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March 2019 Investor Presentation – Enterprise Products Partners LP

Enterprise Products Partners LP · Mar 5, 2019 · 62 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 1
    ENTERPRISE PRODUCTS PARTNERS L.P. INVESTOR CONFERENCE March 57, 2019 Randy Fowler President and Chief Financial Officer ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
  2. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 2
    KEY INVESTMENT CONSIDERATIONS One of the largest midstream energy companies Integrated system enables EPD to reduce impact of cyclical commodity swings Large supply aggregator and access to domestic and international markets provides…
  3. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 3
    EPD: NATURAL GAS, NGLs, CRUDE OIL, PETROCHEMICALS AND REFINED PRODUCTS Asset Overview Connectivity Pipelines: 49,200 miles of natural gas, NGL, crude oil, petrochemicals and Fully integrated midstream energy company refined products…
  4. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 4
    EPDS INTEGRATED MIDSTREAM VALUE CHAIN Earning Fees at Each Link Its not uncommon for Enterprise to touch a molecule 57 times Natural Gas Natural Gas throughout the system Pipelines Pipelines Storage NGL Exports Ethane Natural Gas…
  5. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 5
    FINANCIAL UPDATE ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
  6. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 6
    2018: RECORD RESULTS OPERATIONS Driven by Strong Fundamentals and New Assets 12 operational records as all of our business 2017 2018 Change segments reported operational records Total NGL, crude oil, petrochemical and refined Volume…
  7. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 7
    2018 FINANCIAL ACCOMPLISHMENTS 11 Financial Records 2017 2018 Change Self-funded the equity component of 4.2 billion in growth capex (a year Distributable Cash Flow(1): 4,502 5,989 +33.0% earlier than anticipated) DCF Coverage:…
  8. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 8
    CONSISTENT FINANCIAL RESULTS THROUGH BUSINESS CYCLES EPDs Recent Price Reflects Current Investor Sentiment EPD Has Delivered Consistent Results Throughout Cycles in Millions 400% 160 2,500 350% 140 300% 2,000 120 250% 100…
  9. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 9
    DELIVERED CONSISTENT RETURNS ON CAPITAL Structured For and Executing Through Cycles 13.3% 14.0% 12.9% 13.1% 12.5% 12.6% 100 11.8% 11.6% 11.4% 11.2% 12.0% 10.8% 11.0% 10.5% 10.7% 10.2% 80 10.0% Unlevered ROIC % 8.0% 60…
  10. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 10
    DURABLE CASH FLOW METRICS THROUGHOUT COMMODITY CYCLE 120 As measured by MLP or Conventional metrics 3.00 2.80 2.67 62% 100 1.5x 2.50 Operational DCF & CFFO 80 2.09 2.20 2.16 2.00 2.06 65% 1.99 1.99 2.05 78% 1.97 64% 1.94…
  11. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 11
    FUNDING GROWTH WITH FINANCIAL DISCIPLINE Total Growth Capital Expenditures & Debt Leverage 8.0 7.8 4.6 4.7x 7.0 6.2 4.5x 4.4x 6.0 2.5 Debt / Adjusted EBITDA 4.3x 5.0 in Billions 4.2 4.2x 4.1x 4.1 3.9 4.1x 4.0 0.2…
  12. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 12
    STRENGTHENING DEBT PORTFOLIO Extending Maturities Without Increasing Costs 27.0 Billion Notes Issued 99% Fixed Rate Debt(1) (at December 2018) 2009December 2018 20.0 8.0% 19.0 19.2 18.8 7.0% 12.6% Average Maturity Years…
  13. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 13
    EPD COMPARES WELL AGAINST S&P 100 USING CONVENTIONAL METRICS vs. S&P 100 Market Price / Price / Total CFFO Payout Rating Cap. Earnings (1) Cash Flow (1) Return(1) Ratio(1) AMZN 801B NFLX 97.1x AIG 89.1x FOX 59% MSFT AAA KHC 216%…
  14. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 14
    EPD COMPARES WELL AGAINST UTILITIES USING CONVENTIONAL METRICS vs. Utilities Market Price / Price / Total CFFO Payout Rating Cap. Earnings(1) Cash Flow(1) Return(1) Ratio (1) NEE 82.4B AWK 28.0x AWK 13.8x AES 51% ES A+ EPD 62% DUK…
  15. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 15
    TRANSITIONING TO A TRADITIONAL FINANCIAL MODEL 2-year transition period (2018 and 2019); ahead of schedule Continued distribution growth Self-fund equity portion of capital investments Target debt to normalized EBITDA leverage of…
  16. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 16
    MIDSTREAM ENERGY FUNDAMENTALS ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
  17. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 17
    MACRO ENERGY THEMES Natural Gas Basis Spread /MMbtu HSC vs. Waha Near Term 13 Years 3.0 Production growth rates may be tempered 2.0 slightly from previous trajectories 1.0 DUCs, especially in the Permian, continue to grow…
  18. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 18
    RIG COUNTS: 58% OF RIGS ARE IN PERMIAN, EAGLE FORD AND HAYNESVILLE Baker Hughes Rig Counts 1,200 1,000 800 473 600 82 56 400 200 440 0 All Others Haynesville Eagle Ford Permian Source: Baker Hughes ALL…
  19. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 19
    DUCS: 68% OF ALL DUCS ARE IN PERMIAN, EAGLE FORD AND HAYNESVILLE Drilled Uncompleted Wells 9,000 8,000 7,000 4,170 6,000 5,000 4,000 1,597 3,000 205 2,000 2,826 1,000 - All Others Haynesville Eagle Ford Permian…
  20. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 20
    U.S. OIL AND GAS SUPPLIES GROWING FAST Oil & Condensate Production (MMBPD) Dry Natural Gas Production (Bcf/d) 20 120 16 100 110 101 16 92 80 12 14 79 12 60 69 8 10 40 4 6 20 - - 2012 2018 2020 2022 2025 2012 2018 2020 2022…
  21. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 21
    U.S. PROJECTED TO BECOME A MAJOR CRUDE EXPORTER MMBPD 26 24 Destined for Export 22 20 US Prod - Light 18 2017 U.S. Demand for Crude: 16.8 US Prod - Cond 16 LIGHT OIL US Prod - Medium 14 US Prod - Heavy 12 10 Imports -…
  22. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 22
    LPG SUPPLIES ALREADY EXCEED DOMESTIC DEMAND, MORE EXPORT CAPACITY REQUIRED MBPD 4,500 1.5 MMBPD mostly 4,000 headed to Asia 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2012 2013 2014 2015 2016 2017 2018 2019 2020…
  23. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 23
    ASIA ABOUT HALF OF LPG IS IMPORTED Currently 40% from U.S. A large portion of this demand is consumer-oriented and relatively inelastic Between 2012 and 2017, Chinese and Indian LPG demand grew at 17% and 8% CAGR, respectively…
  24. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 24
    INDIA + ASIA: 52% OF ALL U.S. GULF COAST NGL EXPORTS Europe: 8% of U.S. NGL Exports Far East Asia: 43% C2: 16 MMB of U.S. NGL Exports 2018 USGC Exported C3: 14 MMB C2: 0 MMB C2: 47 MMB C4: 2 MMB C3: 137 MMB C3: 286 MMB C4: 23 MMB…
  25. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 25
    GLOBAL DEMAND FOR PETROCHEMICALS EXPECTED TO REMAIN STRONG Approximate 2010 to 2019 Compounded Annual Growth Rates (CAGR) globally: GDP: 3.0% Oil 1.5% Ethylene: 3.3% Global Ethylene & Propylene Demand Propylene: 4.2% 400 300…
  26. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 26
    THE CHEMICALS INDUSTRY IS INVESTING OVER 200 BILLION* BASED ON U.S. SHALES U.S. World Scale Ethylene Plants Under Construction Capacity Ethane Capacity Ethane Capacity Estimated Company Location Billion lb/year (MBPD) Cumulative…
  27. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 27
    ETHANE TO POLYETHYLENE MARGINS STRONG Indicative U.S. Ethylene Cracker Profit Margin by Feedstock Polyethylene vs. Ethylene Prices (FOB Houston) 75 0.8 HDPE + LDPE is 60% of production 60 Margin Cents per Pound 0.6 45 per…
  28. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 28
    IEA EXPECTS NATURAL GAS TO HELP REDUCE CO2 EMISSIONS AT THE EXPENSE OF COAL AND OIL Pounds CO2 per MMBtu Reality is that the world needs fossil fuels. Natural gas is expected to play a central role in reducing CO2 emissions.…
  29. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 29
    POWER GENERATION FROM SHALE NATURAL GAS AND RENEWABLES HAS LED TO LOWER CO2 EMMISSIONS 15% Decrease in U.S. CO2 Emissions Since 2007 3,500 7,000 Coal, Natural Gas & Petroleum in Million Metric Tons 3,000 6,000 Total…
  30. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 30
    SHALE PRODUCED LPG AND NATURAL GAS SUPPORT EMERGING ECONOMIES WITH CLEANER FUELS Without access to cleaner fuels, poorer nations use wood and exacerbate deforestation and soil erosion problems. More over, propane for example emits 35%…
  31. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 31
    U.S. LPG...CHANGING LIVES AROUND THE WORLD In Chinas Coal Country, a Ban Brings Blue Skies and Cold Homes (New York Times February 10, 2018) https://www.nytimes.com/2018/02/10/world/asia/china- coal-smog-pollution.html A graveyard…
  32. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 32
    NGLS PRODUCE ADVANCED MATERIALS FOR MAKING LIGHTER CARS AND PLANES A large portion of NGLs (about 35% ) are consumed as a feedstock for producing plastics and chemicals, which are used in everyday life. Advanced plastics and coatings…
  33. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 33
    GROWTH PROJECTS UPDATE ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
  34. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 34
    WE CONTINUE TO GROW 5.1B of Major Capital Projects Under Construction NatGas 2% Petchem 6.0 33% NGL 5.5 53% Orla III gas plant 5.0 Seminole NGL to Crude P/L conversion Crude 4.5 12% 4.0 Orla I & II gas plants Mont Belvieu…
  35. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 35
    PERMIAN EXPANSION PROJECTS 6 Billion of Capital Investments...more to come NGL Projects South Eddy and Waha Gas Plants added 350 MMcf/d Orla Gas Plant and related gathering 2 processing trains (Orla I and II) in-service; Orla III…
  36. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 36
    ENTERPRISES PERMIAN CRUDE PIPELINE From Permian Supply Hub to Multiple Markets Midland-to-ECHO I Pipeline Systems Two parallel pipeline systems from Midland to ECHO: Cushing Existing 418-mile, 24 pipeline from Midland to ECHO…
  37. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 37
    PROPOSED SEA PORT OIL TERMINAL (SPOT) 2 MMBPD of Export Capacity EHSC SEALY Capable of loading at 85 MBPH ECHO Manned platform meets or exceeds USCG Regulations Access to over 300 MMBBLS of Gulf Coast storage and 8 MMBPD of…
  38. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 38
    ENTERPRISE CME / NYMEX HOUSTON WTI FUTURES CONTRACT Cushing Cushing Meeting customer demands: Refinery Export Specifications are reflective of Magellan Midland crude and provide a EHSC Magellan consistent, quality barrel of crude…
  39. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 39
    LPG EXPORT TERMINAL EXPANSION Expected 2nd Half of 2019 EHT LPG Expansion Capacity expected to increase 175 MBPD or 5 MMBbls/month 30% expansion Brings total export capacity to 700 MBPD, or 21 MMBbls/month Timeline expected 3Q…
  40. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 40
    ENTERPRISE ETHYLENE SYSTEM Under Development STORAGE & CONNECTIVITY PIPELINE EXPORT TERMINAL Cavern capacity 600 million lbs. Access to USGC ethylene via Export System capable of Cavern In / Out delivery rates Enterprise Mont Belvieu…
  41. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 41
    BUTANE TO BUTYLENE VALUE CHAIN Continuing Strategy: convert low cost NGLs into value added olefins Enterprise Assets Existing Crude MTBE Y-Grade n-Butane IsoButane Isobutylene IsoButane isoButane DeHydro Crude Gas Plants…
  42. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 42
    iBDH The Other DeHydrogenation Project Capacity Facility rendering 937 million pounds of isobutylene annually (425,000 metric tons) Doubles Enterprises capacity Consumes 30 MBPD butane Schedule Permits received Major…
  43. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 43
    ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) PRIORITIES Governance and Oversight: The Governance Committee oversees implementation of policies related to environmental protection, transportation compliance, health & safety policies,…
  44. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 44
    ESG PRIORITIES (continued) Environmental Stewardship Principles: Continuous monitoring of environmental data, allowing us to anticipate and prevent issues. Internal monitoring systems allow us to track operational and emissions data,…
  45. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 45
    MORE GROWTH ON THE HORIZON Potential Opportunities Producer driven projects Additional gas processing plants Add natural gas, NGL and crude pipeline capacity Increase crude pipeline capacity from Permian Basin Expand existing and…
  46. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 46
    WHY ENTERPRISE 20 Years Publicly Traded Partnership Market Capitalization: Geographic Diversification: 2019 20 consecutive 60B 1.765/unit FY distributions years of Enterprise Value: 3.5x Target Leverage (1) distribution 87B…
  47. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 47
    APPENDIX & NON-GAAP RECONCILIATIONS ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
  48. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 48
    GROWTH CAPITAL PROJECTS NGL Pipeline & Services Mont Belvieu Frac 9 85 MBPD Done Orla gas plants 900 MMcf/d and related P/L ( I & II in service, III 2Q 2019) Done Aegis ethane pipeline Phase 2 Done Shin Oak (Permian to Mont Belvieu) 550…
  49. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 49
    ENTERPRISE EXPORT CAPACITY Linking U.S. Supplies to Global Demand Beaumont West Beaumont East Enterprise HSC Mont Belvieu Sealy Morgans Point ECHO Texas City Freeport / Jones Creek ENTERPRISE ASSETS (1) Max Loading…
  50. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 50
    ENTERPRISE EXPORTS EXPECTED TO CONTINUE TO INCREASE 2,000 1,800 1,600 1,400 764 1,200 HURRICANE MBPD HARVEY 1,000 800 321 600 400 560 200 0 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 NGL…
  51. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 51
    NATURAL GAS GATHERING & PROCESSING Limiting the Commodity Exposure 2012 2013 2014 2015 2016 2017 2018 Total GOM 4,387 4,814 5,205 5,339 5,248 5,680 7,326 G&P % of Total GOM 27% 17% 15% 10% 8% 9% 11% 1,350 1.00 0.88 0.90 1,200…
  52. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 52
    MONT BELVIEU FRACTIONATION CAPACITY MBbls 6,000 5,000 4,000 3,000 2,000 1,000 - Existing Potential New Frac Capacity Cumulative New Supply This chart measures total supply vs. Mont Belvieu Frac capacity and does not…
  53. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 53
    GROSS OPERATING MARGIN WATERFALL 2017 to 2018 in MMs 7,500 7,326 133 189 477 7,000 846 6,500 6,000 5,680 5,500 5,000 4,500 4,000 2017 FY GOM New & Expanded Existing assets with Legecy Gas Plants All other changes…
  54. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 54
    PETCHEM AND REFINED PRODUCTS MIDSTREAM SERVICES GOM 2017 to 2018 in MMs 1,100 29 1,058 21 31 1,000 35 55 172 900 800 715 700 600 500 2017 GOM PDH & MTBV TE Products Octane Isoms & DIBs All Other 2018 GOM…
  55. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 55
    PETROCHEMICAL & REFINED PRODUCTS MIDSTREAM SERVICES 1.1B 2018 Gross Operating Margin TE Products FERC regulated 9.5 billion lbs of total capacity Gulf Coast Terminals 1.65B lbs PDH 8 ship/barge docks, 15.3MMbbls of PDH: 100% fixed…
  56. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 56
    HOUSTON WTI FUTURES DELIVERY POINT SUPPLY / MARKET CONNECTIVITY KEYSTONE 36 Cushing Moore Rd. Junction Colorado EHSC EHSC BRIDGETEX 20 36 24 City Magellan EHSC 24 East XOM Crane LONGHORN 18 Houston…
  57. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 57
    TOTAL GROSS OPERATING MARGIN We evaluate segment performance based on our financial measure of gross operating margin. Gross operating margin is an important performance measure of the core profitability of our operations and forms the…
  58. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 58
    ADJUSTED EBITDA Adjusted EBITDA is commonly used as a supplemental financial measure by our management and external users of our financial statements, such as investors, commercial banks, research analysts and ratings agencies to…
  59. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 59
    DISTRIBUTABLE CASH FLOW Distributable cash flow is an important non-GAAP financial measure for our limited partners since it serves as an indicator of our success in providing a cash return on investment. Specifically, this financial…
  60. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 60
    FREE CASH FLOW Free cash flow is a measure of how much cash a business generates after accounting for capital expenditures such as plants or pipelines. We believe that free cash flow is important to traditional investors since it…
  61. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 61
    DEFINITIONS Return on Invested Capital (ROIC) is calculated by dividing non-GAAP gross operating margin for the assets (the numerator) by the average historical cost of the underlying assets (the denominator). The average historical…
  62. March 2019 Investor Presentation – Enterprise Products Partners LP – slide 62
    CONTACT INFORMATION Randy Burkhalter Vice President, Investor Relations (713) 381-6812 rburkhaltereprod.com Jackie Richert Director, Investor Relations (713) 381-3920 jmricherteprod.com ALL RIGHTS RESERVED. ENTERPRISE…

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