(dollars in thousands) |
4th Qtr 2008 |
4th Qtr 2007 |
Change | |||||||||||||||||
Enterprise Products Partners & EPGP | $ | 47,381 | $ | 41,020 | 15.5 | % | ||||||||||||||
TEPPCO Partners & TEPPCO GP | 18,658 | 15,442 | 20.8 | % | ||||||||||||||||
Energy Transfer Equity & LE GP | 20,045 | 21,598 | -7.2 | % | ||||||||||||||||
Total | $ | 86,084 | $ | 78,060 | 10.3 | % |
Consolidated net income for the fourth quarter of 2008 increased to
“We are pleased to report record distributable cash flow for the third consecutive quarter, supported by strong financial and operating results from
Basis of Presentation of Financial Information
Our Investment in
In accordance with rules and regulations of the
In order for the unitholders of
Use of Non-GAAP Financial Measures
The press release and accompanying schedules include the non-GAAP financial measure of distributable cash flow. Exhibit C provides a reconciliation of this non-GAAP financial measure to its most directly comparable financial measure calculated in accordance with GAAP. Distributable cash flow should not be considered an alternative to GAAP financial measures such as net income, net cash flow provided by operating activities or any other GAAP measure of liquidity or financial performance. We define distributable cash flow as follows:
- Cash distributions expected to be received from the Parent Company’s investments in limited and general partner interests (including related incentive distribution rights, if any, held by these general partners); less the sum of,
- Parent Company general and administrative costs on a standalone basis; and
- the general and administrative costs, on a standalone basis, of the general partners of
Enterprise Products Partners andTEPPCO .
Distributable cash flow is a significant liquidity metric used by senior management to compare net cash flow generated by the Parent Company’s investments to the cash distributions the Parent Company is expected to pay its partners. Using this metric, senior management can quickly compute the coverage ratio of estimated cash flow to planned cash distributions.
Distributable cash flow is an important non-GAAP financial measure for the Parent Company’s unitholders since it indicates to investors whether or not the Parent Company’s investments are generating cash flow at a level that can sustain or support an increase in quarterly cash distribution levels. Financial metrics such as distributable cash flow are quantitative standards used by the investment community because the value of a partnership unit is in part measured by its yield (which, in turn, is based on the amount of cash distributions a partnership pays to a unitholder).
Company Information and Forward-Looking Statements
This press release contains various forward-looking statements and information that are based on Enterprise GP Holdings’ beliefs and those of its general partner, as well as assumptions made by and information currently available to
- fluctuations in oil, natural gas and natural gas liquid prices and production due to weather and other natural and economic forces;
- the effects of the Related Companies’ debt level on its future financial and operating flexibility;
- a reduction in demand for the Related Companies’ products by the petrochemical, refining, heating or other industries;
- a decline in the volumes delivered by the Related Companies’ facilities;
- the failure of any of the Related Companies’ credit risk management efforts to adequately protect it against customer non-payment;
- terrorist attacks aimed at the Related Companies’ facilities; and
- the failure to successfully integrate the Related Companies’ operations with companies, if any, that they may acquire in the future.
Exhibit A |
||||||||||||||||
Enterprise GP Holdings L.P. – Parent Company Distributable Cash Flow, Summary Income Statements and Selected Balance Sheet Data – UNAUDITED For the Three Months and Years Ended December 31, 2008 and 2007 (Amounts in thousands) |
||||||||||||||||
The following table presents distributable cash flow, summarized income statement data and selected balance sheet information for the Parent Company with respect to the periods shown and at the dates indicated. |
||||||||||||||||
For the Three Months | For the Year | |||||||||||||||
Ended December 31, | Ended December 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Cash distributions from investees: (1) | ||||||||||||||||
Enterprise Products Partners and EPGP: | ||||||||||||||||
From common units of Enterprise Products Partners (2) |
$ | 7,246 | $ | 6,727 | $ | 28,033 | $ | 26,203 | ||||||||
From 2% general partner interest | 4,889 | 4,441 | 18,667 | 17,259 | ||||||||||||
From general partner IDRs | 35,246 | 29,852 | 131,306 | 112,013 | ||||||||||||
TEPPCO and TEPPCO GP: | ||||||||||||||||
From 4,400,000 common units of TEPPCO | 3,190 | 3,058 | 12,628 | 12,144 | ||||||||||||
From 2% general partner interest | 1,549 | 1,275 | 5,847 | 5,061 | ||||||||||||
From general partner IDRs | 13,919 | 11,109 | 52,163 | 43,850 | ||||||||||||
Energy Transfer Equity and LE GP: | ||||||||||||||||
From 38,976,090 common units of Energy Transfer Equity |
19,878 | 21,437 | 74,444 | 51,157 | ||||||||||||
From member interest in LE GP (3) | 167 | 161 | 505 | 385 | ||||||||||||
Total cash distributions from investees | 86,084 | 78,060 | 323,593 | 268,072 | ||||||||||||
Expenses: | ||||||||||||||||
Parent company expenses, excluding non-cash amortization and other costs |
(18,136 | ) | (21,518 | ) | (73,393 | ) | (68,797 | ) | ||||||||
EPGP expenses | (60 | ) | (127 | ) | (212 | ) | (432 | ) | ||||||||
TEPPCO GP expenses | (1 | ) | (50 | ) | (36 | ) | (203 | ) | ||||||||
Total expenses | (18,197 | ) | (21,695 | ) | (73,641 | ) | (69,432 | ) | ||||||||
Distributable cash flow | $ | 67,887 | $ | 56,365 | $ | 249,952 | $ | 198,640 | ||||||||
Distributions by parent company: | ||||||||||||||||
To limited partners: | ||||||||||||||||
EPCO and affiliates | $ | 43,323 | $ | 37,432 | $ | 164,839 | $ | 136,319 | ||||||||
Public | 14,577 | 13,077 | 55,674 | 42,104 | ||||||||||||
To general partner | 6 | 5 | 22 | 18 | ||||||||||||
To former owners of TEPPCO GP | -- | -- | -- | 15,084 | ||||||||||||
Total cash distributions | $ | 57,906 | $ | 50,514 | $ | 220,535 | $ | 193,525 | ||||||||
Summary income statement data: | ||||||||||||||||
Equity earnings in investees (4) | $ | 44,773 | $ | 47,689 | $ | 238,777 | $ | 187,540 | ||||||||
General and administrative costs | 1,995 | 1,879 | 7,283 | 4,299 | ||||||||||||
Operating income | 42,778 | 45,810 | 231,494 | 183,241 | ||||||||||||
Interest expense, net | (16,674 | ) | (24,020 | ) | (67,438 | ) | (74,220 | ) | ||||||||
Provision for income taxes | (1 | ) | (3 | ) | (1 | ) | -- | |||||||||
Net income | $ | 26,103 | $ | 21,787 | $ | 164,055 | $ | 109,021 | ||||||||
Selected balance sheet data: | ||||||||||||||||
Debt principal outstanding at end of period | $ | 1,077,000 | $ | 1,090,000 | $ | 1,077,000 | $ | 1,090,000 | ||||||||
(1) | Represents cash distributions received or, in the case of the most recent quarter, declared and expected to be received with respect to such quarter. With respect to cash distributions from investees for the fourth quarter of 2008, we received the distribution shown for TEPPCO and its general partners on February 6, 2009. We received the declared distributions from Enterprise Products Partners, Energy Transfer Equity and their respective general partners on February 9, 2009 and February 19, 2009, respectively. | |
(2) | Prior to November 2008, the Parent Company owned 13,454,498 common units of Enterprise Products Partners. In November 2008, the Parent Company purchased an additional 216,427 common units. As of December 31, 2008, the Parent Company owned 13,670,925 common units of Enterprise Products Partners. | |
(3) | In January 2009, the Parent Company acquired an additional 5.7% membership interest in LE GP, which increased its total ownership in LE GP to 40.6% from 34.9%. | |
(4) | Represents the Parent Company’s share of net income of Enterprise Products Partners, TEPPCO, Energy Transfer Equity and their respective general partners. |
Exhibit B |
|||||||||||||
Enterprise GP Holdings L.P. Condensed Statements of Consolidated Operations – UNAUDITED For the Three Months and Years Ended December 31, 2008 and 2007 (Amounts in thousands, except per unit amounts) |
|||||||||||||
Since the Parent Company owns the general partner of Enterprise Products Partners and TEPPCO, our general purpose condensed consolidated financial statements include the financial results of Enterprise Products Partners, EPGP, TEPPCO and TEPPCO GP. The earnings of Enterprise Products Partners, EPGP, TEPPCO and TEPPCO GP that are allocated to limited partner interests not owned by the Parent Company are reflected as minority interest expense in our condensed statements of consolidated operations. On a consolidated basis, we have classified our operations into three business segments: Investment in Enterprise Products Partners, Investment in TEPPCO and Investment in Energy Transfer Equity. The following table summarizes our financial information by business segment: |
|||||||||||||
For the Three Months | For the Year | ||||||||||||
Ended December 31, | Ended December 31, | ||||||||||||
2008 | 2007 | 2008 | 2007 | ||||||||||
Revenues: | |||||||||||||
Investment in Enterprise Products Partners | $ | 3,583,604 | $ | 5,302,469 | $ | 21,905,656 | $ | 16,950,125 | |||||
Investment in TEPPCO | 2,394,098 | 3,103,457 | 13,765,905 | 9,862,676 | |||||||||
Eliminations | (52,226 | ) | (48,426 | ) | (201,985 | ) | (99,032 | ) | |||||
Total revenues | 5,925,476 | 8,357,500 | 35,469,576 | 26,713,769 | |||||||||
Costs and expenses: | |||||||||||||
Investment in Enterprise Products Partners | 3,241,751 | 5,048,605 | 20,551,874 | 16,097,178 | |||||||||
Investment in TEPPCO | 2,314,666 | 3,017,326 | 13,398,579 | 9,520,610 | |||||||||
Other, non-segment including Parent Company | (49,686 | ) | (45,567 | ) | (189,803 | ) | (84,241 | ) | |||||
Total costs and expenses | 5,506,731 | 8,020,364 | 33,760,650 | 25,533,547 | |||||||||
Equity in earnings of unconsolidated affiliates: | |||||||||||||
Investment in Enterprise Products Partners (1) | 5,820 | 10,785 | 37,734 | 20,301 | |||||||||
Investment in TEPPCO (1) | (2,729 | ) | (5,673 | ) | (2,871 | ) | (9,793 | ) | |||||
Investment in Energy Transfer Equity (2) | (5,193 | ) | 3,363 | 31,298 | 3,095 | ||||||||
Total equity earnings | (2,102 | ) | 8,475 | 66,161 | 13,603 | ||||||||
Operating income: | |||||||||||||
Investment in Enterprise Products Partners | 347,673 | 264,649 | 1,391,516 | 873,248 | |||||||||
Investment in TEPPCO | 76,703 | 80,458 | 364,455 | 332,273 | |||||||||
Investment in Energy Transfer Equity | (5,193 | ) | 3,363 | 31,298 | 3,095 | ||||||||
Other, non-segment including Parent Company | (2,540 | ) | (2,859 | ) | (12,182 | ) | (14,791 | ) | |||||
Total operating income | 416,643 | 345,611 | 1,775,087 | 1,193,825 | |||||||||
Interest expense, net | (161,050 | ) | (145,470 | ) | (608,223 | ) | (487,419 | ) | |||||
Provision for income taxes | (10,933 | ) | (6,605 | ) | (31,019 | ) | (15,813 | ) | |||||
Other income, net | 6,297 | 2,636 | 9,668 | 71,788 | |||||||||
Income before minority interest | 250,957 | 196,172 | 1,145,513 | 762,381 | |||||||||
Minority interest (3) | (224,854 | ) | (174,385 | ) | (981,458 | ) | (653,360 | ) | |||||
Net income | $ | 26,103 | $ | 21,787 | $ | 164,055 | $ | 109,021 | |||||
Allocation of net income to: | |||||||||||||
Limited partners | $ | 26,100 | $ | 21,785 | $ | 164,039 | $ | 109,010 | |||||
General partner | $ | 3 | $ | 2 | $ | 16 | $ | 11 | |||||
Earnings per Unit, basic and fully diluted: | |||||||||||||
Net income per Unit | $ | 0.21 | $ | 0.18 | $ | 1.33 | $ | 0.97 | |||||
Average LP Units outstanding (4) | 123,192 | 123,192 | 123,192 | 112,325 | |||||||||
(1) | Represents equity earnings from third-party unconsolidated affiliates as recorded by Enterprise Products Partners and TEPPCO. | |
(2) | Represents the Parent Company’s share of the net income of Energy Transfer Equity and its general partner. The Parent Company’s investment in Energy Transfer Equity and its general partner, which were acquired in May 2007, is accounted for using the equity method. | |
(3) | Primarily represents earnings of Enterprise Products Partners, Duncan Energy Partners and TEPPCO that are allocated to their respective limited partner interests not owned by the Parent Company. | |
(4) | The Parent Company’s 16,000,000 Class C units are non-participating securities; thus, they are excluded from our earnings per Unit computations. |
|
Exhibit C |
||||||||||||||||||
Enterprise GP Holdings L.P. – Parent Company Non-GAAP Reconciliations – UNAUDITED For the Three Months and Years Ended December 31, 2008 and 2007 (Amounts in thousands) |
|||||||||||||||||||
The following table presents the reconciliation of the Parent Company’s non-GAAP distributable cash flow to GAAP net cash flow provided by operating activities. |
|||||||||||||||||||
For the Three Months | For the Year | ||||||||||||||||||
Ended December 31, | Ended December 31, | ||||||||||||||||||
2008 | 2007 | 2008 | 2007 | ||||||||||||||||
Distributable Cash Flow (Exhibit A) | $ | 67,887 | $ | 56,365 | $ | 249,952 | $ | 198,640 | |||||||||||
Adjustments to derive net cash flow provided by operating activities (add or subtract as indicated by sign of number): |
|||||||||||||||||||
Distributions to be received from investees with respect to period indicated (Exhibit A) (1) |
(86,084 | ) | (78,060 | ) | (323,593 | ) | (268,072 | ) | |||||||||||
Distributions received from investees during period |
82,255 | 70,098 | 313,506 | 237,595 | |||||||||||||||
Expenses of EPGP and TEPPCO GP | 62 | 177 | 248 | 635 | |||||||||||||||
Net effect of changes in operating accounts | 535 | 6,262 | (5,341 | ) | 15,875 | ||||||||||||||
Net cash flow provided by operating activities | $ | 64,655 | $ | 54,842 | $ | 234,772 | $ | 184,673 | |||||||||||
(1) | Represents cash distributions collected subsequent to the end of each reporting period. |
Source:
Enterprise GP Holdings L.P., Houston
Investor Relations
Randy Burkhalter, 713-381-6812 or 866-230-0745
or
Media Relations
Rick Rainey, 713-381-3635