10-KPeriod: FY2014

ENTERPRISE PRODUCTS PARTNERS L.P. Annual Report, Year Ended Dec 31, 2014

Filed March 2, 2015For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD) reported its fiscal year 2014 results, highlighting a robust performance driven by increased hydrocarbon production and strategic asset expansions. The company operates a significant midstream energy infrastructure network, providing services for natural gas, NGLs, crude oil, petrochemicals, and refined products across North America. A major development during the period was the significant acquisition of Oiltanking Partners, L.P. for approximately $5.9 billion, which expanded EPD's marine terminal capabilities and overall midstream services. The company also continued to invest heavily in growth capital projects, focusing on expanding its NGL, crude oil, and ethane infrastructure to capitalize on growing production from key shale plays. Looking ahead to 2015, EPD anticipated continued operational strength, though acknowledged the potential impact of volatile commodity prices on producer activity. The company's strategy emphasized fee-based contracts and long-term commitments to ensure stability in cash flows despite market fluctuations. EPD maintained a strong liquidity position and continued to focus on operational execution and strategic growth.

Financial Highlights

44 data points
Beta

Revenue

$47.95B

15.6% Gross Margin

Net Income

$2.79B

5.8% Net Margin

Total Assets

$47.20B

Cash & Equivalents

$74.40M

Free Cash Flow

$1.27B

Financial Statements
Beta
Revenue$47.95B
Cost of Revenue$40.46B
Gross Profit$7.49B
Operating Expenses$44.44B
Operating Income$3.78B
Interest Expense$921.00M
Net Income$2.79B
Shares Outstanding (Diluted)1.90B

Key Highlights

  • 1Completed the significant acquisition of Oiltanking Partners, L.P. for approximately $5.9 billion, enhancing marine terminal and midstream services.
  • 2Invested heavily in growth capital projects, including expansions in NGL, crude oil, and ethane infrastructure, with substantial projects expected to commence operations in 2015 and 2016.
  • 3Reported strong performance across its business segments, benefiting from increased production from shale plays like the Eagle Ford and Permian Basins.
  • 4Maintained a solid liquidity position with significant available borrowing capacity under its revolving credit facilities.
  • 5Navigated a volatile commodity price environment, with crude oil prices declining sharply in late 2014, while focusing on fee-based contracts to ensure stable cash flows.
  • 6Continued expansion of export capabilities, particularly for LPG and ethane, to capitalize on growing international demand and domestic supply surplus.
  • 7Secured key long-term commitments for new pipeline projects, providing revenue visibility and supporting future growth.

Frequently Asked Questions

The most significant event for Enterprise Products Partners L.P. (EPD) in 2014 was the acquisition of Oiltanking Partners, L.P. for approximately $5.9 billion. This strategic acquisition broadened EPD's midstream energy services portfolio, particularly enhancing its capabilities in marine terminals and crude oil and petroleum products storage.

While the sharp decline in crude oil prices in late 2014 presented market uncertainty and could potentially slow drilling activity by producers, EPD's business model, heavily reliant on fee-based contracts and long-term commitments for its infrastructure assets, provided a degree of insulation. The company anticipated that its growth projects, largely backed by contractual volume commitments, would continue to generate stable cash flows.

EPD's growth strategy centers on capitalizing on expected increases in natural gas, NGL, and crude oil production from various domestic basins, including shale plays. This involves expanding its midstream asset base through growth capital projects and strategic acquisitions, with a focus on fee-based businesses to enhance cash flow stability. Key areas of expansion include NGL pipelines, fractionation, export terminals, and crude oil infrastructure.

EPD is actively expanding its export capabilities to serve growing international demand for U.S. energy products. The company was in the process of expanding its Houston Ship Channel LPG export terminal and announced plans for a new ethane export facility on the Houston Ship Channel, expected to begin operations in the third quarter of 2016. These expansions are supported by long-term customer commitments.