Analyzing Enterprise Products Partners’ Distributable Cash Flow

Enterprise Products Partners’ (EPD) DCF (distributable cash flow) for 2018 rose 34% over 2017. The significant rise in Enterprise Products Partners’ DCF over the last five quarters largely came from higher liquids and natural gas transport volumes, higher terminal volumes, and higher fractionation volumes. Higher gas processing and marketing margins further contributed to the growth. Capital projects significantly contributed to the growth in EPD’s volumes.

We’ll discuss Enterprise Products Partners’ capital expenditures and projects in the next part of this series. The above graph shows EPD’s DCF and per unit distributions over six years. As the graph shows, DCF rose significantly in the last five quarters.

Enterprise Products Partners had reduced its distribution growth rate in 2017 to achieve self-funding of the equity portion of its growth capex. The company expects to raise its distributions by 25 cents per unit in each quarter in 2019. The expected quarterly increase remains unchanged from 2018 and implies a 2.3% yearly increase over 2018.

Enterprise Products Partners forms ~9.9% of the Alerian MLP ETF (AMLP) and ~10.0% of the Global X MLP ETF (MLPA).

Next, we’ll take a look at Enterprise Products Partners’ capital expenditures and its key upcoming projects.