epd enterprise product partners jan 2010 presentation

8/14/2019 EPD Enterprise Product Partners Jan 2010 Presentation

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All rights reserved. Enterprise Products Partners L.P. All rights reserved. Enterprise Products Partners L.P.

UBS Wealth ManagementConference

January 27, 2010

Michael A. CreelPresident and CEO



All rights reserved. Enterprise Products Partners L.P. All rights reserved. Enterprise Products Partners L.P. 3

Key Investment Considerations

Largest publicly traded partnership based on market capitalization in the U.S.with a diversified, integrated midstream energy system serving producersand consumers of natural gas, NGLs, crude oil, petrochemicals and refined

products Approximately $31 billion enterprise value, $26 billion in assets and $19 billion

equity market capitalization

Accesses some of the most prolific natural gas, NGL and crude oil supply basins in

the U.S. including non-conventional and shale plays: Jonah / Pinedale, Piceance,Barnett Shale, Eagle Ford and Haynesville

Handles natural gas volumes equivalent to almost 20% of total U.S. demand

Serves 100% of U.S. ethylene steam cracking capacity, the largest market for NGLs

Large asset footprint generates growth opportunitiesInvestment grade credit rating; focus on cost of capital and financial flexibility;demonstrated access to capital in difficult markets

Balance distribution growth and retention of capital

Significant management ownership and industry experience


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Significant Management OwnershipInterests Aligned with Investors

One of the largest ownership positionsby management in the sector

EPCO has purchased approximately$900 million of new equity since IPO inJuly 1998; includes approximately$440 million purchased since 3Q 2008

EPCO has consistently supportedEPD’s growth including the eliminationof the GP’s 50% incentive distribution

right in 2002

Note: Percent ownership as of November 30, 2009.

* The 0.7% G.P. interest in DEP, 2% G.P. interest in EPD, and the 0.01% G.P. interest in EPE represents a 100% ownership of the respective G.P.

Enterprise Products

Partners L.P.

(NYSE: EPD)

2% G.P.Interest*

3.4% L.P.Interest

27.9% L.P.Interest

0.01% G.P.Interest*

77.9% L.P.Interest

58.6% L.P.Interest

NoIDRs

0.7% G.P.Interest*

Enterprise GP

Holdings L.P.

(NYSE: EPE)

Dan Duncan,

Enterprise Products

Company and

Affi liates

Duncan Energy

Partners L.P.

(NYSE: DEP)

1.0% L.P.Interest

No

IDRs



Enterprise System MapExpanding into Refined Products & Crude Oil Logistics

Approximately 48,000 miles of natural gas, NGL, crudeoil, refined products and petrochemical pipelines

200 MMBbls of NGL, refined products and crude oilstorage capacity

27 Bcf of natural gas storage capacity25 natural gas processing plants

17 fractionation facilities

6 offshore hub platforms

NGL import / export terminals

Butane isomerization complex

Octane enhancement facility

One of the largest inland tank barge companies in U.S.

Asset Overview



6%

4%

13%

57%

20%

$2.0 BillionGross Operating Margin

Nine Months Ended 09/30/09

Geographic and Business DiversificationProvide Multiple Earnings Streams

NGL Pipelines & Services (57%)

Natural gas processing & related NGL marketing activities

NGL fractionation plants

NGL pipelines and storage

Onshore Natural Gas Pipelines & Services (20%)

Natural gas pipelines & related marketing

Natural gas storage facilities

Petrochemical and Refined Products & Services (13%)

Refined products and petrochemical pipelines Butane isomerization facilities

Propylene fractionation facilities

Octane enhancement facility

Marine terminals & transportation

Onshore Crude Oil Pipelines & Services (6%) Crude oil pipelines, storage terminals & related marketing

Offshore Pipelines & Services (4%)

Natural gas pipelines

Crude oil pipelines

Platform services



Trinity River Pipeline

ShermanExtension

Dependable cash flow

4.1 Bcf/d of subscribed capacity(including Sherman Extension)

Approximately 80% of capacity

subscribed by third parties withdemand charges; majority areproducers, utilities and powerplants

Little direct exposure to west /east basin spreads

Sherman Extension / TrinityRiver Lateral

Sherman Extension: 1.1 Bcf/dpipeline interconnects with Gulf

Crossing; began collectingdemand charges under 10-yearcommitments on August 1 for950 MMcf/d

Trinity River Lateral: 1 Bcf/d pipeline that extends from Sherman Extension into Trinity River Basin andNewark East Field producing areas

– Expected in-service: partial 4Q 2009; full 2Q 2010

Texas Intrastate Natural Gas P/L SystemSherman Extension Began Service August 2009



Eagle Ford (“EF”) is more than a gas play; hasoil, associated gas and condensate, rich gasand lean gas

Rich gas has NGLs averaging 4–9 gallons per

thousand cubic feet of natural gasEPD’s system has access to more than700,000 acres of EF properties, with400,000 dedicated to EPD

EPD is constructing White Kitchen lateral

which will add more than 200 MMcf/d ofcapacity in 2Q 2010 Some segments already in service

Producers actively developing the play include Apache, Pioneer, ConocoPhillips, Lewis,

Murphy, EnCana, Anadarko, PetroHawk andEOG

Producers success and acceleration of theirdrilling programs has led EPD to exploreadditional investments in natural gas, NGL

and crude oil infrastructure to supportexpected production growth

EPD’s network of assets is well-situated tomaximize value of EF hydrocarbon production

White KitchenLateral

Eagle Ford Shale OpportunityPotentially 10 Million Acres Adjacent to EPD System



Haynesville Shale OpportunityExtension of Acadian Gas Pipeline

Industry sources state Haynesville Shalehas potential to cover 2 million acres andto be 4th largest natural gas field in theworld with approximately 200 Tcf of

reservesInitial production rates are as high as30 MMcf/d; with estimated recoverablereserves of 4.5–8.5 Bcf per well

Haynesville pipeline project: 249-mile pipewith up to 2.1 Bcf/d of capacity; will provideproducers access to additional marketsoutside Perryville Hub

Provides Haynesville producers access to Acadian System, which has 150 end-use

markets, a storage facility and connection toHenry Hub

Additionally provides access to 9 interstatepipelines

Supported by long-term agreements with

7 producersExpected in service: September 2011

Acadian

TETCO

FGT

TGC

ANR

Transco

Cypress

Tennessee

Texas Gas

ColumbiaGulf

Sonat

Pipeline Interconnects



Haynesville Shale Additional Opportunities

Gathering and treatingopportunities in southern halfof the basin

Selling northbound capacityon our pipeline up to the 42”corridor for producercommitments made oncompeting lines

Of the competing projects inthe Haynesville, there are 2

new pipelines and 2 expansions,which all go to Perryville

Other pipelines are in directcompetition with each other




Petrochemical / Ethylene Demand Has ReboundedNGLs are Preferred / Highest Margin Feedstock

0

200

400

600

800

1,000

1,200

1,400

0 0 0

B a r r e l s / D a y

Butane 80 106 83 49 45 71 115 52 36 62 61 64

Propane 385 403 370 337 332 376 333 206 245 335 377 375

Ethane 729 749 776 813 789 812 638 627 680 835 803 860

1Q07 2Q 3Q 4Q 1Q08 2Q 3Q 4Q 1Q09 2Q 3Q 4Q

Source: Pace Hodson, CMAI, quoted forward prices for feedstocks and company estimates on January 15, 2010.

Ethylene production from steamcrackers has rebounded from 4Q 2008to 52 billion pounds per year, whichequals the average ethylene

production for the last five years

NGL feedstocks – ethane and propaneare forecast to provide ethyleneproducers higher margins than more

costly crude oil derivatives over next12 months

Cracker modifications have accountedfor approximately 100 MBPD ofincremental ethane cracking

Daily ethane volumes projected toexceed 900 MBPD in the near-term ascracker operators continue to maximizeethane consumption-$0.16

-$0.12

-$0.08

-$0.04

$0.00

$0.04

$0.08

$0.12

$0.16

J a n - 1 0

F e b -

1 0

M a

r - 1 0

A p r - 1

0

M a y - 1 0

J u n - 1 0

J u l - 1 0

A u g - 1 0

S e p - 1 0

O c t -

1 0

N o

v - 1 0

D e

c - 1 0

Ethane Propane Butane Naphtha Gas Oil




EPD’s NGL fractionation volumeshave increased by approximately50% over the last three years

Fractionators are operating atcapacity

Offloading volumes to ourfractionators in Louisiana that haveexceeded our available capacity atMont Belvieu

Hobbs NGL fractionator has beenoperating at capacity since first

quarter of 2008

Additional capacity will be needed toaccommodate incremental NGL

volumes expected from emergingEagle Ford Shale play

Strong Demand for NGL FractionationCapacity




EPD will build a new75 MBPD NGL fractionatorat Mont Belvieu

Increase fractionationcapacity to 300 MBPD atMont Belvieu; over

600 MBPD system-wide Expansion supported by

long-term contracts

Leveraging existinginfrastructure and recentexperience with Hobbs

Estimated completion in first

quarter 2011

Mont Belvieu Fractionator Expansion




Record Operating Performance(1)

…

3,855

3,704

3,574

3,405

3,000

3,200

3,400

3,600

3,800

4,000

2006 2007 2008 9 Mos 2009

M B P D

NGL, Crude Oil, Petrochemical & RefinedProducts Pipeline Volumes

621

585

563

462

375

425

475

525

575

625

2006 2007 2008 9 Mos 2009

M B P D

NGL / Propylene Fractionation &Butane Isomerization Volumes 116

108

88

63

40

60

80

100

120

2006 2007 2008 9 Mos 2009

M B P D

Equity NGL Production

7.0

8.0

9.0

10.0

11.0

12.0

13.0

2006 2007 2008 9 Mos 2009

T B t

u / d

Onshore & Offshore NaturalGas Pipeline Volumes

9.4

10.1

Offshore

Onshore

11.0

12.0

(1) Recasted to include TEPPCO for all periods.




…Drives Strong Financial Results

Gross Operating Margin

$2.0

$2.6

$2.0

$1.8

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

2006 2007 2008 9M 2009

$ B i l l i o n s

$1.8

$2.3

$1.7$1.6

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

2006 2007 2008 9M 2009

$ B i l l i o n s

Adjusted EBITDA

$100

$314

$26

$98

$0

$50

$100

$150

$200

$250

$300

$350

2006 2007 2008 9M 2009

$ M i l l i o n

s

Retained DCF / Coverage

1.1x

1.0x

1.3x

1.1x

* Annualized

$1.5

$3.1

$2.8

$2.0

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

2006 2007 2008 2009

$ B i l l i o n s

Growth Capital Investment (1)

≈

Forecast

$1.54

$1.70

$1.83

$1.95

$2.08

$2.21

$1.25

$1.50

$1.75

$2.00

$2.25

2004 2005 2006 2007 2008 Current

D i s t r i b u t i o n s D

e c l a r e d

Distribution Rate

*

$1.1

$1.4

$1.0$1.0

$0.0

$0.4

$0.8

$1.2

$1.6

2006 2007 2008 9M 2009

$ B i l l i o n

s

Distributable Cash Flow

(2)

(1) Represents cash used in investing activities, excluding changes in restricted cash.(2) Includes distributable cash flow for TEPPCO for the 3 rd quarter 2009.




History of Financial Discipline56% of Growth Investment Funded with Equity

(1) Growth capital investment includes the capital expenditures, cash used for business combinations, investments in and advances to unconsolidated affiliates, and acquisition of intangibleasset amounts as reflected on our Statements of Consolidated Cash Flows for the respective periods. The value of equity interests granted to complete the GTM merger, the ShellMidstream acquisition, the Encinal acquisition and equity interests TEPPCO granted to complete the Cenac acquisition, as reflected on our Statements of Consolidated Partners’ Equity, arealso included. In addition, capital investment includes $2.0 billion of debt assumed in connection with the GTM merger and $63 million of debt TEPPCO assumed in the Cenac acquisition.Sustaining capital expenditures are excluded.

(2) Equity issued includes net proceeds from the issuance of common units and Class B special units and cash contributions from noncontrolling interests as reflected on our Statements ofConsolidated Cash Flows for the respective periods. Cash contributions from noncontrolling interests primarily reflects the net proceeds from equity issued by DEP and TEPPCO. Alsoincluded is the value of equity issued as consideration for the GTM merger, the Shell Midstream acquisition, Encinal acquisition and Cenac acquisition as reflected on our Statements ofConsolidated Partners’ Equity. In addition, the equity content of our Hybrid securities is included in 2006 – 2007.

Note: Data recasted beginning with 2006 to include TEPPCO.

$ in Millions

Capital Equity Retained %

Investment Issued DCF Equity

1999 504$ 213$ 51$ 52%

2000 331 56 147 61%2001 610 118 128 40%

2002 1,712 181 (12) 10%2003 658 676 (52) 95%

2004 5,803 3,757 31 65%

2005 1,429 920 168 76%2006 1,951 1,585 98 86%

2007 2,752 957 26 36%2008 3,124 641 313 31%

9 mos. 2009 1,035 1,019 100 108%

Totals 19,909$ 10,123$ 998$ 56%

Growth Funded by Equity




Substantial Financial Flexibility Addedby Eliminating GP’s 50% IDR

“Landmark” action taken byEPD’s GP in December 2002to cap GP’s IDRs at 25% forno consideration

3Q 2009 annualized savingsof $261 million (equivalent to

$0.43/unit)Enhances EPD’s financialflexibility by retaining cash

flow for debt retirement orcapital investment

Significantly lowers long-termcost of capital

$100

$125

$150

$175

$200

$225

$250

$275$300

$325

$350

$375

$400

$425

$450

$475

$500

3 Q 0 4

4 Q 0 4

1 Q 0 5

2 Q 0 5

3 Q 0 5

4 Q 0 5

1 Q 0 6

2 Q 0 6

3 Q 0 6

4 Q 0 6

1 Q 0 7

2 Q 0 7

3 Q 0 7

4 Q 0 7

1 Q 0 8

2 Q 0 8

3 Q 0 8

4 Q 0 8

1 Q 0 9

2 Q 0 9

3 Q 0 9

$ i n M

i l l i o n s

LP Distributions GP Distributions Avoided 50% Splits

Cumulative Savings: $524MM

(1)

(1) Includes 131 million newly issued units for the TEPPCO merger.




$722

$999

$5,426

LP Distributions

GP Distributions

Retained DCF

($ in millions)

1.2x LP Distribution

Coverage

Generated $7.1 Billion of DCF (1999 – 3Q 2009)14% DCF Retained / Reinvested in Partnership

History of Providing Distribution Growth WhileRetaining Capital for Flexibility / Reinvestment

$2.20

$2.08

$1.95

$1.83

$1.70

$1.54$1.47

$1.36

$1.19

$1.05

$0.93

$0.00

$0.25

$0.50

$0.75

$1.00

$1.25

$1.50

$1.75

$2.00

$2.25

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

D i s t r i b u t i o n s D e c l a r e d

8. 3 %

C A G R

E t i H G t d




Enterprise Has Generated Attractive Total Returns

QTD 1-Year 2-Year 3-Year 5-Year

Enterprise Products Partners L.P. 13.1% 64.8% 15.2% 34.7% 72.1%

Alerian MLP Index 16.6% 76.5% -30.6% 26.5% 69.2%S&P 500 6.0% 26.5% -16.3% -15.1% 3.1%

S&P Midcap 400 5.7% 37.4% -6.4% -3.8% 19.5%

FTSE NAREIT 2.4% 43.1% -31.4% -31.5% -23.0%

Dow Jones Utility Index 6.7% 12.5% -17.8% -1.3% 44.0%

For period ended December 31, 2009

830%

428%

10%

-100%

0%

100%

200%

300%400%

500%

600%

700%

800%

900%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Dec 09

EPD Alerian MLP Index S&P 500

T o t a l R e t u r n w / R e i n v

e s t e d D i s t r i b u t i o n s

Source: Bloomberg L.P. Past results may not be indicative of future performance.




Non-GAAP Reconciliations




Non-GAAP Reconciliations

Enterprise Products Partners L .P.

Gross Operating Margin (Dollars in millions) For the Nine

Months Ended

September 30,

2006 2007 2008 2009

Gross operating margin by segment:NGL Pipelines & Services 785.7$ 848.0$ 1,325.0$ 1,118.1$

Onshore Natural Gas Pipelines & Services 478.9 493.2 589.9 391.5

Onshore Crude Oil Pipelines & Services 97.8 109.6 132.2 126.7 Offshore Pipelines & Services 103.4 171.6 187.0 83.0

Petrochemical & Refined Products Services 305.1 342.0 374.9 255.6

Total gross operating margin 1,770.9 1,964.4 2,609.0 1,974.9 Adjustments to reconcile gross operating margin to operating income:

Depreciation, amortization and accretion in operating cost and expenses (556.9) (647.9) (725.4) (602.9) Impairment charge included in operating costs and expenses - - - (26.3) Operating lease expense paid by EPCO in operating costs and expenses (2.1) (2.1) (2.0) (0.5)

Gain (loss) on asset sales and related transactions in

operating costs and expenses 5.1 7.8 4.0 0.5

General and administrative costs (95.9) (127.2) (137.2) (133.3) Operating income 1,121.1$ 1,195.0$ 1,748.4$ 1,212.4$

For the Year Ended December 31,




UBS Wealth ManagementConference

January 27, 2010

Michael A. CreelPresident and CEO

epd enterprise product partners jan 2010 presentation

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