Enterprise Products Partners (EPD) Looks to 5.2% 2016 Distribution Growth; Affiliates to Buy $200M Common Unis in Q1

Enterprise Products Partners L.P. (NYSE: EPD) today announced that its management plans to recommend to the board of its general partner distributions totaling $1.61 per unit with respect to 2016, which, if approved by the board, would represent a 5.2 percent increase compared to a total of $1.53 per unit of distributions declared with respect to 2015.

* Subject to approval by the board of directors of Enterprise’s general partner.

Enterprise also announced that affiliates of Enterprise Products Company and its general partner (collectively, “EPCO”) have indicated their intention to purchase a total of $200 million of Enterprise common units during the first quarter of 2016 through the partnership’s distribution reinvestment plan and/or the partnership’s at-the-market (“ATM”) equity issuance program. Enterprise will use the proceeds from these purchases to fund a portion of its growth capital investments and for general company purposes. EPCO owns approximately 34 percent of Enterprise’s common units.

“Historically, it has been Enterprise’s practice to not provide guidance with respect to distribution growth; however, due to recent actions by some of our midstream peers to reduce or freeze their dividends/ distributions, we believe it is important to provide our investors with visibility into management’s planned recommendations for Enterprise’s distribution growth for 2016,” said A.J. “Jim” Teague, chief executive officer of Enterprise’s general partner. “While we are entering the second year of a commodity price cycle, which will provide additional challenges as well as opportunities, we believe our partnership model provides us the flexibility to continue to provide our partners with distribution growth in 2016. This model includes a simple company structure, a supportive general partner, no incentive distribution rights, focus on fee-based cash flows, willingness to sell non-core assets to reinvest in projects that integrate with our value chain and have better returns on capital, moderate distribution growth, solid distribution coverage and reasonable use of financial leverage.”

“Our distribution growth is supported by approximately $6.0 billion of new projects that will begin commercial operations and generate new sources of cash flow during 2016. These projects include our recently completed expansion of the partnership’s LPG export facility on the Houston Ship Channel and the final phase of the Aegis ethane pipeline. One of our long-held financial goals has been to balance consistent distribution growth for our partners with the retention of distributable cash flow to reinvest in the partnership. We expect to successfully execute on this goal again in 2016,” stated Teague.

“EPCO and our general partner continue to be supportive of Enterprise’s growth,” stated Teague. “From 2010 through 2015, EPCO purchased approximately $635 million of common units directly from the partnership to provide capital for growth projects. In 2010, EPCO also facilitated the elimination of our general partner incentive distribution rights in a non-taxable transaction for our partners. EPCO’s financial strength and willingness to reinvest in the partnership continues to provide Enterprise with additional financial flexibility.”

“EPCO is pleased to increase our investment in Enterprise by $200 million in the first quarter of 2016,” stated Randa Duncan Williams, chairman of EPCO. “We will also evaluate the purchase of additional common units during 2016 to further support Enterprise’s growth. We are confident in the partnership’s strong financial position, innovation and prospects for future distribution growth.”

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