Enterprise Reports Record Results for Fourth Quarter 2007; Generates $1 Billion of Distributable Cash Flow in 2007

Business Wire, Jan 28, 2008

HOUSTON -- Enterprise Products Partners L.P. (NYSE:EPD) today announced its financial results for the three months and year ended December 31, 2007. The partnership reported net income of $162 million, or $0.30 per unit on a fully diluted basis, for the fourth quarter of 2007 compared to net income of $133 million, or $0.25 per unit on a fully diluted basis, for the fourth quarter of 2006.

Distributable cash flow was $262 million in the fourth quarter of 2007 compared to $240 million in the fourth quarter of 2006. On January 15, 2008, the board of directors of Enterprise's general partner approved an increase in the partnership's quarterly cash distribution rate to $0.50 per unit with respect to the fourth quarter of 2007. This represents a 7 percent increase over the $0.4675 per unit rate that was paid with respect to the fourth quarter of 2006. Distributable cash flow for the fourth quarter of 2007 provided 1.05 times coverage of the cash distribution to be paid by the partnership to its limited partners. Distributable cash flow is a non-generally accepted accounting principle (or "non-GAAP") financial measure that is defined and reconciled later in this press release to its most directly comparable GAAP financial measure, net cash flows provided by operating activities.

For 2007, Enterprise reported net income of $534 million, or $0.96 per unit on a fully diluted basis, compared to $601 million, or $1.22 per unit on a fully diluted basis, for 2006. Approximately $74 million of the decrease in net income is due to higher interest expense associated with debt issued to fund Enterprise's growth projects, of which most were not in operation for the full year. Distributable cash flow in 2007 was a record $1.0 billion versus $978 million for 2006. Distributable cash flow for 2007 provided 1.03 times coverage of the $1.9475 of cash distributions that were declared with respect to 2007.

"Enterprise reported record performance in the fourth quarter of 2007 as new projects began operations and started to contribute cash flow," said Michael A. Creel, president and chief executive officer of Enterprise. "For the quarter, the partnership posted a 27 percent increase in gross operating margin to a record $431 million. Contributions from the Independence platform and pipeline, Meeker natural gas processing plant, Mid-America pipeline expansion and Hobbs fractionator, together with strong demand for our network of midstream assets, resulted in record volumes for the quarter with over 2 million barrels per day of NGLs, petrochemicals and crude oil transported through our liquids pipelines and 8.5 trillion Btus per day carried by our natural gas pipelines. Notably, our Mid-America and Seminole NGL pipelines transported a record 1 million barrels per day. In addition, the partnership's NGL fractionation facilities handled a record 400,000 barrels per day."

"As good as the fourth quarter of 2007 was, it could have been much better. Construction delays and start-up issues that resulted in unexpected downtime at our Meeker and Pioneer natural gas processing plants cost the partnership, in terms of expense and foregone revenue opportunities, approximately $85 million, or $0.19 per unit, of net income for the quarter. Meeker is now fully operational and has been processing an average of 530 million cubic feet per day of natural gas with 27,000 barrels per day of NGL production in January, while the Pioneer plant is in the commissioning phase and is expected to begin processing natural gas shortly."

"We have invested approximately $3.9 billion in new projects over the last two years. With the completion of the Meeker and Pioneer plants coupled with the performance of our Independence project, we expect 2008 to be an exceptional year as we begin to harvest the cash flow from these investments for Enterprise and our partners," concluded Creel.

Revenue for the fourth quarter of 2007 increased to a record $5.3 billion from $3.4 billion in the fourth quarter of 2006. Gross operating margin was a record $431 million for the fourth quarter of this year compared to $340 million for the fourth quarter of 2006. Operating income was $270 million for the fourth quarter of 2007, a 31 percent increase, versus $206 million in the same quarter of 2006. Earnings before interest, taxes, depreciation and amortization ("EBITDA") for the fourth quarter of 2007 was a record $403 million, a 26 percent increase, compared to $319 million for the fourth quarter of 2006. 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.

Revenue for 2007 increased to a record $17 billion from $14 billion in 2006. Gross operating margin was a record $1.5 billion in 2007 compared to $1.4 billion for 2006. Operating income was a record $883 million for 2007 versus $860 million for 2006. EBITDA for 2007 was a record $1.4 billion compared to $1.3 billion for 2006.