Enterprise Products Partners L.P. Bank of America Merrill Lynch Natural Gas Liquids 1x1 Conference

Transcription

2 Forward Looking Statements This presentation contains forward-looking statements based on the beliefs of the company, as well as assumptions made by, and information currently available to our management team. When used in this presentation, words such as anticipate, project, expect, plan, seek, goal, estimate, forecast, intend, could, should, will, believe, may, potential and similar expressions and statements regarding our plans and objectives for future operations, are intended to identify forward-looking statements. 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. You should not put undue reliance on any forward-looking statements, which speak only as of their dates. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those expected, including insufficient cash from operations, adverse market conditions, governmental regulations, the possibility that tax or other costs or difficulties related thereto will be greater than expected, the impact of competition and other risk factors discussed in our latest filings with the Securities and Exchange Commission. All forward-looking statements attributable to Enterprise or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained herein, in such filings and in our future periodic reports filed with the Securities and Exchange Commission. Except as required by law, we do not intend to update or revise our forward-looking statements, whether as a result of new information, future events or otherwise. All rights reserved. Enterprise Products Partners L.P. 2

3 Key Investment Considerations Largest publicly traded energy partnership with an enterprise value of more than $71 billion 64 th on Fortune 500; 226 th on Fortune Global 500 Integrated midstream energy system serving producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals and refined products Natural gas pipelines transport approximately 14 Bcf/d NGLs, crude oil and other liquid pipelines transport approximately 4.5 million barrels per day Diversified sources of cash flow Visibility to growth with approximately $7.5 billion of capital projects currently under construction Investor-friendly structure and history of successful execution No GP IDRs lower cost of capital Only Baa1 / BBB+ rated MLP Raised distribution in each of the last 35 consecutive quarters 6.8% distribution growth for declared 1Q13 vs. 1Q12 All rights reserved. Enterprise Products Partners L.P. 3

4 It s Not Complicated Simple is Better EPCO & Affiliates Public 37% L.P. Interest (1) Non-economic GP 63% L.P. Interest Enterprise Products Partners L.P. (NYSE: EPD) Completed actions over the past several years to simplify our partnership structure and lower our cost of capital by eliminating GP incentive distribution rights. (1) As of May 31, 2013 All rights reserved. Enterprise Products Partners L.P.

5 Geographic and Business Diversification Provides Multiple Earnings Streams $4.6 Billion Gross Operating Margin For 12 months ended March 31, Year Growth Capital Allocation E (1) $15 Billion 17% 23% 53% 14% 45% 10% 100% 90% 80% 70% 60% 73% 76% 3% 13% Expect Increasing Contribution from Fee-Based Activities 81% 1% 21% NGL Pipelines & Services Onshore Natural Gas Pipelines & Services Petrochemical & Refined Products Services Onshore Crude Oil Pipelines & Services Offshore Pipelines & Services 50% E (1) Growth capital projects result in additional revenue from existing assets or from expansion of our asset base through construction of new facilities. All rights reserved. Enterprise Products Partners L.P. 5

6 Leading Business Positions Across Midstream Energy Value Chain Midstream Energy Services Natural Gas Pipelines Storage Natural Gas Pipelines Ethane NGL Exports Natural Gas Pipelines Natural Gas Crude Oil Gas Processing Mixed NGLs Pipelines Propane Butane Iso-Butane N Gasoline NGL Fractionation Storage NGL Pipelines NGL Wholesale Trucks MTBE Export / Barges Barges Crude Oil Pipelines Storage Olefins Plant Propylene Splitters Storage Butane Isom Belvieu Fuels Chemical Market Refined Products Pipelines Provide services at every link of the value chain Crude Oil Refining All rights reserved. Enterprise Products Partners L.P. 6

7 EPD Portfolio of Integrated Assets 50,000 miles of natural gas, NGL, crude oil, refined products and petrochemical pipelines 200 MMBbls of NGL, refined products and crude oil, and 14 Bcf of natural gas storage capacity 24 natural gas processing plants Major Asset Overview 21 NGL & Propylene fractionators 6 offshore hub platforms NGL import / export terminals Butane isomerization complex; octane enhancement facility; high-purity isobutylene facility All rights reserved. Enterprise Products Partners L.P. 7

8 EPD Accesses Some of the Most Prolific Emerging Shale / Non-Conventional Plays Williston Basin Bakken & Three Forks Appalachian Basin Utica Appalachian Basin Marcellus Jonah Pinedale Uinta Basin Mancos Piceance Basin Mancos Anadarko Basin Woodford Powder River Basin Niobrara Denver Basin Niobrara Anadarko Basin Hz Mississippian Arkoma Basin Woodford Michigan Basin Antrim Arkoma Basin Fayetteville Michigan Basin Utica San Juan Basin Mancos Fort Worth Basin Barnett Illinois Basin New Albany Permian Basin Bone Spring, Avalon, Wolfcamp & Cline Primarily Rich Gas & Oil Primarily Dry Gas Delaware Basin Barnett / Woodford South Texas Eagle Ford & Pearsall North Louisiana, East Texas Haynesville & Bossier South Louisiana Tuscaloosa Marine All rights reserved. Enterprise Products Partners L.P. 8

9 Shale Plays: It s Not Just Gas / NGLs 8 MMBPD Crude Oil Increase (2008 to 2020) Canada Williston CA / AK 0.36 Rockies Mid-Cont. NE U.S Permian ECHO Texas Gulf Coast Refining Complex: 4 MMBPD (25% of Total U.S.) Gulf Coast Offshore North of Cushing / 4.3 MMBPD South of Cushing / 3.7 MMBPD Sources: EIA and EPD Fundamentals All rights reserved. Enterprise Products Partners L.P. 9

10 Emerging Opportunities Near EPD Assets Drilling Play Marcellus Rich Gas Utica Rich Gas Anadarko Cana Woodford Miss. Chat / Lime Tuscaloosa Marine Shale Permian Avalon Shale, Bone Spring, Wolfcamp San Juan Mancos Piceance Mancos Niobrara Location PA / WV OH / WV OK OK / KS LA NM / TX NM CO Enterprise Assets ATEX Express ATEX Express Red River, MAPL Seaway, MAPL Acadian, Louisiana Gas Plants, Dixie West Texas Gathering, Carlsbad, MAPL, Hobbs San Juan, Chaco, MAPL, Hobbs Meeker, MAPL, Hobbs, Front Range, TX Express Products Rich Gas Rich Gas & Oil Lean / Rich Gas & Oil Rich Gas & Oil Rich Gas & Oil Rich Gas & Oil Lean / Rich Gas & Oil Lean / Rich Gas Status Developing Appraising Developing Developing Pilot Developing Pilot Pilot Source: EPD Fundamentals All rights reserved. Enterprise Products Partners L.P. 10

11 Visibility to Growth: $7.5 Billion in Major Capital Projects Under Construction NGL Pipeline & Services In Service Date 1Q Q Q Q Eagle Ford Yoakum Gas Processing Facility (Phase III additional 300 MMcf/d) (1Q 2013) Done NGL Export Facility Expansion at Houston Ship Channel (1Q 2013) Done Mont Belvieu DIB Expansion (1Q 2013) Done Eagle Ford 20" P/L from Yoakum to Needville and 24" P/L from Needville to Alvin (2Q 2013) Done Eagle Ford Phase II Mixed NGL pipeline and Lateral (2Q 2013) Done Texas Express (JV) NGL pipeline and Gathering system Skellytown to Mont Belvieu (3Q 2013) Mont Belvieu Mixed NGL Pipeline & Pump Expansions (3Q 2013) South Carlsbad Expansion (3Q 2013) 60 mile pipeline Mont Belvieu (JV) NGL Fractionators 7 & 8 (4Q 2013) Front Range (JV) NGL Pipeline (4Q 2013) ATEX Express Ethane Pipeline Marcellus / Utica (1Q 2014) Mid-America NGL Pipeline Expansion Rocky Mountain segment (2Q 2014) Aegis Ethane Header Pipeline 270 miles (2Q-4Q 2014) Onshore Crude Oil Pipelines & Services North Loop extension of West Texas Crude system (21 miles of 10" P/L) (2Q 2013) Avalon Bone Springs Gathering Pipeline (Phase II) (2Q 2013) Eagle Ford (JV) - Crude Oil Pipeline (3Q 2013) Seaway (JV) Crude Oil looping (up to 850 MBPD) and laterals (1H 2014) ECHO storage expansion 900MBbls (capacity increase to 1.6MMBbls) (2Q 2014) ECHO addt'l 4MMBbl (total capacity 6 MMBbls) and 55 miles of 36" pipelines (4Q 2014) Done Done Petrochemical & Refined Products Services MTBV PP Splitter IV expansion (2Q 2013) Done Diluent Service to Chicago area (Southern Lights & Cochin P/L connections) (4Q 2013 & 2Q 2014) Refined Products - Beaumont and Morgan's Point export docks (1Q & 2 3Q 2014) Propane Dehydrogenation Unit (3Q 2015) Other Offshore Pipelines & Services Lucius (JV) Crude Oil Pipeline SEKCO (3Q 2014) Value of Capital placed in service in 2013 ($ Billions) $ 0.4 $ 0.7 Value of Remaining Capital Projects to be put in service $ 0.9 $ 0.6 $ 4.8 $ 1.2 All rights reserved. Enterprise Products Partners L.P. 11

13 Portfolio of Major Capital Growth Projects Western Expansion MAPL Rocky Mountain Front Range Texas Express Seaway Pipeline Looping ATEX Express Gulf Coast Projects Aegis ethane header pipeline Fractionation expansions PDH facility Eagle Ford crude oil pipeline ECHO crude oil terminal Refined products export terminals All rights reserved. Enterprise Products Partners L.P. 13

14 Major NGL Capital Growth Projects Western Pipeline Expansion Front Range JV: EPD, Anadarko and DCP 435 miles of 16 pipe; DJ basin to Skellytown; connections to Texas Express and MAPL Capacity: 150 MBPD, expandable to 230 MBPD 10 year ship-or-pay contracts Expected in-service: 4Q % of expected project costs locked in MAPL Rocky Mountain Expansion 265 miles of 16 pipeline and pump modifications 10 year ship-or-pay contracts Capacity from 275 MBPD to 350 MBPD Expected in-service: 2Q % of expected project costs locked in Texas Express JV: EPD, Enbridge, Anadarko and DCP 580 miles of 20 pipe; Skellytown to Mont Belvieu Capacity: 280 MBPD, expandable to 400 MBPD 10 year ship-or-pay contracts Expected in-service: 3Q % of expected project costs locked in All rights reserved. Enterprise Products Partners L.P. 14

15 Major NGL Capital Growth Projects ATEX Express and Aegis Ethane Header Pipeline ATEX Express 1,230 mile pipeline Capacity: 190 MBPD, expandable with system enhancements 15 year ship-or-pay Expected in-service: 1Q 2014 Announced open season to transport propane June 5 July 11, 2013 Propane service could begin: 1Q % of expected project costs locked in Aegis Ethane Header Pipeline 270 mile pipeline system Route depends on shipper commitments Capacity to be determined ( >125 MBPD) Expected in-service: 2Q-4Q 2014 All rights reserved. Enterprise Products Partners L.P. 15

16 Major Crude Oil Growth Projects Seaway JV Looping & Laterals 512 mile, 30 parallel pipeline Supported by commitments up to 20 years 45 mile, 36 lateral from Jones Creek to ECHO 96 mile, 30 lateral from ECHO to Beaumont / Port Arthur Expected in-service: 1H 2014 Eagle Ford Crude Pipeline JV with Plains Completing in 4 phases Expected fully in-service: 3Q 2013 ECHO Storage Terminal Increasing storage capacity to 6 MMBbls of capacity and 55 miles of 36 pipeline Expected in-service: 4Q 2014 All rights reserved. Enterprise Products Partners L.P. 16

17 Future ECHO Supply Connectivity Multiple Grades of Crude with Access to Numerous Markets Valero Lyondell PRSI Shell Deer Park Beaumont / Port Arthur Galena Park Bertron Speed Exxon Baytown Genoa Junction ECHO Pasadena Delivery Morgan s Point Texas City Webster Enterprise BP / Marathon Valero Marathon Enterprise Future Seaway Seaway Future All rights reserved. Enterprise Products Partners L.P. 17

18 EPD s Eagle Ford Shale Projects Cumulative Capital Expenditures: $4 Billion with $3.3 Billion Placed In Service To-Date 900 Eagle Ford Crude / Condensate Production MBPD Source: EPD Fundamentals Est. All rights reserved. Enterprise Products Partners L.P. 18

19 Propane Export Destinations EPD s Export Facility Loaded 46 MMBbls in 2012 Mexico 10.8 MMBbls ( % U.S.) (2005 4% U.S.) Central America 1.3 MMBbls ( % U.S.) ( % U.S.) Europe 6.8 MMBbls ( % U.S.) ( % U.S.) Caribbean 6.0 MMBbls ( % U.S.) (2005 1% U.S.) South America 17.3 MMBbls ( % U.S.) (2005 0% U.S.) Million Barrels Far East 3.7 MMBbls (2012 3% U.S.) (2005 0% U.S.) Top Propane Exporting Countries in E Source: Waterborne EPD Loadings Others All rights reserved. Enterprise Products Partners L.P. 19

20 EPD to Develop Refined Products Export Facilities on Texas Gulf Coast Utilize existing refined products pipeline, storage and terminal facilities Southern Complex: 12 MMBbls storage capacity; connected to 3 interstate pipelines, 1 intrastate pipeline and 2 export docks Loading capacity: 15,000 BPH at each facility with no daylight restrictions In-service: Beaumont 1Q14; Morgan s Point 2Q 3Q14 Connected to 10 Refineries: ExxonMobil Baytown ExxonMobil Beaumont Motiva Port Arthur Total Port Arthur Valero Port Arthur Marathon Galveston Bay Marathon Texas City Valero Texas City Shell Deer Park Phillips 66 Sweeny All rights reserved. Enterprise Products Partners L.P. 20

21 Increased Use of Ethane Reduces U.S. Propylene Supply Ethane demand increasing vs. naphtha due to favorable economics U.S. petrochemical industry is retooling to maximize ethane consumption Shift to ethane has significantly reduced propylene production from ethylene crackers by 38% EPD announced plans to build one of the world s largest PDH units along the Texas Gulf Coast Will consume up to 35 MBPD of propane to produce up to 1.65 billion lbs. per year (25 MBPD) of polymer grade propylene Will integrate with EPD s existing NGL and propylene fractionation / splitter facilities to provide operational reliability and flexibility Supported by long-term, fee-based contracts with investment grade companies Expected to begin commercial operations in 3Q 2015 Billion Pounds Sources: CMAI, EIA and Hodson All rights reserved. Enterprise Products Partners L.P Propylene Supply Ethane Naphtha MBPD

23 Solid Operating Performance (1) TBtu/d Offshore Natural Gas Pipeline Volumes MBPD 4,500 4,300 4,100 3,900 3,990 Liquids Pipeline Volumes 4,289 4,205 4,024 4,492 8 Onshore 3, Q2013 3, Q2013 MBPD NGL / Propylene Fractionation & Butane Isomerization Volumes Equity NGL Production MBPD Equity NGL Production & Fee-based Processing Bcf/d Fee-based Processing Q Q (1) Volumetric data for periods prior to 4Q 2009 include TEPPCO. All rights reserved. Enterprise Products Partners L.P. 23

24 Drives Strong Financial Results $ Billions $5.0 $4.0 $3.0 $2.0 $1.0 $2.9 Gross Operating Margin $4.4 $3.9 $3.3 $1.2 $ Billions $4.5 $3.5 $2.5 $1.5 $1.6 Distributable Cash Flow (DCF) $2.3 $2.2 $4.1 $3.8 $2.9 $2.8 $0.9 $ per Unit $0.0 $2.75 $2.50 $2.25 $2.00 $ Q2013 $2.20 Distributions Declared $2.32 $2.44 $2.57 $ Q2013 $ Millions All rights reserved. Enterprise Products Partners L.P. 24 $0.5 $2,000 $1,600 $1,200 $800 $400 $ Q2013 (1) Retained DCF / Coverage (Retained $4.7B since 2009) $1,732 $ x $480 $ x 1.9x $ x $1, x $ Q2013 Annualized (1) Retained DCF represents the amount of distributable cash flow for each period that was retained by the general partner for reinvestment in capital projects and other reasons. (2) Each period noted includes non-recurring transactions (e.g., proceeds from asset sales and insurance recoveries and payments to settle interest rate hedges) that resulted in a net benefit to DCF. 1.3x (2) (2) $ x Non-recurring items (2) 1.5x

25 History of Financial Discipline While Executing Growth Strategy $4.5 Total Growth Capex (1) & Debt Leverage (2) $ x $ Billions $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $ x $1.5 $ x $ x $ x 3.7x (3) 4.75x 4.50x 4.25x 4.00x 3.75x 3.50x Debt / Adjusted EBITDA $ x $ E Actual Debt Leverage Ratio 3.00x (1) Represents cash used in investing activities as presented on our Statements of Consolidated Cash Flows before changes in restricted cash, proceeds from asset sales and related transactions, and sustaining capital expenditures. (2) Coverage ratio reflects total debt adjusted for the average 50% equity credit that the rating agencies ascribe to the Junior Subordinated Notes. (3) Debt leverage ratio for 12 months ended March 31, All rights reserved. Enterprise Products Partners L.P. 25

26 Strengthening Debt Portfolio Extending Maturities Without Increasing Costs $11.1 Billion Notes Issued % 10.4% 10.4% Year % % 5.7% % % 5.4% 7.0% 6.0% 5.0% Cost of Debt 48.6% 30.6% 5 * 4.0% 3 Year 5 Year 10 Year 30+ Year Average Maturity to First Call Date Average Cost of Debt * As presented, 3/31/13 data has been adjusted for the repayment of $650 million of notes that matured in April All rights reserved. Enterprise Products Partners L.P. 26

27 S&P 500 Fun Facts With an enterprise value of $70.9 billion, EPD ranks 49 th overall Largest Energy Companies by Enterprise Value Largest Utility Companies by Enterprise Value 1 Exxon Mobil Corporation $ 404,764 2 Chevron Corporation 220,456 3 Schlumberger Limited 105,234 4 ConocoPhillips 94,546 5 Kinder Morgan, Inc. 83,441 6 Occidental Petroleum Corporation 71,417 7 Enterprise Products Partners L.P. 70,860 8 Anadarko Petroleum Corporation 57,230 9 Apache Corp. 42, Halliburton Company 37,850 Ratings of Energy Companies AA- or better, 5% A+, 2% BBB-, 9% Not Rated, 11% BB+ or lower, 20% BBB, 23% A, 11% A-, 7% BBB+, 11% AA- or better A+ A A- BBB+ BBB BBB- BB+ or lower Not Rated 1 Duke Energy Corporation $ 90,637 2 Enterprise Products Partners L.P. 70,860 3 Southern Company 64,148 4 NextEra Energy, Inc. 61,333 5 Dominion Resources, Inc. 56,223 6 Exelon Corporation 48,815 7 American Electric Power Co., Inc. 42,781 8 PPL Corporation 37,748 9 FirstEnergy Corp. 37, Sempra Energy 32,883 Source: CapitalIQ; data as of March 31, 2013 All rights reserved. Enterprise Products Partners L.P. 27

28 EPD and AMZ MLP Index Attractive Total Return vs. 9 Other Asset Classes 10-Year 5-Year 3-Year M 2013 CAGR 1 CAGR 1 CAGR 1 REIT Commodities IG Bonds MLP Index EPD EPD REIT EPD EPD EPD EPD 33.1% 40.7% -6.1% 76.4% 41.0% 17.8% 18.3% 21.8% 18.6% 22.8% 27.0% EPD 29.3% EPD EPD 21.8% 18.6% 22.8% 27.0% EPD EPD Hedge Funds EPD MLP Index MLP Index Non-US Equity MLP Index MLP Index MLP Index MLP Index 29.3% 16.9% -19.1% 64.7% 35.9% 13.9% 17.9% 19.7% 17.8% 18.4% 21.5% Non-US Equity MLP Index High Yield Commodities Small Cap Equity IG Bonds Small Cap Equity Small Cap Equity Small Cap Equity High Yield Small Cap Equity 26.9% 12.7% -21.3% 50.3% 26.9% 7.5% 16.3% 12.4% 11.5% 9.4% 13.5% EPD -30.1% MLP Index Hedge Funds EPD High Yield Commodities High Yield S&P 500 S&P 500 Commodities Small Cap Equity S&P % 12.6% -30.1% 39.4% 20.4% 7.1% 16.0% 10.6% 10.9% 8.2% 12.7% Small Cap Equity Non-US Equity Small Cap Equity Non-US Equity REIT Commodities High Yield REIT Non-US Equity IG Bonds REIT 18.4% 11.6% -33.8% 32.5% 17.9% 2.1% 14.4% 7.1% 10.2% 7.1% 11.8% EPD 13.4% S&P 500 IG Bonds MLP Index Small Cap Equity S&P 500 S&P 500 EPD Non-US Equity S&P 500 S&P 500 High Yield 15.8% 6.1% -36.9% 27.2% 15.1% 2.1% 13.4% 5.2% 8.5% 5.8% 10.4% Hedge Funds S&P 500 S&P 500 S&P 500 High Yield Hedge Funds IG Bonds Hedge Funds High Yield Hedge Funds IG Bonds 13.9% 5.5% -37.0% 26.5% 12.5% -2.5% 9.1% 2.3% 7.8% 3.1% 7.9% High Yield High Yield Commodities REIT Hedge Funds REIT Hedge Funds High Yield Hedge Funds Non-US Equity Commodities 8.3% 2.0% -42.8% 25.1% 10.9% -2.5% 7.7% 1.3% 6.9% -0.4% 7.3% IG Bonds Small Cap Equity Non-US Equity Hedge Funds IG Bonds Small Cap Equity MLP Index Commodities REIT Commodities Non-US Equity 4.5% -1.6% -43.1% 18.6% 10.6% -4.2% 4.8% 1.3% 6.2% -0.4% 5.5% Commodities REIT REIT IG Bonds Non-US Equity Non-US Equity Commodities IG Bonds IG Bonds REIT Hedge Funds 0.4% -14.7% -48.2% 17.7% 8.2% -11.7% 0.3% 0.1% 5.9% -0.6% 4.9% (1) CAGR calculations based upon closing prices ending the last trading day of the first quarter for each period. Commodities: S&P World Commodity Index; EPD: Enterprise Products Partners L.P.; Hedge Funds: CS Tremont Hedge Fund; High Yield: Vanguard High Yield US Corporate Fund; IG Bonds: Vanguard Intermediate Term US Investment Grade Fund; MLP Index: Alerian Index; Non-US Equity: MSCI Daily Total Return EAFE Index; REIT: S&P REIT Index; S&P 500: S&P 500 Index; Small Cap Equity: Russell 2000 Index Source: Bloomberg L.P. Past results may not be indicative of future performance. All rights reserved. Enterprise Products Partners L.P. 28

30 Gross Operating Margin We evaluate segment performance based on the non-gaap financial measure of gross operating margin. Gross operating margin (either in total or by individual segment) is an important performance measure of the core profitability of our operations. This measure forms the basis of our internal financial reporting and is used by our management in deciding how to allocate capital resources among business segments. The following table reconciles non-gaap gross operating margin to operating income, which is the most directly comparable GAAP financial measure to gross operating margin (dollars in millions): For the Twelve For the Three For the Year Ended December 31, Months Ended Months Ended March 31, 2013 March 31, 2013 Gross operating margin by segment: NGL Pipelines & Services $ 1,628.7 $ 1,732.6 $ 2,184.2 $ 2,468.5 $ 2,406.1 $ Onshore Natural Gas Pipelines & Services Onshore Crude Oil Pipelines & Services Offshore Pipelines & Services Petrochemical & Refined Products Services Other Investments 41.1 (2.8) Total gross operating margin 2, , , , , ,231.1 Adjustments to reconcile non-gaap gross operating margin to GAAP operating income: Amounts included in operating costs and expenses: Depreciation, amortization and accretion (809.3) (936.3) (958.7) (1,061.7) (1,083.9) (276.8) Non-cash asset impairment charges (33.5) (8.4) (27.8) (63.4) (69.0) (11.0) Operating lease expenses paid by EPCO (0.7) (0.7) (0.3) Gains attributable to asset sales and insurance recoveries General and administrative costs (182.8) (204.8) (181.8) (170.3) (173.5) (49.5) Operating income $ 1,854.6 $ 2,147.2 $ 2,859.1 $ 3,109.2 $ 3,318.0 $ Note: Gross Operating Margin has been presented as if EPD were Enterprise GP Holdings for all periods prior to the Holdings Merger, which was completed in November All rights reserved. Enterprise Products Partners L.P. 30

31 Adjusted EBITDA Adjusted EBITDA is commonly used as a supplemental financial measure by our management and external users of our financial statements, such as investors, commercial banks, research analysts and ratings agencies to assess: (1) the financial performance of our assets without regard to financing methods, capital structures or historical cost basis; (2) the ability of our assets to generate cash sufficient to pay interest and support our indebtedness; and (3) the viability of projects and the overall rates of return on alternative investment opportunities. Since adjusted EBITDA excludes some, but not all, items that affect net income or loss and because these measures may vary among other companies, the adjusted EBITDA data included in this presentation may not be comparable to similarly titled measures of other companies. The following table reconciles non-gaap adjusted EBITDA to net cash flows provided by operating activities, which is the most directly comparable GAAP financial measure to adjusted EBITDA (dollars in millions): For the Three For the Year Ended December 31, Months Ended March 31, 2013 Net income $ 1,140.3 $ 1,383.7 $ 2,088.3 $ 2,428.0 $ Adjustments to GAAP net income to derive non-gaap Adjusted EBITDA: Equity in income of unconsolidated affiliates (92.3) (62.0) (46.4) (64.3) (44.5) Distributions received from unconsolidated affiliates Interest expense (including related amortization) Provision for (benefit from) income taxes (17.2) 6.4 Depreciation, amortization and accretion in costs and expenses , Adjusted EBITDA 2, , , , ,250.1 Adjustments to non-gaap Adjusted EBITDA to derive GAAP net cash flows provided by operating activities: Interest expense (including related amortization) (687.3) (741.9) (744.1) (771.8) (195.9) Benefit from (provision for) income taxes (25.3) (26.1) (27.2) 17.2 (6.4) Gains attributable to asset sales and insurance recoveries - (46.7) (155.7) (86.4) (63.9) Non-cash asset impairment charges Loss on forfeiture of investment in Texas Offshore Port System Net effect of changes in operating accounts (190.4) (582.5) (8.0) Other miscellaneous adjustments (78.9) 13.0 Net cash flows provided by operating activities $ 2,410.3 $ 2,300.0 $ 3,330.5 $ 2,890.9 $ Note: Adjusted EBITDA has been presented as if EPD were Enterprise GP Holdings for all periods prior to the Holdings Merger, which was completed in November All rights reserved. Enterprise Products Partners L.P. 31

32 Distributable Cash Flow Distributable cash flow is an important non-gaap financial measure for our limited partners since it serves as an indicator of our success in providing a cash return on investment. Specifically, this financial measure indicates to investors whether or not we are generating cash flows at a level that can sustain or support an increase in our quarterly cash distributions. Distributable cash flow is also a quantitative standard used by the investment community with respect to publicly traded partnerships because the value of a partnership unit is, in part, measured by its yield, which is based on the amount of cash distributions a partnership can pay to a unitholder. The following table reconciles non-gaap Distributable Cash Flow to net cash flows provided by operating activities, which is the most directly comparable GAAP financial measure to distributable cash flow (dollars in millions): For the Three For the Year Ended December 31, Months Ended March 31, 2013 Net income attributable to limited partners $ 1,030.9 $ 1,266.7 $ 2,046.9 $ 2,419.9 $ Adjustments to GAAP net income attributable to limited partners to derive non-gaap distributable cash flow: Depreciation, amortization and accretion , , Distributions received from unconsolidated affiliates Equity in income of unconsolidated affiliates (61.4) (69.0) (46.4) (64.3) (44.5) Sustaining capital expenditures and cash payments to settle asset retirement obligations (179.0) (251.5) (299.7) (383.9) (70.8) Losses (gains) attributable to asset sales and insurance recoveries 0.1 (46.7) (155.7) (86.4) (63.9) Proceeds from asset sales and insurance recoveries , , Net income attributable to noncontrolling interests - merged affiliates Other miscellaneous adjustments (35.1) (7.5) (26.7) (172.4) (151.1) Distributable cash flow 1, , , , Adjustments to non-gaap distributable cash flow to derive GAAP net cash flows provided by operating activities: Sustaining capital expenditures and cash payments to settle asset retirement obligations Proceeds from asset sales and insurance recoveries (3.5) (105.9) (1,053.8) (1,198.8) (130.5) Net income attributable to noncontrolling interests Net income attributable to noncontrolling interests - merged affiliates (31.3) (150.1) (20.9) - - Net effect of changes in operating accounts (202.1) (582.5) (8.0) Operating cash flows attributable to merged affiliates in our recast financial statements Other miscellaneous adjustments Net cash flows provided by operating activities $ 2,377.2 $ 2,300.0 $ 3,330.5 $ 2,890.9 $ Note: Distributable Cash Flow for periods prior to the fourth quarters of 2010 and 2009 is presented based on the historical results of EPD prior to the Holdings and TEPPCO Mergers, respectively. All rights reserved. Enterprise Products Partners L.P. 32