Pipeline giant points to its higher fuel volumes

Enterprise Products says that eased oil prices’ effect

Pipeline giant Enterprise Products Partners posted third-quarter results Thursday about in line with last year’s, as an increase in the amount of fuel transported and processed helped ease some effects of lower commodity prices.

Houston-based Enterprise said that gross operating margin, its preferred measure of performance that roughly equates to revenue minus costs while leaving out depreciation and some other expenses, held even at $ 1.34 billion in the July-September periods this year and in 2014.

Cash flow

Distributable cash flow, an industry-standard measure that approximates the amount of cash available to pay out in dividends, rose to $2.5 billion for the quarter versus $975 million in the third quarter of 2014. About $1.5 billion of that jump came from the company’s sale of its offshore Gulf of Mexico business.

Absent asset sales, Enterprise Products reported $970 million in distributable cash flow. That allows the company to pay its dividend of 38.5 cents per unit and retain $209 million in extra cash.

During a call with investors Thursday, the company’s management said its performance during the oil price slump was in line with a conservative approach that has left the company a cushion.

Balance sheet

Enterprise is distinct from several other large midstream master limited partnerships in that it retains a larger amount of its cash flow instead of paying out more out to investors. That can mean less payout during the good years but leaves a stronger balance sheet when a slump hits, said Bryan Bulawa, Enterprise’s senior vice president and treasurer.

Net income at the company fell for the quarter from $699 million last year to $658 million.

Midstream companies such as Enterprise calculate some parts of that measure differently than companies in other industries and urge investors to include other metrics, such as distributable cash flow, in evaluating results.