Enterprise Reports Results for Third Quarter 2007

Business Wire, Oct 25, 2007

Revenue for the third quarter of 2007 increased to $4.1 billion from $3.9 billion in the third quarter of 2006. Gross operating margin was $364 million for the third quarter of this year compared to $400 million for the third quarter of 2006. Operating income was $211 million for the third quarter of 2007 versus $274 million in the same quarter last year. Earnings before interest, taxes, depreciation and amortization ("EBITDA") for the third quarter of 2007 was $341 million compared to $389 million for the third quarter of 2006. The principal cause for the decrease in gross operating margin, operating income and EBITDA for the third quarter of this year from the third quarter of 2006 was the $50 million of proceeds from business interruption insurance claims received in the third quarter of last year. Gross operating margin and EBITDA are non-GAAP financial measures that are defined and reconciled later in this press release to their most directly comparable GAAP financial measures.

Review of Segment Performance

NGL Pipelines & Services - Gross operating margin for the NGL Pipeline and Services segment was $190 million for the third quarter of 2007 compared to $232 million for the same quarter of 2006 including proceeds from business interruption insurance claims in the third quarters of 2007 and 2006 of approximately $2 million and $30 million, respectively.

Enterprise's natural gas processing business recorded gross operating margin of $96 million for the third quarter of 2007 versus $108 million in the third quarter of 2006, excluding recoveries from business interruption insurance in both periods. Enterprise's South Louisiana, Chaco and Carlsbad natural gas processing plants generated a $9 million increase in gross operating margin which was more than offset by a decrease in gross operating margin caused by a decline in NGL marketing volumes due in part to lower propane import activity, natural gas hedging expenses and start-up costs caused by the delay in beginning operations at the Meeker natural gas processing facility.

Equity NGL production, which are NGLs that Enterprise earns and takes title to as a result of providing processing services, decreased slightly to 64 thousand barrels per day ("MBPD") for the third quarter of 2007 from 67 MBPD for the same quarter last year. Natural gas volumes processed under fee-based contracts increased to 2.3 billion cubic feet per day ("Bcf/d") this quarter from 2.2 Bcf/d in the third quarter of last year.

Gross operating margin from the partnership's NGL pipeline and storage business increased 25 percent to $71 million in the third quarter of this year from $57 million in the third quarter of 2006, excluding recoveries from business interruption insurance. This increase was primarily attributable to a $10 million improvement in gross operating margin from the Mid-America and Seminole NGL pipelines on a 45 MBPD, or a 5 percent, increase in transportation volumes. An $8 million increase in the gross operating margin from the DEP South Texas, Lou-Tex, Dixie and Louisiana NGL pipelines was offset by a $10 million decrease in gross operating margin from lower import activity at the partnership's import/export terminal and related Channel NGL pipeline as European markets offered higher prices than those in the United States.