NYSE: EPD

ENTERPRISE PRODUCTS PARTNERS LP Report created Feb 7, 2020 Page 1 OF 5

Enterprise Products Partners L.P. is a North American provider of midstream energy services to producers Argus Recommendations
and consumers of natural gas, NGLs, crude oil, refined products and petrochemicals. The partnership's
assets include over 50,000 miles of natural gas, NGL, refined products, and petrochemical pipelines; 260
million barrels of storage capacity for NGLs, refined products and crude oil; and 14 billion cubic feet of Twelve Month Rating SELL HOLD BUY
natural gas storage capacity. The company completed its IPO in July 1998.
Five Year Rating SELL HOLD BUY
Analyst's Notes Under Market Over
Sector Rating Weight Weight Weight
Analysis by Bill Selesky, February 7, 2020
ARGUS RATING: BUY Argus assigns a 12-month BUY, HOLD, or SELL rating to each
stock under coverage.
• Reaffirming BUY following fourth-quarter 2019 results • BUY-rated stocks are expected to outperform the market (the
benchmark S&P 500 Index) on a risk-adjusted basis over the
• We view EPD as a leader in the midstream energy industry, and believe that the company will next year.
continue to benefit from its substantial asset base along the Gulf Coast as well as from projects slated • HOLD-rated stocks are expected to perform in line with the
to enter service over the next three years. market.
• On January 30, EPD reported adjusted 4Q19 net income attributable to limited partners of $1.125 • SELL-rated stocks are expected to underperform the market
on a risk-adjusted basis.
billion or $0.50 per diluted unit, down from $1.305 billion or $0.61 per unit in the prior-year quarter.
The distribution of ratings across Argus' entire company
EPS matched our quarterly estimate but fell short of the consensus estimate of $0.53. universe is: 65% Buy, 35% Hold, 0% Sell.
• The decline reflected lower average sales margins (natural gas processing business) and higher
operating expenses within the NGL Pipelines & Services segment, which felt the impact of lower NGL
(natural gas liquids) prices. Key Statistics
Key Statistics pricing data reflects previous trading day's closing
• On January 19, 2020, EPD announced its 62nd straight quarterly distribution increase, to $0.4445 price. Other applicable data are trailing 12-months unless
per unit, up 2% from the prior-year quarter. The annualized payout of $1.78 yields about 6.8%. otherwise specified

Market Overview
INVESTMENT THESIS Price $25.82
We are reiterating our BUY rating on Enterprise Products Partners LP (NYSE: EPD) Target Price $38.00
with a price target of $38. We view EPD as a leader in the midstream energy industry, and 52 Week Price Range $25.04 to $30.87
believe that the company will continue to benefit from its substantial asset base along the Shares Outstanding 2.19 Billion
Gulf Coast as well as from projects slated to enter service over the next three years. We Dividend $1.78
expect these projects and existing assets to support distribution growth of 5%-6% over the Sector Overview
next 18-24 months. Sector Energy
Enterprise remains levered to the NGL markets, which have been impacted by crude oil Sector Rating MARKET WEIGHT
price volatility. However, we have been impressed by EPD's ability to offset margin Total % of S&P 500 Market Cap. 4.00%
weakness in its NGL business by higher fee-based earnings on rising pipeline volumes. We Financial Strength
think this diversification is a unique aspect of EPD's business that has often been Financial Strength Rating MEDIUM-HIGH
overlooked by investors. In our view, NGL markets are likely to improve gradually over Debt/Capital Ratio 52.0%
the next few years as end-market demand from petrochemical customers' increases and Return on Equity 18.8%
new facilities enter service. Net Margin 14.0%
Payout Ratio 0.80
Market Data Pricing reflects previous trading week's closing price. Current Ratio 0.85
200-Day Moving Average Target Price: $38.00 52 Week High: $29.22 52 Week Low: $25.32 Closed at $25.77 on 1/31 Revenue $32.79 Billion
Price After-Tax Income $4.59 Billion
($)
Valuation
35
Current FY P/E 11.63
Prior FY P/E 12.41
30
Price/Sales 1.72
25 Price/Book 2.31
Book Value/Share $11.19
Market Capitalization $56.52 Billion
Rating BUY
HOLD
SELL Forecasted Growth
EPS 1 Year EPS Growth Forecast
($) 6.73%
5 Year EPS Growth Forecast
8.00%
Quarterly 0.64 0.41 0.54 0.61 0.57 0.55 0.46 0.50 0.53 0.55 0.57 0.58 0.55 0.59 0.59 0.58
2.20 2.08 2.22 ( Estimate) 2.29 ( Estimate)
1 Year Dividend Growth Forecast
Annual
1.14%
Revenue
($ in Bil.) Risk
Beta 0.77
Quarterly 8.4 8.5 9.6 9.2 8.5 8.3 8.0 8.0 8.5 8.6 8.7 8.8 8.7 8.8 8.9 9.1 Institutional Ownership 36.84%
Annual 35.7 32.8 34.6 ( Estimate) 35.4 ( Estimate)
FY ends Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Dec 31 2018 2019 2020 2021

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 NYSE: EPD

ENTERPRISE PRODUCTS PARTNERS LP Report created Feb 7, 2020 Page 2 OF 5

Analyst's Notes...Continued
Our favorable long-term outlook for EPD is based on the
partnership's expanding operating margin; manageable long-term
debt; growing U.S. market share; accretive acquisitions; and, in our
view, an impressive U.S. distribution system, both for natural gas
and NGLs. The company's operating assets are also strategically
located near energy supply sources with a direct connection to
areas of growing demand. In our view, management's expertise and
financial conservatism warrant a premium valuation.
RECENT DEVELOPMENTS
EPD units have outperformed thus far in 2020, falling 8.5%
while the S&P 500 Energy index has dropped 9.8%. In addition,
the shares have outperformed over the past year, declining 7.2%
while the Energy index has decreased 11.9%.
On January 30, EPD reported adjusted 4Q19 net income
attributable to limited partners of $1.125 billion or $0.50 per
diluted unit, down from $1.305 billion or $0.61 per unit in the
prior-year quarter. EPS matched our quarterly estimate but fell
short of the consensus estimate of $0.53.
The year-over-year decline in operating earnings primarily
reflected lower average sales margins (natural gas processing
business) and higher operating expenses within the NGL Pipelines
& Services segment, which felt the impact of lower NGL (natural
gas liquids) prices.
Adjusted fourth-quarter EBITDA rose 8% to $2.019 billion.
However, total company revenue fell 13% to $8.005 billion,
reflecting weakness in the NGL Pipelines & Services segment. The
consensus revenue estimate was $8.600 billion.
On an adjusted basis, Enterprise reported 4Q19 distributable
cash flow of $1.634 billion, up 1% from the prior-year quarter.
Distributable cash flow covered the distribution by a factor of 1.7.
The company reported a gross operating margin of $2.015 billion
in 4Q19, down 6% from 4Q18.
Our preferred metrics for evaluating EPD are adjusted EBITDA,
distributable cash flow, and gross operating margin. Net income
has little impact on our analysis as we prefer to evaluate the
company's performance on a cash flow basis, which excludes
noncash charges, namely, depreciation expense.
For 2019, the company reported fully diluted earnings per unit
of $2.08 compared to diluted earnings per unit of $2.22 in full year
2018.
EARNINGS & GROWTH ANALYSIS
For 2020, the company plans to raise the distribution by
$0.0025 per unit per quarter during the year, implying a 2.3%
increase this year. EPD also intends to use approximately 2% of its
2020 cash from operations to buy back its common units.
We are reaffirming our above-consensus 2020 EPS estimate of
$2.22, which reflects stronger overall volume growth compared to
2019 but also reflects our modestly lower price assumption for
natural gas liquids (NGLs). The 2020 consensus estimate is
currently $2.19.

Growth & Valuation Analysis Financial & Risk Analysis

GROWTH ANALYSIS
($ in Millions, except per share data) 2014 2015 2016 2017 2018
FINANCIAL STRENGTH 2016 2017 2018
Revenue 47,951 27,028 23,022 29,242 36,534
Cash ($ in Millions) 63 5 345
COGS 44,221 23,669 19,644 25,558 31,397
Working Capital ($ in Millions) -1,722 -2,789 -1,107
Gross Profit 3,731 3,359 3,379 3,684 5,137
Current Ratio 0.79 0.70 0.85
SG&A 215 193 160 181 208
LT Debt/Equity Ratio (%) 95.8 96.3 103.5
R&D — — — — —
Total Debt/Equity Ratio (%) 107.5 109.0 109.7
Operating Income 3,516 3,167 3,219 3,503 4,929
Interest Expense 921 962 952 946 1,089 RATIOS (%)
Pretax Income 2,857 2,556 2,576 2,881 4,299 Gross Profit Margin 14.7 12.6 14.1
Income Taxes 23 -2 23 26 60 Operating Margin 14.0 12.0 13.5
Tax Rate (%) 1 — 1 1 1 Net Margin 10.9 9.6 11.4
Net Income 2,787 2,521 2,513 2,799 4,172 Return On Assets 5.0 5.3 7.5
Diluted Shares Outstanding 1,895 1,999 2,089 2,154 2,187 Return On Equity 11.9 12.6 18.0
EPS 1.47 1.26 1.20 1.30 1.91
RISK ANALYSIS
Dividend 1.43 1.51 1.59 1.67 1.72
Cash Cycle (days) 61.2 63.6 47.2
GROWTH RATES (%) Cash Flow/Cap Ex 1.4 1.5 1.5
Revenue 0.5 -43.6 -14.8 27.0 24.9 Oper. Income/Int. Exp. (ratio) 3.8 4.1 5.1
Operating Income 6.6 -9.9 1.6 8.8 40.7 Payout Ratio 118.3 127.6 132.0
Net Income 7.3 -9.6 -0.3 11.4 49.1
EPS 4.3 -14.3 -4.8 8.3 46.9 The data contained on this page of this report has been
Dividend 5.9 5.6 5.3 4.9 2.8 provided by Morningstar, Inc. (© 2020 Morningstar, Inc.
Sustainable Growth Rate 1.2 -2.5 -3.3 -3.9 -0.2 All Rights Reserved). This data (1) is proprietary to
VALUATION ANALYSIS Morningstar and/or its content providers; (2) may not be
Price: High — $36.98 $30.11 $30.25 $30.05 copied or distributed; and (3) is not warranted to be
Price: Low — $20.76 $19.00 $23.59 $23.10 accurate, complete or timely. Neither Morningstar nor its
content providers are responsible for any damages or
Price/Sales: High-Low —-— 2.7 - 1.5 2.7 - 1.7 2.2 - 1.7 1.8 - 1.4
losses arising from any use of this information. Past
P/E: High-Low —-— 29.3 - 16.5 25.1 - 15.8 23.3 - 18.1 15.7 - 12.1
performance is no guarantee of future results. This data
Price/Cash Flow: High-Low —-— 17.7 - 9.9 15.3 - 9.6 15.3 - 12.0 10.7 - 8.2 is set forth herein for historical reference only and is not
necessarily used in Argus’ analysis of the stock set forth
on this page of this report or any other stock or other
security. All earnings figures are in GAAP.

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 NYSE: EPD

ENTERPRISE PRODUCTS PARTNERS LP Report created Feb 7, 2020 Page 3 OF 5

Analyst's Notes...Continued
At the same time, we are establishing a 2021 EPS estimate of
$2.30 per share, implying about 4% earnings growth from our
2020 estimate. The current consensus for 2021 is $2.29.
With respect to long-term growth, we note that EPD has a
leading position across the natural gas and NGL value chain in
some of the largest-producing basins in the U.S. It also has about
$7.7 billion in growth projects that are expected to enter service
over the next several years, and will continue to invest in natural
gas, NGL, and crude oil infrastructure to support shale play
development. The growth in hydrocarbon production from shale
basins and unconventional drilling has resulted in structural cost
advantages for petrochemical production in the U.S. and has
increased NGL demand from the petrochemical industry. This
should boost earnings visibility and support growth in the
distribution. EPD has the highest distributable cash flow coverage
ratio in our MLP coverage universe.
FINANCIAL STRENGTH & DIVIDEND
We rate EPD's financial strength as Medium-High, the
second-highest rating on our five-point scale. The company's debt
is rated BBB+/stable by Standard & Poor's.
At the end of 4Q19, EPD's total debt/capitalization ratio was
52.1%, down slightly from 52.3% a year earlier. The debt/cap
ratio is in line with the peer average and has averaged 51.9% over
the past five years.
Enterprise Products has eliminated the incentive distribution
rights previously held by the general partner, and is transitioning
the company to mainly fee-based businesses that are supported by
long-term contracts. This allows the company to have one of the
lowest costs of capital in its MLP peer group.
Long-term debt totaled $27.0 billion at the end of 4Q19, up
from $26.3 billion at the end of 4Q18. The increase reflected debt
issuance to help fund acquisitions. The company has minimal
short-term borrowings.
EPD had cash and cash equivalents of $111 million at the end
of 4Q19, compared to $344 million at the end of 4Q18. Cash from
operating activities fell to $1.694 billion in 4Q19 from $1.851
billion in the prior-year quarter.
On January 19, 2020, EPD announced its 62nd straight
quarterly distribution increase, to $0.4445 per unit, up 2% from
the prior-year quarter. The annualized payout of $1.78 yields
about 6.8%. We believe the current distribution is safe and
sustainable. The quarterly distribution will be paid February 12,
2020, to unitholders of record as of the close of business January
31, 2020. Our revised distribution estimates are $1.78 for 2020
and $1.80 for 2021.
Enterprise Products initiated a new $2.0 billion dollar share
repurchase program in January 2019. The company repurchased
1.0 million units during the third-quarter of 2019, following a
purchase of $1.1 million units in 2Q19. In its 2020 outlook, the
company indicated that it was initiating a new program for this
year.

Peer & Industry Analysis

The graphics in this section are designed to
P/E
allow investors to compare EPD versus its Growth
industry peers, the broader sector, and the EPD vs.
market as a whole, as defined by the Argus Market
Universe of Coverage. 25 EPD vs.
OKE Sector
• The scatterplot shows how EPD stacks More Value More Growth
up versus its peers on two key
WMB
KMI Price/Sales
characteristics: long-term growth and
20 ENB
value. In general, companies in the lower EPD vs.
left-hand corner are more value-oriented, Market
while those in the upper right-hand corner EPD vs.
are more growth-oriented. Sector
15 More Value More Growth
• The table builds on the scatterplot by
displaying more financial information. Price/Book
• The bar charts on the right take the EPD EPD vs.
analysis two steps further, by broadening Market
10 PSX
the comparison groups into the sector EPD vs.
level and the market as a whole. This tool Sector
is designed to help investors understand More Value More Growth

Value
P/E

how EPD might fit into or modify a PEG

4 6 8 10
diversified portfolio.
5-yr Growth Rate(%) EPD vs.
Market
5-yr Net 1-yr EPS EPD vs.
Market Cap Growth Current Margin Growth Argus Sector
More Value More Growth
Ticker Company ($ in Millions) Rate (%) FY P/E (%) (%) Rating
ENB Enbridge Inc 85,328 4.0 20.5 12.3 3.9 BUY 5 Year Growth
EPD Enterprise Prods Pntr L 56,524 8.0 11.6 14.0 3.2 BUY EPD vs.
KMI Kinder Morgan Inc 48,334 10.0 21.1 16.6 3.0 HOLD Market
EPD vs.
PSX Phillips 66 40,121 5.0 10.4 2.9 22.9 BUY Sector
OKE Oneok Inc. 31,349 10.0 24.5 11.8 21.0 BUY More Value More Growth
WMB Williams Cos Inc 26,011 10.0 21.7 1.9 4.0 HOLD Debt/Capital
Peer Average 47,945 7.8 18.3 9.9 9.6
EPD vs.
Market
EPD vs.
Sector
More Value More Growth

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 NYSE: EPD

ENTERPRISE PRODUCTS PARTNERS LP

Report created Feb 7, 2020 Page 4 OF 5

Analyst's Notes...Continued
MANAGEMENT & RISKS
Jim Teague, formerly the company's COO, became CEO on
December 31, 2015, succeeding Michael Creel. We think that EPD
management has performed well over the last several years through
a combination of accretive acquisitions and internal growth. Its
efforts have led to increased earnings and cash flow. We are also
impressed that management purchases outside energy assets only
after thorough due diligence.
MLPs face substantial funding risk as they are required to pay
out a significant portion of cash flow to unitholders and are thus
dependent on external funding. Investment in pipelines also
involves risks related to fires, explosions and environmental issues.
All of the company's pipelines are regulated by the Federal Energy
Regulatory Commission (FERC). The normal tax risks of investing
in MLPs apply to this investment. Unitholders are responsible for
payment of taxes on their pro rata share of company earnings,
whether or not any cash distribution is made. Unitholders have no
control over the general partner or the election of officers of the
general partner. In addition, investors' holdings could be diluted by
the issuance of additional partnership units. The controlling
unitholder of the partnership could also reduce the price by
disposing of a large number of units.
COMPANY DESCRIPTION
Enterprise Products Partners L.P. is a North American provider
of midstream energy services to producers and consumers of
natural gas, NGLs, crude oil, refined products and petrochemicals.
The partnership's assets include over 50,000 miles of natural gas,
NGL, refined products, and petrochemical pipelines; 260 million
barrels of storage capacity for NGLs, refined products and crude
oil; and 14 billion cubic feet of natural gas storage capacity. The
company completed its IPO in July 1998.
VALUATION
EPD units have traded between $25.04 and $30.87 over the
past 52 weeks and are currently slightly below the midpoint of the
range. They trade at 11.6-times our 2020 EPU estimate and at
11.2-times our 2021 forecast, compared to an eight-year historical
average range of 17-23. Our multistage dividend discount model
yields a fair value of $38 per share, which remains our target price.
We believe that Enterprise should trade at a premium to the
MLP peer group based on its prospects for further cash
distributions and earnings growth, and expect the company to
continue to benefit from solid cost controls and strategically placed
assets.
On February 7 at midday, BUY-rated EPD traded at $25.46,
down $0.30.

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METHODOLOGY & DISCLAIMERS Report created Feb 7, 2020 Page 5 OF 5

About Argus
Argus Research, founded by Economist Harold Dorsey in 1934,
has built a top-down, fundamental system that is used by Argus
analysts. This six-point system includes Industry Analysis, Growth
Analysis, Financial Strength Analysis, Management Assessment,
Risk Analysis and Valuation Analysis.
Utilizing forecasts from Argus’ Economist, the Industry Analysis
identifies industries expected to perform well over the next
one-to-two years.
The Growth Analysis generates proprietary estimates for
companies under coverage.
In the Financial Strength Analysis, analysts study ratios to
understand profitability, liquidity and capital structure.
During the Management Assessment, analysts meet with and
familiarize themselves with the processes of corporate management
teams.
Quantitative trends and qualitative threats are assessed under
the Risk Analysis.
And finally, Argus’ Valuation Analysis model integrates a
historical ratio matrix, discounted cash flow modeling, and peer
comparison.
THE ARGUS RESEARCH RATING SYSTEM
Argus uses three ratings for stocks: BUY, HOLD, and SELL.
Stocks are rated relative to a benchmark, the S&P 500.
• A BUY-rated stock is expected to outperform the S&P 500 on
a risk-adjusted basis over a 12-month period. To make this
determination, Argus Analysts set target prices, use beta as the
measure of risk, and compare expected risk-adjusted stock
returns to the S&P 500 forecasts set by the Argus Market
Strategist.
• A HOLD-rated stock is expected to perform in line with the
S&P 500.
• A SELL-rated stock is expected to underperform the S&P 500.

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© 2020 Morningstar, Inc. All Rights Reserved. Certain financial information included in this report: (1) is proprietary to Morningstar and/or its content providers; (2) may not be
copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising
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