10-QPeriod: Q3 FY2009

ENTERPRISE PRODUCTS PARTNERS L.P. Quarterly Report for Q3 Ended Sep 30, 2009

Filed November 9, 2009For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD) reported its third-quarter results for the period ending September 30, 2009. The company experienced a notable decline in total revenues, falling to $4.60 billion from $6.30 billion in the prior year's quarter, primarily due to lower commodity prices impacting its NGL, natural gas, and petrochemical marketing activities. Despite the revenue decrease, operating income saw a slight increase to $364.5 million from $319.1 million, driven by improved equity in unconsolidated affiliates and a more favorable operating cost structure. Financially, EPD demonstrated strong cash flow from operations, totaling $615.4 million for the nine months ended September 30, 2009, although this was down from $973.0 million in the same period last year. The company also managed its capital expenditures effectively, with a significant reduction in spending compared to the previous year. Furthermore, EPD continued to strengthen its balance sheet through various financing activities, including equity and debt issuances, and successfully completed the significant merger with TEPPCO, expanding its asset base and market reach.

Financial Highlights

37 data points
Beta

Revenue

$6.79B

Net Income

$25.30M

0.4% Net Margin

EPS (Diluted)

$0.23

Total Assets

$19.36B

Cash & Equivalents

$77.30M

Free Cash Flow

-$9.50M

Financial Statements
Beta
Revenue$6.79B
Operating Expenses$6.45B
Operating Income$353.40M
Interest Expense-$161.00M
Net Income$25.30M
EPS (Basic)$0.23
EPS (Diluted)$0.23

Key Highlights

  • 1Total revenues decreased by approximately 27% to $4.60 billion for the three months ended September 30, 2009, compared to $6.30 billion for the same period in 2008, primarily driven by lower commodity prices.
  • 2Operating income increased by approximately 14% to $364.5 million for the three months ended September 30, 2009, compared to $319.1 million in the prior year.
  • 3Net income attributable to Enterprise Products Partners L.P. rose slightly to $212.9 million for the third quarter of 2009, from $203.1 million in the third quarter of 2008.
  • 4Cash flows from operating activities for the nine months ended September 30, 2009, were $615.4 million, a decrease from $973.0 million in the comparable period of 2008.
  • 5Capital expenditures significantly decreased, with $838.3 million spent on property, plant, and equipment for the nine months ended September 30, 2009, compared to $1.46 billion in the same period of 2008.
  • 6The company completed the significant merger with TEPPCO and TEPPCO GP on October 26, 2009, expanding its pipeline network and asset base.
  • 7Total long-term debt remained relatively stable at $9.20 billion as of September 30, 2009, compared to $9.11 billion as of December 31, 2008.

Frequently Asked Questions

The primary driver for the decrease in revenue was lower commodity prices, particularly for NGLs, natural gas, and petrochemicals, which impacted the company's marketing activities during the third quarter of 2009 compared to the same period in 2008.

Yes, operating income increased from $319.1 million in Q3 2008 to $364.5 million in Q3 2009. This was due to a combination of factors including improved equity income from unconsolidated affiliates and a reduction in operating costs and expenses that outpaced the decline in revenues.

The most significant corporate event was the completion of the merger with TEPPCO and TEPPCO GP on October 26, 2009. This strategic move was intended to expand the company's asset base and market reach within the midstream energy sector.

The company significantly reduced its capital expenditures compared to the prior year. Capital spending for property, plant, and equipment decreased from $1.46 billion for the first nine months of 2008 to $838.3 million for the same period in 2009, reflecting a more cautious approach to investment amid economic conditions.