash Flow (“DCF”) was
Adjusted cash flow provided by operating activities (“Adjusted CFFO”) was
Second Quarter 2023 Highlights
|
Three Months Ended June 30, |
|||
($ in millions, except per unit amounts) |
2023 |
2022 |
||
Operating income |
$ |
1,579 |
$ |
1,764 |
Net income |
$ |
1,283 |
$ |
1,440 |
Fully diluted earnings per common unit |
$ |
0.57 |
$ |
0.64 |
Total gross operating margin (1) |
$ |
2,181 |
$ |
2,362 |
Adjusted EBITDA (1) |
$ |
2,171 |
$ |
2,418 |
Adjusted CFFO (1) |
$ |
1,866 |
$ |
2,092 |
Adjusted FCF (1) |
$ |
1,073 |
$ |
1,718 |
DCF (1) |
$ |
1,735 |
$ |
2,018 |
(1) |
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. |
-
Gross operating margin, operating income and net income attributable to common unitholders included non-cash, mark-to-market (“MTM”) losses on financial instruments used in our commodity hedging activities of
$7 million $52 million
-
Capital investments were
$784 million $683 million $101 million $1.4 billion $1.2 billion $185 million
-
During the second quarter of 2023, Enterprise purchased 2.9 million of its common units on the open market for approximately
$75 million $92 million
Second Quarter 2023 Volume Highlights
|
Three Months Ended June 30, |
|
|
2023 |
2022 |
NGL, crude oil, refined products & petrochemical pipeline volumes (million BPD) |
7.1 |
6.6 |
Marine terminal volumes (million BPD) |
1.9 |
1.7 |
Natural gas pipeline volumes (TBtus/d) |
18.3 |
16.8 |
NGL fractionation volumes (million BPD) |
1.4 |
1.3 |
Propylene plant production volumes (MBPD) |
84 |
109 |
Fee-based natural gas processing volumes (Bcf/d) |
5.7 |
5.1 |
Equity NGL-equivalent production volumes (MBPD) |
173 |
195 |
As used in this press release, “NGL” means natural gas liquids, “BPD” means barrels per day, “MBPD” means thousand barrels per day, “MMcf/d” means million cubic feet per day, “Bcf/d” means billion cubic feet per day, “BBtus/d” means billion British thermal units per day, and “TBtus/d” means trillion British thermal units per day. |
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“Enterprise had a successful second quarter and reported resilient financial results despite the impacts of lower prices for crude oil, natural gas, NGLs and petrochemicals as a result of uneven global economic and manufacturing activity due in part to higher interest rates,” said A.J. “Jim”
“We reported both total gross operating margin and Adjusted EBITDA of
“Since the beginning of the second quarter, we completed construction and placed into service four major projects:
- a 400 MMcf/d expansion of the Haynesville Extension of the Acadian natural gas pipeline system,
-
our Poseidon cryogenic natural gas processing plant in the
Midland Basin, -
our 12th NGL fractionator in
Chambers County, Texas , and -
our second propane dehydrogenation plant (“PDH 2”) in
Chambers County .
We have another
Review of Second Quarter 2023 Results
Enterprise reported total gross operating margin of
NGL Pipelines & Services – Gross operating margin from the NGL Pipelines & Services segment was
Gross operating margin from Enterprise’s natural gas processing and related NGL marketing business was
Gross operating margin from NGL marketing activities decreased
The partnership’s
Enterprise’s
Gross operating margin from the partnership’s
Enterprise’s Rocky Mountain natural gas processing plants reported a combined
Total fee-based natural gas processing volumes were 5.7 Bcf/d in the second quarter of 2023 compared to 5.1 Bcf/d in the second quarter of 2022. Equity NGL-equivalent production volumes were 173 MBPD this quarter compared to 195 MBPD for the second quarter last year.
Gross operating margin from the partnership’s NGL pipelines and storage business increased 11 percent to
The partnership’s storage business in
Gross operating margin from Enterprise Hydrocarbons Terminal (“EHT”) increased
Gross operating margin from Enterprise’s Eastern ethane pipelines, which include the ATEX and Aegis pipelines, increased a combined
Enterprise’s NGL fractionation business reported gross operating margin of
Crude Oil Pipelines & Services – Gross operating margin from the partnership’s Crude Oil Pipelines & Services segment increased to
Gross operating margin from Enterprise’s
Gross operating margin from the partnership’s other crude oil marketing activities increased
The partnership’s West Texas Pipeline System had a
Gross operating margin from Enterprise’s EFS Midstream System decreased
Gross operating margin from the South Texas Crude Oil Pipeline System decreased
Enterprise’s share of gross operating margin from the Seaway Pipeline decreased
Natural Gas Pipelines & Services – Gross operating margin from Enterprise’s Natural Gas Pipelines & Services segment increased to
Gross operating margin from Enterprise’s natural gas marketing business increased
The East Texas Gathering System reported an
Gross operating margin from the partnership’s Acadian Gas System increased
Gross operating margin from Enterprise’s Texas Intrastate System increased a net
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 decreased
Petrochemical & Refined Products Services – Gross operating margin for the Petrochemical & Refined Products Services segment was
Gross operating margin from the partnership’s propylene production and related activities decreased
Gross operating margin from the partnership’s octane enhancement business and related plant operations for the second quarter of 2023 decreased a net
Gross operating margin from Enterprise’s refined products pipelines and related activities increased a net
Enterprise’s butane isomerization and related operations reported an
Capitalization
Total debt principal outstanding at June 30, 2023 was
Capital Investments
Total capital investments in the second quarter of 2023 were
We continue to expect organic growth capital investments for 2023 will be in the range of
Conference Call to Discuss Second Quarter 2023 Earnings
Today, Enterprise will host a conference call to discuss second quarter 2023 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
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
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 Six Months
|
For the Twelve
|
||||||||||||
|
2023 |
2022 |
2023 |
2022 |
2023 |
||||||||||
Revenues |
$ |
10,651 |
|
$ |
16,060 |
|
$ |
23,095 |
|
$ |
29,068 |
|
$ |
52,213 |
|
Costs and expenses: |
|
|
|
|
|
||||||||||
Operating costs and expenses |
|
9,137 |
|
|
14,341 |
|
|
19,894 |
|
|
25,738 |
|
|
45,658 |
|
General and administrative costs |
|
56 |
|
|
62 |
|
|
113 |
|
|
124 |
|
|
230 |
|
Total costs and expenses |
|
9,193 |
|
|
14,403 |
|
|
20,007 |
|
|
25,862 |
|
|
45,888 |
|
Equity in income of unconsolidated affiliates |
|
121 |
|
|
107 |
|
|
225 |
|
|
224 |
|
|
465 |
|
Operating income |
|
1,579 |
|
|
1,764 |
|
|
3,313 |
|
|
3,430 |
|
|
6,790 |
|
Other income (expense): |
|
|
|
|
|
||||||||||
Interest expense |
|
(302 |
) |
|
(309 |
) |
|
(616 |
) |
|
(628 |
) |
|
(1,232 |
) |
Other, net |
|
19 |
|
|
2 |
|
|
31 |
|
|
5 |
|
|
60 |
|
Total other expense, net |
|
(283 |
) |
|
(307 |
) |
|
(585 |
) |
|
(623 |
) |
|
(1,172 |
) |
Income before income taxes |
|
1,296 |
|
|
1,457 |
|
|
2,728 |
|
|
2,807 |
|
|
5,618 |
|
Provision for income taxes |
|
(13 |
) |
|
(17 |
) |
|
(23 |
) |
|
(36 |
) |
|
(69 |
) |
Net income |
|
1,283 |
|
|
1,440 |
|
|
2,705 |
|
|
2,771 |
|
|
5,549 |
|
Net income attributable to noncontrolling interests |
|
(29 |
) |
|
(28 |
) |
|
(60 |
) |
|
(62 |
) |
|
(123 |
) |
Net income attributable to preferred units |
|
(1 |
) |
|
(1 |
) |
|
(2 |
) |
|
(2 |
) |
|
(3 |
) |
Net income attributable to common unitholders |
$ |
1,253 |
|
$ |
1,411 |
|
$ |
2,643 |
|
$ |
2,707 |
|
$ |
5,423 |
|
Per common unit data (fully diluted): |
|
|
|
|
|
||||||||||
Earnings per common unit |
$ |
0.57 |
|
$ |
0.64 |
|
$ |
1.20 |
|
$ |
1.23 |
|
$ |
2.47 |
|
Average common units outstanding (in millions) |
|
2,196 |
|
|
2,201 |
|
|
2,195 |
|
|
2,200 |
|
|
2,196 |
|
|
|
|
|
|
|
||||||||||
Supplemental financial data: |
|
|
|
|
|
||||||||||
Net cash flow provided by operating activities |
$ |
1,902 |
|
$ |
2,119 |
|
$ |
3,485 |
|
$ |
4,264 |
|
$ |
7,260 |
|
Cash flows used in investing activities |
$ |
765 |
|
$ |
336 |
|
$ |
1,402 |
|
$ |
3,868 |
|
$ |
2,488 |
|
Cash flows used in financing activities |
$ |
1,136 |
|
$ |
1,839 |
|
$ |
2,012 |
|
$ |
2,964 |
|
$ |
4,892 |
|
Total debt principal outstanding at end of period |
$ |
28,926 |
|
$ |
29,061 |
|
$ |
28,926 |
|
$ |
29,061 |
|
$ |
28,926 |
|
|
|
|
|
|
|
||||||||||
Non-GAAP Distributable Cash Flow (1) |
$ |
1,735 |
|
$ |
2,018 |
|
$ |
3,673 |
|
$ |
3,855 |
|
$ |
7,569 |
|
Non-GAAP Adjusted EBITDA (2) |
$ |
2,171 |
|
$ |
2,418 |
|
$ |
4,492 |
|
$ |
4,675 |
|
$ |
9,126 |
|
Non-GAAP Adjusted Cash flow from operations (3) |
$ |
1,866 |
|
$ |
2,092 |
|
$ |
3,888 |
|
$ |
4,046 |
|
$ |
7,935 |
|
Non-GAAP Free Cash Flow (4) |
$ |
1,109 |
|
$ |
1,745 |
|
$ |
2,017 |
|
$ |
318 |
|
$ |
4,628 |
|
Non-GAAP Adjusted Free Cash Flow (4) |
$ |
1,073 |
|
$ |
1,718 |
|
$ |
2,420 |
|
$ |
100 |
|
$ |
5,303 |
|
Gross operating margin by segment: |
|
|
|
|
|
||||||||||
NGL Pipelines & Services |
$ |
1,110 |
|
$ |
1,327 |
|
$ |
2,322 |
|
$ |
2,552 |
|
$ |
4,912 |
|
Crude Oil Pipelines & Services |
|
422 |
|
|
407 |
|
|
819 |
|
|
822 |
|
|
1,652 |
|
Natural Gas Pipelines & Services |
|
238 |
|
|
229 |
|
|
552 |
|
|
449 |
|
|
1,145 |
|
Petrochemical & Refined Products Services |
|
383 |
|
|
421 |
|
|
802 |
|
|
825 |
|
|
1,494 |
|
Total segment gross operating margin (5) |
|
2,153 |
|
|
2,384 |
|
|
4,495 |
|
|
4,648 |
|
|
9,203 |
|
Net adjustment for shipper make-up rights (6) |
|
28 |
|
|
(22 |
) |
|
21 |
|
|
(28 |
) |
|
2 |
|
Non-GAAP total gross operating margin (7) |
$ |
2,181 |
|
$ |
2,362 |
|
$ |
4,516 |
|
$ |
4,620 |
|
$ |
9,205 |
|
(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 |
(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 |
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Selected Operating Data – UNAUDITED |
|||||
|
|
|
|
||
|
For the Three Months
|
For the Six Months
|
For the Twelve
|
||
|
2023 |
2022 |
2023 |
2022 |
2023 |
Selected operating data: (1) |
|
|
|
|
|
NGL Pipelines & Services, net: |
|
|
|
|
|
NGL pipeline transportation volumes (MBPD) |
3,910 |
3,683 |
3,944 |
3,626 |
3,865 |
NGL marine terminal volumes (MBPD) |
765 |
747 |
794 |
696 |
772 |
NGL fractionation volumes (MBPD) |
1,376 |
1,336 |
1,373 |
1,327 |
1,361 |
Equity NGL-equivalent production volumes (MBPD) (2) |
173 |
195 |
169 |
189 |
171 |
Fee-based natural gas processing volumes (MMcf/d) (3,4) |
5,677 |
5,133 |
5,609 |
5,025 |
5,466 |
Crude Oil Pipelines & Services, net: |
|
|
|
|
|
Crude oil pipeline transportation volumes (MBPD) |
2,366 |
2,197 |
2,332 |
2,197 |
2,290 |
Crude oil marine terminal volumes (MBPD) |
814 |
777 |
829 |
786 |
810 |
Natural Gas Pipelines & Services, net: |
|
|
|
|
|
Natural gas pipeline transportation volumes (BBtus/d) (5) |
18,264 |
16,803 |
18,145 |
16,629 |
17,850 |
Petrochemical & Refined Products Services, net: |
|
|
|
|
|
Propylene production volumes (MBPD) |
84 |
109 |
90 |
107 |
93 |
Butane isomerization volumes (MBPD) |
120 |
115 |
109 |
103 |
112 |
Standalone DIB processing volumes (MBPD) |
174 |
162 |
163 |
156 |
162 |
Octane enhancement and related plant sales volumes (MBPD) (6) |
37 |
42 |
31 |
38 |
36 |
Pipeline transportation volumes, primarily refined products and petrochemicals (MBPD) |
837 |
751 |
812 |
749 |
785 |
Refined products and petrochemicals marine terminal volumes (MBPD) (7) |
283 |
225 |
303 |
217 |
246 |
Total, net: |
|
|
|
|
|
NGL, crude oil, petrochemical and refined products pipeline transportation volumes (MBPD) |
7,113 |
6,631 |
7,088 |
6,572 |
6,940 |
Natural gas pipeline transportation volumes (BBtus/d) |
18,264 |
16,803 |
18,145 |
16,629 |
17,850 |
Equivalent pipeline transportation volumes (MBPD) (8) |
11,919 |
11,053 |
11,863 |
10,948 |
11,637 |
NGL, crude oil, refined products and petrochemical marine terminal volumes (MBPD) |
1,862 |
1,749 |
1,926 |
1,699 |
1,828 |
(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 |
(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 |
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|
|
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) |
2022 by quarter: |
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|
|
|
|
|
|
First Quarter |
|
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|
|
|
|
|
|
Second Quarter |
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|
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|
Third Quarter |
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|
Fourth Quarter |
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|
|
2022 Averages |
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2023 by quarter: |
|
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|
|
|
|
|
|
First Quarter |
|
|
|
|
|
|
|
|
Second Quarter |
|
|
|
|
|
|
|
|
2023 Averages |
|
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|
|
|
|
|
|
(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”), which is a division of S&P Global, Inc. Refinery grade propylene prices represent weighted-average spot prices for such product as reported by IHS. |
|
WTI |
|
|
LLS |
|
Crude Oil, |
Crude Oil, |
Crude Oil |
Crude Oil, |
|
$/barrel (1) |
$/barrel (2) |
$/barrel (2) |
$/barrel (3) |
2022 by quarter: |
|
|
|
|
First Quarter |
|
|
|
|
Second Quarter |
|
|
|
|
Third Quarter |
|
|
|
|
Fourth Quarter |
|
|
|
|
2022 Averages |
|
|
|
|
|
|
|
|
|
2023 by quarter: |
|
|
|
|
First Quarter |
|
|
|
|
Second Quarter |
|
|
|
|
2023 Averages |
|
|
|
|
(1) |
West Texas Intermediate (“WTI”) prices are based on commercial index prices at |
(2) |
|
(3) |
Light Louisiana Sweet (“LLS”) prices are based on commercial index prices as reported by Platts. |
The weighted-average indicative market price for NGLs (based on prices for such products at
| Enterprise Products Partners L.P. | Exhibit D |
|||||||||||
Free Cash Flow and Adjusted Free Cash Flow – UNAUDITED |
||||||||||||
($ in millions) |
|
|
||||||||||
|
For the Three Months
|
For the Six Months
|
||||||||||
|
2023 |
2022 |
2023 |
2022 |
||||||||
Free Cash Flow (“FCF”) and Adjusted FCF |
|
|
|
|
||||||||
Net cash flow provided by operating activities (GAAP) |
$ |
1,902 |
|
$ |
2,119 |
|
$ |
3,485 |
|
$ |
4,264 |
|
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 |
|
(765 |
) |
|
(336 |
) |
|
(1,402 |
) |
|
(3,868 |
) |
Cash contributions from noncontrolling interests |
|
11 |
|
|
2 |
|
|
15 |
|
|
4 |
|
Cash distributions paid to noncontrolling interests |
|
(39 |
) |
|
(40 |
) |
|
(81 |
) |
|
(82 |
) |
FCF (non-GAAP) |
$ |
1,109 |
|
$ |
1,745 |
|
$ |
2,017 |
|
$ |
318 |
|
Net effect of changes in operating accounts, as applicable |
|
(36 |
) |
|
(27 |
) |
|
403 |
|
|
(218 |
) |
Adjusted FCF (non-GAAP) |
$ |
1,073 |
|
$ |
1,718 |
|
$ |
2,420 |
|
$ |
100 |
|
|
|
|
|
|
||||||||
|
|
|
|
|||||||||
For the Twelve Months
|
|
|
||||||||||
2023 |
2022 |
|
|
|||||||||
Net cash flow provided by operating activities (GAAP) |
$ |
7,260 |
|
$ |
8,760 |
|
|
|
||||
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 |
|
(2,488 |
) |
|
(4,774 |
) |
|
|
||||
Cash contributions from noncontrolling interests |
|
18 |
|
|
58 |
|
|
|
||||
Cash distributions paid to noncontrolling interests |
|
(162 |
) |
|
(165 |
) |
|
|
||||
FCF (non-GAAP) |
$ |
4,628 |
|
$ |
3,879 |
|
|
|
||||
Net effect of changes in operating accounts, as applicable |
|
675 |
|
|
(1,185 |
) |
|
|
||||
Adjusted FCF (non-GAAP) |
$ |
5,303 |
|
$ |
2,694 |
|
|
|
||||
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
|
For the Six Months
|
For the Twelve Months
|
|||||||||||||
|
2023 |
2022 |
2023 |
2022 |
2023 |
2022 |
||||||||||
Adjusted Cash flow from operations (“Adjusted CFFO”) |
|
|
|
|
|
|
||||||||||
Net cash flow provided by operating activities (GAAP) |
$ |
1,902 |
|
$ |
2,119 |
|
$ |
3,485 |
$ |
4,264 |
|
$ |
7,260 |
$ |
8,760 |
|
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 |
|
(36 |
) |
|
(27 |
) |
|
403 |
|
(218 |
) |
|
675 |
|
(1,185 |
) |
Adjusted CFFO (non-GAAP) |
$ |
1,866 |
|
$ |
2,092 |
|
$ |
3,888 |
$ |
4,046 |
|
$ |
7,935 |
$ |
7,575 |
|
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 Twelve
|
||||||||||||
|
For the Three Months
|
For the Six Months
|
|||||||||||||
|
2023 |
2022 |
2023 |
2022 |
2023 |
||||||||||
Distributable Cash Flow (“DCF”) |
|
|
|
|
|
||||||||||
Net income attributable to common unitholders (GAAP) |
$ |
1,253 |
|
$ |
1,411 |
|
$ |
2,643 |
|
$ |
2,707 |
|
$ |
5,423 |
|
Adjustments to net income attributable to common unitholders to derive DCF (addition or subtraction indicated by sign): |
|
|
|
|
|
||||||||||
Depreciation, amortization and accretion expenses |
|
576 |
|
|
566 |
|
|
1,143 |
|
|
1,117 |
|
|
2,271 |
|
Cash distributions received from unconsolidated affiliates |
|
128 |
|
|
159 |
|
|
247 |
|
|
279 |
|
|
512 |
|
Equity in income of unconsolidated affiliates |
|
(121 |
) |
|
(107 |
) |
|
(225 |
) |
|
(224 |
) |
|
(465 |
) |
Asset impairment charges |
|
3 |
|
|
5 |
|
|
16 |
|
|
19 |
|
|
50 |
|
Change in fair market value of derivative instruments |
|
7 |
|
|
52 |
|
|
10 |
|
|
94 |
|
|
(6 |
) |
Deferred income tax expense (benefit) |
|
(11 |
) |
|
7 |
|
|
(8 |
) |
|
16 |
|
|
36 |
|
Sustaining capital expenditures (1) |
|
(101 |
) |
|
(82 |
) |
|
(185 |
) |
|
(157 |
) |
|
(400 |
) |
Other, net |
|
(3 |
) |
|
4 |
|
|
5 |
|
|
(10 |
) |
|
13 |
|
Operational DCF |
|
1,731 |
|
|
2,015 |
|
|
3,646 |
|
|
3,841 |
|
|
7,434 |
|
Proceeds from asset sales and other matters |
|
4 |
|
|
3 |
|
|
6 |
|
|
14 |
|
|
114 |
|
Monetization of interest rate derivative instruments accounted for as cash flow hedges |
|
– |
|
|
– |
|
|
21 |
|
|
– |
|
|
21 |
|
DCF (non-GAAP) |
$ |
1,735 |
|
$ |
2,018 |
|
$ |
3,673 |
|
$ |
3,855 |
|
$ |
7,569 |
|
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 |
|
36 |
|
|
27 |
|
|
(403 |
) |
|
218 |
|
|
(675 |
) |
Sustaining capital expenditures |
|
101 |
|
|
82 |
|
|
185 |
|
|
157 |
|
|
400 |
|
Other, net |
|
30 |
|
|
(8 |
) |
|
30 |
|
|
34 |
|
|
(34 |
) |
Net cash flow provided by operating activities (GAAP) |
$ |
1,902 |
|
$ |
2,119 |
|
$ |
3,485 |
|
$ |
4,264 |
|
$ |
7,260 |
|
(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 G |
||||||||||||||
Adjusted EBITDA - UNAUDITED |
|
||||||||||||||
($ in millions) |
|
|
|
||||||||||||
|
|
|
For the Twelve
|
||||||||||||
|
For the Three Months
|
For the Six Months
|
|||||||||||||
|
2023 |
2022 |
2023 |
2022 |
2023 |
||||||||||
Net income (GAAP) |
$ |
1,283 |
|
$ |
1,440 |
|
$ |
2,705 |
|
$ |
2,771 |
|
$ |
5,549 |
|
Adjustments to net income to derive Adjusted EBITDA (addition or subtraction indicated by sign): |
|
|
|
|
|
||||||||||
Depreciation, amortization and accretion in costs and expenses (1) |
|
558 |
|
|
543 |
|
|
1,104 |
|
|
1,070 |
|
|
2,190 |
|
Interest expense, including related amortization |
|
302 |
|
|
309 |
|
|
616 |
|
|
628 |
|
|
1,232 |
|
Cash distributions received from unconsolidated affiliates |
|
128 |
|
|
159 |
|
|
247 |
|
|
279 |
|
|
512 |
|
Equity in income of unconsolidated affiliates |
|
(121 |
) |
|
(107 |
) |
|
(225 |
) |
|
(224 |
) |
|
(465 |
) |
Asset impairment charges |
|
3 |
|
|
5 |
|
|
16 |
|
|
19 |
|
|
50 |
|
Provision for income taxes |
|
13 |
|
|
17 |
|
|
23 |
|
|
36 |
|
|
69 |
|
Change in fair market value of commodity derivative instruments |
|
7 |
|
|
52 |
|
|
10 |
|
|
94 |
|
|
(6 |
) |
Other, net |
|
(2 |
) |
|
– |
|
|
(4 |
) |
|
2 |
|
|
(5 |
) |
Adjusted EBITDA (non-GAAP) |
|
2,171 |
|
|
2,418 |
|
|
4,492 |
|
|
4,675 |
|
|
9,126 |
|
Adjustments to reconcile Adjusted EBITDA to net cash flow provided by operating activities (addition or subtraction indicated by sign): |
|
|
|
|
|
||||||||||
Interest expense, including related amortization |
|
(302 |
) |
|
(309 |
) |
|
(616 |
) |
|
(628 |
) |
|
(1,232 |
) |
Deferred income tax expense (benefit) |
|
(11 |
) |
|
7 |
|
|
(8 |
) |
|
16 |
|
|
36 |
|
Provision for income taxes |
|
(13 |
) |
|
(17 |
) |
|
(23 |
) |
|
(36 |
) |
|
(69 |
) |
Net effect of changes in operating accounts, as applicable |
|
36 |
|
|
27 |
|
|
(403 |
) |
|
218 |
|
|
(675 |
) |
Other, net |
|
21 |
|
|
(7 |
) |
|
43 |
|
|
19 |
|
|
74 |
|
Net cash flow provided by operating activities (GAAP) |
$ |
1,902 |
|
$ |
2,119 |
|
$ |
3,485 |
|
$ |
4,264 |
|
$ |
7,260 |
|
(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 Twelve
|
||||||||||||
|
For the Three Months
|
For the Six Months
|
|||||||||||||
|
2023 |
2022 |
2023 |
2022 |
2023 |
||||||||||
Total gross operating margin (non-GAAP) |
$ |
2,181 |
|
$ |
2,362 |
|
$ |
4,516 |
|
$ |
4,620 |
|
$ |
9,205 |
|
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) |
|
(545 |
) |
|
(531 |
) |
|
(1,078 |
) |
|
(1,045 |
) |
|
(2,140 |
) |
Asset impairment charges in operating costs and expenses |
|
(3 |
) |
|
(5 |
) |
|
(16 |
) |
|
(19 |
) |
|
(50 |
) |
Net gains (losses) attributable to asset sales and related matters in operating costs and expenses |
|
2 |
|
|
– |
|
|
4 |
|
|
(2 |
) |
|
5 |
|
General and administrative costs |
|
(56 |
) |
|
(62 |
) |
|
(113 |
) |
|
(124 |
) |
|
(230 |
) |
Total operating income (GAAP) |
$ |
1,579 |
|
$ |
1,764 |
|
$ |
3,313 |
|
$ |
3,430 |
|
$ |
6,790 |
|
(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 Twelve
|
|||||||
|
For the Three Months
|
For the Six Months
|
||||||||
|
2023 |
2022 |
2023 |
2022 |
2023 |
|||||
Capital investments: |
|
|
|
|
|
|||||
Capital expenditures |
$ |
780 |
$ |
382 |
$ |
1,433 |
$ |
731 |
$ |
2,666 |
Cash used for business combinations, net of cash received |
|
– |
|
– |
|
– |
|
3,204 |
|
|
Investments in unconsolidated affiliates |
|
– |
|
– |
|
– |
|
– |
|
1 |
Other investing activities |
|
4 |
|
1 |
|
5 |
|
2 |
|
8 |
Total capital investments |
$ |
784 |
$ |
383 |
$ |
1,438 |
$ |
3,937 |
$ |
2,675 |
The following table summarizes the non-cash mark-to-market gains (losses) for the periods indicated:
|
|
|
For the Twelve
|
||||||||||||
|
For the Three Months
|
For the Six Months
|
|||||||||||||
|
2023 |
2022 |
2023 |
2022 |
2023 |
||||||||||
Mark-to-market gains (losses) in gross operating margin: |
|
|
|
|
|
||||||||||
NGL Pipelines & Services |
$ |
(5 |
) |
$ |
(11 |
) |
$ |
(19 |
) |
$ |
(30 |
) |
$ |
(41 |
) |
Crude Oil Pipelines & Services |
|
(7 |
) |
|
(38 |
) |
|
6 |
|
|
(69 |
) |
|
45 |
|
Natural Gas Pipelines & Services |
|
4 |
|
|
1 |
|
|
2 |
|
|
(1 |
) |
|
– |
|
Petrochemical & Refined Products Services |
|
1 |
|
|
(4 |
) |
|
1 |
|
|
6 |
|
|
2 |
|
Total mark-to-market impact on gross operating margin |
$ |
(7 |
) |
$ |
(52 |
) |
$ |
(10 |
) |
$ |
(94 |
) |
$ |
6 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230801386649/en/
Randy Burkhalter, Vice President, Investor Relations, (713) 381-6812
Rick Rainey, Vice President, Media Relations, (713) 381-3635
Source: Enterprise Products Partners L.P.
FAQ
What was Enterprise's net income for Q2 2023?
What was the Distributable Cash Flow (DCF) for Q2 2023?
Did the distributions declared increase or decrease in Q2 2023?
What was the adjusted cash flow provided by operating activities for Q2 2023?
What were the NGL, crude oil, refined products & petrochemical pipeline volumes in Q2 2023?
What were the natural gas pipeline volumes in Q2 2023?
