HOUSTON--(BUSINESS WIRE)--Jan. 31, 2019-- Enterprise Products Partners L.P. (NYSE: EPD) (“Enterprise”) today announced that the board of directors of its general partner has approved a $2.0 billion multi-year common unit buyback program. Enterprise’s management also provided distribution guidance for 2019.
Enterprise’s board approved a $2 billion multi-year common unit buyback program to provide the partnership with an additional method to return capital to investors. The program authorizes the partnership to purchase its common units from time to time, including through open market purchases and negotiated transactions. The timing and pace of buy backs under the program will be determined by a number of factors including Enterprise’s financial performance and flexibility; organic growth and acquisition opportunities with higher potential returns on investment; Enterprise’s unit price and implied distributable cash flow yield; and maintaining targeted financial leverage with a debt-to-normalized EBITDA ratio in the 3.5 times area. No time limit has been set for the completion of the program, and the program may be suspended or discontinued at any time.
With regard to distribution guidance for 2019, based on current expectations, Enterprise’s management plans to continue to recommend to its board a $0.0025 per unit per quarter increase to its distribution rate. This pace of increase would result in a 2.3 percent increase in distributions paid with respect to 2019 to $1.765 per unit compared to $1.725 per unit for distributions declared for 2018.
“It was just fifteen months ago that we announced our plan to transition away from the MLP externally-dependent financing model with a goal of self-funding the equity portion of our growth capital investments,” said A.J. “Jim” Teague, chief executive officer of the general partner of Enterprise. “I am pleased to announce that we accomplished this objective a year early by self-funding over 50 percent of our 2018 growth capital investments and acquisitions of approximately $4 billion. To position Enterprise to return more capital to investors, we believed the first step was to become equity self-funding and to strengthen our credit metrics. We believe the authorization of a new buyback program gives us another ‘tool in the toolbox’ to opportunistically return capital to investors.”