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Enterprise Reports Results For The Third Quarter Of 2012

Stocks in this article: EPD

Enterprise Products Partners L.P. (“Enterprise”) (NYSE: EPD) today announced its financial results for the three and nine months ended September 30, 2012.

Third Quarter 2012 Highlights

  • For the third quarter of 2012, Enterprise reported record gross operating margin of $1.1 billion; adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) of $1.1 billion; net income of $588 million and earnings per unit of $0.66 on a fully diluted basis. Net income for the third quarter of 2012 was reduced by non-cash asset impairment charges of $43 million, or $0.05 per unit on a fully diluted basis. Gross operating margin, Adjusted EBITDA and net income included a $24 million, or $0.03 per unit on a fully diluted basis, benefit from the settlement of certain litigation.
                             
Three months ended Nine months ended
September 30, September 30,
2012         2011 2012         2011
($ in millions, except per unit amounts)                
Gross operating margin (1) $ 1,140 $ 973 $ 3,225 $ 2,771
Operating income $ 789 $ 681 $ 2,287 $ 1,950
Net income $ 588 $ 480 $ 1,811 $ 1,363
Fully diluted earnings per unit $ 0.66 $ 0.55 $ 2.03 $ 1.55
Adjusted EBITDA (1) $ 1,063 $ 956 $ 3,198 $ 2,762
Distributable cash flow (1) (2) $ 743 $ 856 $ 3,247 $ 2,327
 
         

(1)

        Gross operating margin, Adjusted EBITDA and distributable cash flow are non-generally accepted
accounting principle (“non-GAAP”) financial measures that are defined and reconciled later in
this press release.
 

(2)

Distributable cash flow for the third quarters of 2012 and 2011 included $8 million and $190
million, respectively, of net proceeds from the sale of assets and investments. Distributable cash
flow for the first nine months of 2012 and 2011 included $1.137 billion and $441 million,
respectively, of net proceeds from the sale of assets and investments.
 
  • Enterprise increased its cash distribution with respect to the third quarter of 2012 to $0.65 per unit, or $2.60 per unit on an annualized basis, which represents a 6.1 percent increase from the distribution rate paid with respect to the third quarter of 2011. This is the 33 rd consecutive quarterly increase and the 42 nd increase since the partnership’s initial public offering in 1998. The distribution with respect to the third quarter of 2012 will be paid on November 8, 2012 to unitholders of record as of the close of business on October 31, 2012;
  • Enterprise reported distributable cash flow of $743 million for the third quarter of 2012, which provided 1.3 times coverage of the $0.65 per unit cash distribution that will be paid to common unitholders. Enterprise retained approximately $177 million of distributable cash flow for the third quarter of 2012. Distributable cash flow for the third quarter of 2012 included a $24 million benefit from the settlement of litigation and was reduced by $70 million from a loss on the settlement of interest rate hedges associated with Enterprise’s issuance of senior notes in August 2012. Excluding these items, distributable cash flow for the third quarter of 2012 would have been $789 million and provided 1.4 times coverage of the cash distribution declared with respect to the quarter;
  • Enterprise’s total NGL, crude oil, refined products and petrochemical pipeline volumes for the third quarter of 2012 were 4.3 million barrels per day (“BPD”), which was 6 percent more than volumes in the third quarter of 2011. Total natural gas pipeline volumes increased 12 percent to a record 14.9 trillion British thermal units per day (“TBtud”) for the third quarter of 2012. NGL fractionation volumes for the third quarter of 2012 increased 18 percent to 653 thousand barrels per day (“MBPD”). Fee-based natural gas processing volumes for the third quarter of 2012 increased 17 percent to a record 4.5 billion cubic feet per day (“Bcfd”), while equity NGL production for the third quarter of 2012 decreased 13 percent to 99 MBPD;
  • Enterprise made capital investments of $1.1 billion during the third quarter of 2012, including $1.0 billion of growth capital expenditures and investments and $102 million of sustaining capital expenditures; and
  • Enterprise had consolidated liquidity (defined as unrestricted cash on hand plus available borrowing capacity under its revolving credit facility) at September 30, 2012 of approximately $3.4 billion.

“Enterprise reported record crude oil and natural gas pipeline volumes; record fee-based natural gas processing volumes and near record NGL pipeline and fractionation volumes for the third quarter of 2012,” stated Michael A. Creel, president and CEO of Enterprise. “This volume growth in our fee-based businesses along with attractive sales margins led to another quarter of strong financial performance with a $167 million, or 17 percent, increase in gross operating margin for the third quarter of 2012 compared to the third quarter of last year.”

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