Intrinsic value of Enterprise Products Partners L.P. - EPD

Previous Close

$29.09

  Intrinsic Value

$14.01

stock screener

  Rating & Target

str. sell

-52%

Previous close

$29.09

 
Intrinsic value

$14.01

 
Up/down potential

-52%

 
Rating

str. sell

We calculate the intrinsic value of EPD stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 63.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  9.00
  8.60
  8.24
  7.92
  7.62
  7.36
  7.13
  6.91
  6.72
  6.55
  6.39
  6.26
  6.13
  6.02
  5.92
  5.82
  5.74
  5.67
  5.60
  5.54
  5.49
  5.44
  5.39
  5.35
  5.32
  5.29
  5.26
  5.23
  5.21
  5.19
Revenue, $m
  39,822
  43,247
  46,810
  50,516
  54,367
  58,370
  62,529
  66,852
  71,346
  76,018
  80,880
  85,939
  91,207
  96,694
  102,414
  108,378
  114,600
  121,095
  127,876
  134,961
  142,366
  150,107
  158,204
  166,675
  175,540
  184,821
  194,540
  204,720
  215,384
  226,559
Variable operating expenses, $m
  31,973
  34,642
  37,419
  40,307
  43,309
  46,429
  49,670
  53,040
  56,542
  60,184
  63,037
  66,980
  71,086
  75,363
  79,821
  84,469
  89,319
  94,381
  99,666
  105,188
  110,959
  116,993
  123,303
  129,906
  136,815
  144,049
  151,624
  159,558
  167,870
  176,579
Fixed operating expenses, $m
  2,312
  2,363
  2,415
  2,468
  2,522
  2,577
  2,634
  2,692
  2,751
  2,812
  2,874
  2,937
  3,002
  3,068
  3,135
  3,204
  3,275
  3,347
  3,420
  3,496
  3,572
  3,651
  3,731
  3,813
  3,897
  3,983
  4,071
  4,160
  4,252
  4,345
Total operating expenses, $m
  34,285
  37,005
  39,834
  42,775
  45,831
  49,006
  52,304
  55,732
  59,293
  62,996
  65,911
  69,917
  74,088
  78,431
  82,956
  87,673
  92,594
  97,728
  103,086
  108,684
  114,531
  120,644
  127,034
  133,719
  140,712
  148,032
  155,695
  163,718
  172,122
  180,924
Operating income, $m
  5,538
  6,242
  6,977
  7,741
  8,536
  9,364
  10,225
  11,120
  12,052
  13,023
  14,969
  16,021
  17,119
  18,263
  19,458
  20,704
  22,007
  23,367
  24,790
  26,277
  27,834
  29,463
  31,169
  32,956
  34,827
  36,789
  38,846
  41,002
  43,263
  45,634
EBITDA, $m
  8,228
  9,084
  9,975
  10,903
  11,868
  12,872
  13,916
  15,002
  16,132
  17,309
  18,533
  19,809
  21,139
  22,525
  23,972
  25,481
  27,058
  28,705
  30,426
  32,226
  34,109
  36,079
  38,142
  40,302
  42,565
  44,936
  47,420
  50,025
  52,756
  55,620
Interest expense (income), $m
  948
  1,414
  1,506
  1,766
  2,036
  2,317
  2,609
  2,912
  3,228
  3,555
  3,896
  4,250
  4,619
  5,003
  5,402
  5,818
  6,252
  6,704
  7,176
  7,668
  8,182
  8,719
  9,281
  9,868
  10,482
  11,124
  11,796
  12,500
  13,237
  14,008
  14,817
Earnings before tax, $m
  4,124
  4,736
  5,211
  5,705
  6,219
  6,755
  7,312
  7,893
  8,497
  9,126
  10,718
  11,402
  12,116
  12,861
  13,640
  14,453
  15,303
  16,192
  17,122
  18,095
  19,115
  20,182
  21,301
  22,474
  23,704
  24,993
  26,346
  27,765
  29,254
  30,817
Tax expense, $m
  1,114
  1,279
  1,407
  1,540
  1,679
  1,824
  1,974
  2,131
  2,294
  2,464
  2,894
  3,079
  3,271
  3,473
  3,683
  3,902
  4,132
  4,372
  4,623
  4,886
  5,161
  5,449
  5,751
  6,068
  6,400
  6,748
  7,113
  7,497
  7,899
  8,321
Net income, $m
  3,011
  3,457
  3,804
  4,165
  4,540
  4,931
  5,338
  5,762
  6,203
  6,662
  7,824
  8,324
  8,845
  9,389
  9,957
  10,551
  11,171
  11,820
  12,499
  13,209
  13,954
  14,733
  15,550
  16,406
  17,304
  18,245
  19,232
  20,268
  21,356
  22,497

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  62,125
  67,468
  73,027
  78,808
  84,816
  91,061
  97,549
  104,293
  111,304
  118,594
  126,177
  134,070
  142,288
  150,849
  159,772
  169,076
  178,783
  188,915
  199,495
  210,548
  222,099
  234,176
  246,808
  260,023
  273,854
  288,333
  303,495
  319,375
  336,013
  353,446
Adjusted assets (=assets-cash), $m
  62,125
  67,468
  73,027
  78,808
  84,816
  91,061
  97,549
  104,293
  111,304
  118,594
  126,177
  134,070
  142,288
  150,849
  159,772
  169,076
  178,783
  188,915
  199,495
  210,548
  222,099
  234,176
  246,808
  260,023
  273,854
  288,333
  303,495
  319,375
  336,013
  353,446
Revenue / Adjusted assets
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
Average production assets, $m
  45,636
  49,561
  53,645
  57,891
  62,305
  66,892
  71,658
  76,612
  81,762
  87,117
  92,688
  98,486
  104,523
  110,812
  117,366
  124,201
  131,332
  138,775
  146,546
  154,666
  163,151
  172,023
  181,301
  191,009
  201,169
  211,805
  222,943
  234,609
  246,830
  259,637
Working capital, $m
  -199
  -216
  -234
  -253
  -272
  -292
  -313
  -334
  -357
  -380
  -404
  -430
  -456
  -483
  -512
  -542
  -573
  -605
  -639
  -675
  -712
  -751
  -791
  -833
  -878
  -924
  -973
  -1,024
  -1,077
  -1,133
Total debt, $m
  27,890
  32,699
  37,702
  42,905
  48,313
  53,932
  59,772
  65,842
  72,151
  78,712
  85,537
  92,641
  100,037
  107,742
  115,773
  124,147
  132,883
  142,002
  151,524
  161,471
  171,867
  182,737
  194,105
  205,999
  218,446
  231,477
  245,123
  259,416
  274,389
  290,080
Total liabilities, $m
  55,912
  60,721
  65,724
  70,927
  76,335
  81,955
  87,794
  93,864
  100,173
  106,734
  113,560
  120,663
  128,059
  135,764
  143,795
  152,169
  160,905
  170,024
  179,546
  189,493
  199,889
  210,759
  222,127
  234,021
  246,468
  259,500
  273,145
  287,438
  302,411
  318,102
Total equity, $m
  6,212
  6,747
  7,303
  7,881
  8,482
  9,106
  9,755
  10,429
  11,130
  11,859
  12,618
  13,407
  14,229
  15,085
  15,977
  16,908
  17,878
  18,892
  19,950
  21,055
  22,210
  23,418
  24,681
  26,002
  27,385
  28,833
  30,349
  31,938
  33,601
  35,345
Total liabilities and equity, $m
  62,124
  67,468
  73,027
  78,808
  84,817
  91,061
  97,549
  104,293
  111,303
  118,593
  126,178
  134,070
  142,288
  150,849
  159,772
  169,077
  178,783
  188,916
  199,496
  210,548
  222,099
  234,177
  246,808
  260,023
  273,853
  288,333
  303,494
  319,376
  336,012
  353,447
Debt-to-equity ratio
  4.490
  4.850
  5.160
  5.440
  5.700
  5.920
  6.130
  6.310
  6.480
  6.640
  6.780
  6.910
  7.030
  7.140
  7.250
  7.340
  7.430
  7.520
  7.600
  7.670
  7.740
  7.800
  7.860
  7.920
  7.980
  8.030
  8.080
  8.120
  8.170
  8.210
Adjusted equity ratio
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3,011
  3,457
  3,804
  4,165
  4,540
  4,931
  5,338
  5,762
  6,203
  6,662
  7,824
  8,324
  8,845
  9,389
  9,957
  10,551
  11,171
  11,820
  12,499
  13,209
  13,954
  14,733
  15,550
  16,406
  17,304
  18,245
  19,232
  20,268
  21,356
  22,497
Depreciation, amort., depletion, $m
  2,691
  2,842
  2,999
  3,162
  3,332
  3,508
  3,691
  3,882
  4,080
  4,286
  3,565
  3,788
  4,020
  4,262
  4,514
  4,777
  5,051
  5,337
  5,636
  5,949
  6,275
  6,616
  6,973
  7,347
  7,737
  8,146
  8,575
  9,023
  9,493
  9,986
Funds from operations, $m
  5,701
  6,299
  6,803
  7,327
  7,872
  8,439
  9,029
  9,644
  10,283
  10,948
  11,389
  12,112
  12,865
  13,651
  14,471
  15,327
  16,222
  17,157
  18,135
  19,158
  20,229
  21,349
  22,523
  23,753
  25,041
  26,391
  27,807
  29,292
  30,849
  32,483
Change in working capital, $m
  -16
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -22
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -31
  -32
  -34
  -35
  -37
  -39
  -40
  -42
  -44
  -46
  -49
  -51
  -53
  -56
Cash from operations, $m
  5,718
  6,316
  6,820
  7,345
  7,891
  8,459
  9,050
  9,665
  10,305
  10,972
  11,413
  12,137
  12,891
  13,678
  14,500
  15,357
  16,253
  17,190
  18,169
  19,194
  20,266
  21,388
  22,563
  23,795
  25,085
  26,438
  27,856
  29,343
  30,902
  32,539
Maintenance CAPEX, $m
  -1,611
  -1,755
  -1,906
  -2,063
  -2,227
  -2,396
  -2,573
  -2,756
  -2,947
  -3,145
  -3,351
  -3,565
  -3,788
  -4,020
  -4,262
  -4,514
  -4,777
  -5,051
  -5,337
  -5,636
  -5,949
  -6,275
  -6,616
  -6,973
  -7,347
  -7,737
  -8,146
  -8,575
  -9,023
  -9,493
New CAPEX, $m
  -3,760
  -3,925
  -4,084
  -4,247
  -4,414
  -4,587
  -4,767
  -4,954
  -5,150
  -5,355
  -5,571
  -5,798
  -6,037
  -6,289
  -6,555
  -6,835
  -7,131
  -7,443
  -7,772
  -8,119
  -8,485
  -8,872
  -9,279
  -9,708
  -10,160
  -10,636
  -11,138
  -11,666
  -12,222
  -12,807
Cash from investing activities, $m
  -5,371
  -5,680
  -5,990
  -6,310
  -6,641
  -6,983
  -7,340
  -7,710
  -8,097
  -8,500
  -8,922
  -9,363
  -9,825
  -10,309
  -10,817
  -11,349
  -11,908
  -12,494
  -13,109
  -13,755
  -14,434
  -15,147
  -15,895
  -16,681
  -17,507
  -18,373
  -19,284
  -20,241
  -21,245
  -22,300
Free cash flow, $m
  347
  636
  830
  1,035
  1,251
  1,476
  1,711
  1,955
  2,209
  2,472
  2,492
  2,774
  3,067
  3,369
  3,683
  4,008
  4,346
  4,696
  5,060
  5,438
  5,832
  6,241
  6,668
  7,114
  7,579
  8,064
  8,572
  9,102
  9,657
  10,239
Issuance/(repayment) of debt, $m
  1,712
  4,808
  5,003
  5,203
  5,408
  5,620
  5,840
  6,069
  6,309
  6,561
  6,825
  7,103
  7,396
  7,705
  8,031
  8,374
  8,736
  9,119
  9,522
  9,947
  10,396
  10,869
  11,368
  11,894
  12,448
  13,031
  13,646
  14,293
  14,974
  15,690
Issuance/(repurchase) of shares, $m
  432
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  2,144
  4,808
  5,003
  5,203
  5,408
  5,620
  5,840
  6,069
  6,309
  6,561
  6,825
  7,103
  7,396
  7,705
  8,031
  8,374
  8,736
  9,119
  9,522
  9,947
  10,396
  10,869
  11,368
  11,894
  12,448
  13,031
  13,646
  14,293
  14,974
  15,690
Total cash flow (excl. dividends), $m
  2,492
  5,445
  5,834
  6,238
  6,658
  7,096
  7,551
  8,025
  8,518
  9,033
  9,317
  9,878
  10,463
  11,074
  11,714
  12,382
  13,082
  13,815
  14,582
  15,385
  16,228
  17,111
  18,037
  19,008
  20,027
  21,095
  22,217
  23,395
  24,631
  25,929
Retained Cash Flow (-), $m
  -3,443
  -534
  -556
  -578
  -601
  -624
  -649
  -674
  -701
  -729
  -758
  -789
  -822
  -856
  -892
  -930
  -971
  -1,013
  -1,058
  -1,105
  -1,155
  -1,208
  -1,263
  -1,322
  -1,383
  -1,448
  -1,516
  -1,588
  -1,664
  -1,743
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -951
  4,910
  5,278
  5,660
  6,058
  6,471
  6,902
  7,350
  7,817
  8,304
  8,559
  9,088
  9,641
  10,218
  10,821
  11,452
  12,111
  12,801
  13,524
  14,280
  15,073
  15,903
  16,773
  17,686
  18,643
  19,648
  20,701
  21,807
  22,967
  24,186
Discount rate, %
  11.10
  11.66
  12.24
  12.85
  13.49
  14.17
  14.88
  15.62
  16.40
  17.22
  18.08
  18.98
  19.93
  20.93
  21.98
  23.08
  24.23
  25.44
  26.71
  28.05
  29.45
  30.92
  32.47
  34.09
  35.80
  37.59
  39.47
  41.44
  43.51
  45.69
PV of cash for distribution, $m
  -856
  3,939
  3,733
  3,490
  3,217
  2,922
  2,614
  2,302
  1,993
  1,695
  1,375
  1,129
  908
  714
  550
  413
  303
  216
  150
  102
  67
  42
  26
  15
  9
  5
  3
  1
  1
  0
Current shareholders' claim on cash, %
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5

Enterprise Products Partners L.P. (Enterprise) is a provider of midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals and refined products in North America. The Company's segments include NGL Pipelines & Services; Crude Oil Pipelines & Services; Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services. The Company's midstream energy operations include natural gas gathering, treating, processing, transportation and storage; NGL transportation, fractionation, storage, and import and export terminals, including liquefied petroleum gas (LPG); crude oil gathering, transportation, storage and terminals; petrochemical and refined products transportation, storage, export and import terminals, and related services, and a marine transportation business that operates primarily on the United States inland and Intracoastal Waterway systems.

FINANCIAL RATIOS  of  Enterprise Products Partners L.P. (EPD)

Valuation Ratios
P/E Ratio 24.5
Price to Sales 2.7
Price to Book 2.8
Price to Tangible Book
Price to Cash Flow 15.2
Price to Free Cash Flow 59.1
Growth Rates
Sales Growth Rate -14.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -21%
Cap. Spend. - 3 Yr. Gr. Rate -2.4%
Financial Strength
Quick Ratio 0
Current Ratio 0.2
LT Debt to Equity 95.8%
Total Debt to Equity 107.5%
Interest Coverage 4
Management Effectiveness
Return On Assets 6.8%
Ret/ On Assets - 3 Yr. Avg. 7.4%
Return On Total Capital 5.7%
Ret/ On T. Cap. - 3 Yr. Avg. 6.5%
Return On Equity 11.9%
Return On Equity - 3 Yr. Avg. 13.9%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 14.7%
Gross Margin - 3 Yr. Avg. 11.6%
EBITDA Margin 22%
EBITDA Margin - 3 Yr. Avg. 17%
Operating Margin 15.6%
Oper. Margin - 3 Yr. Avg. 12.2%
Pre-Tax Margin 11.2%
Pre-Tax Margin - 3 Yr. Avg. 8.9%
Net Profit Margin 10.9%
Net Profit Margin - 3 Yr. Avg. 8.7%
Effective Tax Rate 0.9%
Eff/ Tax Rate - 3 Yr. Avg. 0.5%
Payout Ratio 131.4%

EPD stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the EPD stock intrinsic value calculation we used $36534 million for the last fiscal year's total revenue generated by Enterprise Products Partners L.P.. The default revenue input number comes from 0001 income statement of Enterprise Products Partners L.P.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our EPD stock valuation model: a) initial revenue growth rate of 9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 11.1%, whose default value for EPD is calculated based on our internal credit rating of Enterprise Products Partners L.P., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Enterprise Products Partners L.P..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of EPD stock the variable cost ratio is equal to 80.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $2262 million in the base year in the intrinsic value calculation for EPD stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Enterprise Products Partners L.P..

Corporate tax rate of 27% is the nominal tax rate for Enterprise Products Partners L.P.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the EPD stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for EPD are equal to 114.6%.

Life of production assets of 26 years is the average useful life of capital assets used in Enterprise Products Partners L.P. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for EPD is equal to -0.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $2769.5 million for Enterprise Products Partners L.P. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 2184.856 million for Enterprise Products Partners L.P. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Enterprise Products Partners L.P. at the current share price and the inputted number of shares is $63.6 billion.

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