Enterprise Reports Fourth Quarter 2003 Results.Business Editors HOUSTON--(BUSINESS WIRE)--Feb. 3, 2004 Enterprise Products Partners L.P. (NYSE NYSE See: New York Stock Exchange : EPD EPD expected progeny difference. ) today announced its financial results for the fourth quarter and the year ended December December: see month. 31, 2003. Enterprise reported net income for the fourth quarter of 2003 of $34.4 million, or $0.13 per unit on a fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis. Included in net income for the fourth quarter was a non-cash asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge of $1.2 million, or $0.01 per unit. Net income for the fourth quarter of 2002 was $55.5 million, or $0.28 per unit on a fully diluted basis. Distributable Cash Flow for the fourth quarter of 2003 was $68.5 million compared to $89.6 million for the fourth quarter of 2002. For the year ended December 31, 2003, Distributable Cash Flow was $268.5 million versus $226.1 million in 2002. "Overall, our partnership's performance in the fourth quarter of 2003 was consistent with our expectations and the guidance we provided to investors in October October: see month. with the exception of our octane oc·tane n. 1. Any of various isomeric paraffin hydrocarbons with the formula C8H18, found in petroleum and used as a fuel and solvent. 2. An octane number. enhancement business and higher depreciation expense," said O.S. "Dub" Andras Andras demon of discord. [Occultism: Jobes, 93] See : Discord , President and Chief Executive Officer of Enterprise. "Throughout the fourth quarter, we saw measured and consistent improvement in demand for ethane ethane (ĕth`ān), CH3CH3, gaseous hydrocarbon. It is a continuous-chain alkane. As a constituent of natural gas, it is used for fuel. It can be prepared by cracking and fractional distillation of petroleum. from the depressed levels recorded during the second and third quarters of 2003. Ethane demand in the fourth quarter improved to 718,000 barrels per day Barrels per day (abbreviated BPD, bbl/d, bpd, bd or b/d) is a measurement used to describe the amount of crude oil (measured in barrels) produced or consumed by an entity in one day. , a 17% and 9% improvement over the second and third quarters, respectively; but still less than the five-year average of 750,000 barrels per day. This level of demand has supported higher NGL NGL - A dialect of IGL. extraction extraction /ex·trac·tion/ (eks-trak´shun) 1. the process or act of pulling or drawing out. 2. the preparation of an extract. rates in most regions of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. despite persistently high natural gas prices. As a result, many of our pipeline and fractionation fractionation /frac·tion·a·tion/ (frak?shun-a´shun) 1. in radiology, division of the total dose of radiation into small doses administered at intervals. 2. facilities operated at their highest operating rates Operating rate The percentage of total production capacity of a company, industry, or country that is being used. operating rate The portion of capacity at which a business operates. of the year during the fourth quarter and reported increased gross operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: compared to the third quarter; however, this was still less than expected levels under average business conditions." "As we begin 2004, we continue to be encouraged by the further improvement of the underlying business fundamentals business fundamentals The general background within which an economy operates including earnings, sales, wage rates, taxes, and inflation. Improving business fundamentals are generally viewed as bullish for stocks, although stock prices at any given point for our partnership. We have received indications from many of our largest NGL consuming customers that their operating rates and demand for NGLs should be greater in 2004 than 2003 based on the demand for their products and the prospects of a strengthening economy. As we emerge from the bottom of this difficult business cycle, we will continue to manage our business to maximize our incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. cash flow while we pursue long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth opportunities for our partnership," continued Andras. For the full year of 2003, reported net income was $104.8 million, or $0.41 per unit on a fully diluted basis, which includes non-cash asset impairment charges of $23.7 million, or $0.11 per unit. Excluding these charges, net income would have been $128.5 million, or $0.52 per unit. Reported net income for 2002 was $95.5 million, or $0.48 per unit on a fully diluted basis. Enterprise reported revenue of $1.4 billion for the fourth quarter of 2003 compared to $1.2 billion for the fourth quarter of 2002. Gross operating margin for the fourth quarter of 2003 was $109.0 million, including the $1.2 million non-cash impairment charge. Gross operating margin for the fourth quarter of 2002 was $132.0 million. "Our 50% ownership interest in the general partner of GulfTerra Energy Partners, L.P. (NYSE: GTM See Good-this-Month order. ) had an immaterial Not essential or necessary; not important or pertinent; not decisive; of no substantial consequence; without weight; of no material significance. immaterial adj. impact on our earnings for the fourth quarter of 2003 since it was acquired on December 15, 2003. However, our Distributable Cash Flow for the first quarter of 2004 will include approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $10 million from our share of the GulfTerra cash distribution that was declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. in January January: see month. and is scheduled to be paid on February February: see month. 13," said Andras. Pipelines - Gross operating margin from the Pipelines segment for the fourth quarter of 2003 increased by $5.4 million, or 8%, to $72.0 million from $66.6 million in the third quarter of 2003. Gross operating margin for the Pipelines segment for the fourth quarter of 2002 was $86.2 million. Gross operating margin from the Mid-America and Seminole Seminole, Native North Americans whose language belongs to the Muskogean branch of the Hokan-Siouan linguistic stock (see Native American languages). They separated (their name means "separatist") from the Creek in the early 18th cent. pipelines for the fourth quarter of 2003 was $36.2 million compared to $32.7 million for the third quarter of 2003 and $51.0 million for the fourth quarter of 2002. Total volumes for these pipelines increased by 53,000 barrels per day ("BPD Borderline personality disorder (BPD) A pattern of behavior characterized by impulsive acts, intense but chaotic relationships with others, identity problems, and emotional instability. ") to 788,000 BPD for the fourth quarter of 2003 compared to 735,000 BPD in the third quarter of 2003. Comparable volumes for the fourth quarter of 2002 were 827,000 BPD. "During most of 2003, the Mid-America and Seminole pipelines have been significantly impacted by the decrease in demand for ethane, the ethane extraction economics in the Southwest Southwest or south west is the ordinal direction halfway between south and west, the opposite of northeast. Southwest or south west may also refer to:
Wyoming, city (1990 pop. 63,891), Kent co., W Mich., in the greater Grand Rapids metropolitan area, on the Grand River; settled 1832, inc. 1959. region and higher fuel costs. During the fourth quarter, in order to maximize gross operating margin for these pipelines during periods where ethane would otherwise be left in the natural gas stream and not available to our pipelines, we instituted an incentive tariff tariff, tax on imported and, more rarely, exported goods. It is also called a customs duty. Tariffs may be distinguished from other taxes in that their predominant purpose is not financial but economic—not to increase a nation's revenue but to protect domestic that promotes processors to increase the amount of ethane extracted and shipped on the pipelines. This action and a slight improvement in extraction economics accounted for most of the increase in gross operating margin over the third quarter of 2003," continued Andras. Gross operating margin for the Mid-America and Seminole pipelines was also reduced during 2003 due to expenses associated with pipeline integrity work that we did not incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. in 2002. Pipeline integrity expenses for these pipelines were $2.3 million and $3.9 million for the fourth quarter and the full year of 2003, respectively. Total pipeline integrity costs for all Enterprise pipelines, both expensed and capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. through sustaining capital expenditures, were $5.8 million for the fourth quarter of 2003 and $10.0 million for the full year of 2003. Approximately $4.8 million of the decrease in Pipelines gross operating margin for the fourth quarter of 2003 compared to the same quarter of 2002 was due to a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. rate case settlement that increased gross operating margin in 2002. Fractionation - The Fractionation segment recorded the highest quarterly gross operating margin of the year during the fourth quarter of 2003. Gross operating margin for the segment increased by $6.7 million, or 22%, to $37.3 million compared to the third quarter of 2003. Gross operating margin for the fourth quarter of 2002 was $36.2 million. Compared to both the prior quarter and the prior year, improvements in gross operating margin from the partnership's NGL and propylene propylene /pro·pyl·ene/ (pro´pi-len) a gaseous hydrocarbon, CH3CHdbondCH2. propylene glycol a colorless viscous liquid used as a humectant and solvent in pharmaceutical preparations. fractionation businesses more than offset a slight decrease in margin from the butane butane (by  `tān), C4H10, gaseous alkane, a hydrocarbon that is obtained from natural gas or by refining petroleum. isomerization isomerization /isom·er·iza·tion/ (i-som?er-i-za´shun) the process whereby any isomer is converted into another isomer, usually requiring special conditions of temperature, pressure, or catalysts. business.Processing - Gross operating margin for the Processing segment was $5.0 million for the fourth quarter of 2003 compared to a loss of $6.9 million in the third quarter of 2003 and gross operating margin of $8.5 million in the fourth quarter of 2002. The improvement in gross operating margin over the third quarter of 2003 was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to both the natural gas processing Natural gas processing plants, or fractionators, are used to purify the raw natural gas extracted from underground gas fields and brought up to the surface by gas wells. The processed natural gas, used as fuel by residential, commercial and industial consumers, is almost pure and the related NGL marketing businesses. Equity NGL production increased by 9,000 BPD, or 16%, to 66,000 BPD in the fourth quarter compared to the third quarter of 2003. Compared to the fourth quarter of 2002, the increase in gross operating margin from the gas processing business was offset by a decrease in margin from NGL marketing. Equity NGL production for the fourth quarter of 2002 was 61,000 BPD. The indicative gross spread for natural gas processing activities on the Gulf Coast averaged $0.17 per gallon gallon: see English units of measurement. for the fourth quarter of 2003 compared to $0.10 for the third quarter of 2003 and $0.13 for the fourth quarter of 2002. "We have made a great deal of progress in recontracting our natural gas processing business during 2003. This will become more apparent in 2004 when these agreements will be in place for the full year. We believe these changes will better insulate in·su·late tr.v. in·su·lat·ed, in·su·lat·ing, in·su·lates 1. To cause to be in a detached or isolated position. See Synonyms at isolate. 2. our Processing segment from the impacts of periods with high natural gas prices relative to crude oil and NGLs. Since the beginning of 2004, most of our processing facilities have been maximizing the extraction of NGLs because of favorable processing economics," stated Andras. Octane Enhancement - Gross operating margin for the Octane Enhancement segment was a loss of $4.8 million for the fourth quarter of 2003 compared to an adjusted positive gross operating margin of $1.3 million in the third quarter of 2003, adjusted to exclude the $22.5 million asset impairment charge, and $1.5 million for the fourth quarter of 2002. Lower volumes and unit margins due to decreased demand by the motor gasoline gasoline or petrol, light, volatile mixture of hydrocarbons for use in the internal-combustion engine and as an organic solvent, obtained primarily by fractional distillation and "cracking" of petroleum, but also obtained from natural gas, by industry for methyl methyl (mĕth`əl), CH3, organic free radical or alkyl group derived from methane by the removal of one hydrogen atom. tertiary tertiary (tûr`shēârē), in the Roman Catholic Church, member of a third order. The third orders are chiefly supplements of the friars—Franciscans (the most numerous), Dominicans, and Carmelites. butyl butyl /bu·tyl/ (bu´t'l) a hydrocarbon radical, C4H9. bu·tyl n. A hydrocarbon radical, C4H9. butyl a hydrocarbon radical, C4H9. ether ether, in chemistry ether, any of a number of organic compounds whose molecules contain two hydrocarbon groups joined by single bonds to an oxygen atom. ("MTBE MTBE Methyl-tert-butyl-ether Surgery An aliphatic ether that rapidly dissolves cholesterol stones in vivo, introduced under local anesthesia via a percutaneous transhepatic cholecystectomy catheter, as a non-invasive method for treating gallstones; after injection, ") was the primary reason for the decrease. "Our Octane Enhancement segment did not meet our expectations for the fourth quarter as the result of a weaker supply/demand balance. We are in the process of modifying this facility to produce another octane additive additive In foods, any of various chemical substances added to produce desirable effects. Additives include such substances as artificial or natural colourings and flavourings; stabilizers, emulsifiers, and thickeners; preservatives and humectants (moisture-retainers); and , isooctane i·so·oc·tane n. A highly flammable liquid, (CH3)2CHCH2C(CH3)3, used to determine the octane ratings of fuels. , which should provide our partnership with an acceptable return on capital. The expected completion date for this modification has been delayed from the end of the second quarter of 2004 to the end of the third quarter. Until this modification is completed, our objective will be to produce MTBE or isobutylene Noun 1. isobutylene - used also in making gasoline components butene, butylene - any of three isomeric hydrocarbons C4H8; all used in making synthetic rubbers butyl - a hydrocarbon radical (C4H9) based on marginal economics. This facility is scheduled to resume production for the month of February after being down for January," said Andras. Comparability of the gross operating margin for the Octane Enhancement segment for the periods presented in this press release is impacted due to ownership changes in the octane enhancement facility in 2003. Prior to October 1, 2003, our 33 1/3% ownership interest in this facility was recorded under the equity method of accounting. On September September: see month. 30, 2003, we increased our ownership interest in this facility to 66 2/3%. As a result of this increased ownership interest, beginning with the fourth quarter of 2003, the financial results of this facility are now consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: in our financial statements. Gross operating margin represents operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. before depreciation, amortization, lease expense for which Enterprise does not have the payment obligation, general and administrative expenses and gain or loss on sale of assets. Enterprise's equity earnings from unconsolidated affiliates are included in gross margin. Pipeline volumes expressed in terms of equivalent barrels per day ("BPDE BPDE Benzo A-Pyrene-Diol-Epoxide ") are on an energy equivalent basis where 3.8 million British thermal units British thermal unit, abbr. Btu, unit for measuring heat quantity in the customary system of English units of measurement, equal to the amount of heat required to raise the temperature of one pound of water at its maximum density [which occurs at a temperature of 39. ("MMBtu") of natural gas is equivalent to one barrel barrel: see English units of measurement. of NGLs. We have reconciled rec·on·cile v. rec·on·ciled, rec·on·cil·ing, rec·on·ciles v.tr. 1. To reestablish a close relationship between. 2. To settle or resolve. 3. gross operating margin (a non-GAAP performance measure) to operating income. Several adjustments to net income are required to calculate Distributable Cash Flow. These adjustments include: (1) the addition of non-cash expenses Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) such as depreciation and amortization expense; (2) the addition of expenses for which the partnership does not have the payment obligation; (3) the addition of actual cash distributions received from unconsolidated affiliates less the related equity in income from unconsolidated affiliates; (4) other miscellaneous non-cash adjustments such as the addition of decreases or the subtraction subtraction, fundamental operation of arithmetic; the inverse of addition. If a and b are real numbers (see number), then the number a−b is that number (called the difference) which when added to b (the subtractor) equals of increases in the value of financial instruments related to hedging activities; and (5) the subtraction of sustaining capital expenditures. Distributable cash flow is before reserves established for the purpose of funding future expansion or sustaining capital expenditures, debt reduction and cash distributions to the limited partners and general partner. We have reconciled Distributable Cash Flow (a non-GAAP liquidity measure) to cash flow from operating activities. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become is defined as net income plus interest expense, provision for income taxes and depreciation and amortization amounts. We have reconciled EBITDA (a non-GAAP liquidity measure) to net income and cash flow from operating activities. For the three months ended December 31, 2003, EBITDA includes the non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $1.2 million, and for the twelve months ended December 31, 2003, EBITDA includes both the non-cash impairment charge related to the octane enhancement production facility taken in the third quarter and the non-cash charge booked this quarter. Enterprise Products Partners L.P. is the second largest publicly traded midstream mid·stream n. 1. The middle part of a stream. 2. The part of a course that is neither at the beginning nor at the end: the midstream of life. Noun 1. energy partnership with an enterprise value of over $7 billion. Enterprise is a leading North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. provider of midstream energy services to producers and consumers of natural gas and natural gas liquids ("NGLs"). The Company's services include natural gas transportation, processing and storage and NGL fractionation (or separation), transportation, storage and import/export terminaling. Today, Enterprise will host a conference call to discuss fourth quarter earnings. The call will be broadcast live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at 10:00 a.m. Eastern Time and may be accessed by visiting the company's website at www.epplp.com. Participants should access the "Investor Information" section of the website at least ten minutes prior to the start of the conference call to download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. This press release contains various forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. and information that are based on the Company's beliefs and those of its general partner, as well as assumptions made by and information currently available to the Company. When used in this press release, words such as "anticipate," "project," "expect," "plan," "goal," "forecast," "intend," "could," "believe," "may," and similar expressions and statements regarding the plans and objectives of the Company for future operations, are intended to identify forward-looking statements. Although the Company and its general partner believe that such expectations reflected in such forward-looking statements are reasonable, neither the Company nor its general partner can give assurances that such expectations will prove to be correct. Such statements are subject to a variety of risks, uncertainties and assumptions. If one or more of these risks or uncertainties materialize ma·te·ri·al·ize v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. , or if underlying assumptions prove incorrect, the Company's actual results may vary materially from those the Company anticipated, estimated, projected or expected. Among the key risk factors that may have a direct bearing on the Company's results of operations and financial condition are: -- fluctuations in oil, natural gas and NGL prices and production due to weather and other natural and economic forces; -- a reduction in demand for the Company's products by the petrochemical petrochemical, any one of a large group of chemicals derived from a component of petroleum or natural gas. The cracking processes for manufacturing gasoline produce vast quantities of gaseous hydrocarbons. , refining refining, any of various processes for separating impurities from crude or semifinished materials. It includes the finer processes of metallurgy, the fractional distillation of petroleum into its commercial products, and the purifying of cane, beet, and maple sugar or heating industries; -- a decline in the volumes of NGLs delivered by the Company's facilities; -- the failure of the Company's credit risk management efforts to adequately protect it against customer non-payment non-payment Noun failure to pay money owed non-payment n → Nichtzahlung f, Zahlungsverweigerung f non-payment n ; -- the failure to successfully integrate new acquisitions; and -- terrorist attacks aimed at the Company's facilities. The Company has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Enterprise Products Partners L.P.
Statement of Consolidated Operations - UNAUDITED
For the Three Months and Year Ended December 31, 2003 and 2002
----------------------------------------------------------------------
($ in 000s, except per unit amounts)
For the Three Months For the Year
Ended December 31, Ended December 31,
----------------------- ------------------------
2003 2002 2003 2002
----------- ----------- ----------- ------------
Revenue
-------
Revenue from
consolidated
operations $1,419,404 $1,193,159 $5,346,429 $3,584,783
----------- ----------- ----------- ------------
Total Revenue 1,419,404 1,193,159 5,346,429 3,584,783
----------- ----------- ----------- ------------
Costs and Expenses:
-------------------
Operating costs and
expenses 1,347,340 1,103,970 5,046,777 3,382,840
Selling, general and
administrative 8,647 14,899 37,586 42,890
----------- ----------- ----------- ------------
Total Costs and
Expenses 1,355,987 1,118,869 5,084,363 3,425,730
----------- ----------- ----------- ------------
----------- ----------- ----------- ------------
Equity in income
(loss) of
unconsolidated
affiliates 2,687 12,995 (13,960) 35,253
---------------- ----------- ----------- ----------- ------------
Operating Income 66,104 87,285 248,106 194,306
----------------
Other Income (Expense):
----------------------
Interest expense (32,811) (33,345) (140,561) (101,580)
Dividend income from
unconsolidated
affiliates 1,044 2,541 5,595 4,737
Other, net 231 251 803 2,618
----------- ----------- ----------- ------------
Total Other Income
(Expense) (31,536) (30,553) (134,163) (94,225)
----------- ----------- ----------- ------------
Income before provision
for taxes and
minority interest
----------------------- 34,568 56,732 113,943 100,081
Provision for taxes (665) 422 (5,293) (1,634)
----------- ----------- ----------- ------------
Income before minority
interest 33,903 57,154 108,650 98,447
----------------------
Minority interest 539 (1,621) (3,859) (2,947)
----------- ----------- ----------- ------------
Net income $34,442 $55,533 $104,791 $95,500
---------- =========== =========== =========== ============
Allocation of Net Income to:
----------------------------
Limited partners $27,934 $51,538 $84,057 $84,837
General partner $6,508 $3,995 $20,734 $10,663
Per Unit data (Fully Diluted):
------------------------------
Net income per unit $0.13 $0.28 $0.41 $0.48
Weighted-average LP
Units Outstanding
(000s) 213,933 183,064 206,367 176,490
Other Financial data:
---------------------
Operating activities
cash inflow $196,120 $159,652 $424,689 $329,761
Investing activities
cash inflow (outflow) $(503,501) $(30,917) $(656,961) $(1,708,348)
Financing activities
cash inflow (outflow) $302,714 $(169,621) $254,020 $1,260,333
Distributable cash
flow $68,486 $89,642 $268,477 $226,114
Depreciation and
amortization $32,354 $32,018 $128,435 $94,925
Operating lease
expense paid by EPCO,
including minority
interest component $2,274 $2,273 $9,094 $9,125
Distributions received
from unconsolidated
affiliates $6,179 $17,548 $31,882 $57,662
Non-cash impairment
loss in operating
costs and expenses $(1,200) $(1,200)
Non-cash impairment
loss in equity
earnings from
unconsolidated
affiliates $(22,494)
Non-cash income (loss)
related to hedging
activities (mark-to-
market valuations) $4 $2,617 $29 $(10,213)
Sustaining capital
expenditures $5,356 $2,827 $20,313 $7,201
Total capital
expenditures $47,929 $25,177 $145,897 $72,135
Investments in and
advances to (from)
unconsolidated
affiliates $442,513 $458 $471,927 $13,651
Total debt principal
outstanding at end of
period $2,144,000 $2,245,000 $2,144,000 $2,245,000
Enterprise Products Partners L.P.
Operating Data - UNAUDITED
For the Three Months and Year Ended December 31, 2003 and 2002
----------------------------------------------------------------------
For the Three Months For the Year
Ended December 31, Ended December 31,
--------------------- -------------------
2003 2002 2003 2002
----------- --------- --------- ---------
Gross Operating Margin
by Segment ($000s):
----------------------
Pipelines $71,966 $86,187 $282,456 $214,932
Fractionation (a) 37,287 36,185 132,822 129,000
Processing 4,967 8,508 30,724 (17,633)
Octane enhancement (b) (4,837) 1,531 (32,701) 8,569
Other (425) (425) (2,888) (2,519)
----------- --------- --------- ---------
Total gross operating margin $108,958 $131,986 $410,413 $332,349
----------- --------- --------- ---------
Depreciation and
amortization in operating
costs and expenses 31,882 27,537 115,643 86,029
Retained lease expense, net,
in operating costs and
expenses 2,274 2,273 9,094 9,125
Loss (gain) on sale of
assets in operating
costs and expenses 51 (8) (16) (1)
Selling, general and
administrative expenses 8,647 14,899 37,586 42,890
----------- --------- --------- ---------
Operating income $66,104 $87,285 $248,106 $194,306
=========== ========= ========= =========
(a) Includes non-cash asset impairment charge of $1.2 million recorded
during fourth quarter of 2003
(b) Includes non-cash asset impairment charge of $22.5 million
recorded during third quarter of 2003
Selected Volumetric Operating Data:
-----------------------------------
MBPD, net
---------
NGL and petrochemical
pipelines 1,364 1,342 1,343 1,357
NGL fractionation 241 242 227 235
Propylene fractionation 56 56 57 55
Isomerization 70 89 77 84
Equity NGL production 66 61 56 73
Octane enhancement 7 5 4 5
BBtus per day, net
------------------
Natural gas pipelines 1,005 1,055 1,032 1,207
Equivalent MBPD, net
--------------------
NGL, petrochemical and
natural gas pipelines 1,628 1,620 1,615 1,675
Enterprise Products Partners L.P.
Reconciliation of Unaudited GAAP Financial Measures to Our Non-GAAP
Financial Measures - Part I
(Dollars in thousands)
For the Three Months For the Year
Ended December 31, Ended December 31,
--------------------- -------------------
2003 2002 2003 2002
----------- --------- --------- ---------
Reconciliation of Non-GAAP
"Total Gross Operating Margin"
to GAAP "Operating Income"
-----------------------------
Operating Income $66,104 $87,285 $248,106 $194,306
Adjustments to reconcile
Total Gross Operating
Margin to Operating Income:
Depreciation and
amortization in
operating costs and
expenses 31,882 27,537 115,643 86,029
Retained lease expense,
net, in operating costs
and expenses 2,274 2,273 9,094 9,125
Loss (gain) on sale of
assets in operating
costs and expenses 51 (8) (16) (1)
Selling, general and
administrative costs 8,647 14,899 37,586 42,890
----------- --------- --------- ---------
Total Gross Operating Margin $108,958 $131,986 $410,413 $332,349
=========== ========= ========= =========
Reconciliation of Non-GAAP
"Adjusted Net Income" to
GAAP "Net Income"
--------------------------
Net income $34,442 $55,533 $104,791 $95,500
Adjustments to reconcile
Adjusted Net Income to
Net Income:
Impairment charge related
to BEF MTBE facility
included in equity earnings
from unconsolidated
affiliates 22,494
Impairment charge related
to Petal NGL fractionator
included in operating
costs and expenses 1,200 1,200
----------- --------- --------- ---------
Adjusted Net Income $35,642 $55,533 $128,485 $95,500
=========== ========= ========= =========
Reconciliation of Non-GAAP "Adjusted
Fully Diluted Earnings Per Unit" to
GAAP "Fully Diluted Earnings Per Unit"
---------------------------------------
Fully Diluted Earnings Per Unit $0.13 $0.28 $0.41 $0.48
Adjustments to reconcile
Adjusted Fully Diluted
Earnings Per Unit to Fully
Diluted Earnings Per Unit:
Non-cash impairment charges 0.01 0.11
----------- --------- --------- ---------
Adjusted Fully Diluted
Earnings Per Unit $0.14 $0.28 $0.52 $0.48
=========== ========= ========= =========
For the Three
Months
Ended
September 30,
2003
-------------
Reconciliation of Non-GAAP
"Gross Operating Margin"
for the Octane Enhancement
segment reported for third
quarter of 2003 to
adjusted "Gross Operating
Margin" for the Octane
Enhancement segment as
used in this press release
---------------------------
Gross operating margin for
Octane Enhancement
reported previously
for third quarter of 2003 $(21,195)
Adjustments to reconcile to
adjusted Gross Operating
Margin as used in this press
release:
Impairment charge related to
BEF MTBE facility included
in equity earnings from
unconsolidated affiliates 22,494
-----------
Gross operating margin for
Octane Enhancement segment
for third quarter of 2003
adjusted to exclude
non-cash impairment charge $1,299
===========
Enterprise Products Partners L.P.
Reconciliation of Unaudited GAAP Financial Measures to Our Non-GAAP
Financial Measures - Part II
(Dollars in thousands)
For the Three Months Ended For the Year Ended
December 31, December 31,
--------------------------- -------------------
2003 2002 2003 2002
------------- ------------- --------- ---------
Reconciliation of
Non-GAAP "EBITDA" to
GAAP "Net Income" and
GAAP "Operating
Activities Cash Flows"
-----------------------
Net Income $34,442 $55,533 $104,791 $95,500
Adjustments to
reconcile EBITDA to
Net Income:
Interest expense 32,811 33,345 140,561 101,580
Provision for income
taxes 665 (422) 5,293 1,634
Depreciation and
amortization
(excluding amortization
component in interest expense) 31,958 27,560 115,802 86,106
--------- -------- -------- ---------
EBITDA $99,876 $116,016 $366,447 $284,820
Reconciliation of "EBITDA" to
"Operating Activities Cash Flows":
Interest expense (32,811) (33,345) (140,561) (101,580)
Amortization in
interest expense 396 4,458 12,633 8,819
Provision for income
taxes (665) 422 (5,293) (1,634)
Earnings from
unconsolidated
affiliates (2,687) (12,995) 13,960 (35,253)
Distributions from
unconsolidated
affiliates 6,179 17,548 31,882 57,662
Loss (gain) on sale
of assets 51 (8) (16) (1)
Provision for
impairment of asset 1,200 1,200
Operating lease
expense paid by EPCO
(excluding minority
interest portion) 2,258 2,251 9,010 9,033
Other expenses paid
by EPCO (excluding
minority interest
portion) (169) 436
Minority interest (539) 1,621 3,859 2,947
Deferred income tax
expense 6,352 1,551 10,534 2,080
Changes in fair
market value of
financial instruments (4) (2,617) (29) 10,213
Net effect of changes
in operating accounts 116,683 64,750 120,627 92,655
--------- -------- -------- ---------
Operating Activities
Cash Flows $196,120 $159,652 $424,689 $329,761
========= ======== ======== =========
Reconciliation of Non-GAAP
"Distributable Cash Flow" to GAAP
----------------------------------
"Net Income" and GAAP
"Operating Activities
Cash Flows"
----------------------
Net Income $34,442 $55,533 $104,791 $95,500
Adjustments to reconcile
Distributable Cash Flow
to Net Income:
Operating lease
expense paid by EPCO
(excluding minority
interest portion) 2,258 2,251 9,010 9,033
Operating lease
expense paid by EPCO
(minority interest
portion only) 16 22 84 92
Other expenses paid
by EPCO (excluding
minority interest portion) (169) 436
Other expenses paid by EPCO
(minority interest portion only) 6
Earnings from
unconsolidated affiliates (2,687) (12,995) 13,960 (35,253)
Distributions from
unconsolidated
affiliates 6,179 17,548 31,882 57,662
Provision for asset
impairment 1,200 1,200
Loss (gain) on sale
of assets 51 (8) (16) (1)
Proceeds from sale of
assets 35 147 212 165
Changes in fair
market value of
financial instruments (4) (2,617) (29) 10,213
Depreciation and
amortization 32,354 32,018 128,435 94,925
Sustaining capital
expenditures (5,356) (2,827) (20,313) (7,201)
Non-cash reduction in reserves
established for Enron bankruptcy
recorded as a component of
changes in operating accounts (2,073)
General partner minority
interest in net income 167 570 892 979
--------- -------- -------- ---------
Distributable Cash
Flow 68,486 89,642 268,477 226,114
Reconciliation of
"Distributable Cash Flow"
to "Operating Activities Cash Flows":
Sustaining capital
expenditures 5,356 2,827 20,313 7,201
Deferred income tax
expense 6,352 1,551 10,534 2,080
Proceeds from sale of
assets (35) (147) (212) (165)
Minority interest in
earnings not included
in calculation of
Distributable Cash Flow (706) 1,051 2,967 1,968
Minority interest of
General Partner in
Operating Partnership's
allocation of leases and
other expenses paid by EPCO (16) (22) (90) (92)
Non-cash reduction in reserves
established for Enron bankruptcy
recorded as a component of
changes in operating accounts 2,073
Net effect of changes in
operating accounts 116,683 64,750 120,627 92,655
--------- -------- -------- ---------
Operating Activities
Cash Flows $196,120 $159,652 $424,689 $329,761
================= ========= ========= =========
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