Enterprise Products Partners L.P. (“Enterprise”) (NYSE: EPD)
today announced its financial results for the three months and year
ended December 31, 2023.
Fourth Quarter and Year End 2023
Financial Highlights
Three Months Ended December
31,
Year Ended December
31,
($ in millions, except per unit
amounts)
2023
2022
2023
2022
Operating income
$
1,921
$
1,765
$
6,929
$
6,907
Net income
$
1,602
$
1,452
$
5,657
$
5,615
Fully diluted earnings per common unit
$
0.72
$
0.65
$
2.52
$
2.50
Total gross operating margin (1)
$
2,548
$
2,368
$
9,395
$
9,309
Adjusted EBITDA (1)
$
2,499
$
2,376
$
9,318
$
9,309
Adjusted CFFO (1)
$
2,215
$
2,097
$
8,124
$
8,093
Adjusted FCF (1)
$
1,218
$
1,407
$
4,811
$
2,983
DCF (1)
$
2,059
$
2,028
$
7,601
$
7,751
Operational DCF (1)
$
2,024
$
1,926
$
7,538
$
7,629
(1)
Total gross operating margin,
adjusted earnings before interest, taxes, depreciation and
amortization (“Adjusted EBITDA”), Adjusted cash flow provided by
operating activities (“Adjusted CFFO”), Adjusted Free Cash Flow
(“Adjusted FCF”), Distributable Cash Flow (“DCF”) and Operational
Distributable Cash Flow (“Operational DCF”) are non-generally
accepted accounting principle (“non-GAAP”) financial measures that
are defined and reconciled later in this press release.
Year End 2023 Results
Enterprise reported net income attributable to common
unitholders of $5.5 billion, or $2.52 per common unit on a fully
diluted basis, for 2023 compared to $5.5 billion, or $2.50 per
common unit on a fully diluted basis, for 2022.
Operational DCF was $7.5 billion for 2023 compared to $7.6
billion for 2022. DCF provided 1.7 times coverage of the
distributions declared with respect to 2023. Enterprise retained
$3.2 billion of DCF in 2023 to reinvest in the partnership,
repurchase partnership common units, and reduce debt. Distributions
declared with regard to 2023 increased 5.3 percent compared to
those declared for 2022 and marked Enterprise’s 25th consecutive
year of distribution growth.
Adjusted CFFO was $8.1 billion for both 2023 and 2022. Adjusted
FCF was $4.8 billion for 2023 compared to $3.0 billion for 2022.
For 2023, Enterprise’s payout ratio of declared distributions to
common unitholders and partnership unit buybacks was 56 percent of
Adjusted CFFO and 94 percent of Adjusted FCF for 2023.
“Enterprise’s 2023 earnings demonstrated the value and
resiliency of our diversified, fee-based midstream businesses,”
said Jim Teague, co-chief executive officer of Enterprise’s general
partner. “Despite significantly lower commodity prices and natural
gas processing margins in 2023 compared to 2022, Enterprise
generated comparable earnings per common unit on a fully diluted
basis, Adjusted EBITDA, Adjusted CFFO and Operational DCF in 2023
to our record setting year in 2022. During 2023, the partnership
benefited from a 9 percent increase in total equivalent pipeline
volumes to 12.2 million barrels per day, a 20 percent increase in
marine terminal volumes to 2.1 million barrels per day, a 16
percent increase in NGL fractionation volumes to 1.6 million
barrels per day, and a 13 percent increase in fee-based natural gas
processing volumes to 5.8 million cubic feet per day. We also
benefited from another year of strong demand for octane in the
international gasoline markets. As we embark on a new year, we
recognize and are grateful for the tireless effort and contribution
of our employees that enabled us to achieve exemplary performance
again in 2023.”
“During 2023, we completed construction on $3.5 billion of
capital growth projects. Our two new natural gas processing plants
in the Permian Basin and 12th NGL fractionator in Chambers County,
which we placed into service during the second half of 2023, were
essentially full soon after operations began. While construction of
our PDH 2 facility was completed and commercial operations began in
the third quarter, we incurred downtime to address process and
mechanical issues and as a result this plant did not contribute
significantly to earnings in 2023. Most of these issues have been
rectified and we expect higher utilization rates in 2024. We begin
2024 with $6.8 billion of major organic growth projects under
construction, of which $1.1 billion is for the Texas Western
Products System and two natural gas processing plants in the
Permian Basin, scheduled to be completed in 2024. These projects
provide visibility to new sources of cash flow for the partnership
for this year and beyond,” stated Teague.
“The world is currently experiencing the most geopolitical
volatility and uncertainty since World War II. Financial markets
have gone from a decade of essentially ‘free’ money to a period
with one of the most rapid increases in interest rates in decades.
These actions have resulted in record amounts of government debt
and deficits, and above-trend inflation exacerbated by the
combination of a continuing flood of government stimulus and
abnormally low unemployment due to demographic shifts in the
workforce. The United States, deficits and all, is arguably in the
strongest position of any developed country. The bedrock of this
strength is our access to abundant natural resources, including
energy. Our energy security and low cost of energy supplies is the
lubricant for our economic growth and prosperity. It also
underwrites our geopolitical strength. We believe Enterprise’s
asset footprint and financial strength will serve and facilitate
the efforts of our customers who provide that energy security,
economic development and U.S. jobs,” said Teague.
Fourth Quarter and Year End 2023 Volume
Highlights
Three Months Ended
December 31,
Year Ended December
31,
2023
2022
2023
2022
NGL, crude oil, refined products &
petrochemical pipeline volumes (million BPD)
7.8
6.9
7.3
6.7
Marine terminal volumes (million BPD)
2.3
1.7
2.1
1.7
Natural gas pipeline volumes (TBtus/d)
18.7
17.6
18.4
17.1
NGL fractionation volumes (million
BPD)
1.6
1.3
1.6
1.3
Propylene plant production volumes
(MBPD)
102
89
101
101
Fee-based natural gas processing volumes
(Bcf/d)
6.2
5.4
5.8
5.2
Equity NGL-equivalent production volumes
(MBPD)
185
173
175
182
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.
- Gross operating margin, operating income and net income
attributable to common unitholders for the fourth quarter of 2023
included $15 million of net non-cash, mark-to-market (“MTM”) gains
on financial instruments used in our commodity hedging activities,
compared to $32 million of net MTM losses for the fourth quarter of
2022. For the years ended December 31, 2023 and 2022, the
partnership had net MTM losses of $33 million and $78 million,
respectively.
- Enterprise increased its cash distribution 5.1 percent to
$0.515 per common unit with respect to the fourth quarter of 2023,
compared to the distribution declared with respect to the fourth
quarter of 2022. The distribution will be paid on February 14,
2024, to common unit holders of record as of the close of business
on January 31, 2024.
- DCF for the fourth quarter of 2023 was $2.1 billion, which
provided 1.8 times coverage of the $0.515 per common unit cash
distribution. Enterprise retained $932 million of DCF in the fourth
quarter of 2023.
- Adjusted CFFO was $2.2 billion for the fourth quarter of 2023
compared to $2.1 billion for the fourth quarter of 2022. Adjusted
FCF was $1.2 billion for the fourth quarter of 2023 compared to
$1.4 billion for the fourth quarter of 2022.
- Capital investments were $1.0 billion in the fourth quarter of
2023, which included $823 million of growth capital expenditures,
$65 million for the acquisition of the Wilson natural gas storage
facility, which previously was under lease and $129 million of
sustaining capital expenditures. For the year ended December 31,
2023, capital investments were $3.3 billion, including $2.9 billion
of growth capital expenditures and $413 million of sustaining
capital expenditures.
- Enterprise repurchased approximately $96 million of its common
units on the open market in the fourth quarter of 2023, bringing
the total amount of common unit buybacks to $187 million in 2023.
Including these purchases, the partnership has utilized 46 percent
of its authorized $2.0 billion common unit buyback program.
“Enterprise finished 2023 with a strong fourth quarter,” said
Teague. “We handled record equivalent pipeline volumes of 12.7
million BPD, marine terminal volumes of 2.3 million BPD and NGL
fractionation volumes of 1.6 million BPD. Gross operating margin
from these fee-based businesses, along with improved margins in our
propylene and octane enhancement businesses more than offset weaker
natural gas processing margins and resulted in record net income,
total gross operating margin, Adjusted EBITDA and cash flow
metrics. We increased our cash distribution for the fourth quarter
of 2023 by 5.1 percent compared to the same quarter in 2022, and
DCF provided 1.8 times coverage of the distribution.”
Review of Fourth Quarter 2023
Results
Enterprise reported total gross operating margin of $2.5 billion
for the fourth quarter of 2023 compared to $2.4 billion for the
fourth quarter of 2022. Below is a detailed review of each business
segment’s performance for the fourth quarter of 2023.
NGL Pipelines & Services – Gross operating margin
from the NGL Pipelines & Services segment was $1.4 billion for
the fourth quarter of 2023 compared to $1.3 billion for the fourth
quarter of 2022.
Gross operating margin from Enterprise’s natural gas processing
and related NGL marketing business was $371 million for the fourth
quarter of 2023 compared to $459 million for the fourth quarter of
2022.
Gross operating margin from NGL marketing activities decreased a
net $56 million for the fourth quarter of 2023 compared to the
fourth quarter of 2022, primarily due to lower average sales
margins and sales volumes, partially offset by an increase in
non-cash, MTM earnings.
The partnership’s Rocky Mountain gas processing facilities
reported a net $17 million decrease in gross operating margin for
the fourth quarter of 2023 compared to the fourth quarter of 2022,
primarily due to lower average processing margins, including the
impact of hedging activities, which more than offset the benefit
associated with a 9 MBPD increase in equity NGL-equivalent
volumes.
Enterprise’s gas processing facilities in the Permian reported
an $8 million decrease in gross operating margin for the fourth
quarter of 2023 compared to the fourth quarter of 2022, primarily
due to higher utility and other operating costs and lower average
processing margins, including the impact of hedging activities.
These decreases were partially offset by an increase in fee-based
processing volumes, which increased 506 MMcf/d this quarter
compared to the fourth quarter of 2022, primarily due to processing
volumes from the partnership’s Poseidon and Mentone 2 natural gas
processing plant, which were placed into service in July 2023 and
October 2023, respectively.
Total fee-based natural gas processing volumes were a record 6.2
Bcf/d for the fourth quarter of 2023 compared to 5.4 Bcf/d for the
fourth quarter of 2022. Equity NGL-equivalent production volumes
were 185 MBPD this quarter compared to 173 MBPD for the fourth
quarter of 2022.
Gross operating margin from the partnership’s NGL pipelines and
storage business increased $133 million, or 21 percent, to a record
$779 million for the fourth quarter of 2023 compared to $646
million for the fourth quarter of 2022. NGL pipeline transportation
volumes increased to a record 4.3 million BPD in the fourth quarter
of 2023 from 3.9 million BPD in the fourth quarter of 2022. NGL
marine terminal volumes increased 23 percent to a record 922 MBPD
for the fourth quarter of 2023 from 751 MBPD in the same quarter of
2022.
Gross operating margin from the partnership’s eastern ethane
pipelines, which includes the ATEX and Aegis pipelines, increased a
combined $22 million for the fourth quarter of 2023 compared to the
fourth quarter of 2022, primarily due to higher average
transportation fees and a 41 MBPD increase in transportation
volumes.
A number of Enterprise’s NGL pipelines, including the
Mid-America and Seminole NGL Pipeline Systems, Shin Oak NGL
Pipeline and Chaparral NGL Pipeline, serve the Permian Basin and
Rocky Mountain regions. On a combined basis, these pipelines
reported a $23 million increase in gross operating margin for the
fourth quarter of 2023 compared to the fourth quarter of 2022,
primarily due to higher average transportation fees and a 101 MBPD,
net to our interest, increase in transportation volumes.
The Enterprise Hydrocarbons Terminal (“EHT”) had a $22 million
increase in gross operating margin for the fourth quarter of 2023
compared to the fourth quarter of 2022, primarily due to a 126 MBPD
increase in LPG export volumes and higher average loading fees. The
partnership’s Morgan’s Point Ethane Export Terminal reported a $15
million increase in gross operating margin, primarily attributable
to a 45 MBPD increase in export volumes and higher average loading
fees. For the fourth quarter of 2023, the associated Houston Ship
Channel Pipeline System reported a $13 million increase in gross
operating margin, primarily due to a 174 MBPD increase in
transportation volumes and higher average transportation fees
compared to the fourth quarter of 2022.
Enterprise’s Chambers County storage facility reported a $15
million increase in gross operating margin for the fourth quarter
of 2023 compared to the fourth quarter of 2022 primarily due to
higher storage revenues.
Enterprise’s NGL fractionation business reported a $41 million
increase in gross operating margin to $230 million for the fourth
quarter of 2023 compared to $189 million for the fourth quarter of
2022. Total NGL fractionation volumes were a record 1.6 million BPD
in the fourth quarter of 2023 compared to 1.3 million BPD for the
fourth quarter of 2022.
Gross operating margin from Enterprise’s NGL fractionation
complex in Chambers County, Texas increased $38 million for the
fourth quarter of 2023 compared to the same quarter in 2022,
primarily due to a 229 MBPD, net to our interest, increase in
fractionation volumes. The increase in NGL fractionation volumes
was primarily due to contributions from the 12th NGL fractionator
at the complex, which began service in July 2023.
Crude Oil Pipelines & Services – Gross operating
margin from the Crude Oil Pipelines & Services segment
increased to $456 million for the fourth quarter of 2023 compared
to $418 million for the fourth quarter of 2022. Included in gross
operating margin for the fourth quarter of 2023 and 2022 are
non-cash, MTM gains of $22 million and $8 million, respectively.
Total crude oil pipeline transportation volumes increased to a
record 2.6 million BPD, and total crude oil marine terminal volumes
increased to a record 1 million BPD for the fourth quarter of 2023
compared to the same quarter of last year.
Enterprise’s Midland-to-ECHO Pipeline System, including related
marketing activities, had a $34 million increase in gross operating
margin for the fourth quarter of 2023 compared to the fourth
quarter of 2022. This increase was primarily due to a 160 MBPD, net
to our interest, increase in transportation volumes and higher
average transportation fees and related margins from marketing
activities, partially offset by lower other revenues and higher
operating costs.
Gross operating margin from our Texas in-basin crude oil
pipelines, terminals, and other marketing activities (excluding the
results of our Midland-to-ECHO System and Seaway) increased a
combined $9 million, primarily due to higher sales volumes, higher
non-cash, MTM earnings and higher transportation revenues,
partially offset by lower average sales margins. Transportation
volumes on these systems increased a combined 53 MBPD, net to our
interest, for the fourth quarter of 2023 compared to the same
quarter of 2022.
Natural Gas Pipelines & Services – Gross operating
margin from the Natural Gas Pipelines & Services segment was
$286 million for the fourth quarter of 2023 compared to $315
million for the fourth quarter of 2022. Total natural gas
transportation volumes increased 6 percent to a record 18.7 TBtus/d
this quarter compared to 17.6 TBtus/d for the same quarter of
2022.
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 $14 million for the fourth quarter of 2023 compared to
the fourth quarter of 2022, primarily due to lower average
gathering fees and an aggregate 96 BBtus/d decrease in gathering
volumes from these systems.
Gross operating margin from Enterprise’s natural gas marketing
business decreased $39 million for the fourth quarter of 2023
compared to the same quarter of 2022, primarily due to lower
average sales margins.
Enterprise’s Permian Basin natural gas gathering systems
reported a combined $12 million increase in gross operating margin
for the fourth quarter of 2023 compared to the fourth quarter of
2022. The Delaware Basin Gathering System benefited from higher
average gathering fees and a 178 BBtus/d increase in gathering
volumes. The Midland Basin Gathering System reported a 413 BBtus/d
increase in gathering volumes. Both systems had higher operating
costs in the quarter compared to the same quarter in 2022.
Petrochemical & Refined Products Services – Gross
operating margin for the Petrochemical & Refined Products
Services segment increased 30 percent, or $100 million to $439
million for the fourth quarter of 2023. Total segment pipeline
transportation volumes were 899 MBPD for the fourth quarter this
year compared to 740 MBPD for the fourth quarter of 2022. Total
refined products and petrochemicals marine terminal volumes
increased to 352 MBPD this quarter compared to 215 MBPD for the
same quarter of 2022.
Gross operating margin from the partnership’s propylene
production and related activities increased $66 million for the
fourth quarter of 2023 compared to the fourth quarter of 2022.
Total propylene production volumes were 102 MBPD, net to our
interest, this quarter compared to 89 MBPD, net to our interest,
for the fourth quarter of 2022. The increase in gross operating
margin was primarily due to higher propylene sales volumes and
average margins, and higher propylene processing revenues from
Enterprise’s Chambers County propylene production facilities. PDH 2
operated at an approximately 20 percent utilization rate during the
fourth quarter of 2023 and contributed 5 MBPD of propylene
production.
The partnership’s octane enhancement and related operations
business reported a $15 million increase in gross operating margin
for the fourth quarter of 2023 compared to the fourth quarter of
2022, primarily due to higher average sales margins as a result of
the strong demand for octane in the international gasoline
markets.
Enterprise’s refined products pipelines and related activities
reported a $13 million increase in gross operating margin for the
fourth quarter of 2023 compared to the fourth quarter of 2022.
Contributing to the quarterly increase in gross operating margin
were higher average transportation fees and lower operating costs
on Enterprise’s TE Products Pipeline System. Overall,
transportation volumes on our TE Products Pipeline System increased
98 MBPD for the fourth quarter of 2023 compared to the same quarter
last year. Also contributing to the quarterly increase in gross
operating margin were higher storage and other revenues, and lower
operating costs at Enterprise’s Beaumont marine terminals.
Partially offsetting these increases were lower sales volumes and
average margins and lower earnings from MTM activity from refined
products marketing activities.
Capitalization
Total debt principal outstanding at December 31, 2023 was $29.0
billion, including $2.3 billion of junior subordinated notes to
which the nationally recognized debt rating agencies ascribe
partial equity content. At December 31, 2023, Enterprise had
consolidated liquidity of approximately $3.9 billion, comprised of
available borrowing capacity under its revolving credit facilities
and unrestricted cash on hand.
Capital Investments
Total capital investments in the fourth quarter of 2023 were
$1.0 billion, which included $129 million of sustaining capital
expenditures and $65 million for the acquisition of the Wilson
natural gas storage facility. For the year 2023, Enterprise’s
capital investments totaled $3.3 billion, which included $413
million of sustaining capital expenditures.
Our current expectation for growth capital investments in 2024
is approximately $3.25 billion to $3.75 billion. We estimate
sustaining capital expenditures for 2024 will be approximately $550
million, which includes capital expenditures associated with
scheduled turnarounds for our PDH 1 plant, iBDH facility, and
high-purity isobutylene production facility. These turnarounds
typically do not occur annually, but rather in three-to-four year
cycles.
2023 K-1 Tax Packages
The timing of the availability of Enterprise’s K-1 tax packages
for 2023 is dependent upon actions of the U.S. Congress and the
Biden administration with regard to the passage, or not, of the
recently proposed H.R. 7024 legislation that includes changes in
tax law which would be applied retroactively to the 2023 tax year.
As currently written, certain provisions in H.R. 7024 would lower
Enterprise’s taxable income for 2023 compared to existing tax law.
Barring any changes in tax law, Enterprise’s K-1 tax packages,
including all information to fiduciaries for common units owned in
tax exempt accounts, could be made available online through our
website at www.enterpriseproducts.com on or before February 29,
2024 and the mailing of the tax packages would be completed by
March 8, 2024. Should Congress and the Biden administration’s
consideration of H.R. 7024 impact this timeline, we will issue a
press release to update our investors on the timing of the
availability of the K-1 tax packages.
Conference Call to Discuss Fourth
Quarter 2023 Earnings
Today, Enterprise will host a conference call to discuss fourth
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, Operational 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 300 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,
insufficient cash from operations, adverse market conditions,
governmental regulations and other factors discussed in
Enterprise’s filings with the U.S. Securities and Exchange
Commission. If any of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results or
outcomes may vary materially from those expected. The partnership
disclaims any intention or obligation to update publicly or reverse
such statements, whether as a result of new information, future
events or otherwise.
Enterprise Products Partners
L.P.
Exhibit A
Condensed Statements of Consolidated
Operations – UNAUDITED
($ in millions, except per unit
amounts)
For the Three Months
Ended December 31,
For the Year Ended
December 31,
2023
2022
2023
2022
Revenues
$
14,622
$
13,650
$
49,715
$
58,186
Costs and
expenses:
Operating costs and expenses
12,757
11,952
43,017
51,502
General and administrative costs
59
62
231
241
Total costs and expenses
12,816
12,014
43,248
51,743
Equity in income of
unconsolidated affiliates
115
129
462
464
Operating
income
1,921
1,765
6,929
6,907
Other income
(expense):
Interest expense
(325
)
(307
)
(1,269
)
(1,244
)
Other, net
5
22
41
34
Total other expense, net
(320
)
(285
)
(1,228
)
(1,210
)
Income before income
taxes
1,601
1,480
5,701
5,697
Benefit from (provision for) income
taxes
1
(28
)
(44
)
(82
)
Net
income
1,602
1,452
5,657
5,615
Net income
attributable to noncontrolling interests
(34
)
(32
)
(125
)
(125
)
Net income
attributable to preferred units
–
–
(3
)
(3
)
Net income
attributable to common unitholders
$
1,568
$
1,420
$
5,529
$
5,487
Per common unit data
(fully diluted):
Earnings per common unit
$
0.72
$
0.65
$
2.52
$
2.50
Average common units outstanding (in
millions)
2,192
2,194
2,194
2,199
Supplemental
financial data:
Net cash flow provided by operating
activities
$
2,366
$
2,725
$
7,569
$
8,039
Cash flows used in investing
activities
$
977
$
645
$
3,197
$
4,954
Cash flows used in financing
activities
$
1,383
$
2,129
$
4,258
$
5,844
Total debt principal outstanding at end of
period
$
29,021
$
28,566
$
29,021
$
28,566
Non-GAAP Distributable Cash Flow (1)
$
2,059
$
2,028
$
7,601
$
7,751
Non-GAAP Operational Distributable Cash
Flow (1)
$
2,024
$
1,926
$
7,538
$
7,629
Non-GAAP Adjusted EBITDA (2)
$
2,499
$
2,376
$
9,318
$
9,309
Non-GAAP Adjusted Cash flow from
operations (3)
$
2,215
$
2,097
$
8,124
$
8,093
Non-GAAP Free Cash Flow (4)
$
1,369
$
2,035
$
4,256
$
2,929
Non-GAAP Adjusted Free Cash Flow (4)
$
1,218
$
1,407
$
4,811
$
2,983
Gross operating margin by segment:
NGL Pipelines & Services
$
1,380
$
1,294
$
4,898
$
5,142
Crude Oil Pipelines & Services
456
418
1,707
1,655
Natural Gas Pipelines & Services
286
315
1,077
1,042
Petrochemical & Refined Products
Services
439
339
1,694
1,517
Total segment gross operating margin
(5)
2,561
2,366
9,376
9,356
Net adjustment for shipper make-up rights
(6)
(13
)
2
19
(47
)
Non-GAAP total gross operating margin
(7)
$
2,548
$
2,368
$
9,395
$
9,309
(1)
See Exhibit F for reconciliation
to GAAP net cash flow provided by operating activities.
(2)
See Exhibit G for reconciliation
to GAAP net cash flow provided by operating activities.
(3)
See Exhibit E for reconciliation
to GAAP net cash flow provided by operating activities.
(4)
See Exhibit D for reconciliation
to GAAP net cash flow provided by operating activities.
(5)
Within the context of this table,
total segment gross operating margin represents a subtotal and
corresponds to measures similarly titled within the financial
statement footnotes provided in our quarterly and annual filings
with the U.S. Securities and Exchange Commission (“SEC”).
(6)
Gross operating margin by segment
for NGL Pipelines & Services and Crude Oil Pipelines &
Services reflects adjustments for non-refundable deferred
transportation revenues relating to the make-up rights of committed
shippers on certain major pipeline projects. These adjustments are
included in managements’ evaluation of segment results. However,
these adjustments are excluded from non-GAAP total gross operating
margin in compliance with guidance from the SEC.
(7)
See Exhibit H for reconciliation
to GAAP total operating income.
Enterprise Products Partners
L.P.
Exhibit B
Selected Operating Data –
UNAUDITED
For the Three Months
Ended December 31,
For the Year Ended
December 31,
2023
2022
2023
2022
Selected operating
data: (1)
NGL Pipelines & Services, net:
NGL pipeline transportation volumes
(MBPD)
4,258
3,867
4,040
3,703
NGL marine terminal volumes (MBPD)
922
751
821
723
NGL fractionation volumes (MBPD)
1,598
1,336
1,556
1,339
Equity NGL-equivalent production volumes
(MBPD) (2)
185
173
175
182
Fee-based natural gas processing volumes
(MMcf/d) (3,4)
6,237
5,445
5,848
5,182
Crude Oil Pipelines & Services,
net:
Crude oil pipeline transportation volumes
(MBPD)
2,610
2,278
2,461
2,222
Crude oil marine terminal volumes
(MBPD)
1,000
756
913
788
Natural Gas Pipelines & Services,
net:
Natural gas pipeline transportation
volumes (BBtus/d) (5)
18,723
17,605
18,365
17,107
Petrochemical & Refined Products
Services, net:
Propylene production volumes (MBPD)
102
89
101
101
Butane isomerization volumes (MBPD)
117
105
112
108
Standalone DIB processing volumes
(MBPD)
191
157
176
159
Octane enhancement and related plant sales
volumes (MBPD) (6)
40
38
36
39
Pipeline transportation volumes, primarily
refined products and petrochemicals (MBPD)
899
740
836
747
Refined products and petrochemicals marine
terminal volumes (MBPD) (7)
352
215
320
202
Total, net:
NGL, crude oil, petrochemical and refined
products pipeline transportation volumes (MBPD)
7,767
6,885
7,337
6,672
Natural gas pipeline transportation
volumes (BBtus/d)
18,723
17,605
18,365
17,107
Equivalent pipeline transportation volumes
(MBPD) (8)
12,694
11,518
12,170
11,174
NGL, crude oil, refined products and
petrochemical marine terminal volumes (MBPD)
2,274
1,722
2,054
1,713
(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
Third Quarter
$2.54
$0.30
$0.68
$0.83
$0.94
$1.55
$0.36
$0.15
Fourth Quarter
$2.88
$0.23
$0.67
$0.91
$1.07
$1.48
$0.46
$0.17
2023 Averages
$2.74
$0.25
$0.71
$0.91
$1.00
$1.52
$0.43
$0.19
(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
Third Quarter
$82.26
$83.85
$84.02
$84.72
Fourth Quarter
$78.32
$79.62
$79.89
$80.93
2023 Averages
$77.62
$78.86
$79.08
$80.13
(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 $0.57 per
gallon during the fourth quarter of 2023 versus $0.69 per gallon
during the fourth quarter of 2022. Fluctuations in our consolidated
revenues and cost of sales amounts are explained in large part by
changes in energy commodity prices. An increase in our consolidated
marketing revenues due to higher energy commodity sales prices may
not result in an increase in gross operating margin or cash
available for distribution, since our consolidated cost of sales
amounts would also be expected to increase due to comparable
increases in the purchase prices of the underlying energy
commodities. The same type of relationship would be true in the
case of lower energy commodity sales prices and purchase costs.
Enterprise Products Partners
L.P.
Exhibit D
Free Cash Flow and Adjusted Free Cash
Flow – UNAUDITED
($ in millions)
For the Three Months
Ended December 31,
For the Year Ended
December 31,
2023
2022
2023
2022
Free
Cash Flow (“FCF”) and Adjusted FCF
Net cash flow provided by operating
activities (GAAP)
$
2,366
$
2,725
$
7,569
$
8,039
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
(977
)
(645
)
(3,197
)
(4,954
)
Cash contributions from noncontrolling
interests
19
3
44
7
Cash distributions paid to noncontrolling
interests
(39
)
(48
)
(160
)
(163
)
FCF (non-GAAP)
$
1,369
$
2,035
$
4,256
$
2,929
Net effect of changes in operating
accounts, as applicable
(151
)
(628
)
555
54
Adjusted FCF (non-GAAP)
$
1,218
$
1,407
$
4,811
$
2,983
FCF is a non-GAAP measure of how much cash a business generates
after accounting for capital expenditures such as plants or
pipelines. Additionally, Adjusted FCF is a non-GAAP measure of how
much cash a business generates, excluding the net effect of changes
in operating accounts, after accounting for capital expenditures.
We believe that FCF is important to traditional investors since it
reflects the amount of cash available for reducing debt, investing
in additional capital projects and/or paying distributions. We
believe that Adjusted FCF is also important to traditional
investors for the same reasons as FCF, without regard for
fluctuations caused by timing of when amounts earned or incurred
were collected, received or paid from period to period. Since we
partner with other companies to fund certain capital projects of
our consolidated subsidiaries, our determination of FCF and
Adjusted FCF appropriately reflect the amount of cash contributed
from and distributed to noncontrolling interests.
Enterprise Products Partners
L.P.
Exhibit E
Adjusted Cash flow from operations –
UNAUDITED
($ in millions)
For the Three Months
Ended December 31,
For the Year Ended
December 31,
2023
2022
2023
2022
Adjusted
Cash flow from operations (“Adjusted CFFO”)
Net cash flow provided by operating
activities (GAAP)
$
2,366
$
2,725
$
7,569
$
8,039
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
(151
)
(628
)
555
54
Adjusted CFFO (non-GAAP)
$
2,215
$
2,097
$
8,124
$
8,093
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. 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 and Operational
Distributable Cash Flow– UNAUDITED
($ in millions)
For the Three Months
Ended December 31,
For the Year Ended
December 31,
2023
2022
2023
2022
Distributable Cash Flow (“DCF”) and Operational
DCF
Net income attributable to common
unitholders (GAAP)
$
1,568
$
1,420
$
5,529
$
5,487
Adjustments to net income attributable to
common unitholders to derive DCF (addition or subtraction indicated
by sign):
Depreciation, amortization and accretion
expenses
601
570
2,343
2,245
Cash distributions received from
unconsolidated affiliates
121
133
488
544
Equity in income of unconsolidated
affiliates
(115
)
(129
)
(462
)
(464
)
Asset impairment charges
4
5
32
53
Change in fair market value of derivative
instruments
(15
)
32
33
78
Deferred income tax expense
7
36
12
60
Sustaining capital expenditures (1)
(129
)
(138
)
(413
)
(372
)
Other, net
(18
)
(3
)
(24
)
(2
)
Operational DCF (non-GAAP)
2,024
1,926
7,538
7,629
Proceeds from asset sales and other
matters
35
102
42
122
Monetization of interest rate derivative
instruments accounted for as cash flow hedges
–
–
21
–
DCF (non-GAAP)
$
2,059
$
2,028
$
7,601
$
7,751
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
151
628
(555
)
(54
)
Sustaining capital expenditures
129
138
413
372
Other, net
27
(69
)
110
(30
)
Net cash flow provided by operating
activities (GAAP)
$
2,366
$
2,725
$
7,569
$
8,039
(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.
Operational DCF, which is defined as DCF excluding the impact of
proceeds from asset sales and other matters and monetization of
interest rate derivative instruments accounted for as cash flow
hedges, is a supplemental non-GAAP liquidity measure that
quantifies the portion of cash available for distribution to common
unitholders that was generated from our normal operations. We
believe that it is important to consider this non-GAAP measure as
it provides an enhanced perspective of our assets’ ability to
generate cash flows without regard for certain items that do not
reflect our core operations.
The GAAP measure most directly comparable to DCF and Operational
DCF is net cash flow provided by operating activities.
Enterprise Products Partners
L.P.
Exhibit G
Adjusted EBITDA - UNAUDITED
($ in millions)
For the Three Months
Ended December 31,
For the Year Ended
December 31,
2023
2022
2023
2022
Net income (GAAP)
$
1,602
$
1,452
$
5,657
$
5,615
Adjustments to net income to derive
Adjusted EBITDA (addition or subtraction indicated by sign):
Depreciation, amortization and accretion
in costs and expenses (1)
584
550
2,267
2,156
Interest expense, including related
amortization
325
307
1,269
1,244
Cash distributions received from
unconsolidated affiliates
121
133
488
544
Equity in income of unconsolidated
affiliates
(115
)
(129
)
(462
)
(464
)
Asset impairment charges
4
5
32
53
Provision for (benefit from) income
taxes
(1
)
28
44
82
Change in fair market value of commodity
derivative instruments
(15
)
32
33
78
Other, net
(6
)
(2
)
(10
)
1
Adjusted EBITDA (non-GAAP)
2,499
2,376
9,318
9,309
Adjustments to reconcile Adjusted EBITDA
to net cash flow provided by operating activities (addition or
subtraction indicated by sign):
Interest expense, including related
amortization
(325
)
(307
)
(1,269
)
(1,244
)
Deferred income tax expense
7
36
12
60
Benefit from (provision for) income
taxes
1
(28
)
(44
)
(82
)
Net effect of changes in operating
accounts, as applicable
151
628
(555
)
(54
)
Other, net
33
20
107
50
Net cash flow provided by operating
activities (GAAP)
$
2,366
$
2,725
$
7,569
$
8,039
(1)
Excludes amortization of major
maintenance costs for reaction-based plants, which are a component
of Adjusted EBITDA.
Adjusted EBITDA is commonly used as a supplemental financial
measure by our management and external users of our financial
statements, such as investors, commercial banks, research analysts
and rating agencies, to assess the financial performance of our
assets without regard to financing methods, capital structures or
historical cost basis; the ability of our assets to generate cash
sufficient to pay interest and support our indebtedness; and the
viability of projects and the overall rates of return on
alternative investment opportunities.
Since Adjusted EBITDA excludes some, but not all, items that
affect net income or loss and because these measures may vary among
other companies, the Adjusted EBITDA data presented in this press
release may not be comparable to similarly titled measures of other
companies. The GAAP measure most directly comparable to Adjusted
EBITDA is net cash flow provided by operating activities.
Enterprise Products Partners
L.P.
Exhibit H
Gross Operating Margin –
UNAUDITED
($ in millions)
For the Three Months
Ended December 31,
For the Year Ended
December 31,
2023
2022
2023
2022
Total gross operating margin
(non-GAAP)
$
2,548
$
2,368
$
9,395
$
9,309
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)
(571
)
(538
)
(2,215
)
(2,107
)
Asset impairment charges in operating
costs and expenses
(3
)
(5
)
(30
)
(53
)
Net gains (losses) attributable to asset
sales and related matters in operating costs and expenses
6
2
10
(1
)
General and administrative costs
(59
)
(62
)
(231
)
(241
)
Total operating income (GAAP)
$
1,921
$
1,765
$
6,929
$
6,907
(1)
Excludes amortization of major maintenance
costs for reaction-based plants, which are a component of gross
operating margin.
We evaluate segment performance based on our financial measure
of gross operating margin. Gross operating margin is an important
performance measure of the core profitability of our operations and
forms the basis of our internal financial reporting. We believe
that investors benefit from having access to the same financial
measures that our management uses in evaluating segment
results.
The term “total gross operating margin” represents GAAP
operating income exclusive of (i) depreciation, amortization and
accretion expenses (excluding amortization of major maintenance
costs for reaction-based plants), (ii) impairment charges, (iii)
gains and losses attributable to asset sales and related matters,
and (iv) general and administrative costs. Total gross operating
margin includes equity in the earnings of unconsolidated
affiliates, but is exclusive of other income and expense
transactions, income taxes, the cumulative effect of changes in
accounting principles and extraordinary charges. Total gross
operating margin is presented on a 100 percent basis before any
allocation of earnings to noncontrolling interests. The GAAP
financial measure most directly comparable to total gross operating
margin is operating income.
Total gross operating margin excludes amounts attributable to
shipper make-up rights as described in footnote (6) to Exhibit A of
this press release.
Enterprise Products Partners L.P.
Exhibit I
Other Information – UNAUDITED
($ in millions)
For the Three Months
Ended December 31,
For the Year Ended
December 31,
2023
2022
2023
2022
Capital investments:
Capital expenditures
$
1,012
$
761
$
3,266
$
1,964
Cash used for business combinations, net
of cash received
–
–
–
3,204
Investments in unconsolidated
affiliates
–
–
2
1
Other investing activities
5
2
13
5
Total capital investments
$
1,017
$
763
$
3,281
$
5,174
The following table summarizes the non-cash mark-to-market gains
(losses) for the periods indicated:
For the Three Months
Ended December 31,
For the Year Ended
December 31,
2023
2022
2023
2022
Mark-to-market gains (losses) in gross
operating margin:
NGL Pipelines & Services
$
(3
)
$
(40
)
$
(25
)
$
(52
)
Crude Oil Pipelines & Services
22
8
(5
)
(30
)
Natural Gas Pipelines & Services
1
(1
)
(1
)
(3
)
Petrochemical & Refined Products
Services
(5
)
1
(2
)
7
Total mark-to-market impact on gross
operating margin
$
15
$
(32
)
$
(33
)
$
(78
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240201718288/en/
Randy Burkhalter, Vice President, Investor Relations, (713)
381-6812 Rick Rainey, Vice President, Media Relations, (713)
381-3635
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