Enterprise Products Partners L.P. (NYSE:EPD) Q4 2017 Earnings Conference Call - Preliminary Transcript

Jan 31, 2018 • 10:00 am ET


Enterprise Products Partners L.P. (NYSE:EPD) Q4 2017 Earnings Conference Call - Preliminary Transcript


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Good morning. My name is Amy and I will be your conference operator today. At this time, I would like to welcome everyone to the Enterprise Products Partners Q4 2017 Earnings 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]. We ask that you limit your questions to one question with one follow-up and then you may reenter to the queue to ask additional questions and follow-up. Thank you. Randy Burkhalter, you may begin your conference.

Randy Burkhalter

Relations Thank you, Amy. Good morning, everyone, and welcome to the Enterprise Products Partners conference call to discuss earnings for the fourth quarter. Our speakers today will be Jim Teague, chief executive officer of Enterprise's general partner, and Bryan Bulawa, chief financial officer.

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 that may be made during this call. And with that, I'll turn it over to Jim Teague.

Jim Teague

Officer OK. Thank you, Randy. As we said in this morning's press release, our businesses continued to perform well in 2017 and, frankly, throughout the turmoil over the last three years. With higher crude oil prices, production of oil and gas in the U.S. is growing dramatically.

Meanwhile, demand globally continues to exceed expectations. The downturn that started in 2014 has been painful but it did have a silver lining. The downturn taught the market a lesson about the staying power of the U.S. oil and gas industry, abundant short-cycle, highly reliable supplies priced by free markets and made possible by our workforce, who have produced from rock that was previously thought to be worthless.

As indicated by record liquid pipeline volumes and record marine terminal volumes, the amount of this new production that's in our pipes, in our plants, and moving across our docks is continually growing. Given our size, our reach, and our business model, we have significant operating leverage across all our systems to handle growing production, serve new markets, and handle the significant increases we're seeing in exports.

In addition, we have a number of our long-lead-time projects coming online and several new initiatives that are under construction. For 2017, Enterprise reported a 10% increase in operating income, to $3.9 billion. Gross operating margin for 2017 increased at 8%, to a record $5.7 billion from $5.2 billion in 2016. Net cash flow provided by