Enterprise GP Holdings Reports Third Quarter 2009 Results
November 9, 2009 5:56 PM ET
Enterprise GP Holdings L.P. EPE today announced its consolidated
and parent-only financial results for the three and nine months ended
September 30, 2009. Enterprise GP Holdings L.P., the Parent Company,
reported a 20.6 percent increase in distributable cash flow to $78.4
million for the third quarter of 2009 compared to $65.0 million reported
for the third quarter of 2008.
On October 15, 2009, the Board of Directors of Enterprise GP Holdings’
general partner approved an increase in the partnership’s quarterly cash
distribution rate to $0.515 per common unit with respect to the third
quarter of 2009, which is a 13.2 percent increase from the $0.455 per
common unit that was paid with respect to the third quarter of 2008.
Distributable cash flow provided 1.1 times coverage of the quarterly
cash distribution which was paid Friday, November 6 to unitholders of
record as of the close of business on October 30, 2009. Distributable
cash flow is a non-generally accepted accounting principle (“non-GAAP”)
financial measure that is defined and reconciled later in this press
release to its most directly comparable U.S. GAAP measure, which is net
cash flow provided by operating activities.
The Parent Company will receive an aggregate $90.7 million of cash
distributions from its investments with respect to the third quarter of
2009. This represents a 10.2 percent increase from the $82.3 million of
cash distributions it received with respect to the third quarter of
2008. The increase in cash distributions is primarily due to higher cash
distribution rates from Enterprise Products Partners and Energy Transfer
Equity. TEPPCO did not declare a cash distribution for the third quarter
of 2009 since the merger of TEPPCO with a subsidiary of Enterprise
Products Partners was completed before the record date of the
distribution paid by Enterprise Products Partners for the third quarter
of 2009. As a result of the TEPPCO merger, the Parent Company received
approximately 5.5 million Enterprise Products Partners common units in
exchange for the 4.4 million TEPPCO units the partnership owned
immediately prior to the TEPPCO merger. The Parent Company also received
an additional 1.3 million Enterprise Products Partners common units in
exchange for its ownership of Texas Eastern Products Pipeline Company,
LLC, TEPPCO’s general partner, which merged with a wholly owned
subsidiary of Enterprise Products Partners as a condition of the merger.
|
| |
|
3rd Qtr
|
|
3rd Qtr
| (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 Enterprise GP Holdings for the
third quarter of 2009 was $25.3 million, or $0.18 per unit on a fully
diluted basis, compared to $42.0 million, or $0.34 per unit on a fully
diluted basis, for the third quarter of 2008. Net income attributable to
Enterprise GP Holdings for the third quarter of 2009 was negatively
impacted by approximately $18.9 million, or $0.14 per unit, for its
share of charges related to (i) the Texas Offshore Port System (“TOPS”)
litigation settlement by affiliates of Enterprise Products Partners and
TEPPCO, (ii) asset impairment charges for certain TEPPCO river terminals
and marine barge assets and (iii) a charge for contractual obligations
associated with TEPPCO’s terminal assets.
Parent Company interest expense for the third quarter of 2009 decreased
to $10.1 million from $16.3 million recorded in the third quarter of
2008, primarily due to lower interest rates.
“We are pleased to report record distributable cash flow for the sixth
consecutive quarter from increased cash received from Enterprise
Products Partners and Energy Transfer Partners,” said Dr. Ralph S.
Cunningham, president and chief executive officer of Enterprise GP
Holdings. “The underlying businesses of Enterprise Products Partners and
TEPPCO are complementary and combined form a stronger, more diversified
partnership. We expect the merger of the two partnerships will lead to
additional commercial opportunities and an overall lower cost of
capital, which should provide us with increased distributable cash flow.”
Basis of Presentation of Financial
Information
Our Investment in Enterprise Products Partners business segment reflects
the consolidated operations of Enterprise Products Partners and its
general partner. Our Investment in TEPPCO business segment reflects the
consolidated operations of TEPPCO and its general partner. We control
Enterprise Products Partners through our ownership of its general
partner. As of September 30, 2009, we controlled TEPPCO through our
ownership of its general partner. On October 26, 2009, as a result of
the mergers described above, each of TEPPCO and its general partner
became wholly owned subsidiaries of Enterprise Products Partners.
Our Investment in Energy Transfer Equity business segment reflects our
noncontrolling interests in Energy Transfer Equity and its general
partner accounted for under the equity method of accounting. We evaluate
segment performance based on operating income.
In order for the unitholders of Enterprise GP Holdings and others to
more fully understand the Parent Company’s business and financial
statements on a standalone basis, our press release includes information
devoted exclusively to the Parent Company apart from that of our
consolidated Partnership. A key difference between the non-consolidated
Parent Company financial information and those of our consolidated
Partnership is that the Parent Company views each of its investments
(i.e., Enterprise Products Partners, TEPPCO and Energy Transfer Equity)
as unconsolidated affiliates and records its share of the net income of
each as equity earnings. In accordance with GAAP, we eliminate such
equity earnings related to Enterprise Products Partners and TEPPCO in
the preparation of our consolidated Partnership financial statements.
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
Enterprise GP Holdings L.P. is one of the largest publicly traded GP
partnerships and it owns the general partner and certain limited partner
interests in Enterprise Products Partners L.P., as well as certain
noncontrolling general partner and limited partner interests in Energy
Transfer Equity, L.P. For more information on Enterprise GP Holdings
L.P., visit its website at www.enterprisegp.com.
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 Enterprise GP Holdings. 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
Enterprise GP Holdings, Enterprise Products Partners, Energy Transfer
Equity or Energy Transfer Partners (the “Related Companies”) for future
operations, are intended to identify forward-looking statements.
Although Enterprise GP Holdings and its general partner believe that
such expectations reflected in such forward-looking statements are
reasonable, neither Enterprise GP Holdings 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,
or if underlying assumptions prove incorrect, Enterprise GP Holdings’
actual results may vary materially from those it anticipated, estimated,
projected or expected. Among the key risk factors that may have a direct
bearing on the Related Companies’ and, in turn, Enterprise GP Holdings’
results of operations and financial condition are:
-
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.
Enterprise GP Holdings has no obligation to publicly update or revise
any forward-looking statement, whether as a result of new information,
future events or otherwise.
|
| | 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) | |
|
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:
| |
| |
| Three Months |
| Nine Months | | | Ended September 30, |
| Ended September 30, | | | 2009 |
| 2008 |
| 2009 |
| 2008 | Cash distributions from investees: (1)
| | |
| | | |
| | Enterprise Products Partners and EPGP: (2)
| | | | | | | | | |
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: | | | | | | | | | |
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.
|
(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).
|
(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.
|
(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.
|
(5) 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 and Nine Months Ended September 30, 2009 and 2008 | | (Amounts in millions, except per unit amounts) | | | | | |
|
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:
| | | | | | | | |
| |
| 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
| |
$
|
*
|
|
|
$
|
*
|
|
|
$
|
*
|
|
|
$
|
*
|
| | 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
(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.
|
(3) Represents equity income (loss) of unconsolidated affiliates
as recorded by Enterprise Products Partners and TEPPCO, excluding
those consolidated by the Parent Company.
|
(4) Represents the Parent Company’s share of the net income of
Energy Transfer Equity and its general partner.
|
(5) Represents earnings of Enterprise Products Partners and TEPPCO
allocated to their respective limited partner interests not owned
by the Parent Company.
| |
|
* Amount is negligible
| |
|
|
| | 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) | |
|
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:
| |
| |
| 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):
| | | | | | | | |
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.
| |
|
Enterprise GP Holdings L.P.
Investor Relations
Randy
Burkhalter, 713-381-6812 or 866-230-0745
or
Media Relations
Rick
Rainey, 713-381-3635
Copyright 2009 Business Wire
Back to News Home
- MSN Money
- Search MSN Money
- Message Boards
- Site Status
|
For today's top Money video click here
E-mail this article
Print-friendly version
Discuss this article