Enterprise Products Partners L.P. (NYSE:EPD) Q4 2016 Earnings Conference Call - Final Transcript

Jan 30, 2017 • 10:00 am ET


Enterprise Products Partners L.P. (NYSE:EPD) Q4 2016 Earnings Conference Call - Final Transcript


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Good morning. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Enterprise Products Partners Fourth Quarter 2016 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]

I would now like to turn the conference over to Randy Burkhalter. Sir, you may begin.

Randy Burkhalter

Thank you, Regina. Good morning, everyone, and welcome to the Enterprise Products Partners fourth quarter 2016 earnings conference call. Our speakers today will be Jim Teague, Chief Executive Officer of Enterprise's General Partner; and Bryan Bulawa, Chief Financial Officer; followed by a few comments from Randy Fowler, our President. Other members of our senior management team are also in attendance for the call today.

During this call, we will make forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934 based on the beliefs of the company as well as assumptions made by and information currently available to Enterprise's management team. Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Please refer to our latest filings with the SEC for a list of factors that may cause actual results to differ materially from those in the forward-looking statements made during this call.

And with that, I'll turn it over to Jim.

James Teague

Thank you, Randy. Our business continued to perform well in 2016, despite a still challenging environment. We reported gross operating margin of $5.2 billion in 2016 compared to $5.3 billion for '15.

Distributable cash flow, not including proceeds from asset sales, increased to $4.1 billion compared to $4 billion in 2015. We increased distributions to $1.61 per unit, a 5.2% increase compared to 2015. Distributable cash flow, not including proceeds from asset sales, provided 1.2 times coverage giving the enterprise over $700 million of distributable cash to put into growth. Like the three previous quarters, we also ended the year on another strong note as we reported DCF of $1 billion for the fourth quarter of 2016, again, 1.2 times coverage and we retained $159 million in the fourth quarter of 2016.

In the area of growth projects during 2016, we successfully completed $2.2 billion of projects, including two new cryo plants in the Delaware basin and our ethane export terminal on the Ship Channel.

In addition, we were successful in developing organic growth projects throughout this part of the cycle. Including our isobutane dehydrogenation or iBDH project that we announced this morning, we now have approximately $6.7 billion of growth capital projects under construction that would be completed between now and 2019.

Our largest project PDH at our Mont Belvieu complex is expected to begin commercial operations mid-year, and due to the increase in activity and expected crude oil volume growth from the Permian, we have decided to commission our Midland ECHO