UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report: February 2, 2001
Commission File Number 333-93239-01
ENTERPRISE PRODUCTS OPERATING L.P.
(Exact name of registrant as specified in its charter)
DELAWARE 76-0568220
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
2727 North Loop West
Houston, Texas 77008
(Address of principal executive (Zip Code)
offices)
(713) 880-6500
(Registrant's telephone number, including area code)
Item 5. OTHER EVENTS
The Limited Partner of the Company published a press release relating
to its fourth quarter 2000 and fiscal 2000 earnings on January 30, 2001. The
Company and its subsidiaries conduct substantially all of the business of the
Limited Partner. The text of the press release is filed as exhibit 99.1 to this
current report.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of business acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
99.1 Press Release dated January 30, 2001.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ENTERPRISE PRODUCTS OPERATING L.P.
By: Enterprise Products GP, LLC,
its general partner
Date: February 2, 2001 By: /s/ Michael J. Knesek
------------------------------
Michael J. Knesek
Vice President, Controller, and
Principal Accounting Officer of
Enterprise Products GP, LLC
EXHIBIT 99.1
Enterprise Reports Record Full-Year 2000 Earnings of $2.64 Per Diluted Unit;
Fourth Quarter Earnings of $0.65 Per Diluted Unit
Houston, Texas (Tuesday, January 30, 2001) - Enterprise Products
Partners L.P. (NYSE: "EPD") today announced increased earnings and cash flow for
the full-year and fourth quarter ending December 31, 2000. For the full-year
2000, Enterprise reported an 83% increase in net income to $220.5 million, or
$2.64 per unit on a fully diluted basis, from full-year 1999 net income of
$120.3 million, or $1.64 per unit.
Cash flow for the full-year of 2000 increased by 75 percent to $292.9
million from $167.7 million in 1999. For 2000, this equates to $4.32 of cash
flow per unit based on the weighted average common and subordinated units
outstanding, which provides 206 percent coverage of the cash distributed to
unitholders for 2000. The 16.5 million Special Units outstanding do not receive
cash distributions until their conversion into common units, which occurs over
the next three years. The cash flow generated during 2000 would have provided
166 percent coverage of the distribution requirement had the Special Units been
eligible to participate in the distributions.
Net income for the fourth quarter increased to $55.2 million, or $0.65
per unit on a fully diluted basis. This compares to net income of $54.3 million,
or $0.66 per unit, for the fourth quarter of 1999. The average number of units
outstanding, on a fully diluted basis, for the fourth quarter of 2000 was 84.2
million, versus 81.2 million for the same quarter of 1999.
Enterprise generated $80.7 million of cash flow during the fourth
quarter of 2000, or $1.19 per common and subordinated unit, a 27 percent
increase versus $63.6 million of cash flow earned during the same quarter of
1999. This provided 216 percent coverage for the recently increased cash
distribution rate of $0.55 per unit. The cash flow generated during the fourth
quarter of 2000 would have provided 171 percent coverage of the distribution
requirement had the Special Units been eligible to participate in the
distribution.
"We are extremely proud of our financial performance during 2000. The
growth of our net income and cash flow is due to our focused, high-quality asset
base and business expansion over the past eighteen months, which has benefited
from a strong demand for NGLs. Our public partners had an excellent year, as
Enterprise's partnership units returned approximately 81 percent in appreciation
and cash distributions for the entire year of 2000," stated O.S. "Dub" Andras,
President and Chief Executive Officer of Enterprise.
"During 2000, we invested approximately $240 million in fee-based, NGL
and propylene pipelines and related facilities. We broadened our base of assets
on the Gulf Coast to include natural gas pipelines with the recent purchase of
interests in five natural gas pipeline systems in the Gulf of Mexico for $112
million and our agreement to acquire Acadian Gas, LLC for $226 million.
Including the Acadian acquisition, which is expected to close in the first
quarter of 2001, Enterprise will have invested over $1.2 billion in midstream
energy assets since our IPO in 1998," continued Andras.
"One of our latest fee-based investments, the Lou-Tex NGL pipeline,
which links major NGL markets in Louisiana and Texas, commenced operations in
late-November and has immediately contributed earnings and cash flow at levels
which have surpassed our expectations. The growth of our fee-based businesses
has enabled us to achieve our goal of increasing our cash distribution rate to
partners by 10 percent per year. We have accomplished this goal both in 1999 and
2000," stated Andras.
"The combination of strong cash flows and a solid financial position
provides us with significant financial flexibility in pursuing our objective of
growing our asset base by $300 million per year while maintaining a solid
investment grade balance sheet. During 2000, excluding cash provided from
changes in working capital, we generated approximately $290 million of cash of
which we have reinvested over $150 million back into the company for growth and
debt reduction. At the end of the year, net debt to total capitalization was 27
percent after adjusting for $58 million of cash on hand," stated Andras.
"I am particularly pleased in our financial performance despite the
challenges brought by the unprecedented level of natural gas prices during the
fourth quarter that has extended into January. As the result of these prices, we
have seen a reduction in NGL volumes produced at natural gas processing plants
and serviced by our pipeline and fractionation facilities. This has resulted in
regional supply imbalances of NGLs. Our integrated NGL system has provided us
opportunities to service this marketplace which has helped to thus far reduce
the negative effect of higher natural gas prices," stated Andras.
For the full-year, total revenues exceeded $3.0 billion, a 128 percent
increase from $1.3 billion in 1999. Revenues for the fourth quarter of 2000
increased 73 percent to $993.5 million from $575.1 million for the fourth
quarter of 1999. Gross margin for the full-year of 2000 increased 79 percent to
$320.6 compared to $179.2 million in 1999. For the fourth quarter, gross
operating margin increased 15 percent to $83.1 million versus $72.3 million
during the same period in 1999.
Fractionation - For the fourth quarter of 2000, Fractionation gross
operating margin was $32.9 million compared to $31.5 million in 1999. NGL
fractionation volumes for the current quarter were 207,000 barrels per day
("BPD") versus 206,000 BPD last year. Net propylene fractionation volumes were
level at 31,000 BPD as customers elected to reduce production to reduce
inventory levels at year-end. Butane isomerization volumes decreased to 64,000
BPD from 76,000 BPD in the prior year due to seasonal fluctuations in the demand
for octane enhancement in motor gasoline.
Pipelines - Pipelines' gross margin in the current quarter increased 10
percent to $17.0 million from $15.4 million in the fourth quarter of 1999. The
margin improvement was due to a 17 percent increase in net pipeline throughput
to 374,000 BPD from 319,000 BPD in the same period of 1999. The increases in
margin and volume are due to volumes associated with the Lou-Tex Propylene and
the Lou-Tex NGL pipelines.
Processing - For the fourth quarter of 2000, Processing generated gross
operating margin of $35.1 million compared to $21.8 million in 1999. The
Processing segment includes Enterprise's natural gas processing business and its
related merchant activities. Enterprise's equity NGL production was 72,000 BPD
for the current quarter versus 68,000 BPD last year.
Today, Enterprise will host a conference call that will further discuss
fourth quarter earnings. The call will be broadcast live over the Internet at
10:00 a.m. EST. at http://www.epplp.com. To access the webcast, participants
should visit the "Presentation" section, which is accessed through the "Investor
Information" button on the home page of the website, at least fifteen minutes
prior to the start of the conference call to download and install any necessary
audio software.
Several adjustments to net income are required to calculate cash flow.
These adjustments include the addition of (1) non-cash expenses such as
depreciation and amortization expense; (2) lease expenses for which the
partnership does not have the payment obligation; (3) principal payments on
notes receivable held by the company; (4) actual cash distributions from
unconsolidated affiliates as compared to book earnings, and (5) other
miscellaneous adjustments, less maintenance capital expenditures.
Gross operating margin represents operating income 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.
Enterprise Products Partners L.P. is the second largest publicly
traded, midstream energy partnership with an enterprise value of approximately
$3.0 billion. Enterprise is a leading integrated provider of processing,
fractionation, storage, transportation and terminalling services to producers
and consumers of natural gas liquids ("NGLs") and other liquid hydrocarbons. The
Company's assets are geographically focused on the United States' Gulf Coast,
which accounts for approximately 55 percent of domestic NGL production and 75
percent of domestic NGL demand.
This press release includes forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934 based on the
beliefs of the company, as well as assumptions made by, and information
currently available to, management. Although Enterprise believes that the
expectations reflected in such forward-looking statements are reasonable, it can
give no assurance that such expectations will prove to be correct. Please refer
to the Company's latest filings with the Securities and Exchange Commission for
a list of factors that may cause actual results to differ materially from those
in the forward-looking statements contained in this press release.
Contact: Randy Fowler, Treasurer, Enterprise Products Partners L.P. (713)
880-6694, www.epplp.com -------------
Enterprise Products Partners L.P.
Statement of Consolidated Operations - UNAUDITED
For the Three Months and Twelve Months Ended December 31, 2000 and 1999
($ in 000s, except per unit amounts)
For the three months ended For the twelve months ended
------------------------------------ ------------------------------------
December 31, December 31, December 31, December 31,
2000 1999 2000 1999
----------------- ----------------- ----------------- -----------------
Revenue
Revenue from consolidated operations $ 992,713 $ 569,186 $3,049,020 $1,332,979
Equity in income of unconsolidated affiliates 829 5,886 24,119 13,477
----------------- ----------------- ----------------- -----------------
Total Revenue 993,542 575,072 3,073,139 1,346,456
Costs and Expenses:
Operating costs and expenses 922,827 512,628 2,801,060 1,201,605
Selling, general and administrative 8,325 3,300 28,345 12,500
----------------- ----------------- ----------------- -----------------
Total Costs and Expenses 931,152 515,928 2,829,405 1,214,105
----------------- ----------------- ----------------- -----------------
Operating Income 62,390 59,144 243,734 132,351
Other Income (Expense):
Interest expense (9,999) (7,532) (33,329) (16,439)
Interest income from unconsolidated affiliates 1,605 571 1,787 1,667
Dividend income from unconsolidated affiliates 855 3,435 7,091 3,435
Interest income - other 725 (228) 3,748 886
Other, net 224 (496) (272) (379)
----------------- ----------------- ----------------- -----------------
Total Other Income (Expense) (6,590) (4,250) (20,975) (10,830)
----------------- ----------------- ----------------- -----------------
Income before minority interest 55,800 54,894 222,759 121,521
Minority interest (564) (554) (2,253) (1,226)
----------------- ----------------- ----------------- -----------------
Net income $ 55,236 $ 54,340 $ 220,506 $ 120,295
================= ================= ================= =================
Allocation of Net Income to:
Limited partners $ 54,486 $ 53,797 $ 217,909 $ 119,092
================= ================= ================= =================
General partner $ 750 $ 543 $ 2,597 $ 1,203
================= ================= ================= =================
Per Unit data (Fully Diluted):
Net income per Common, Subordinated
& Special Units $ 0.65 $ 0.66 $ 2.64 $ 1.64
================= ================= ================= =================
Average LP Common, Subordinated & Special
Units Outstanding (000s) 84,174.3 81,195.6 82,443.6 72,788.5
Other Financial data:
Depreciation and Amortization $ 13,064 $ 8,035 $ 41,016 $ 25,315
Leases paid by EPCO $ 2,660 $ 2,580 $ 10,644 $ 10,557
Collection of notes receivable
from unconsolidated affiliates $ - $ 3,260 $ 6,519 $ 19,979
Distributions received from
unconsolidated affiliates $ 11,270 $ 1,401 $ 37,267 $ 6,008
Maintenance capital expenditures $ 1,219 $ 774 $ 3,546 $ 2,440
Total Capital Expenditures $ 43,916 $ 10,631 $ 244,073 $ 21,234
Investments in and advances to (from)
unconsolidated affiliates $ 29,188 $ 3,427 $ 31,495 $ 61,887
Inventory balance at end of period $ 93,222 $ 39,907 $ 93,222 $ 39,907
Total Debt balance at end of period $ 404,000 $ 295,000 $ 404,000 $ 295,000
Enterprise Products Partners L.P.
Operating Data - UNAUDITED
For the Three Months and Twelve Months Ended December 31, 2000 and 1999
For the three months ended For the twelve months ended
---------------------------------- ---------------------------------
December 31, December 31, December 31, December 31,
2000 1999 2000 1999
---------------------------------- ---------------------------------
Gross Operating Margin by Segment ($000s):
Fractionation $ 32,944 $ 31,469 $ 129,376 $ 110,424
Pipeline 16,980 15,359 56,099 31,195
Processing 35,117 21,808 122,240 28,485
Octane Enhancement (2,595) 3,427 10,407 8,183
Other 638 257 2,493 908
---------------------------------- ---------------------------------
Total Gross Operating Margin $ 83,084 $ 72,320 $ 320,615 $ 179,195
Depreciation and amortization 9,715 7,296 35,622 23,664
Retained Lease Expense, net 2,660 2,580 10,644 10,557
(Gain) loss on sale of assets (6) - 2,270 123
General and Administrative Expense 8,325 3,300 28,345 12,500
---------------------------------- ---------------------------------
Operating Income $ 62,390 $ 59,144 $ 243,734 $ 132,351
================================== =================================
Operating Data (000s of barrels/day, Net):
Equity NGL Production 72 68 72 67
NGL Fractionation 207 206 213 184
Isomerization 64 76 74 74
Propylene Fractionation 31 31 33 28
Octane Enhancement 4 5 5 5
Major Pipelines 374 319 367 264
Average Commodity Prices:
- -------------------------
Henry Hub Natural Gas ($/MMBtu) $ 6.44 $ 2.43 $ 4.31 $ 2.26
Gulf Coast Crude Oil ($/barrel) $ 31.92 $ 24.56 $ 30.32 $ 19.29
Mont Belvieu Natural Gas Liquids ($/gallon) $ 0.61 $ 0.41 $ 0.53 $ 0.31