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Enterprise Announces Record Earnings and Cash Flow; Quarterly Earnings Increase Over 340%

HOUSTON--(BUSINESS WIRE)--Jan. 27, 2000--Enterprise Products Partners L.P. (NYSE:EPD) today announced record earnings and cash flow for both the fourth quarter and full year 1999. Net income for the fourth quarter of 1999 was $54.3 million, or $0.66 per unit on a fully diluted basis, compared to net income of $12.3 million, or $0.18 per unit on a fully diluted basis, for the fourth quarter of 1998. The average number of units outstanding for the fourth quarter of 1999 was 81.2 million, versus 67.0 million for the fourth quarter of 1998.

Net income for the full year 1999 was $120.3 million, or $1.64 per unit, compared to an adjusted $37.3 million, or $0.62 per unit, for 1998. Included in net income for 1999 was a non-cash charge for the cumulative effect of a change in accounting principle related to the write-off of deferred start-up costs of approximately $1.5 million, or $0.02 per unit. Reported net income for 1998 was $10.1 million, or a $0.17 per unit, which includes a $27.2 million extraordinary charge for the prepayment of debt. The average number of units outstanding for 1999 was 72.8 million versus 60.1 million for 1998.

Enterprise generated the highest level of distributable cash flow in the Company's history during the fourth quarter of 1999. Distributable cash flow for the fourth quarter was $62.3 million, or $1.37 per unit based on common units and $0.93 per unit on both common and subordinated units. This provided cash flow coverage of the $0.50 per unit quarterly distribution of 274% on common units only and 186% on common and subordinated units. The 14.5 million Special Units outstanding were not considered as they do not participate in distributions until their conversion into common units, which will occur over the next three years beginning Aug. 1, 2000.

Distributable cash flow generated for the full year of 1999 was $164.3 million, or $3.61 per unit on common units only and $2.45 per unit on common and subordinated units. This provides cash distribution coverage on common units of 195% and coverage of common and subordinated units of 133%.

"Enterprise had a tremendous quarter and year. During the year, we registered strong growth in earnings and cash flow and we have significantly broadened our platform in the NGL industry from which to pursue other midstream investment opportunities," stated O.S. "Dub" Andras, president and CEO of Enterprise.

Andras continued, "We saw a substantial expansion of cash flows from our fee-based businesses as the result of recent acquisitions and new projects that began commercial operations during the year. Also, our natural gas processing segment was a significant contributor as the result of increased production, which surpassed our expectations, and a strong price environment that favored the extraction of natural gas liquids from natural gas."

"To provide our unitholders with a distribution that is stable and not impacted by quarterly changes in commodity prices or the conversion of the Special Units, our policy will be to establish our distribution rate based principally on the cash flows generated from our large foundation of fee businesses and considering all partnership units outstanding. The expansion of our fee business cash flows supported the 11% increase in our quarterly distribution rate to $0.50 per unit that will be paid in February," Andras said.

"We will reinvest the cash generated in excess of the distribution requirement in the growth of the company through capital investment and acquisitions or paydown debt. Our goal is to grow the fee-based component of the company which would provide the basis for future distribution increases," stated Andras.

Revenues for the fourth quarter of 1999 more than tripled to $575.1 million from $181.0 million for the fourth quarter of 1998. For the full year of 1999, revenues were $1.346 billion versus $755 million for 1998.

Gross margin increased 213% during the fourth quarter to $73.2 million from $23.4 million during 1998. For the full year 1999, gross margin was $179.2 million versus $99.6 million in 1998, an 80% increase. The growth in gross margin both for the quarter and the full year was due to substantial increases in the Fractionation and Processing segments of the company. Gross margin represents earnings before depreciation, lease expense obligations retained by the Company's largest unitholder, Enterprise Products Company ("EPCO"), and general and administrative expenses. Enterprise's equity earnings from unconsolidated affiliates are included in gross margin.

To better reflect the performance and business activities of the Company, Enterprise's financial reporting will be separated into five operating segments effective with results of the fourth quarter. The five segments and a description of the businesses included in each are shown below.



Operating Segment:        Description:

Fractionation             NGL fractionation, polymer grade propylene
                          fractionation and butane isomerization
                          (converting normal butane into isobutane
                          and fractionating to high purity) services

Pipeline                  Pipeline, storage and import/export terminal
                          services

Processing                Natural gas processing and NGL merchant
                          businesses

Octane Enhancement        The company's 33 1/3% ownership interest in
                          a facility that produces motor gasoline
                          additives to enhance octane, currently
                          producing MTBE

Other                     Fee-based marketing services, other plant
                          support functions and eliminations

Fractionation -- Gross operating margin for Fractionation during the fourth quarter of 1999 increased 127% to $29.8 million from $13.2 million in the fourth quarter of 1998. This growth was attributable to earnings from facilities acquired during the year, a 22% increase in propylene production volumes and a 4% increase in butane isomerization volumes.

For the full year 1999, Fractionation gross margin was $106.3 million compared to $66.6 million for 1998, an increase of 60%. This improvement was primarily attributable to a recovery in margins and volume growth in the isomerization and propylene businesses and from assets acquired during 1999.

Pipelines -- Pipeline's gross margin in the current fourth quarter was $12.9 million, an increase of 62% over $8.0 million in 1998. For the full year 1999, gross margin from Pipeline was $27.0 million versus $27.3 million in the prior year. For the quarter, margin improvement was led by 156% volume growth on the Louisiana NGL pipeline system and equity earnings from the Tri-States and Wilprise NGL pipelines which began commercial operations during 1999.

Processing -- Processing had a breakthrough fourth quarter with a gross margin of $26.8 million compared to a loss of $0.4 million in 1998. Enterprise's equity NGL production averaged 68,000 barrels per day and processing margins benefited from a favorable pricing environment where the ratio of crude oil to natural gas prices averaged 9.9 during the quarter.

For 1999, gross margin from Processing, which represents five months of earnings from the processing assets acquired during 1999, was $36.8 million versus a loss of $0.7 million in 1998.

Several adjustments to net income are required to calculate distributable cash. These adjustments include the addition of (1) non-cash expenses such as depreciation and amortization expense; (2) lease expenses for which the payment obligation was retained by EPCO; (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.

Enterprise Products Partners L.P., with an enterprise value of approximately $2 billion, is one of the leading midstream energy service companies in North America, providing complete services of processing, fractionation, transportation and storage to producers of NGLs and consumers of NGL products. Enterprise has ownership interests in and operates some of the largest natural gas processing and NGL fractionation facilities in the United States, the largest commercial isobutane complex in the United States, two propylene fractionation facilities, an NGL import/export terminal, approximately 43.7 million barrels of net storage capacity, a 2,400-mile network of pipelines and an MTBE production facility, all located on the U.S. Gulf Coast. The Gulf Coast accounts for approximately 55% of U.S. NGL production and 75% of U.S. demand for NGLs.

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.

Enterprise Products Partners L.P.

Statement of Consolidated Operations - UNAUDITED

For the three months and year ended December 31, 1999

($ in 000s, except per unit amounts)

                                      For the three months ended
                                      --------------------------
                                 Dec. 31,  Dec. 31,     % Increase
                                   1999      1998       (Decrease)
                                ---------- ----------   -----------
Revenue
 Revenue from
  consolidated operations       $569,187   $176,199       223.0%
 Equity income in
  unconsolidated affiliates        5,886      4,847        21.4%
                                --------   --------
 Total Revenue                   575,073    181,046       217.6%

Costs and Expenses:
 Operating costs
  and expenses                   511,956    164,732       210.8%
 Selling, general
  and administrative               3,300      2,854        15.6%
                                --------   --------
 Total Costs and Expenses        515,256    167,586       207.5%
                                --------   --------

Operating Income                  59,817     13,460       344.4%

Other Income (Expense):
 Interest expense                 (6,922)    (1,392)      397.3%
 Interest income
  from unconsolidated
  affiliates                         571        469        21.7%
 Dividend income
  from unconsolidated
  affiliates                       3,435         --          NM
 Interest income - other            (228)       127      -279.8%
 Other, net                       (1,776)      (191)      830.1%
                                --------   --------
 Total Other
  Income (Expense)                (4,922)      (987)      398.7%
                                --------   --------
Income before
 extraordinary item and
 minority interest                54,895     12,473       340.1%
Extraordinary
 charge on early
 extinguishment of debt                                      NM
                                --------   --------
Income before
 minority interest                54,895     12,473          NM
Minority interest                   (554)      (125)         NM
                                --------   --------
Net income                       $54,341    $12,348          NM
                                ========   ========

Allocation of Net Income to:
 Limited partners                $53,798    $12,225          NM
 General partner                    $543       $123          NM

Per Unit data (Diluted):
Net income per
 Common, Subordinated &
 Special Units                     $0.66      $0.18          NM
Average LP Common,
 Subordinated &
 Special Units
 Outstanding (000s)             81,195.6   66,962.8

Other Financial data:
 Depreciation and
  Amortization                    $8,034     $4,398
 Leases paid by EPCO              $3,327       $683
 Collection of
  notes receivable
  from unconsolidated
  affiliates                      $3,260     $3,686
 Distributions
  from or (cash calls to)
  unconsolidated affiliates       $1,401     $2,516
 Maintenance capital
  expenditures                      $774     $2,101
 Total Capital Expenditures      $10,861     $1,201
 Investments in and advances to
  unconsolidated affiliates       $3,427     $6,854
 Inventory balance at end
  of period                      $46,131    $17,574
 Total Debt balance at end
  of period                     $295,000    $90,000

                                       For the year ended
                                      --------------------
                                  Dec. 31,  Dec. 31,    % Increase
                                   1999      1998       (Decrease)
                                 --------- ----------  ------------
Revenue
 Revenue from
  consolidated operations       1,332,979   $738,902       80.4%
 Equity income in
  unconsolidated affiliates        13,477     15,671      -14.0%
                                ---------   --------
 Total Revenue                  1,346,456    754,573       78.4%

Costs and Expenses:
 Operating costs
  and expenses                  1,200,206    686,160       74.9%
 Selling, general
  and  administrative              12,500     18,216      -31.4%
                                ---------   --------
 Total Costs and Expenses       1,212,706    704,376       72.2%
                                ---------   --------
Operating Income                  133,750     50,197      166.5%

Other Income (Expense):
 Interest expense                 (14,917)   (14,696)      39.9%
 Interest income
  from unconsolidated
  affiliates                        1,667        809      106.0%
 Dividend income
  from unconsolidated
  affiliates                        3,435                    NM

 Interest income - other              886        772       14.7%
 Other, net                        (3,298)       273    -1308.2%
                                ---------   --------
 Total Other
  Income (Expense)                (12,229)   (12,842)      -4.8%
                                ---------   --------
Income before extraordinary
 item and minority interest       121,521     37,355      225.3%
Extraordinary
 charge on early
 extinguishment of debt                      (27,176)        NM
                                ---------   --------
Income before
 minority interest                121,521     10,179         NM
Minority interest                  (1,226)      (102)        NM
                                ---------   --------
Net income                       $120,295    $10,077         NM
                                =========   ========

Allocation of Net Income to:
 Limited partners                $119,092     $9,976         NM
 General partner                   $1,203       $101         NM

Per Unit data (Diluted):
Net income per
 Common, Subordinated &
 Special Units                      $1.64      $0.17         NM
Average LP
 Common, Subordinated &
 Special Units
 Outstanding (000s)              72,788.5   60,124.4

Other Financial data:
 Depreciation and
  Amortization                    $25,314    $19,194
 Leases paid by EPCO              $13,309     $4,010
 Collection of
  notes receivable
  from unconsolidated
  affiliates                      $19,979     $7,228
 Distributions
  from or (cash calls to)
  unconsolidated
  affiliates                       $6,008     $9,117
 Maintenance
  capital expenditures             $2,440     $7,670
 Total Capital
  Expenditures                    $21,464     $8,360
 Investments in
  and advances to
  unconsolidated
  affiliates                      $61,887    $26,842
 Inventory balance at end
  of period                       $46,131    $17,574
 Total Debt balance at end
  of period                      $295,000    $90,000

     NM - Not meaningful.


Enterprise Products Partners L.P.
Operating Data by Segment - UNAUDITED
For the three months and year ended December 31, 1999

     $ in 000s

                             For the three months ended
                        ----------------------------------
                         Dec. 31,   Dec. 31,   % Increase
                          1999       1998      (Decrease)
                        --------- ----------   -----------
Gross Operating
 Margin by Segment:

 Fractionation            $29,811    $13,153       126.6%
 Pipeline                  12,859      7,962        61.5%
 Processing                26,807       (371)        NM
 Octane Enhancement         3,427      3,191         7.4%
 Other                        257       (537)        NM
                         ---------  ---------
  Total Gross
   Operating Margin        73,161     23,400       212.7%

 Depreciation               7,467      3,928        90.1%
 Retained Lease
  Expense, net              2,578      3,158       -18.4%
 General and
 Administrative
  Expense                   3,300      2,854        15.6%
                         ---------  ---------
  Operating Income        $59,817    $13,460       344.4%
                         =========  =========     =======
Operating Volume
 Data - 000s of
 Barrels per Day:

 Fractionation:

 Mont Belvieu NGL
  Fractionation               161        173        -6.8%
 Mont Belvieu
  Isomerization                76         73         4.3%
 Mont Belvieu
  Propylene Production         31         25        22.2%
 Mont Belvieu
  DIB Processing               43         44        -3.2%
 Norco Fractionation           48         --         NM

 Pipeline:

 Oil Tanking
  Import Terminal               7          6        16.1%
 Channel Pipeline             112        101        10.6%
 Louisiana Pipeline
  System                      118         46       155.6%
 Chunchula Pipeline
  System                        5          4        31.2%

 Processing:

 Gas Processing
  Plants (equity prod)         68         --         NM

 Octane Enhancement:

  MTBE Production              16         16        -1.6%

Average Benchmark
 Commodity Prices:
------------------
 Natural Gas
  Henry Hub Avg
   Daily Prices
   ($/MMBtu)                $2.48      $1.90        30.5%
 Crude Oil
  Cushing Avg
  Daily Prices
  ($/Barrel)               $24.56     $12.87        90.8%
 Natural Gas
  Liquids
   Mont Belvieu
    Avg. Daily
    Prices
    ($/Barrel)             $17.03      $8.44       101.8%


                                   For the year ended
                            ----------------------------------
                             Dec. 31,   Dec. 31,   % Increase
                              1999       1998      (Decrease)
                            --------- ----------   -----------
Gross Operating
 Margin by Segment:

 Fractionation              $106,266    $66,627       59.5%
 Pipeline                     27,037     27,334       -1.1%
 Processing                   36,799       (652)        NM
 Octane Enhancement            8,183      9,800      -16.5%
 Other                           908     (3,484)        NM
                            ---------   --------
  Total Gross
   Operating Margin          179,195     99,626       79.9%

 Depreciation                 22,449     18,579       20.8%
 Retained Lease
  Expense, net                10,496     12,635      -16.9%
 General and
  Administrative
  Expense                     12,500     18,216      -31.4%
                            ---------   --------
  Operating Income          $133,750    $50,197      166.5%
                            =========   ========
Operating Volume
 Data - 000s of
 Barrels per Day:

 Fractionation:

 Mont Belvieu NGL
  Fractionation                  157        191      -18.0%
 Mont Belvieu
  Isomerization                   74         67        9.8%
 Mont Belvieu
  Propylene Production            28         26        6.4%
 Mont Belvieu
  DIB Processing                  24         34      -29.0%
 Norco Fractionation              48         --         NM

 Pipeline:

 Oil Tanking
  Import Terminal                 14         31      -55.7%
 Channel Pipeline                 99        107       -7.4%
 Louisiana Pipeline
  System                         104         40      159.1%
 Chunchula Pipeline
  System                           5          5       6.1%

 Processing:

 Gas Processing
  Plants (equity prod)            67         --         NM

 Octane Enhancement:

  MTBE Production                 14         14       -1.0%

Average Benchmark
 Commodity Prices:

 Natural Gas
  Henry Hub Avg
   Daily Prices
   ($/MMBtu)                   $2.27      $2.08        9.1%
 Crude Oil
  Cushing Avg
  Daily Prices
  ($/Barrel)                  $19.29     $14.41       33.9%
 Natural Gas
  Liquids
   Mont Belvieu
    Avg. Daily
    Prices
    ($/Barrel)                $13.18      $9.47       39.2%

     NM - Not meaningful.



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

K-1 Tax Information

The 2017 K-1s for Enterprise Products Partners L.P. (EPD) are available online.

Contact Info

Investor Relations

P.O. Box 4324

Houston, TX 77210-4324 USA

Phone: (866) 230-0745

Fax: (713) 381-8200

Email: Investor.relations@eprod.com

Transfer Agent

Mail

EQ Shareowner Services

PO Box 64874

St Paul MN 55164-0874

855-235-0839


Overnight Mail

EQ Shareowner Services

1110 Centre Pointe Curve,

Suite 101

Mendota Heights MN 55120-4100