On
The Parent Company will receive an aggregate
3rd Qtr |
3rd Qtr |
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(Amounts in millions) |
2009 | 2008 | ||
Enterprise and TEPPCO (1) | $69.7 | $63.4 | ||
Energy Transfer Equity & LE GP | 21.0 | 18.9 | ||
Total | $90.7 | $82.3 | ||
(1) Includes cash distributions from Enterprise Products Partners, TEPPCO and their respective general partners. See Exhibit A for detailed information regarding the distributions the Parent Company received (or expects to receive) from its investments. | ||||
Consolidated net income attributable to
Parent Company interest expense for the third quarter of 2009 decreased to
“We are pleased to report record distributable cash flow for the sixth consecutive quarter from increased cash received from
Basis of Presentation of Financial Information
Our Investment in
Our Investment in
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;
- Parent Company interest expense on a standalone basis, before non-cash amortization; and
- the general and administrative costs, on a standalone basis, of the general partners of
Enterprise Products Partners and TEPPCO.
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 | ||||||||||||||||
Selected Financial Data– UNAUDITED | ||||||||||||||||
For the Three and Nine Months Ended September 30, 2009 and 2008 | ||||||||||||||||
(Amounts in millions) |
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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: |
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Three Months | Nine Months | |||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Cash distributions from investees: (1) |
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Enterprise Products Partners and EPGP: (2) |
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From common units of Enterprise Products Partners | $ | 11.5 | $ | 7.0 | $ | 26.3 | $ | 20.8 | ||||||||
From 2% general partner interest and related IDRs | 58.2 | 37.8 | 143.0 | 109.9 | ||||||||||||
TEPPCO and TEPPCO GP: (3,4) | ||||||||||||||||
From units of TEPPCO | n/a | 3.2 | 6.4 | 9.4 | ||||||||||||
From 2% general partner interest and related IDRs | n/a | 15.4 | 31.0 | 42.5 | ||||||||||||
Energy Transfer Equity and LE GP: | ||||||||||||||||
From common units of Energy Transfer Equity | 20.8 | 18.8 | 62.2 | 54.6 | ||||||||||||
From member interest in LE GP | 0.2 | 0.1 | 0.4 | 0.3 | ||||||||||||
Total cash distributions from investees | 90.7 | 82.3 | 269.3 | 237.5 | ||||||||||||
Cash expenses, primarily Parent Company |
(12.3 | ) | (17.3 | ) | (43.4 | ) | (55.4 | ) | ||||||||
Distributable cash flow |
$ | 78.4 | $ | 65.0 | $ | 225.9 | $ | 182.1 | ||||||||
Distributions by Parent Company |
$ | 71.7 | $ | 56.1 | $ | 208.8 | $ | 162.6 | ||||||||
Coverage ratio |
1.1x | 1.2x | 1.1x | 1.1x | ||||||||||||
Parent Company summarized income statement data: |
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Equity in income of investees (5) | $ | 37.3 | $ | 59.8 | $ | 172.3 | $ | 194.0 | ||||||||
General and administrative costs | 1.9 | 1.5 | 8.7 | 5.3 | ||||||||||||
Operating income | 35.4 | 58.3 | 163.6 | 188.7 | ||||||||||||
Interest expense, net | (10.1 | ) | (16.3 | ) | (36.3 | ) | (50.7 | ) | ||||||||
Net income attributable to Enterprise GP Holdings L.P. | $ | 25.3 | $ | 42.0 | $ | 127.3 | $ | 138.0 | ||||||||
Parent Company debt principal outstanding at end of period |
$ | 1,078.5 | $ | 1,077.0 | $ | 1,078.5 | $ | 1,077.0 | ||||||||
(1) Represents cash distributions received or, in the case of Energy Transfer Equity declared and scheduled to be received, with respect to such quarter. With respect to cash distributions for the third quarter of 2009, we received the distributions shown for Enterprise Products Partners and its general partner on November 5, 2009. The declared distribution from Energy Transfer Equity and its general partner for the third quarter of 2009 is scheduled to be paid on November 19, 2009. |
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(2) Cash distributions from Enterprise Products Partners and EPGP with respect to the third quarter of 2009 reflect the common units and other consideration received by the Parent Company in connection the merger of TEPPCO and TEPPCO GP with Enterprise Products Partners on October 26, 2009 (see notes 3 and 4 below). |
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(3) TEPPCO did not declare a distribution for the third quarter of 2009 as the merger was completed before the record date; therefore, we did not receive any distributions from TEPPCO with respect to the third quarter of 2009. The TEPPCO merger was completed on October 26, 2009. Under the terms of the merger agreement, each of TEPPCO’s unitholders (including the Parent Company) received 1.24 common units of Enterprise Products Partners for each TEPPCO unit owned immediately prior to the merger. As a result, the Parent Company received 5,456,000 common units of Enterprise Products Partners in exchange for the 4,400,000 TEPPCO units that it owned immediately prior to the merger. The record date for distributions paid by Enterprise Products Partners with respect to the third quarter of 2009 was October 30, 2009. |
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(4) Immediately prior to and as a condition to the TEPPCO merger, TEPPCO GP merged with a wholly owned subsidiary of Enterprise Products Partners (the “GP merger”). In connection with the GP merger, the Parent Company, as owner of TEPPCO GP and EPGP, received an additional 1,331,681 common units of Enterprise Products Partners and an increase in the capital account of EPGP sufficient to maintain EPGP’s 2% general partner interest in Enterprise Products Partners. |
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(5) Represents the Parent Company’s share of net income of Enterprise Products Partners, TEPPCO, Energy Transfer Equity and their respective general partners. |
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Exhibit B | ||||||||||||||||
Enterprise GP Holdings L.P. | ||||||||||||||||
Condensed Statements of Consolidated Operations – UNAUDITED | ||||||||||||||||
For the Three and Nine Months Ended September 30, 2009 and 2008 | ||||||||||||||||
(Amounts in millions, except per unit amounts) |
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At September 30, 2009 and 2008, the Parent Company owned the general partners of (and therefore controlled) Enterprise Products Partners and TEPPCO; thus, our consolidated financial statements include the financial results of Enterprise Products Partners and TEPPCO. The net income of Enterprise Products Partners and TEPPCO allocated to limited partner interests not owned by the Parent Company is allocated to noncontrolling interests. At September 30, 2009 and 2008, we have three reportable 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 periods presented: |
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Three Months | Nine Months | |||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Revenues: | ||||||||||||||||
Investment in Enterprise Products Partners |
$ | 4,596.1 | $ | 6,297.9 | $ | 11,527.1 | $ | 18,322.1 | ||||||||
Investment in TEPPCO |
2,265.4 | 4,264.4 | 5,756.9 | 11,371.8 | ||||||||||||
Eliminations |
(72.3 | ) | (63.1 | ) | (173.5 | ) | (149.8 | ) | ||||||||
Total revenues |
6,789.2 | 10,499.2 | 17,110.5 | 29,544.1 | ||||||||||||
Costs and expenses: | ||||||||||||||||
Investment in Enterprise Products Partners (1) |
4,287.7 | 5,993.7 | 10,582.4 | 17,310.2 | ||||||||||||
Investment in TEPPCO (2) |
2,232.4 | 4,176.2 | 5,520.9 | 11,083.9 | ||||||||||||
Other, non-segment including Parent Company |
(70.3 | ) | (61.4 | ) | (164.8 | ) | (140.2 | ) | ||||||||
Total costs and expenses |
6,449.8 | 10,108.5 | 15,938.5 | 28,253.9 | ||||||||||||
Equity in income (loss) of unconsolidated affiliates: | ||||||||||||||||
Investment in Enterprise Products Partners (3) |
16.5 | 9.6 | 34.7 | 31.9 | ||||||||||||
Investment in TEPPCO (3) |
(1.5 | ) | 0.4 | (2.7 | ) | (0.1 | ) | |||||||||
Investment in Energy Transfer Equity (4) |
(0.9 | ) | 9.4 | 25.7 | 36.5 | |||||||||||
Total equity in income of unconsolidated affiliates |
14.1 | 19.4 | 57.7 | 68.3 | ||||||||||||
Operating income: | ||||||||||||||||
Investment in Enterprise Products Partners |
324.9 | 313.8 | 979.4 | 1,043.8 | ||||||||||||
Investment in TEPPCO |
31.5 | 88.6 | 233.3 | 287.8 | ||||||||||||
Investment in Energy Transfer Equity |
(0.9 | ) | 9.4 | 25.7 | 36.5 | |||||||||||
Other, non-segment including Parent Company |
(2.0 | ) | (1.7 | ) | (8.7 | ) | (9.6 | ) | ||||||||
Total operating income |
353.5 | 410.1 | 1,229.7 | 1,358.5 | ||||||||||||
Interest expense | (170.9 | ) | (153.3 | ) | (508.2 | ) | (447.2 | ) | ||||||||
Provision for income taxes | (7.7 | ) | (7.7 | ) | (26.8 | ) | (20.1 | ) | ||||||||
Other income, net | 0.1 | 0.5 | 2.2 | 3.4 | ||||||||||||
Net income | 175.0 | 249.6 | 696.9 | 894.6 | ||||||||||||
Net income attributable to noncontrolling interest (5) | (149.7 | ) | (207.6 | ) | (569.6 | ) | (756.6 | ) | ||||||||
Net income attributable to Enterprise GP Holdings L.P. | $ | 25.3 | $ | 42.0 | $ | 127.3 | $ | 138.0 | ||||||||
Allocation of net income to: | ||||||||||||||||
Limited partners | $ | 25.3 | $ | 42.0 | $ | 127.3 | $ | 138.0 | ||||||||
General partner |
$ |
* |
$ |
* |
$ |
* |
$ |
* |
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Earnings per Unit, basic and fully diluted: | ||||||||||||||||
Net income per Unit | $ | 0.18 | $ | 0.34 | $ | 0.93 | $ | 1.12 | ||||||||
Average LP Units outstanding | 139.2 | 123.2 | 137.4 | 123.2 | ||||||||||||
|
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(1) Amounts for the three and nine months ended September 30, 2009 include $66.9 million and $135.3 million, respectively, of charges related to TOPS. Prior to the dissociation of our affiliates from TOPS in March 2009, we consolidated TOPS and reported its activities under the Investment in Enterprise Products Partners segment. |
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(2) Amounts for the three and nine months ended September 30, 2009 include $51.0 million and $53.3 million, respectively, of asset impairment and related charges recorded by TEPPCO. The asset impairments and related charges are primarily due to the current level of throughput volumes at certain river terminals and the suspension by TEPPCO management of three river terminal expansion projects. |
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(3) Represents equity income (loss) of unconsolidated affiliates as recorded by Enterprise Products Partners and TEPPCO, excluding those consolidated by the Parent Company. |
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(4) Represents the Parent Company’s share of the net income of Energy Transfer Equity and its general partner. |
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(5) Represents earnings of Enterprise Products Partners and TEPPCO allocated to their respective limited partner interests not owned by the Parent Company. |
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* Amount is negligible |
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Exhibit C | ||||||||||||||||
Enterprise GP Holdings L.P. – Parent Company | ||||||||||||||||
Non-GAAP Reconciliations – UNAUDITED | ||||||||||||||||
For the Three and Nine Months Ended September 30, 2009 and 2008 | ||||||||||||||||
(Amounts in millions) |
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The following table presents a reconciliation of the Parent Company’s non-GAAP distributable cash flow amounts to GAAP net cash flow provided by operating activities: |
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Three Months | Nine Months | |||||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Distributable Cash Flow (Exhibit A) | $ | 78.4 | $ | 65.0 | $ | 225.9 | $ | 182.1 | ||||||||
Adjustments to derive net cash flow provided by operating activities (add or subtract as indicated by sign of number): |
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Distributions to be received from investees with respect to period indicated (Exhibit A) (1) |
(90.7 | ) | (82.3 | ) | (269.3 | ) | (237.5 | ) | ||||||||
Distributions received from investees during period
|
90.3 | 79.1 | 264.6 | 231.2 | ||||||||||||
Expenses of EPGP and TEPPCO GP |
0.1 | 0.1 | 0.1 | 0.2 | ||||||||||||
Net effect of changes in operating accounts |
(5.6 | ) | (1.4 | ) | (3.5 | ) | (5.9 | ) | ||||||||
Net cash flow provided by operating activities | $ | 72.5 | $ | 60.5 | $ | 217.8 | $ | 170.1 | ||||||||
(1) Represents cash distributions collected subsequent to the end of each reporting period. | ||||||||||||||||
Source:
Enterprise GP Holdings L.P.
Investor Relations
Randy Burkhalter, 713-381-6812 or 866-230-0745
or
Media Relations
Rick Rainey, 713-381-3635