01—Abstract
Summary
Summary of the 10-K filed March 21, 2002. Cited figures are marked; the original filing is the authoritative source.
Enterprise Products Partners L.P.
(EPD) has filed its annual report for the period ending December 30, 2001. The company has demonstrated strong performance, with record revenues, gross operating margin, and operating income in 2001, largely driven by strategic acquisitions and internal growth projects. Key acquisitions in 2001 included Acadian Gas and interests in Gulf of Mexico natural gas pipelines, significantly expanding the company's natural gas pipeline footprint.
EPD's business strategy focuses on capitalizing on increased natural gas and NGL production, developing joint ventures, expanding its asset base through complementary acquisitions, and increasing fee-based cash flows. The company's diverse operations span five reportable segments: Fractionation, Pipelines, Processing, Octane Enhancement, and Other.
Management expresses optimism for 2002, anticipating improved NGL extraction rates and increased demand, despite some economic headwinds. The company's financial health is supported by its investment-grade credit ratings and available credit facilities, positioning it well for continued growth and capital investments.
02—Key points
Key Highlights
- Record financial performance in 2001 with revenues exceeding $3.1 billion and operating income reaching nearly $288 million.
- Significant expansion of the natural gas pipeline business in 2001 through the acquisition of Acadian Gas and equity interests in four Gulf of Mexico natural gas pipeline systems.
- Continued strategic investments in growth projects and complementary acquisitions, totaling over $1.4 billion in the last three years.
- Diversified operations across five segments: Fractionation, Pipelines, Processing, Octane Enhancement, and Other, providing multiple revenue streams.
- Positive outlook for 2002, with expectations of improved NGL extraction rates and increased demand due to stabilized processing margins.
- Strong liquidity and capital resources, supported by investment-grade credit ratings and available credit facilities, enabling future growth and acquisitions.
- Initiation of a two-for-one unit split, reflecting confidence in future performance and aimed at enhancing unit liquidity.
03—Questions
Frequently Asked Questions
What were the key strategic drivers of Enterprise Products Partners L.P.'s growth in 2001?
In 2001, EPD's growth was primarily driven by a series of strategic acquisitions and internal growth projects. Notable acquisitions included Acadian Gas and equity interests in several Gulf of Mexico natural gas pipeline systems, which significantly expanded the company's midstream energy services capabilities. The company's strategy also focused on capitalizing on anticipated increases in natural gas and NGL production, developing joint ventures, and expanding its fee-based cash flows.
How did the company perform financially in 2001 compared to previous years?
Enterprise Products Partners L.P. achieved record financial results in 2001. Revenues reached approximately $3.18 billion, an increase from $3.07 billion in 2000. Gross operating margin also saw a significant increase to $376.8 million in 2001 from $320.6 million in 2000. Operating income and net income also reached record highs, reflecting successful acquisitions and improved operational performance.
What are the company's main business segments and how do they contribute to its overall performance?
EPD operates through five reportable segments: Fractionation (NGL and propylene), Pipelines (liquids and natural gas), Processing (natural gas processing and merchant activities), Octane Enhancement (MTBE production), and Other (fee-based marketing services). The Pipelines and Processing segments were significant contributors to the company's strong performance in 2001, bolstered by recent acquisitions and favorable market conditions.
What is the company's outlook for 2002, and what are the key factors influencing it?
EPD has a positive outlook for 2002, expecting improved NGL extraction rates due to stabilized processing margins and increased demand for natural gas. The company anticipates benefiting from new gas-fired cogeneration facilities and continued strong demand for storage services. Key factors influencing the outlook include expected stable natural gas market prices, the economic environment, and the success of ongoing integration of recent acquisitions.
04—Continue