10-KPeriod: FY2017

ENTERPRISE PRODUCTS PARTNERS L.P. Annual Report, Year Ended Dec 31, 2017

Filed February 28, 2018For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD) reported its 2017 fiscal year results, showcasing robust performance driven by its extensive midstream energy infrastructure. The company operates across four key segments: NGL Pipelines & Services, Crude Oil Pipelines & Services, Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services. EPD's integrated network, encompassing approximately 50,000 miles of pipelines and significant storage capacity, effectively connects major North American supply basins with domestic and international markets. The company's strategy focuses on capitalizing on demand growth, expanding its asset base through organic projects and acquisitions, and enhancing cash flow stability through fee-based businesses. Financially, EPD demonstrated growth in revenues and operating income compared to the prior year, supported by increased volumes and higher commodity prices in certain segments. The company also highlighted its commitment to returning capital to unitholders through growing cash distributions. Significant capital investments were made in 2017, with plans for continued expansion and development of key growth projects, including NGL infrastructure and export terminals, to capitalize on anticipated increases in U.S. hydrocarbon production and export demand.

Financial Statements
Beta
Revenue$29.24B
Cost of Revenue$21.49B
Gross Profit$7.75B
Operating Expenses$25.74B
Operating Income$3.93B
Interest Expense$984.60M
Net Income$2.80B
Shares Outstanding (Diluted)2.15B

Key Highlights

  • 1EPD operates a vast midstream energy network with approximately 50,000 miles of pipelines and substantial storage capacity.
  • 2The company's business is diversified across four segments: NGL Pipelines & Services, Crude Oil Pipelines & Services, Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services.
  • 3EPD's strategy centers on leveraging its integrated asset network to meet growing demand for natural gas, NGLs, crude oil, and refined products, including significant export growth.
  • 4In 2017, EPD made substantial capital investments in growth projects, with significant expansion plans continuing into 2018 and beyond, supported by long-term customer commitments.
  • 5The company generated increased revenues and operating income in 2017 compared to 2016, driven by higher volumes and improved commodity prices in several segments.
  • 6EPD is committed to returning capital to unitholders, with a history of growing cash distributions.
  • 7Major ongoing projects include expansions in NGL fractionation capacity, crude oil pipelines, and the development of export terminals, positioning EPD to benefit from U.S. energy production growth.

Frequently Asked Questions

Enterprise Products Partners operates in four primary segments: NGL Pipelines & Services, Crude Oil Pipelines & Services, Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services. These segments cover a wide range of midstream energy activities, including gathering, processing, transporting, storing, and distributing hydrocarbons and petrochemicals.

In 2017, Enterprise Products Partners reported increased revenues and operating income compared to 2016. This growth was primarily driven by higher sales prices and volumes across various segments, particularly in NGL marketing and crude oil midstream services. The company continued to invest heavily in growth capital projects.

EPD's growth strategy focuses on leveraging its integrated midstream asset network to capitalize on expected demand growth, including for exports. This involves expanding its asset base through growth capital projects and accretive acquisitions of complementary assets, while also enhancing the stability of its cash flows by investing in fee-based businesses.

For 2018, EPD anticipated continued growth in producer investment and drilling activity, particularly in key basins like the Permian, Eagle Ford, Haynesville, and Rockies. The company expected its assets to benefit from this activity and also projected growth in demand for NGLs and natural gas, supported by new petrochemical plants and export opportunities. Management also guided for continued cash distribution growth.