Enterprise Reports First Quarter 2025 Earnings

•

Gross operating margin from Permian natural gas processing facilities, including the Delaware Basin and Midland Basin assets, increased $46 million primarily due to higher processing volumes and higher equity NGL-equivalent production volumes. In March of 2024, we began service at the Leonidas plant in the Midland Basin and the Mentone 3 plant in the Delaware Basin. Permian Basin processing plant inlet volumes increased 824 MMcf/d, including increases of 395 MMcf/d in the Delaware Basin and 429 MMcf/d in the Midland Basin.

•	Gross operating margin from NGL marketing activities decreased a net $20 million primarily due to lower average sales margins, partially offset by higher sales volumes.

•	Gross operating margin from Rockies natural gas processing facilities decreased $7 million primarily due to lower average processing margins, including the impact of hedging activities. Rockies processing plant inlet volumes decreased 87 MMcf/d.

•

On a combined basis, the pipelines serving the Permian and Rocky Mountain regions reported a $22 million increase in gross operating margin. This includes the Mid-America and Seminole NGL Pipeline Systems, Shin Oak NGL Pipeline and Chaparral NGL Pipeline. The variance was primarily driven by a 74 MBPD increase in transportation volumes.

•	Gross operating margin from Morgan’s Point Ethane Export Terminal increased $19 million primarily due to a 68 MBPD increase in export volumes.

•	Gross operating margin from the Dixie Pipeline and related terminals increased $16 million primarily due to higher loading, transportation, and other revenues. Dixie Pipeline volumes increased 27 MBPD.

•	Eastern ethane pipelines, which include the ATEX and Aegis pipelines, reported a $12 million increase in gross operating margin largely due to higher transportation revenues. Eastern ethane pipeline volumes decreased 25 MBPD.

•	The South Texas NGL Pipeline System reported a $9 million increase in gross operating margin primarily due to higher transportation-related revenues and lower operating costs. South Texas NGL Pipeline System volumes increased 12 MBPD.

•	Gross operating margin from our Mont Belvieu area NGL fractionation complex decreased $15 million primarily due to higher operating costs and lower ancillary service revenues. Mont Belvieu area NGL fractionation volumes increased 10 MBPD.

•	On a combined basis, gross operating margin from our crude oil assets and crude oil marketing decreased a net $37 million primarily due to lower sales volumes and lower average sales margins, partially offset by an increase in storage and other revenues at EHT.

•

Permian natural gas gathering, including Delaware Basin and Midland Basin Gathering Systems, reported a combined $37 million net increase in gross operating margin primarily due to higher treating and other revenues and a 1.3 TBtus/d increase in gathering volumes, partially offset by higher operating costs. In October 2024, we expanded our Delaware Basin Gathering System by acquiring the Pinon Midstream sour gas gathering and treating system.

•	Gross operating margin from the Texas Intrastate System increased $27 million primarily due to higher transportation-related revenues. Transportation volumes increased 129 BBtus/d.

•	Gross operating margin from our natural gas marketing business decreased $15 million primarily due to lower MTM earnings, partially offset by higher average sales margins.

•

Gross operating margin from the refined products pipelines and related activities increased $33 million primarily due to higher transportation volumes and revenues, including a $13 million contribution from the TW Products System that was commissioned in phases beginning in March 2024 through October 2024.

•	Gross operating margin from our octane enhancement and related plant operations decreased $83 million primarily due to lower average sales margins and lower deficiency revenues.

•

Propylene production and related activities reported a $52 million decrease in gross operating margin driven by lower average propylene sales margins as a result of lower Refinery Grade Propylene to Polymer Grade Propylene spreads. Additionally, the majority of our legacy margin-based contracts at our propylene splitters, which contained exposure to this spread and represented approximately 20 percent of total propylene production volumes in the first quarter of 2024, were converted to fee-based processing agreements by the end of the first quarter of 2025. The partnership’s propane dehydrogenation facility known as “PDH 1” was down for approximately 63 days during the first quarter of 2025 for maintenance, compared to 52 days in the same quarter last year. Total propylene and associated by-product production volumes increased 7 MBPD to 113 MBPD, net to our interest.

•	Gross operating margin from our ethylene exports and related activities decreased $28 million primarily due to lower deficiency revenues on our ethylene pipelines and a 25 MBPD decrease in ethylene export volumes.

The weighted-average indicative market price for NGLs (based on prices for such products at Mont Belvieu, Texas, which is the primary industry hub for domestic NGL production) was $0.67 per gallon during the first quarter of 2025 versus $0.62 per gallon during the first quarter of 2024.  Fluctuations in our consolidated revenues and cost of sales amounts are explained in large part by changes in energy commodity prices.  An increase in our consolidated marketing revenues due to higher energy commodity sales prices may not result in an increase in gross operating margin or cash available for distribution, since our consolidated cost of sales amounts would also be expected to increase due to comparable increases in the purchase prices of the underlying energy commodities.  The same type of relationship would be true in the case of lower energy commodity sales prices and purchase costs.

FCF is a non-GAAP measure of how much cash a business generates after accounting for capital expenditures such as plants or pipelines.  Additionally, Adjusted FCF is a non-GAAP measure of how much cash a business generates, excluding the net effect of changes in operating accounts, after accounting for capital expenditures.  We believe that FCF is important to traditional investors since it reflects the amount of cash available for reducing debt, investing in additional capital projects and/or paying distributions.  We believe that Adjusted FCF is also important to traditional investors for the same reasons as FCF, without regard for fluctuations caused by timing of when amounts earned or incurred were collected, received or paid from period to period. Since we partner with other companies to fund certain capital projects of our consolidated subsidiaries, our determination of FCF and Adjusted FCF appropriately reflect the amount of cash contributed from and distributed to noncontrolling interests.

Adjusted CFFO is a non-GAAP measure that represents net cash flow provided by operating activities before the net effect of changes in operating accounts. We believe that it is important to consider this non-GAAP measure as it can often be a better way to measure the amount of cash generated from our operations that can be used to fund our capital investments or return value to our investors through cash distributions and buybacks, without regard for fluctuations caused by timing of when amounts earned or incurred were collected, received or paid from period to period.

DCF is an important non-GAAP liquidity measure for our common unitholders since it serves as an indicator of our success in providing a cash return on investment.  Specifically, this liquidity 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.  DCF 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 common unitholder.

Operational DCF, which is defined as DCF excluding the impact of proceeds from asset sales and other matters and monetization of interest rate derivative instruments, is a supplemental non-GAAP liquidity measure that quantifies the portion of cash available for distribution to common unitholders that was generated from our normal operations.  We believe that it is important to consider this non-GAAP measure as it provides an enhanced perspective of our assets’ ability to generate cash flows without regard for certain items that do not reflect our core operations.

The GAAP measure most directly comparable to DCF and Operational DCF is net cash flow provided by operating activities.

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 rating agencies, to assess the financial performance of our assets without regard to financing methods, capital structures or historical cost basis; the ability of our assets to generate cash sufficient to pay interest and support our indebtedness; and 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 presented in this press release may not be comparable to similarly titled measures of other companies.  The GAAP measure most directly comparable to Adjusted EBITDA is net cash flow provided by operating activities.

We evaluate segment performance based on our financial measure of gross operating margin.  Gross operating margin is an important performance measure of the core profitability of our operations and forms the basis of our internal financial reporting.  We believe that investors benefit from having access to the same financial measures that our management uses in evaluating segment results. 

The term “total gross operating margin” represents GAAP operating income exclusive of (i) depreciation, amortization and accretion expenses (excluding amortization of major maintenance costs for reaction-based plants and amortization of finance lease right-of-use assets), (ii) impairment charges, (iii) gains and losses attributable to asset sales and related matters, and (iv) general and administrative costs.  Total gross operating margin includes equity in the earnings of unconsolidated affiliates, but is exclusive of other income and expense transactions, income taxes, the cumulative effect of changes in accounting principles and extraordinary charges.  Total gross operating margin is presented on a 100 percent basis before any allocation of earnings to noncontrolling interests.  The GAAP financial measure most directly comparable to total gross operating margin is operating income.

Total gross operating margin excludes amounts attributable to shipper make-up rights as described in footnote (6) to Exhibit A of this press release.

The following table summarizes the mark-to-market gains (losses) for the periods indicated: