Good morning. My name is Dexter, and I will be your conference operator today. At this time, I would like to welcome everyone to the Enterprise Products Partners Fourth Quarter 2020 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there'll be a question-and-answer session. As a reminder, this conference is being recorded. Mr. Randy Burkhalter, Vice President of Investor Relations, will begin your conference. Please go ahead, sir.

Thank you, Dexter, and good morning, everyone, and welcome to the Enterprise Products Partners conference call to discuss fourth quarter 2020 earnings. Our speakers today will be Co-Chief Executive Officers of Enterprise's General Partner, Jim Teague and Randy Fowler. Other members of our senior management team are also in attendance for the call today. During this call, we will make forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, based on the beliefs of the Company, as well as assumptions made by and information currently available to Enterprise's management team. Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Please refer to our latest filings with the SEC for a list of factors that may cause actual results to differ materially from those in the forward-looking statements made during the call. And with that, I'll turn it over to Jim.

Thank you, Randy. As we said in this morning's press release, our business has continued to perform well throughout 2020. We reported net income attributable to common unitholders for 2020 of $3.8 billion, or $1.71 per unit compared to $4.6 billion, or $2.09 per unit on a fully diluted basis for 2019. Net income for 2020 was reduced by non-cash asset impairment charges of approximately $891 million, which Randy is going to address. Distributable cash flow was $6.4 billion for 2020 compared to $6.6 billion for 2019. DCF provided 1.6 times coverage, and we retained $2.5 billion of DCF in 2020 to reinvest in the partnership. We completed 2020 with significant financial flexibility and in a strong balance sheet. We really are proud of Enterprise’s employees for their dedication and perseverance and responding to the challenges during 2020 caused by the coronavirus pandemic. The diversification of our businesses across multiple commodities, the magnitude of our transportation and storage assets, the depth of our marketing activities, and our cost control efforts enabled us to generate distributable cash flow just 3% shy of the record DCF we earned in 2019.

Thank you, Jim and good morning, everyone. I'll start by reviewing some fourth quarter income statement items. Net income attributable to common unit holders for the fourth quarter of 2020 was $337 million, or $0.15 per unit on a fully diluted basis, compared to $1.1 billion or $0.50 per unit for the fourth quarter of 2019. Net income for the fourth quarters of 2020 and 2019 were reduced by non-cash asset impairment and related charges of approximately $800 million or $0.36 per unit for the fourth quarter of 2020 and $82 million, or $0.04 per unit for the fourth quarter of 2019. The impairment charges recorded in 2020 were primarily for goodwill associated with the partnerships, natural gas pipelines and services segment and for certain long lived assets including those associated with our marine business that is our barge and push business and natural gas gathering and processing facilities. Moving on to cash flows. Cash flows from operations was $1.6 billion for the fourth quarter of 2020 compared to $1.7 billion for the fourth quarter 2019. On a full year basis cash flow from operations was $5.9 billion and $6.5 billion for 2020 and 2019 respectively. Cash flow from operations for 2020 and 2019 were both reduced by $768 million and $457 million respectively, for cash used for working capital. Free cash flow for 2020 which we define as cash flow from operations minus investing activities less distributions to non-controlling interest was $2.7 billion for the year, which is an 8% increase compared to free cash flow for 2019. Our payout ratio which we define as the sum of cash distributions and buybacks, as a percent of cash flow from operations was 70% for 2020, 67% from distribution and distribution equivalent rights, and another 3% from common unit buybacks.

Okay. Thank you, Randy. Dexter, we are ready to take questions from our listeners.

Thank you. Your first question comes from the line of Jeremy Tonet. Your line is now open.

Hi, good morning.

Good morning.

Just want to start off on the supply side, if I could, maybe just a question for Tony and Jim here, and just wondering what your latest thoughts are given producer conversations on the outlook for supply growth, from what we can see, it looks like the Permian will continue to grow. Other basins could decline in the Permian kind of take share here. Just wondering what your thoughts are for supply, GMP supply going forward. And also, with federal land issues, they're kind of encroaching on the Permian thoughts on that and how this all kind of impacts EPD?

Jeremy, we're going to produce a new supply forecast at the Analyst Day. But the long and the short of it is if you look at what public producers are saying and what they're telling us, they plan on remaining flat in 2021. And flat being most of them couch it as where they exited 2020, where they plan on exiting 2021. And you are correct that the Permian is going to be the lion's share of the activity. That said, we are seeing some increase in activity and production in the Eagle Ford that we like to see. And then I guess, now, I'll move to the federal acreage comment. And it's early on to this. Brent may want to chime in, it's early on to this pronouncement from the Biden administration kind of two weeks into it. But when we look at the Permian acreage, and we back up and look at what we consider active acreage, it's nearly 15 million acres. Only about 12% of that, as we gauge it is on federal land. And on that federal land, there's some approximately 2,000 permits probably more as we speak in 600 or 700 DUCs. What we're hearing from producers, I think, ramping and let me know if you feel differently, some are actually speeding up. Most are saying at this point, no change. And I would say few, if any, at this point said I'm laying a rig or two down because they're well permitted. They saw that it might come and that's where they're headed. There's a lot of political pushback. This is big for the state of New Mexico. And so, stay tuned. But when we look at it holistically, this is how we feel. Brent, did I miss anything?

No, I think you covered it, Tony. In terms of some green shoots, we are seeing some private guys be more active out there with put more rigs in play. When we talk to our customers and I think the simple answer is we don't know what's going to happen. But when we talk to our customers, it feels like they have a timeline to go ahead and execute the permits that they have. And it's not a rush to go out there and get it done. So, it's kind of a case by case basis, depending on the producer, but I haven't sensed panic from talking to our customers.

Got it. That's helpful. Thanks. And maybe kind of building off that supply impact as you see it for 2021 here. Just wondering if you couple that with, I guess, the turnarounds in the petchem segment. Does this mean that kind of you expect 2021 EBITDA would step down from 2020? Or are there any other kind of big moving pieces that we should be thinking about?

Yes, Jeremy, I'd say, I think we're - based on what we see thus far, we think, we can hold it flat. And could it be soft $100 million, $200 million? Could be. But I tell you what, never doubt. The resolve of this organization to come in and capture opportunities. So we'll see, I think we're in good shape going into the year.

That's very helpful. I'll stop there. Thank you.

Your next question comes from the line of Colton Bean from Tudor, Pickering, Holt. Thank you very much. You may ask your question.

Good morning. So with the total capital down nearly 40% for this upcoming year and leverage effectively at your long-term target, can you just update us on how you're thinking about payout ratio for 2021?

Yes, and I’d really refer back to the comments that I had in the conference call script. I think, we do expect to start generating discretionary free cash flow in the second half of the year. A good bit of our CapEx is skewed more towards the beginning of the year. And - but we think we'll be discretionary free cash flow positive. At this point in time, we really don't want to provide any guidance on payout or I mean payout is still going to be pretty lofty. I mean, just given where our distribution is, since the distribution makes up a substantial amount of the cash that we returned to our investors. So it's still going to be fairly high just based on that. So as far as what we do on buyback, I think, we'd like to get a little bit farther into the year, again, a lot of uncertainties as we enter the beginning of this year. And we just like to get better visibility before we provide any guidance on that front.

And then, Randy, just to follow-up on that. Do you see any benefit to going materially below that 3.5 times leverage target?

We set on 3.5 times, it's - our definition of 3.5 times area is 3.5 plus or minus a quarter turn. So that's our target that we've been talking about that, being our target for two or three years now and we're still comfortable with that range.

Understood. And then just on the propylene operations with the spread between PGP and RGP widening further year-to-date, any potential for the fracs to offset the PDH downtime here with Q1 upcoming?

Where is Chris, you want to answer it?

Sure. Yes, with the spreads the way they are, obviously, we're running out as hard as we can. So I think we're expecting to do as much as we can with that.

Yes. This is Jim. The spreads are wide, but we don't have exposure to the total. I think we got exposure to about 30% of our capacity of that spread. So to the extent we have exposure, yes, we'll benefit. I'm not sure how much it'll make up.

Appreciate that. And just a quick final one. The ethylene storage capacity, I don't think that was online until almost the end of December. Can you just update us on what you've seen there and how you're expecting exports to turn over the course of the year? Appreciate it.

Our storage hub was actually online the prior year, but we finished our storage tank at the export terminal at the end of the year. And we were operating at pretty high rates before the tank was in service. And having that tank just allows us to optimize dock loadings and to load at higher rates. So really, at this point, we have contracts in place. But it's really going to be determined by the global arbitrage.

Are you sold out?

We're sold out with some opportunity for spot business.

Your next question comes from the line of Kyle May from Capital One Securities. Your line is open.

Hey, good morning, guys. I just wanted to maybe go into a little bit in the release, you talked about analyzing renewable project opportunities. So just want to get a feel for maybe what you're looking at and how that would fit with the business.

Yes, it wasn't really renewable opportunities, what we said we've got some growth projects that we're looking at that are if you would consistent with the energy evolution, not necessarily specifically renewable projects.

Okay, got it. Appreciate that. Can you maybe go into a little bit more details on what those projects would be?

Not really.

Okay, fair enough. And second question would be, I believe you mentioned that your growth CapEx could move a little bit higher to around $2 billion this year. Any more details around what would push you to that upper end?

The previous question?

All right. Fair enough. Thanks, guys.

We have a question from Jean Salisbury of Bernstein. Your line is open.

Hi, good morning. Ethane storage in U.S is at record levels and frankly more ethane storage than I knew existed. Can you come in and assess mostly your inventory and perhaps your view on if this high storage will dampen ethane prices in 2021?

Yes, I mean, we're seeing, we saw ethane storage peak in the fourth quarter, we're seeing it roll off as crackers came back online. Ethane was a little bit of a challenge during the fourth quarter as ethane trying to clean up. I think you know, I think we're fundamentally bullish. A lot of things as it relates to hydrocarbons, I think in terms of an outright price on ethane, I still think you have to have some sort of baseline gas call. But if you look at how this market balances with demand and supply on that day and if you look at the demand coming online, you hear what Tony says about supply from talking to our customers. And you're seeing it happen. We've seen it happen the last several weeks, ethane, has to work and go to work to go price to get back into the NGL stream. So, whether that means coming from further away, or whether that means that people have to adjust prices in the Permian Basin, we believe that these markets need to balance and I think fundamentally -- I read reports, Jeannie, and I don't know if we're going to see some numbers that I've read from you a month or two months back, but I think we're aligned that we're fairly bullish, I think.

Thank you. That's helpful. And Asia propane prices were quite high for much of December and January. Can you comment if you were able to capture a material amount of marketing margin there? Or did most of that go to the shipping company?

This is Brent again. We have a massive presence in NGLs. So, when price goes to work in NGLs, I think it's fair to assume that somehow enterprise participate in it.

Thanks a lot, Brent. That's all for me.

Your next question comes from the line of Pearce Hammond from Simmons Energy. Your line is open.

Yes, thank you and good morning. Thanks for taking my questions. My first question is what are your expectations for crude oil export volumes for 2021? And what are the puts and takes around that view?

Okay, we're going this as the Brent Secrest show. Brent? Go to your answer that you gave earlier.

If you look at our volumes, I can speak specifically to enterprise. Our volumes for crude exports have gone down. So, the pandemic has taught us a lot of things and one thing that it has taught us is something that we've preached over the last several years, is that Houston truly is a market. I understand and I see the numbers, too, that there's a lot of barrels going out a Corpus. I recognize the fact is, once the train leaves the station in Midland and the heads to Corpus, it has to go to the water. What we offer in Houston is truly a market and the domestic price that our customers achieve in Houston is higher than the price that they can achieve on the water. And that's the reason they've elected to not take the barrel across the water. Now as enterprise from a profitability standpoint, I'd say we're somewhat agnostic to it, we can provide the service, we have no problem providing the service, but the domestic price in Houston is higher than Corpus. So, at some point, the market is going to require that barrel to go across the water once the global market needs that barrel. But right now, our customers are achieving a higher net back in Houston.

Okay.

So, you could see the volumes decline. But when it comes to revenue, frankly, our revenue stays flat. It will continue to stay flat for quite some time and then when we have to export, frankly, there's additional, expenses that you undertake from exporting.

Okay, that's super helpful. Thank you. And then my follow up is, can you elaborate on the drivers of the current strength in the NGL market and how sustainable you think those are for 2021? And that's following up on some of the earlier questions.

Yes, this is Justin Kleiderer. I think it's all chemical-driven. The demand for plastics as a function of what we've been experiencing throughout 2020, I think we expect to continue and that's supporting the entire NGL value chain.

What about your exports in Asia?

On the export front, we continue to seem to set records on volume every quarter. We did in the fourth quarter as well and I think we expect volumes to remain robust through 2021.

Okay, thank you very much.

Your next question comes from the line of Michael Blum from Wells Fargo. Your line is open.

Thanks. Good morning, everyone. I wanted to get your thoughts on what's been going on at the Panama Canal and how that impacts or could impact in the future LPG movements, kind of more on a long term basis?

Yes, this is Justin again, I'll take a stab at it. I think what you saw and what you continue to see with the congestion could potentially change trade flows. However, I don't think that we expected to materially do so in which that would impact volumes across Gulf Coast docks. At the end of the day, barrels need to clear that demand needs it and they'll continue to pay the price to get it there.

Got it. Thank you. And then you have a line in the press release that your goal I guess, is to source 25% of your power from renewable sources by 2025. Can you just elaborate a little bit on that? Is that primarily replacing compressors along the pipelines? Or are there other areas where you think you're going to source that power?

I think the power sourcing is from a wide variety of areas. Over the over the last number of years, if we look 10 years plus, we've been going more and more to electrical drivers as at our new facilities. The power is really sourced both from opportunistic, been able to go out and acquire solar power as well as the ERCOT grid provides a significant amount of renewable power.

Great, thank you so much.

We have a question from Shneur Gershuni from UBS. Your line is open.

Hi, good morning, everyone. I wanted to start off with a question on the Permian. There's been a lot of talk over the last year and-a-half or so about the Permian overbuilt thesis. I was just wondering if I can get your broader thoughts on it? Is the industry really discussing it correctly? And I'm kind of wondering along the lines of how we look at the egress out of the Permian. Is there a way to think about it in terms of egress to Cushing versus egress to demand centers? You were just talking about how great Houston is as kind of a demand center for a market? And so as we sort of think about it over time, when pipelines come up for re-contracting and so forth, is there going to be a different price for pipelines that evacuate crude to Houston Corpus to the demand centers versus towards Cushing? And should there should there be kind of a dual market that sort of emerges over time? And just kind of thinking about your thoughts on how that entirely plays itself out?

This is Jim. Brent pointing his finger to me, but I got more high points than him. So, Brent, you want to answer that question?

I think what we're seeing flown to Cushing, you guys could see the ARB between Midland and the overcapacity build that's coming out of Midland. I think there are some barrels that this refinery complexes are going to want to go from Midland to Cushing. If you looked at volumes and what they've done month-over-month, they continue to go down. Much like most areas in this country, I would say there's too much pipeline capacity, going to Cushing. Now, how that pipeline capacity gets rationalized and how it gets repurposed, or what direction it flows, that remains to be seen. As far as Corpus in Houston, I'd argue, hey, they all work great when barrels are flowing and going straight to the water and there's no decision to make. There's a bunch of place that worked 15 months ago.

Let's speak to the magnet you're building.

In terms of what we offer to use in terms of the refining capacity, the access to from pipeline connectivity, if you look at the amount of storage of the Houston Gulf Coast versus Corpus, you're talking hundreds of millions of capacity taken in weather storms, like we saw in 2020, versus what they are for Corpus when you look at grades, what people can do with different grades, what the export customers want with different grades. And if you look at frankly, our announcement last week with Magellan, and working on a pricing point that there works frankly, for everybody, it works for producers, it should work for refiners, it should work for consumers. And in fact, there's transparency for people to go out and conduct their business long-term. Whether that's a hedge that they buy, or whether that's a hedge that they sell and then they can decide to execute on that, or they take it across the water or not -- but they don't have to take it across the water -- they can go sell it back in the market if the doesn't work versus other ports where frankly, you have vessels floating around out there hoping the phone rings. Because once that phone rings and say, 'Hey, I need you,' then, frankly, the people, all they have to do is go beat the price in Midland. And I think that gets old after a while.

Okay. So bottom line, the evacuation to the Gulf Coast should be more valuable than the evacuation to Cushing?

This is going to work overtime as contracts roll off. We got some sticky contracts that people have and markets evolve over time and people learn lessons. In terms of our presence on barrels going from Midland to Cushing is very, very small. But you can sit there and probably look at pipeline flows that are going from Midland to Cushing and say, that is something that is incredibly overbuilt.

Got it. Okay, perfect. Maybe to pivot a little bit here. Randy, in your prepared remarks, you'd mentioned the word -- you don't want to use the word programmatic. I definitely appreciate not wanting to say that with respect to buybacks, but you do have a target of 2% of CFFO, which is kind of programmatic in nature. Enterprise did buy back 3% of their stock last year. Have there been any internal discussions around raising that target to 5% or even 10% before green lighting growth capital? And it's part of the larger discussion around buybacks, just given where your debt is trading at, any thoughts on tolerating a quarter turn extra leverage just to use the opportunity to take out some units, given where they're trading? It would help obviously reduce the distribution, claim on cash flows? I think you put in your slides at 67%. Just wondering if you can give us an expanded discussion on that, on your thought process there?

Yes, Shneur, I put that statement in there about opportunistic versus programmatic just to head off this question and I guess it didn't work. You asked a number of them there. The 2% target that we talked about for buybacks was really with respect to 2020. Coming in this year, again, we're getting into new territory in the second half of this year, as far as what we see now based on current expectations, where we'll be discretionary, free cash flow positive. And we just come back in, this has really been 2020 and even coming in here to 2021, has been a very dynamic environment with a lot of uncertainties. And boy, you can go down the list of sort of what the uncertainties are as we enter into this year and we're just not at a place we think it's premature to come in and provide any guidance on what we're going to do with returning capital, buybacks or distributions at this point in time. The distribution that we announced in January, I don't think that should have been a surprise to anybody. We've been increasing distributions 22 years in a row. So that shouldn't have been surprising. We talked about trying to keep purchase power priority on our distribution. We don't have a lot of inflation, but we wanted to come in and go ahead and bump the distribution. But when it when it comes to the buyback, we just like to get a little bit more visibility for 2021.

All right, that makes sense. Appreciate the color today, guys. Thank you very much and stay safe.

We have a question from Keith Stanley from Wolfe Research. Your line is open.

Hi, good morning. One of the follow-up on the 2021 outlook. So in the past you've alluded to, I think $500 million to $600 million have sort of outsized spread, market-based opportunities was Permian crude spreads in 2019, contango trades in 2020. I'm wondering how you think about kind of what we're seeing in NGL and pet chem markets so far in Q1? If this is potentially the next thing to backfill what you saw in 2020, on contango and tying that into -- I think earlier, I just want to confirm you made a comment about 2021 maybe being flattish overall, the 2020 -- just how all that ties together? Thanks.

Yes, Randy said it was going to be flattened and I endorsed that and it makes Justin Kleiderer nervous. So we'll turn it over to him.

Yes, it's Justin, I think you hit on what I'm about to say for the reasons that I'm going to say it, which is, the opportunities that we see are certainly going to be different than the past and most certainly going to be different than 2020. But I think we firmly believe that they're going to be there. It could be on NGLs and pet chem, like you alluded to. I think we feel good about the opportunities out there. But, the future holds opportunities that we can't forecast, but we do forecasting to be there. So, we're geared up to meet Jim's target.

Great. And then just one cleanup item. Just thinking about the working capital -- and I wouldn't normally ask this, but it's kind of large. You reference it was over $700 million use of cash in 2020. For working capital items. It was almost $500 million in 2019. So that's over a billion dollars. I'm assuming that's just related to greater storage and marketing, but when would you expect to get this cash back and just how should we think about that going forward?

Keith, this is Chris Nelly. A lot of that working capital uses just -- if you look at the forward curve, it should be coming back over the next couple of quarters. But again, going back to what Justin just stated, that a lot of that is going to be dependent upon what market opportunities are out there and what working capital utilization will then be as a result. So again, those are self-liquidating short-term deals that have high returns.

Thanks.

Our next question comes from Ujjwal Pradhan from Bank of America. Your line is open.

Good morning, everyone. Thanks for taking my question. I just wanted to ask first on the growth projects that are going to service in 2021 that you noted in the press release. Could you talk about the costs associated with these with respect to the 2021 budget? And perhaps return expectations for the three projects in the press release?

Yes, we typically don't talk about capital costs of specific projects. I will say this, that the projects, they're coming online, or all on time on budget. We also don't talk about returns of specific projects, a little bit for the same reason that we don't come in and are reluctant to talk about projects under development. We've got a lot of competitors on these calls and we just not to get into too much detail. In the earning support slides, we do provide a list of projects under development. Jackie, what page?

I got it. I see it in Page 6. My question was about each of these projects, sort of how much do the contribute to that? 2021 budget versus PDH 2, which I know is the big ticket item in the budget.

So bear with me just a minute. Yes, when you when you come in and you look at the $1.6 billion that we expect to invest in capital projects in 2021, probably the PDH 2 represents about a third of it.

Got it. That helpful. Thanks for that. And a quick follow-up with regards to the planned increase in renewable power uses. Could you comment on whether that would be neutral to your current power costs or a reduction to it? Thank you.

Could you repeat the question please?

The cost of the additional renewable power uses, will that be neutral to your current power costs or a reduction to it?

It will be neutral to our current power costs.

Got it. Thank you.

Your next question comes from the line of Michael Lapides from Goldman Sachs. Your line is open.

Hey, guys, thank you for taking my question. I actually have a couple several that are short-term kind of 202-focused, and then one longer-term one. On 2021, can you talk about the cadence of CapEx during the year? Meaning is it very front end loaded? When I think about the bill six of growth CapEx? That's the first question. The second is the $400 million or so of cost savings that you realized in 2020, does some of that come back in 2021? So, when you refer to flattish EBITDA, is there a cost to pressure or there are incremental OpEx savings? And then the last one is probably for Brent, or Tony. When Wink to Webster fully comes online, how do you think that impacts the battle between Houston and Corpus for crude and crude exports?

Okay, Mike, I'll take that first one. Probably the as far as CapEx, there's a little bit more in the first half of the year compared to the second half, but not a lot. As far as the operating cost, a big driver for us in 2021 compared to 2020, will be the turnarounds that we have primarily at PDH and B. So that's a kind of an outlier compared to 2020. In 2020, we did a lot of focus on cost. We got some of our base cost structure down part through supply chain negotiations that enabled us to lower costs. We've also focused very much on data is driving how we manage our cost a lot on our power utilization in one area. Those are going to be sustainable costs track of optimization. And sometimes when we look at cost savings, we really look at overall value sometimes, particularly on the optimization of our fractionators, we're using a lot of data to drive that. Sometimes it's a cost reduction, sometimes it's just overall value optimization. But I feel good about going into 2021 and our cost management that we did in 2020. I will continue that on in 2021.

This is Brent. I think with Wink to Webster, it's up right but it's going to continue to ramp up over the next several months. And so, we've seen this before Corpus' pipelines came on, took barrels from Houston. You look at the people involved with Wink to Webster, they're obviously going to go take barrels from pipelines that go to Corpus and all this stuff, when the tide starts rolling out, we'll find out who has contracts and who doesn't and what's sticky and what's not. So, I would expect barrels to decrease that are flown to corpus and roll over to Wink to Webster. There may be some pipelines that frankly, don't have contracts that are going to Houston that they may take from those pipelines. So, we've seen this happen over the last couple years.

What's your pipeline? What's your contract position?

To Jim's question, what's our contract position and Brad Martell is going to go into this endless meeting. But we got about a million barrels a day of committed contracts for crude oil that last, caught out to 2028 and beyond. So it's hard for me to say that we're going to have a bunch of discretionary barrels until the Permian Basin recovers and that's going to take years, but I feel when it comes to weathering the storm, we'll be okay.

Do you think there's an opportunity for other owners or even yourself to repurpose pipes? And if so -- to kind of hope hopefully tighten the crude pipeline market -- and if so, what kind of opportunities are out there? Do you see the NGL pipe market getting tighter as well? Or do you think that's as over-supplied is the crude side?

I fundamentally believe that capacity has to be rationalized. And there's different ways to do that. And you can be repurposed or inefficient operators can frankly figure out something else to do. Those assets shut down. But the industry as a whole has to properly figure this out. As far as the details that we look at, we're not going to go into it, but I think it's naive to assume that we don't look at figuring out how to solve some of these capacity issues that are existing in the market.

Got it. Thank you, guys. Much appreciated.

Dexter, we have time for one more question from our audience.

Your last question comes from Eve Siegel from Siegel Asset Management. Your line is open.

Thank you. Good morning, everybody. My question really relates to growth the underlying premise, I think of most of the questions today goes back to what Jim sort of laid out, that fossil fuels are going to disappear. And so, it's more playing defense than playing offense. So the question really relates to how do you folks think about the long term, opportunities for growth? How much operating leverage is there right now? And what are the longer term, opportunities perhaps that you see going forward? And if I could, just want editorial real quick in terms of leverage and stock buybacks. I totally appreciate Shneur's question, but the other aspect of that is that, you have to live with the consequences and I think being conservative has really held you in pretty good position for a very long time. So, thanks, guys.

Thank you, Eve.

Eve, this is Jim. I'm not sure we can spell defense. We're always on the offense and we're working on some pretty exciting projects, recognizing that we need to be responsible about it. But we're looking at some pretty exciting things and Brent said, it takes years in the Permian. I'm a firm believer that price heals all ills and Tony is bullish on hydrocarbon prices in the future, but not as bullish as I am. And prices create supply. I think you're going to see -- I'm a believer in the Permian, I'm a believer in the Eagle Ford if you have federal land issues in New Mexico, we got a hell of a position in Eagle Ford, maybe be rigs go down there. So I feel pretty good about things, and I feel good about the things we're working on -- we said are out there, we're not going to talk about.

Yes. And we appreciate your comment on that. You come back in and you look at the midstream over time. We went through a couple of periods where whether it was an investor-driven or whether it was general partners without ER driven. It was distribution-growth, distribution-growth, distribution-growth and you heard the request for that and you saw a lot of that. And a little bit we were conservative in that. We tried to do something that would -- again, we're trying to build a partnership that's durable for the long term. And a little bit of the tortoise and hare and you had a lot of midstream companies that got too far out over their skis on distribution growth. You've seen them come back in and cut. And a little bit when we think about returning capital, again, we're trying to build a durable partnership. We have a proven track record of returning capital back to our investors, 70% last year. But I think we're going to be deliberate in what we do and again, a lot of uncertainties. We'll continue to return capital to our investors. But the other thing I think, some of the mantra that you hear on buyback, buyback, buyback, these companies better watch out, you get too aggressive on buybacks and that can come in and bite you in the future, too. So that's a little bit why we're being deliberate. But I appreciate your comment.

Okay. Well, thanks, guys.

Thank you, Eve. That ends our call today and the management team here at Enterprise really thanks you for joining us. We're going to leave the call now. Dexter, would you please give our listeners the replay information? And thank you all again for joining us.

Okay. And this concludes today's conference call. Thanks for joining. You may now disconnect.