Enterprise Products Partners L.P.

Good day and thank you for standing by. Welcome to the Q4 2023 Enterprise Products Partners LP earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Randy Burkhalter, Vice President of Investor Relations.

Thank you, Josh. Good morning, everyone, and welcome to the Enterprise Products Partners conference call to discuss fourth quarter 23 earnings. Our speakers today will be co-chief executive officers of Enterprise's general partner, Jim Teague and Randy Fowler. Other members of our senior management team are also in attendance for the call. During this call, we will make forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, based on the beliefs of the company, as well as assumptions made by and information currently available in Enterprise's management team. Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Please refer to our latest filings with the SEC for a list of factors that may cause actual results to differ materially from those in the forelooking statements made during this call. And with that, I'll turn it over to Jim. Thank you, Randy.

We generated $7.6 billion of distributive cash flow in 2023, providing 1.7 times coverage, and we retained $3.2 billion. We set nine financial records and 13 operating records in 23. Our 23 operating results included records in NGL pipeline transportation, ethane exports, total NGL marine terminal volumes, NGL fractionation volumes, fee-based natural gas processing volumes, and crude pipeline and natural gas transportation volumes. Barrels of oil equivalent per day, Enterprise transported a record 12.2 million barrels a day in 2023, compared to 11.2 million barrels a day in 2022. During the fourth quarter, we transported 12.7 million barrels a day, compared to 11.5 million barrels a day in the fourth quarter of 2022. We exported a record 2.3 million barrels a day of liquid hydrocarbons, and that includes everything from crude oil to LPGs to ethane, refined products, and basic petrochemicals, ethane and propylene. When you look at our exports, it's clear that Enterprise is not a one-trick pony. It's quite remarkable that volumes across all our pipes and facilities increase sequentially each quarter in 2023, supported by the strong supply and demand fundamentals for hydrocarbons from the Permian and other basins we serve, integrated with the midstream services that we have, including exports that we just discussed. Relative to commodity markets, 2023 was a relatively weak year, especially for natural gas and natural gas liquids. Nonetheless, Enterprise proved once again that we don't need really high prices to make substantial returns. The financial records and 13 operating records summarized were achieved in a commodity price environment where natural gas prices were down almost 60 percent from 22, crude was down nearly 20 percent, propane was down 36 percent, ethane was down almost 50 percent, and the NGL processing basket was down 35 percent. Relative to the several 23 records at our marine terminals, we have long said that hydrocarbons would price to export proven once again in 2023. In growth capital during 23, we completed construction of $3.5 billion of projects. Significant assets put into service include two new natural processing plants in the Permian Basin and our 12th NGO fractionator in Chambers County. All of these assets were essentially full after operations began. While production of our PDH2 facility was completed in the third quarter of 23, we spent much of the remainder of the year addressing startup issues. As a result, this plant did not meet our expectations in earnings in 23. We believe most of these issues have been resolved and we anticipate much higher utilization rates this year. We began 24 with We begin 24 with $6.8 billion of major organic projects under construction, with three projects representing approximately $1.1 billion in capital investment expected to be completed this year. Major 24 projects include our Texas Western Products pipeline system and two additional processing plants in the Permian. We have considerable amount of growth capital underway. All of these projects provide strategic growth to our system and can add considerable visibility to new sources of cash flow. I wanted to take a minute to talk about Project 9.3. We started this project in 22 as an incentive for all employees to find innovative ways to improve the bottom line. This was especially important as we in the industry were re-engaging after COVID and faced the challenges of a slower global economy in 23. We achieved the goals we set for ourselves both in 2022 and 2023. We are very proud of our employees for that accomplishment. That said, we will not have a project nine type program for 2024. You've always heard me say if you want to know where we're going, look at what we're doing. The Permian Basin has been the cornerstone for much of our growth capital. As we look at 2024 and beyond, we see supply and demand opportunities as the Permian continues to grow and the world continues to have an ever-increasing appetite for U.S. hydrocarbons. We noted in the press release that these may be the most geopolitically challenging times since World War II, but it's abundantly clear that all of this chaos is leading itself to a growing appetite for the most stable hydrocarbon supplies in the world, the USA, in spite of government and regulatory challenges. Without a doubt, relative to energy, our nation's biggest geopolitical challenges continue to be self-inflicted. Enterprise has one of the world's leading natural gas liquids franchise, and we have the liquids hydrocarbon storage and export franchise. On top of all of that, we have a dedicated employee base that creates value regardless of the environment. 2023 marked our 25th anniversary as a public company. It's been a great quarter century. It has been for the US energy industry. It included the downfall of the energy merchants, the great financial crisis, the innovation of the EMP and oil field service industries to unlock the potential of the shale plays, which is still continuing. It included the near-death and remarkable renaissance of the U.S. petrochemical industry, from having the highest-cost feedstock pre-shell to now the lowest cost. It included two OPEC price wars, a once-in-a-century pandemic, and the reemergence of geopolitical upheaval. During this time, we stuck to our objectives of investing capital at reasonable returns, providing reliable value-added services to customers, consistently returning capital to our partners, and increasing the value of the partnership for the long term. During this time, the enterprise value of the partnership has grown from $1.2 billion to almost $90 billion. The value of our partnership units has increased almost 400%. We increased our distribution 25 consecutive years at an approximately 7% compound annual growth rate. We've returned $52 billion of capital to investors through distributions and buybacks. We have high quality employees. and we thank our employees, we thank our customers, our service providers, our banks, and our investors for the contributions to this success. We're looking forward to the exciting opportunities and challenges for the next 25 years as the world's population, quality of life, and demand for energy reaches new heights. Put frankly, Based on what I see in the future for energy, I'd give anything if I could turn the clock back and be 50 years old. With that, I'll turn it over to Randy.