ENTERPRISE PRODUCTS PARTNERS L.P. Q3 FY2024 earnings call

• Jim Teague noted adjusted EBITDA of $2.4 billion, $2 billion distributable cash flow. Set 5 volumetric records including natural gas processing and pipeline volumes. - On track to complete projects in 2025 and 2026, including processing plants, pipelines, and terminal expansions. - Acquired Piñon Midstream, complementary to Permian processing footprint. - Employees completed turnarounds at PDH plants with no lost time accidents. - Developed big data and data science team for applications like predictive maintenance and market analytics.

Adjusted EBITDA for the third quarter was $2.4 billion compared to $2.3 billion in the same period last year. Distributable cash flow was $2 billion, providing 1.7x coverage. Net income attributable to common unit holders was $1.4 billion or $0.65 per unit for the third quarter of 2024, an 8% increase from the third quarter of 2023. Adjusted cash flow from operations increased 4% to $2.1 billion for the third quarter of 2024. The partnership purchased approximately 2.6 million common units off the open market for $76 million in the third quarter. Year-to-date retained DCF totals $2.3 billion.

• Expected range of growth capital expenditures for 2024 remains $3.5 billion to $3.75 billion. - Updated 2025 estimated growth capital expenditure range to $3.5 billion to $4 billion to encompass new opportunities. - Sustaining capital expenditures expected to be approximately $640 million in 2024.

• Potential impact of setback rules in New Mexico if they come into play, with the industry stating it will adjust once rules are known.

Q: Thank you for standing by and welcome to Enterprise Products Partners L.P.'s Third Quarter 2024 Earnings Conference Call.

A: [Operator's opening remarks] Q: I wanted to follow-up on Jim's comments about the datacenter and power demand theme. Just how do you see enterprise participating in this? And if you have any color details on commercial discussion to date.

A: Natalie Gayden responded about datacenter demand in Dallas, Fort Worth, and San Antonio areas and how Enterprise is positioned to serve them.

Q: Related to the recent Piñon acquisition, can you provide some details on how you plan to integrate it across your NGL assets and the ability you have to roll out treating services beyond the immediate to midstream acreage and just the long-term value creation you see from these assets?

A: Natalie Gayden and Jim Teague discussed integrating Piñon with integrated GMP assets and it leading to more organic growth through processing.

Q: Ethane storage is full. There's no new demand until you and ET's export facilities come online next year. Can you kind of talk about how you see this resolving? Do you see a big step down in ethane recovery? Would that change your growth rate the next few quarters, and is there kind of a positive offset to that for Enterprise in your portfolio?

A: Tug Hanley responded about recoveries and rejections balancing the market and positive storage opportunities on collecting contango.

Q: Is this the final state of the TW Products System? Can the pipe do more than that if you add truck loading capacity, or should we think about this as being the end state of the system?

A: Justin Kleiderer responded that there is more capability to add truck loading and they are working on it.

Q: Maybe can you just walk us through your decision to buy versus build there [Piñon acquisition]. Just curious if that was in any way reflective of some sort of bottleneck on the treating side in the basin.

A: Jim Teague said buying was easier and quicker as building Greenfield would have taken 3 years.

Q: Second question, just maybe sticking with New Mexico. I guess last week there was some news headlines just around a new setback rule that could come into play. I know this can pop up from time-to-time and it sounds like at least for now there's not much to do around it. But just curious maybe to get your all's view on how you think about the potential impact there if something like that comes into play.

A: Anthony Chovanec and Natalie Gayden discussed that the industry will adjust once rules are known and no major changes to plans at this point.

Q: Just wanted to touch base with Tony here on I guess more on the macro outlook and I guess producer-customer conversations as well as what the macro team sees as far as production trends at this point in time, given the volatility we've seen in commodity prices.

A: Tony Chovanec and Natalie Gayden discussed production trends in Permian and gassier basins.

Q: Jeremy Tonet asked about Bahia project timeline shift and Permian NGL pipeline egress.

A: Justin Kleiderer updated on Bahia project delays and commercial development around NGL utilization.

Q: Michael Blum asked about CO2 pipeline project with Oxy and LPG export dock spot rate dynamics.

A: Bob Sanders and Tug Hanley responded on CO2 pipeline details and capturing higher LPG spot rates.

Q: Neal Dingmann asked about Petrochem expansion and marketing.

A: Chris D'Anna and Randy Fowler responded on ethylene pipeline growth and marketing strength due to Waha spread.

Q: Keith Stanley asked about commercial conversations on spot project and valuation gap.

A: Jay Bany and Randy Fowler responded on commercial conversation timelines and valuation gap considerations.

Q: John McKay asked about up-fee idea and PDH assets.

A: Randy Fowler and Jim Teague responded on up-fee complexity and PDH assets running at full rates.

Q: AJ O'Donnell asked about Matterhorn pipeline and 2025 capital budget.

A: Jim Teague and Jim Teague responded on Matterhorn pipeline flows and Piñon projects in 2025.

Q: Manav Gupta asked about 2026 growth projects and shareholder returns.

A: Randy Fowler responded on 2026 growth project room and expected buyback ranges.