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Enterprise Announces Near 150% Increase in Net Income; Announces Unit Buy-Back Program

HOUSTON--(BUSINESS WIRE)--July 31, 2000--Enterprise Products Partners L.P. (NYSE:EPD) today announced increased earnings and cash flow for the second quarter ending on June 30, 2000. Net income for the second quarter was $45.6 million, or $0.56 per unit on a fully diluted basis, which included a non-recurring loss of $2.3 million, or $0.03 per unit, on the sale of an asset. This compares to net income of $19.2 million, or $0.28 per unit, for the second quarter of 1999. The average number of units outstanding for the second quarter of 2000 was 81.2 million, versus 66.7 million for the second quarter of 1999.

For the first six months of 2000, reported net income increased by 288% to $115.0 million, or $1.40 per unit on a fully diluted basis, versus $29.6 million, or $0.44 per unit, in 1999.

Enterprise generated $59.4 million of cash flow during the second quarter of 2000, which more than doubled the $28.9 million of cash flow earned during the same quarter of 1999. For the current quarter of 2000, this equates to $0.87 per unit based on common and subordinated units outstanding. Cash flow coverage of the quarterly cash distribution, which was recently increased to $0.525 per unit, was 166% on common and subordinated units. The 14.5 million Special Units outstanding do not participate in cash distributions until their conversion into common units, which occurs over the next three years beginning Aug. 1, 2000. The cash flow generated during the second quarter of 2000 would have provided a 137% coverage of the distribution requirement had the Special Units been eligible to participate in the distribution.

Enterprise also announced that its board of directors has authorized the partnership to repurchase up to one million of Enterprise's outstanding common units over the next two years. Units may be purchased from time to time in the open market or in privately negotiated transactions, as conditions warrant. The timing of any such purchases will be based on the unit price and other market factors.

"Our increased earnings and cash flow were driven by volume growth, earnings contributions from over $600 million of accretive investments made during the last year and the strong domestic and international demand for natural gas liquids and motor gasoline additives. Each of our business segments reported outstanding results for the quarter," stated O.S. "Dub" Andras, president and CEO of Enterprise.

"The Company's financial position at the end of the quarter, 32% total debt to total capitalization and $87 million in cash, provides us with significant financial flexibility to pursue our growth strategy," Andras continued.

Andras stated, "The primary objective of the buy-back program is for any repurchase to be accretive to unitholders in terms of earnings per unit as well as cash flow per unit. We will balance this program with our plans for continued growth through new investments in internally developed projects and acquisitions and with our goals of maintaining our investment grade debt ratings. We may use the repurchased units as a currency in connection with significant and accretive acquisitions to maintain an appropriate capital structure and increase unitholder value."

Revenues for the second quarter of 2000 increased to $604.0 million from $177.5 million for the second quarter of 1999. Gross operating margin increased 127 percent during the second quarter of 2000 to $71.4 million as compared to $31.5 million during 1999. Gross operating margin represents earnings before depreciation, amortization, lease expense for which Enterprise does not have the payment obligation, gain or loss from the sale of assets, general and administrative expenses and interest. Enterprise's equity earnings from unconsolidated affiliates are also included in gross margin.

Fractionation -- For the second quarter of 2000, Fractionation gross operating margin increased 12 percent to $29.6 million from $26.5 million. Net NGL fractionation volumes were 215,000 barrels per day ("BPD") versus 61,000 BPD in the second quarter of last year. Propylene fractionation volumes in the second quarter of 2000 were 30,000 BPD compared to 31,000 BPD in the second quarter of 1999. Butane isomerization volumes increased to 81,000 BPD from 74,000 BPD in the same quarter of 1999.

Pipelines -- Pipeline's gross margin in the current quarter was $14.2 million, an increase of 226 percent from $4.4 million in the second quarter of 1999. The margin improvement was due to a 78 percent increase in net pipeline throughput to 331,000 BPD from 186,000 BPD in the second quarter of 1999. The current quarter includes a full quarter of contribution from the Lou-Tex Propylene Pipeline, which was acquired effective March 1, 2000.

Processing -- Processing generated gross operating margin of $18.5 million compared to a loss of $1.5 million in 1999. The Processing segment includes Enterprise's natural gas processing business, which was acquired effective Aug. 1, 1999, and its merchant businesses. This segment benefited from Enterprise-owned NGL production of 71,000 BPD and strong processing economics.

Octane Enhancement -- The Octane Enhancement segment reported gross operating margin of $8.3 versus $1.9 million in the second quarter of 1999. This increase was driven by strong demand for motor gasoline and motor gasoline additives during the quarter. This plant operated near full capacity during both the second quarters of 2000 and 1999 with net production of 5,000 BPD.

Several adjustments to net income are required to calculate available cash flow. These adjustments include the addition of (1) non-cash expenses such as depreciation and amortization expense; (2) lease expenses for which the partnership does not have the payment obligation; (3) principal payments on notes receivable held by the company; (4) actual cash distributions from unconsolidated affiliates as compared to book earnings, and (5) other miscellaneous adjustments, less maintenance capital expenditures and reserves deemed prudent by the general partner.

Enterprise Products Partners L.P. is one of the largest publicly traded master limited partnerships with an enterprise value of approximately $2.2 billion. Enterprise is a leading integrated provider of processing, fractionation, storage, transportation and terminalling services to producers and consumers of natural gas liquids ("NGLs") and other liquid hydrocarbons. The Company's assets are geographically focused on the United States' Gulf Coast, which accounts for approximately 55 percent of domestic NGL production and 75 percent of domestic NGL demand.

This press release includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 based on the beliefs of the company, as well as assumptions made by, and information currently available to, management. Although Enterprise 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. -0-

Enterprise Products Partners L.P.

Statement of Consolidated Operations -- UNAUDITED

For the Three Months and Six Months Ended June 30, 2000

($ in 000s, except per unit amounts)

                       For the three months     For the six months
                             ended                   ended
                     -----------------------  ----------------------
                       June 30,    June 30,    June 30,    June 30,
                        2000        1999        2000        1999
                     ----------- -----------  ---------- -----------
Revenue
-------
 Revenue from
  consolidated
  operations            $592,913    $174,599  $1,339,194    $321,913
 Equity income in
  unconsolidated
  affiliates              11,097       2,880      18,540       4,443
                     ----------- ----------- ----------- -----------
  Total Revenue          604,010     177,479   1,357,734     326,356

Costs and Expenses:
-------------------
 Operating costs
  and expenses           546,306     153,410   1,219,212     287,219
 Selling, general
  and
  administrative           7,658       3,000      13,042       6,000
                     ----------- ----------- ----------- -----------
  Total Costs and
   Expenses              553,964     156,410   1,232,254     293,219
                     ----------- ----------- ----------- -----------
Operating Income          50,046      21,069     125,480      33,137

Other Income (Expense):
----------------------
 Interest expense         (8,070)     (2,129)    (15,844)     (4,392)
 Interest income
  from
  unconsolidated
  affiliates                 126         292         270         689
 Dividend income
  from
  unconsolidated
  affiliates               2,761        --         3,995        --
 Interest
  income -- other          1,225         148       2,706         432
 Other, net                  (62)        (30)       (425)         45
                     ----------- ----------- ----------- -----------
  Total Other
   Income
   (Expense)              (4,020)     (1,719)     (9,298)     (3,226)
                     ----------- ----------- ----------- -----------
Income before
 minority interest        46,026      19,350     116,182      29,911

Minority
 interest                   (466)       (196)     (1,175)       (302)
                     ----------- ----------- ----------- -----------
Net income               $45,560     $19,154    $115,007     $29,609
                     =========== =========== =========== ===========
Allocation of
 Net Income to:
--------------
  Limited partners       $45,104     $18,962    $113,857     $29,313
  General partner           $456        $192      $1,150        $296

Per Unit data
 (Fully Diluted):
----------------
Net income per Common,
 Subordinated & Special
 Units                     $0.56       $0.28       $1.40       $0.44

Average LP Common,
 Subordinated & Special
 Units Outstanding
 (000s)                 81,195.6    66,695.6    81,195.6    66,725.4

Other Financial data:
--------------------
 Depreciation and
  Amortization            $9,299      $4,885     $18,347      $9,790
 Leases paid by EPCO      $2,657      $2,665      $5,324      $5,332
 Collection of notes
  receivable from
  unconsolidated
  affiliates              $3,232      $3,685      $6,519      $7,369
 Distributions from or
  (cash calls to)
  unconsolidated
  affiliates              $7,119      $1,486     $14,268      $3,991
 Maintenance capital
  expenditures              $268        $420        $472        $678
 Total Capital
  Expenditures           $42,797        $841    $154,246      $2,513
 Investments in
  and advances to
  unconsolidated
  affiliates             $(2,935)    $11,566      $3,037     $40,432
 Total Debt balance
  at end of period      $404,000    $145,000    $404,000    $145,000

Enterprise Products Partners L.P.
Operating Data -- UNAUDITED
For the Three Months and Six Months Ended June 30, 2000


                  For the three months ended  For the six months ended
                  --------------------------- ------------------------
                                       %                          %
                  June 30, June 30, Increase June 30, June 30, Increase
                    2000     1999  (Decrease) 2000     1999   (Decrease)
                  ----------------- -------- ---------------- ---------

Gross Operating Margin
 by Segment ($000s):
-------------------
 Fractionation       $29,591 $26,492     12%  $63,922 $42,814     49%
 Pipeline             14,192   4,350    226%   28,827   8,851    226%
 Processing           18,486  (1,524)    NM    58,040    (433)    NM
 Octane Enhancement    8,307   1,936    329%   10,812   2,237    383%
 Other                   872     276    216%    1,426     480    197%
                     ---------------          ---------------
Total Gross
 Operating
 Margin              $71,448 $31,530    127% $163,027 $53,949    202%
                     ---------------          ---------------
 Depreciation and
  amortization         8,755   4,668     88%   16,879   9,356     80%
 Retained Lease
  Expense, net         2,687   2,666      1%    5,324   5,332      0%
  (Gain) loss
   on sale of assets   2,303     127   1713%    2,303     124   1757%
 General and
  Administrative
  Expense              7,657   3,000    155%   13,041   6,000    117%
                     ---------------          ---------------
Operating Income     $50,046 $21,069    138% $125,480 $33,137    279%
                     ===============          ===============
Operating Data (000s
 of barrels/day, Net):
---------------------
 Equity NGL
  Production              71     N/A     NM        71     N/A     NM
 NGL Fractionation       215      61    251%      215      58    269%
 Isomerization            81      74      9%       74      71      5%
 Propylene
  Fractionation           30      31     -2%       30      27     12%
 Octane Enhancement        5       5     -2%        4       4     -1%
 Major Pipelines         331     186     78%      338     173     96%

Average
 Commodity Prices:
-----------------
 Henry Hub Natural
  Gas ($/MMBtu)        $3.61   $2.24     62%    $3.11   $2.02     54%
 Gulf Coast Crude
  Oil ($/barrel)      $28.82  $17.66     63%   $28.85  $15.44     87%
 Mont Belvieu
  Natural Gas
  Liquids ($/gallon)   $0.47   $0.28     71%    $0.49   $0.24    106%



    CONTACT: Enterprise Products Partners L.P., Houston
             Randy Fowler, 713/880-6694
             www.epplp.com

K-1 Tax Information

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