Enterprise Products Partners L.p. · NYSE:EPD
Enterprise Products Partners L.p — Wachovia Securities Kick the Tires Tour (May 2006)
34 slides from Enterprise Products Partners L.p's conference presentation, May 31, 2006
Slide 1: Enterprise Products Partners L.P. Wachovia Securities Kick the Tires Tour
Enterprise Products Partners L.P. Wachovia Securities Kick the Tires Tour May 31, 2006
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements and information that are based on Enterprise’s beliefs and those of its general partner, as well as assumptions made by and information currently available to them. When used in this presentation, words such as “anticip
Slide 3: Premier Network of Midstream Energy Assets
Premier Network of Midstream Energy Assets
Slide 4: Proven Growth, Superior Returns
Proven Growth, Superior Returns
Slide 5: Diversified Business Mix
Diversified Business Mix NGL Pipelines & Services (51%) Natural gas processing plants & related marketing activities NGL fractionation plants NGL pipelines and storage Onshore Natural Gas Pipelines & Services (31%) Natural gas pipelines Natural gas storage facilities Offshore Pipelines & Services (7
Slide 6: Strong Results Since Merger Due to Diversified Businesses
Strong Results Since Merger Due to Diversified Businesses Cash flows and operating results reflects benefits of integrated value chain and fee-based businesses This in spite of three major hurricanes in the last two years Effectively hedged to swings in commodity prices DCF for 1Q05 includes proceed
Slide 7: Strong NGL Industry Fundamentals Since Downturn in 2003
Strong NGL Industry Fundamentals Since Downturn in 2003 U.S. ethylene production has rebounded from the mid-year 2003 troughs Key factors are the economy and GDP growth, plant operating rates and gas-to-crude price ratio Ethane extraction increases as ethylene production increases History has shown
Slide 8: Access to Supply Growth Drives Expansion Strategies
Access to Supply Growth Drives Expansion Strategies
Slide 9: Major Growth Projects Overview
Major Growth Projects Overview1 Diversified Portfolio of Capital Projects Capital Spending by Year
Slide 10: Gross Operating Margin Potential Major Growth Projects
Gross Operating Margin Potential Major Growth Projects1 2006 is a bridge year in this construction cycle Increase in gross operating margin is compared to a 2005 base Does not account for potential additional organic growth projects or acquisitions This summary includes selected major growth capital
Slide 11: Western U.S. Growth Strategy: Rocky Mountain Expansion Projects
Western U.S. Growth Strategy Rocky Mountain Expansion Projects EPD will benefit from natural gas and NGL production growth from Rockies New investments include: Pioneer Processing Plant Jonah Gathering JV Meeker Processing Plant 50 MBPD expansion of Mid-America Pipeline (“MAPL”) 75 MBPD Hobbs NGL fr
Slide 12: Western U.S. Growth Strategy: Expected Natural Gas Volume Growth in Rockies
Western U.S. Growth Strategy Expected Natural Gas Volume Growth in Rockies Between 2005 and 2010 industry experts expect natural gas production from the Rockies to increase by 33%, or 2.4 Bcf/d 7.3 - 9.7 Bcf/d Basins characterized by low producer finding costs, long-lived reserves and limited midstr
Slide 13: Western U.S. Growth Strategy: Expected NGL Volume Growth in Rockies
Western U.S. Growth Strategy Expected NGL Volume Growth in Rockies1 MAPL Rocky Mountain leg flowed at 90%+ of 225 MBPD capacity in 2005 MAPL Phase I 50 MBPD expansion under construction Project expected to be completed mid-2007
Slide 14: Western U.S. Growth Strategy: Jonah and Pinedale Area Growth
Western U.S. Growth Strategy Jonah and Pinedale Area Growth Jonah / Pinedale cumulative production - 2.1 Tcf with 30 Tcf ultimate recoverable reserves1 Production expected to grow from 1.2 to 3.5 Bcf/d (2005 -2012)1 Jonah Gas Gathering Joint Venture expansion underway to increase system capacity to
Slide 15: Western U.S. Growth Strategy: Piceance Basin Processing Plant
Western U.S. Growth Strategy Piceance Basin Processing Plant Piceance Basin is a prolific unconventional gas play with volume growth of 20% per year Production expected to grow from 0.9 to 1.4 Bcf/d (2005 - 2012)1 Executed long-term contract with EnCana to process up to 1.3 Bcf/d of natural gas Meek
Slide 16: Western U.S. Growth Strategy: Fractionation Expansion - Hobbs
Western U.S. Growth Strategy Fractionation Expansion - Hobbs EPD controlled NGL fractionation volumes consistently exceeded EPD’s 210 MBPD capacity at Mont Belvieu in 2005 requiring offloads to 3rd parties MTBV West Texas II fractionation expansion (15 MBPD) operational in April 2006 75 MBPD Hobbs f
Slide 17: Deepwater GOM Growth Strategy: Enterprise Gulf of Mexico Assets
Deepwater GOM Growth Strategy Enterprise Gulf of Mexico Assets Active in the Gulf of Mexico since 1993 Integrated pipeline and platform network covers major corridors with active developments New projects supported by substantial reserve and fixed fee commitments Hurricanes delay production ramp-up
Slide 18: Deepwater GOM Growth Strategy: Constitution Oil & Gas Pipelines
Deepwater GOM Growth Strategy Constitution Oil & Gas Pipelines Owner / Operator - EPD First production - February 15, 2006 (ahead of schedule) Currently producing 28 MBPD and 26 MMcf/d Feeds downstream Anaconda, Cameron Highway and Poseidon pipelines Kerr McGee recently announced new oil discovery a
Slide 19: Deepwater GOM Growth Strategy: Independence Hub Platform & Trail Pipeline
Deepwater GOM Growth Strategy Independence Hub Platform & Trail Pipeline Hub (80% Enterprise) / Pipeline (100% Enterprise) Expanded Hub and Pipeline to 1 Bcf/d capacity Three additional discoveries since project was sanctioned Producers - Anadarko, Kerr-McGee, Dominion, Hydro, Devon New 134-mile 24”
Slide 20: Deepwater GOM Growth Strategy: Independence Construction Update
Deepwater GOM Growth Strategy Independence Construction Update April 14 / July 2006 - Pipelay installation, SCR complete April 23 / May 2006 - Suction pile installation May 9 / June 2006 - Hull en route from Singapore Topside fabrication ~95% complete July / Oct 2006 - Integration and pre-commission
Slide 21: Financial Overview
Financial Overview © Allrights reserved. Enterprise Products Partners L.P.
Slide 22: First Quarter 2006 Recap
First Quarter 2006 Recap Delivered record gross operating margin of $313 million and EBITDA of $301 million Revenue and operating income increased by 27% and 17%, respectively from first quarter 2005 Strong contributions from NGL pipelines, onshore natural gas pipelines and storage, and our petroche
Slide 23: First Quarter 2006 Recap (Con't)
First Quarter 2006 Recap (Con’t) Made substantial progress on our organic growth projects Constitution pipelines completed ahead of schedule Completed San Juan optimization project Completed expansion of NGL fractionator at MTBV Expanded scope of Independence Hub & Trail project to 1 Bcf/d Announced
Slide 24: Financial Position
Financial Position EPD is in the second year of a major construction phase that is expected to provide significant growth in gross operating margin beginning in late-2006 / early-2007 Investment grade ratings supported by strong balance sheet and financial flexibility Higher cash flow returns on cap
Slide 25: EPD's Organic Growth and Lower Cost of Capital Drives Cash Flow Accretion
EPD’s Organic Growth and Lower Cost of Capital Drives Cash Flow Accretion “Cash is King” in the partnership sector Cash flow generated by a new investment supports the long-term cost of capital to fund the investment plus provides accretion for existing LP units outstanding Many analysts/investors f
Slide 26: Unique Ownership Structure
Unique Ownership Structure Value of interests in EPD and EPE of $6.4 billion Chairman and co-founder of EPD gets no compensation from EPD Sponsor has long-term investment horizon Sponsor has consistently been supportive of growth in EPD
Slide 27: Overview of Results
Overview of Results (8 in millions) First Quarter Year Ending Dec. 31 2006 2005 2005 2004 Gross Operating Margin By Segment: NGL Pipelines & Services $171 $153 $580 $374 Onshore Natural Gas Pipelines & Services 97 80 353 91 Offshore Pipelines & Services 17 23 ee 36 Petrochemical Services 28 19 126 1
Slide 28: Capitalization
Capitalization Avg. life of debt - 10.8 years Avg. interest rate - 5.67%
Slide 29: Key Investment Considerations
Key Investment Considerations Leading business positions across the midstream energy sector with strategically located assets that access the most prolific supply basins and largest consuming regions of the U.S. One of the strongest organic growth profiles in the industry Lower cost of capital than
Slide 30: Questions and Answers
Enterprise Products Partners L.P. Questions and Answers
Slide 31: Non-GAAP Reconciliations
Non-GAAP Reconciliations Entesprise Products Partners LP. For the Twelve Months Gross Operating Margin by Segment (olla For the Quarterly Period Ended December 34, 4004 1005 20-05 30-05 40.05 10-06 2005 2004 Gross operating margin by segment: NOL Pipelines & Services 9142466 9183304 $120528 $1837 9
Slide 32: Non-GAAP Reconciliations
Non-GAAP Reconciliations Enterprise Products Partners L.P. For the Three Months For the Twelve Months EBITDA (Dollars in 000s, Unaudited) Ended March 31, Ended December 31, 2006 2005 2005 2004 Reconeiliation of Non-GAAP "EBITDA" to GAAP "Net income" and. GAAP "Cash provided by operating activities"
Slide 33: Non-GAAP Reconciliations
Non-GAAP Reconciliations Ertarprise Products Partners LP. Forthe Twelve Morthe Distributable Cash Flow (Dallas in 000s, Unaudited) For the Quarterly Period Ended December 21 woe 70s aos 3005 age Toe 2005 2008 Income” ard GAAP ‘Cash provided by sein) operating aches” (in 0005) Netincome $115364 10025
Slide 34: Non-GAAP Reconciliations
Non-GAAP Reconciliations Enterprise Products Operating LP. ‘At Merch ‘At December Leverage Ratio (Dollarsin 000s, Unaudited) 31,2006 34,205 Net income" 5 446309 5 420,00 Adjustients to reconcile GAAP Net incow 20 Non-GAAP "Leverage Ratio Cash Flow” Deduct equiy eamnings trom unconsolidated afiltes (
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