Enterprise Products Partners L.p. · NYSE:EPD
Enterprise Products Partners L.p — Wachovia Securities Nantucket Equity Conference 2006
35 slides from Enterprise Products Partners L.p's conference presentation, Jun 21, 2006
Slide 1: Enterprise Products Partners L.P. Wachovia Securities Nantucket Equity Conference
Enterprise Products Partners L.P. Wachovia Securities Nantucket Equity Conference June 21, 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 GTM Merger Due to Diversified Businesses
Strong Results Since GTM Merger Due to Diversified Businesses Stability and consistency of gross operating margin and distributable cash flow reflect 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
Slide 7: Strong NGL Industry Fundamentals
Strong NGL Industry Fundamentals 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 that industry flexibili
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
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 2005 Does not account for potential additional organic growth projects or acquisitions This summary includes selected major growth capital projec
Slide 11: Western U.S. Growth Strategy: Rocky Mountain Expansion Projects
Western U.S. Growth Strategy Rocky Mountain Expansion Projects EPD expects to 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
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 Based on company estimates
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 Gulf storms delay production ramp-up
Slide 18: 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 19: 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 20: Financial Overview
Financial Overview © Allrights reserved. Enterprise Products Partners LP
Slide 21: Financial Objectives
Financial objectives Maintain a strong balance sheet and credit metrics that support investment grade credit ratings Key financial objective since IPO Increase cash flows from fee-based businesses Prudently invest to expand the partnership through organic growth, acquisitions and joint ventures with
Slide 22: History of Financial Discipline in Executing Growth Strategy
History of Financial Discipline in Executing Growth Strategy Strong coverage of distributions Provided 1.2x coverage of distributions paid since IPO in July 1998 Reinvested $474MM of distributable cash flow back into the partnership since 1999 (first full year since the IPO) Reinvested $213MM of dis
Slide 23: Management's Interest Aligned with Limited Partners
Management’s Interest Aligned with Limited Partners 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 24: Financial Position
Financial Position EPD is in the final 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 capi
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: 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 27: 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 at produc
Slide 28: Overview of Results
Overview of Results (8 in mittions) First Quarter Year Ending Dec. 34 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 77 36 Petrochemical Services 28 19 126 1
Slide 29: Capitalization
Capitalization Avg. life of debt - 10.8 years Avg. interest rate - 5.67%
Slide 30: 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 31: Questions and Answers
Enterprise Products Partners L.P. Questions and Answers
Slide 32: Non-GAAP Reconciliations
Non-GAAP Reconciliations Enterprise Products Parinars LP. Gross Operating Margin by Segment (Dollarsin 000s) ‘Gress operating margin by segment NGL Pipelines & Servioes Onshore Natural Gas Pipelines & Services Offshore Pipelines & Services Petrochemical Services ‘other, non-zegment Total segment gre
Slide 33: 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 f Nlon-GAAP " "to GAAP ‘W. * GAAP “Hi ty A (8. in 005) Net income § 193777 $ 109255 § 419508 § 268 261 Addi
Slide 34: Non-GAAP Reconciliations
Non-GAAP Reconciliations Enterprise Products Parnes LP. Ustnbulatle Cash Flow (Dalasi 000s, Urausted) Ferthe Quarterly Parca Fer the Twelve Morthe Ended December 3 aoe Tg _ 20s 3008 aS aoe 0s 200 esata GAAP 1 Chscatng Aas Net inome $1664 $109258 § THAD 1,169 StoRANe GISSTIT SaTOAME 208281 ‘Alustwent
Slide 35: Non-GAAP Reconciliations
Non-GAAP Reconciliations Enterprise Preducts Operating LP. at Marah Tht December Leverage Ratio (Dallars in 000s, Unaudited) 31,2006 21.2005, Net ncome 8 e300 8 420.980 Adjustinentsto reconsie GAAP “tet hoowe“b ibe-GAAP “leverage Ratio Cast Flow" (Deduct equity earings fom unconsolidated afiiste= 40
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