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Enterprise reports stable Q4, FY'16 earnings amid commodity downturn

Enterprise Products Partners LP reported $658.8 million in fourth-quarter 2016 net income attributable to limited partners, or 31 cents per unit, compared to $684.8 million, or 34 cents per unit, in the prior-year quarter.

The S&P Capital IQ consensus normalized EPS estimate for the fourth quarter was 32 cents.

Adjusted EBITDA remained relatively flat at $1.36 billion, compared to the year-ago quarter's $1.34 billion. Distributable cash flow amounted to $1.03 billion, a slight decrease from the year-ago quarter's $1.09 billion. DCF included proceeds from asset sales and insurance recoveries of $3 million, a significantly lower amount compared to $71 million in the fourth quarter of 2015.

Capital investments for the fourth quarter totaled $553 million, accounting for $73 million in sustaining CapEx and bringing total capital investment for 2016 to $4.1 billion.

For the full-year 2016, net income attributable to limited partners remained stable year-over-year at $2.51 billion, or $1.20 per unit, compared to $2.52 billion, or 1.26 per unit, in the previous year. The S&P Capital IQ consensus normalized EPS estimate for the full year was $1.22.

Full-year adjusted EBITDA amounted to $5.26 billion, compared to $5.27 billion a year ago, while DCF slid to $4.10 billion, from the previous year's $5.61 billion. Still, distributions rose 5.2% year over year to $1.61 per unit in 2016, providing 1.2x coverage. Enterprise retained $709 million of the year's DCF for reinvestment in the partnership's growth.

Proceeds from assets sales and insurance recoveries made up $47 million of 2016's DCF, compared to $1.6 billion accounted for in the previous year.

"Our performance for 2016 was highlighted by 11.7 percent volume growth for our NGL, refined products and petrochemical pipeline and marine terminal assets to a record 4.6 million barrels per day, which more than offset the impact of a 7.3 percent decline in volumes on our onshore crude oil pipelines and marine terminals compared to 2015," said Jim Teague, CEO of Enterprise's general partner. "Cash flow generated from our fee-based businesses, new assets, expansions and cost control more than offset the decrease in cash flow from our crude oil, natural gas and commodity-sensitive businesses."

New project in Mont Belvieu, Texas

In a separate release, Enterprise said it intends to build an isobutane dehydrogenation unit designed to produce 425,000 tons per year of isobutylene. The facility, to be constructed in Mont Belvieu, Texas, is underpinned by long-term contracts.

The plant is expected to supply isobutylene at Enterprise's downstream octane enhancement and petrochemical facilities, filling underutilized capacity, as well as meeting market demand. "The construction of this new [isobutane dehydrogenation] plant will extend our butane value chain and allow full utilization of our existing olefins assets," Teague said.

The project is scheduled for completion in the fourth quarter of 2019.