Enterprise Products Partners L.P.

Overview Key strengths Key risks Significant operating scale, being one of the largest, most-integrated midstream systems in the U.S. A decline in commodity prices could slightly lower its operating margins under multiple business segments and potentially lower future growth prospects. Diversified and integrated asset footprint connecting various basins, including the prolific Permian Basin. The partnership pays out a substantial amount of its cash flow in the form of distributions. High percentage of fee-based contracts helps limit commodity price risk. Forecast leverage of about 3x over the next two years. Strong operating and financial flexibility. . Enterprise Products Partners? (EPD) adjusted EBITDA for fiscal 2023 was $9.3 billion. We forecast EPD to generate S&P Global Ratings-adjusted EBITDA of about $9.5 billion

...We forecast operating metrics to remain strong in 2024. Enterprise Products Partners' (EPD) adjusted EBITDA for fiscal 2023 was $9.3 billion. We forecast EPD to generate S&P Global Ratings-adjusted EBITDA of about $9.5 billion in 2024. The majority of EPD's EBITDA comes from its natural gas liquids (NGL) pipelines and services segment, which we believe has some level of cash flow volatility because it is indirectly exposed to commodity prices through its gathering and processing (G&P) business. We consider G&P operations to have more risk than contracted pipeline and logistics operations but note that almost 77% of the EPD's operating margin is fee based, which supports cash flow visibility. Major projects coming online in 2024 include the Texas Western products pipeline system and two additional processing plants in the Permian. The projects are backed by long-term fee-based contracts and support EPD's growth in the Permian. EPD's robust capital spending program will contribute to an increase...

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