Enterprise Products Partners L.P. (“Enterprise”) (NYSE: EPD)
today announced its financial results for the three and six months
ended June 30, 2023.
Enterprise reported net income attributable to common
unitholders of $1.3 billion, or $0.57 per unit on a fully diluted
basis, for the second quarter of 2023, compared to $1.4 billion, or
$0.64 per unit on a fully diluted basis, for the second quarter of
2022.
Distributable Cash Flow (“DCF”) was $1.7 billion for the second
quarter of 2023 compared to $2.0 billion for the second quarter of
2022. Distributions declared with respect to the second quarter of
2023 increased 5.3 percent to $0.50 per common unit, or $2.00 per
common unit annualized, compared to distributions declared for the
second quarter of 2022. DCF provided 1.6 times coverage of the
distribution declared with respect to the second quarter of 2023.
Enterprise retained $639 million of DCF for the second quarter of
2023 and $3.3 billion for the twelve months ended June 30,
2023.
Adjusted cash flow provided by operating activities (“Adjusted
CFFO”) was $1.9 billion for the second quarter of 2023, compared to
$2.1 billion for the second quarter of 2022. Enterprise’s payout
ratio, comprised of distributions to common unitholders and
partnership unit buybacks, for the twelve months ended June 30,
2023, was 57 percent of Adjusted CFFO and 86 percent of Adjusted
Free Cash Flow (“Adjusted FCF”).
Second Quarter 2023
Highlights
Three Months Ended June 30,
($ 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 and $52 million for the
second quarters of 2023 and 2022, respectively.
- Capital investments were $784 million in the second quarter of
2023, which included $683 million of growth capital expenditures
and $101 million for sustaining capital expenditures. Capital
investments were $1.4 billion for the first six months of 2023,
which included $1.2 billion of growth capital expenditures and $185
million for sustaining capital expenditures.
- During the second quarter of 2023, Enterprise purchased 2.9
million of its common units on the open market for approximately
$75 million. For the first six months of 2023, the partnership
purchased approximately 3.6 million common units on the open market
for approximately $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.
“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” Teague, co-chief executive
officer of Enterprise’s general partner. “During the quarter, we
established several operational records, including natural gas
pipeline volumes, NGL fractionation volumes and 11.9 million
equivalent barrels per day of total pipeline volumes. We completed
construction and began operations on $2.5 billion of organic growth
projects that will begin generating new sources of cash flow for
the partnership. We also increased the partnership’s cash
distribution by 5.3 percent, to an annualized rate of $2.00 per
common unit, compared to the payout a year ago. We are grateful and
proud of Enterprise’s history of consistently returning capital to
our limited partners with 2023 representing 25 consecutive years of
distribution growth.”
“We reported both total gross operating margin and Adjusted
EBITDA of $2.2 billion for the second quarter of 2023 compared to
$2.4 billion for the second quarter of last year. While we earned
higher revenues from increases in volumes across our NGL, natural
gas and crude oil businesses, this was more than offset by the
effects of lower natural gas processing margins due to a 48 percent
decrease in NGL prices, lower revenues on our EFS Midstream System
as a result of the expiration of minimum volume commitments at the
end of June 2022, and lower sales margins and volumes in our
propylene and octane enhancement businesses,” stated Teague.
“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 $4.1 billion of major organic growth projects
still under construction. We are on schedule to complete our
Mentone II natural gas processing plant in the Delaware Basin in
the fourth quarter of this year and the first phase of our Texas
Western products pipeline system at the end of 2023,” said
Teague.
Review of Second Quarter 2023
Results
Enterprise reported total gross operating margin of $2.2 billion
for the second quarter of 2023 compared to $2.4 billion for the
second quarter of 2022. Below is a review of each business
segment’s performance for the second quarter of 2023.
NGL Pipelines & Services – Gross operating margin
from the NGL Pipelines & Services segment was $1.1 billion for
the second quarter of 2023 compared to $1.3 billion for the second
quarter of 2022.
Gross operating margin from Enterprise’s natural gas processing
and related NGL marketing business was $310 million for the second
quarter of 2023 compared to $587 million for the second quarter of
2022. Lower NGL prices led to an aggregate decrease in average
processing margins from all of the partnership’s processing plants.
The weighted-average indicative NGL price for the second quarter of
2023 decreased 48 percent to $0.55 per gallon this quarter from
$1.06 per gallon for the second quarter of 2022.
Gross operating margin from NGL marketing activities decreased
$102 million for the second quarter of 2023 compared to the second
quarter of 2022, primarily due to lower sales volumes and average
sales margins.
The partnership’s Midland Basin natural gas processing plants
reported a net $88 million decrease in gross operating margin for
the second quarter of 2023 compared to the second quarter of 2022,
primarily due to lower average processing margins and equity NGL
production, partially offset by a 190 MMcf/d increase in fee-based
natural gas processing volumes.
Enterprise’s Delaware Basin processing plants reported a $29
million decrease in gross operating margin for the second quarter
of 2023 compared to the same quarter in 2022, primarily due to
lower average processing margins, including the impact of hedging
activities. Fee-based natural gas processing volumes increased 64
MMcf/d compared to the second quarter of 2022.
Gross operating margin from the partnership’s South Texas
processing plants decreased $29 million for the second quarter of
2023 versus the same quarter in 2022, primarily due to lower
average processing margins, including the impact of hedging
activities. Fee-based natural gas processing volumes increased 28
MMcf/d this quarter compared to the second quarter of 2022.
Enterprise’s Rocky Mountain natural gas processing plants
reported a combined $20 million decrease in gross operating margin
for the second quarter of 2023 compared to the second quarter of
2022, primarily due to lower average processing margins, including
the impact of hedging activities. On a combined basis, fee-based
natural gas processing volumes decreased 74 MMcf/d this quarter
compared to the second quarter of 2022.
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 $598 million for the
second quarter of 2023 compared to $539 million for the second
quarter of 2022. NGL pipeline transportation volumes increased to
3.9 million BPD this quarter compared to 3.7 million BPD for the
same quarter last year.
The partnership’s storage business in Chambers County reported a
$13 million increase in gross operating margin for the second
quarter of 2023 versus the same quarter in 2022, primarily due to
lower operating costs.
Gross operating margin from Enterprise Hydrocarbons Terminal
(“EHT”) increased $12 million for the second quarter of 2023
compared to the second quarter of 2022, primarily due to higher
average loading fees. Liquefied Petroleum Gas (“LPG”) export
volumes were 583 MBPD this quarter compared to 587 MBPD for the
second quarter last year. The partnership’s Morgan’s Point Ethane
Export Terminal reported an $11 million increase in gross operating
margin for the second quarter of 2023 compared to the second
quarter of 2022, primarily due to a 22 MBPD increase in export
volumes and higher average loading fees. The partnership’s
associated Houston Ship Channel pipeline reported a $6 million
increase in gross operating margin for the second quarter of 2023
compared to the second quarter of 2022, primarily due to higher
average transportation fees and a 59 MBPD increase in
transportation volumes. In total, the partnership’s NGL marine
terminal volumes were 765 MBPD for the second quarter of 2023
compared to 747 MBPD for the second quarter of 2022.
Gross operating margin from Enterprise’s Eastern ethane
pipelines, which include the ATEX and Aegis pipelines, increased a
combined $4 million for the second quarter of 2023 compared to the
second quarter of 2022, primarily due to higher average
transportation fees. Transportation volumes on these pipelines
increased a combined 95 MBPD this quarter compared to the same
quarter last year.
Enterprise’s NGL fractionation business reported gross operating
margin of $202 million for the second quarter of 2023 compared to
$201 million for the second quarter of 2022. Total NGL
fractionation volumes for the second quarter of 2023 increased 40
MBPD to a record 1.4 million BPD compared to the same quarter of
2022.
Crude Oil Pipelines & Services – Gross operating
margin from the partnership’s Crude Oil Pipelines & Services
segment increased to $422 million for the second quarter of 2023
from $407 million for the second quarter of 2022. Gross operating
margin for the second quarters of 2023 and 2022 included non-cash
MTM losses related to commodity hedging activities of $7 million
and $38 million, respectively. Total crude oil pipeline
transportation volumes increased 8 percent to 2.4 million BPD for
the second quarter of 2023 compared to the second quarter of 2022.
Total crude oil marine terminal volumes were 814 MBPD for the
second quarter of 2023 compared to 777 MBPD for the same quarter
last year.
Gross operating margin from Enterprise’s Midland-to-ECHO
Pipeline System, including related marketing activities, increased
a net $59 million for the second quarter of 2023 compared to the
same quarter in 2022, primarily due to higher transportation
revenues and related margins from marketing activities, partially
offset by higher operating costs. Transportation volumes increased
by 124 MBPD, net to our interest, compared to the second quarter of
2022.
Gross operating margin from the partnership’s other crude oil
marketing activities increased $51 million for the second quarter
of 2023 compared to the second quarter of 2022, primarily due to
higher non-cash MTM earnings and higher average sales margins.
The partnership’s West Texas Pipeline System had a $42 million
increase in gross operating margin for the second quarter of 2023
compared to the second quarter of 2022, primarily due to higher
ancillary service and other revenues. Transportation volumes on the
West Texas Pipeline System increased 17 MBPD this quarter compared
to the second quarter of 2022.
Gross operating margin from Enterprise’s EFS Midstream System
decreased $82 million for the second quarter of 2023 compared to
the second quarter of 2022, primarily due to lower deficiency
revenues as a result of the expiration of minimum volume
commitments at the end of June 2022 associated with certain
long-term gathering agreements entered into at the time Enterprise
acquired this system and lower average transportation fees. The EFS
Midstream System continues to transport volumes produced from
dedicated acreage through the remaining term of these
agreements.
Gross operating margin from the South Texas Crude Oil Pipeline
System decreased $30 million for the second quarter of 2023
compared to the second quarter of 2022, primarily due to lower
ancillary service and other revenues, deficiency revenues and
average transportation fees. Transportation volumes on this system
decreased 50 MBPD for the second quarter of 2023 compared to the
same quarter in 2022.
Enterprise’s share of gross operating margin from the Seaway
Pipeline decreased $24 million for the second quarter of 2023
compared to the same quarter in 2022, primarily due to lower
ancillary service and other fee revenues. Transportation volumes on
the Seaway Pipeline increased 52 MBPD, net to our interest, this
quarter compared to the second quarter of last year.
Natural Gas Pipelines & Services – Gross operating
margin from Enterprise’s Natural Gas Pipelines & Services
segment increased to $238 million for the second quarter of 2023
compared to $229 million for the second quarter of 2022. Total
natural gas transportation volumes increased 9 percent to a record
18.3 TBtus/d for the second quarter of 2023 compared to 16.8
TBtus/d for the second quarter of 2022.
Gross operating margin from Enterprise’s natural gas marketing
business increased $11 million for the second quarter of 2023
compared to the same quarter last year, primarily due to higher
average sales margins from location price differentials.
The East Texas Gathering System reported an $8 million increase
in gross operating margin for the second quarter of 2023 versus the
same quarter last year, primarily due to a 459 BBtus/d increase in
gathering volumes. The partnership’s Delaware Basin Gathering
System reported a $6 million increase in gross operating margin for
the second quarter of 2023 compared to the second quarter of 2022,
primarily due to higher average gathering fees. Gathering volumes
on this system increased 67 BBtus/d for the second quarter of 2023
compared to the same quarter last year.
Gross operating margin from the partnership’s Acadian Gas System
increased $4 million for the second quarter of 2023 compared to the
second quarter of 2022, primarily due to lower maintenance and
other operating costs. Transportation volumes on this system
increased 91 BBtus/d for the second quarter of 2023 compared to the
second quarter of 2022.
Gross operating margin from Enterprise’s Texas Intrastate System
increased a net $2 million for the second quarter of 2023 compared
to the second quarter last year, primarily due to a 793 BBtus/d
increase in transportation volumes and higher average
transportation fees which more than offset lower ancillary and
other revenues.
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 $22 million for the second quarter of 2023 compared to
the second quarter of 2022, primarily due to lower average
gathering fees on the San Juan Gathering System, a combined 126
BBtus/d decrease in gathering volumes, and higher maintenance and
other operating costs.
Petrochemical & Refined Products Services – Gross
operating margin for the Petrochemical & Refined Products
Services segment was $383 million for the second quarter of 2023
compared to $421 million for the second quarter of 2022. Total
segment pipeline volumes increased 11 percent to 837 MBPD for the
second quarter of 2023 compared to 751 MBPD for the second quarter
of 2022. Marine terminal volumes were 283 MBPD this quarter
compared to 225 MBPD for the same quarter of last year.
Gross operating margin from the partnership’s propylene
production and related activities decreased $29 million for the
second quarter of 2023 compared to the second quarter of 2022.
Enterprise’s Chambers County propylene production facilities
reported a $34 million decrease in gross operating margin for the
second quarter of 2023 versus the same quarter of 2022, primarily
due to lower average propylene sales margins, lower feedstock
supplies from refineries and a 25 MBPD decrease in propylene
production volumes. Three of the propylene fractionators were down
a combined 57 days for planned maintenance during the second
quarter of 2023. Total propylene and associated by-product
production volumes were 84 MBPD for the second quarter of 2023
compared to 109 MBPD in the same quarter last year.
Gross operating margin from the partnership’s octane enhancement
business and related plant operations for the second quarter of
2023 decreased a net $52 million compared to the second quarter
last year, primarily due to lower sales volumes and average sales
margins, partially offset by lower utility and other operating
costs.
Gross operating margin from Enterprise’s refined products
pipelines and related activities increased a net $25 million for
the second quarter of 2023 compared to the second quarter of 2022.
Contributing to the quarterly increase in gross operating margin
were higher average sales margins from refined products marketing
activities and higher storage and other fee revenues from the
refined products terminals in Beaumont, Texas, partially offset by
higher operating costs from our TE Products Pipeline System.
Refined product marine terminal volumes at Beaumont increased 68
MBPD for the second quarter of 2023 compared to the same quarter
last year.
Enterprise’s butane isomerization and related operations
reported an $8 million increase in gross operating margin for the
second quarter of 2023 compared to the same quarter in 2022,
primarily due to lower utility and other operating costs.
Capitalization
Total debt principal outstanding at June 30, 2023 was $28.9
billion, including $2.3 billion of junior subordinated notes, to
which the debt rating agencies ascribe partial equity content. At
June 30, 2023, Enterprise had consolidated liquidity of
approximately $4.0 billion, comprised of available borrowing
capacity under its revolving credit facilities and unrestricted
cash on hand.
Capital Investments
Total capital investments in the second quarter of 2023 were
$784 million, which includes $101 million of sustaining capital
expenditures. For the first six months of 2023, Enterprise’s
capital investments totaled $1.4 billion, which includes $185
million of sustaining capital expenditures.
We continue to expect organic growth capital investments for
2023 will be in the range of $2.4 billion to $2.8 billion. We
expect sustaining capital expenditures for 2023 will be
approximately $400 million.
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 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
June 30,
For the Six Months Ended June
30,
For the Twelve Months Ended
June 30,
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 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
June 30,
For the Six Months Ended June
30,
For the Twelve Months Ended
June 30,
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 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)
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
2023 by quarter:
First Quarter
$3.44
$0.25
$0.82
$1.11
$1.16
$1.62
$0.50
$0.22
Second Quarter
$2.09
$0.21
$0.67
$0.78
$0.84
$1.44
$0.40
$0.21
2023 Averages
$2.77
$0.23
$0.75
$0.95
$1.00
$1.53
$0.45
$0.22
(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
Midland
Houston
LLS
Crude Oil,
Crude Oil,
Crude Oil
Crude Oil,
$/barrel (1)
$/barrel (2)
$/barrel (2)
$/barrel (3)
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
2023 by quarter:
First Quarter
$76.13
$77.50
$77.74
$79.00
Second Quarter
$73.78
$74.48
$74.68
$75.87
2023 Averages
$74.96
$75.99
$76.21
$77.44
(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 $0.55 per
gallon during the second quarter of 2023 versus $1.06 per gallon
during the second quarter of 2022. Fluctuations in our consolidated
revenues and cost of sales amounts are explained in large part by
changes in energy commodity prices. An increase in our consolidated
marketing revenues due to higher energy commodity sales prices may
not result in an increase in gross operating margin or cash
available for distribution, since our consolidated cost of sales
amounts would also be expected to increase due to comparable
increases in the purchase prices of the underlying energy
commodities. The same type of relationship would be true in the
case of lower energy commodity sales prices and purchase costs.
Enterprise Products Partners L.P.
Exhibit D
Free Cash Flow and Adjusted Free Cash
Flow – UNAUDITED
($ in millions)
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
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 Ended
June 30,
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 Ended
June 30,
For the Six Months Ended June
30,
For the Twelve Months Ended
June 30,
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 Months Ended
June 30,
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
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 Months Ended
June 30,
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
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 Months Ended
June 30,
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
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 Months Ended
June 30,
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
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 Months Ended
June 30,
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
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
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