10-QPeriod: Q3 FY2012

ENTERPRISE PRODUCTS PARTNERS L.P. Quarterly Report for Q3 Ended Sep 30, 2012

Filed November 9, 2012For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD) reported increased revenues and net income for the nine months ended September 30, 2012, compared to the same period in 2011. This growth was driven by strong performance across its diverse midstream energy segments, particularly in NGL Pipelines & Services and Onshore Crude Oil Pipelines & Services, which benefited from higher volumes and improved margins. The company continued to invest heavily in growth capital projects, expanding its infrastructure network to capitalize on increasing North American energy production. Liquidity remained strong, supported by significant cash flows from operations and access to credit facilities. The company also actively managed its debt, issuing new notes and repaying maturing obligations. Key strategic initiatives during the period included the commencement of operations at the ECHO Crude Oil Terminal and progress on various pipeline expansions and new construction projects, positioning EPD for continued growth and operational efficiency.

Financial Highlights

42 data points
Beta

Revenue

$10.47B

16.0% Gross Margin

Net Income

$586.80M

5.6% Net Margin

Total Assets

$35.28B

Cash & Equivalents

$14.50M

Free Cash Flow

-$625.50M

Financial Statements
Beta
Revenue$10.47B
Cost of Revenue$8.79B
Gross Profit$1.67B
Operating Expenses$9.70B
Operating Income$788.50M
Interest Expense$199.70M
Net Income$586.80M
Shares Outstanding (Diluted)1.78B

Key Highlights

  • 1Total revenues for the nine months ended September 30, 2012, were $31.51 billion, a decrease from $32.73 billion in the prior year, primarily due to lower commodity prices for NGLs and natural gas.
  • 2Net income attributable to limited partners increased to $1.80 billion for the nine months ended September 30, 2012, up from $1.33 billion in the same period of 2011, reflecting improved segment performance and gains from asset sales.
  • 3Gross operating margin increased by 16.4% to $3.23 billion for the first nine months of 2012, driven by robust performance in NGL Pipelines & Services and Onshore Crude Oil Pipelines & Services segments.
  • 4Capital expenditures totaled $3.08 billion for the nine months ended September 30, 2012, primarily focused on growth projects across various midstream infrastructure segments.
  • 5The company's liquidity position remained strong with $3.43 billion in consolidated liquidity (unrestricted cash and available credit) as of September 30, 2012.
  • 6EPD completed the sale of its remaining investment in Energy Transfer Equity, realizing aggregate gains of $68.8 million during 2012.
  • 7Several key growth projects advanced, including the commencement of operations at the ECHO Crude Oil Terminal and the expansion of the Seaway Pipeline.

Frequently Asked Questions

For the nine months ended September 30, 2012, Enterprise Products Partners L.P. reported a net income attributable to limited partners of $1.80 billion, an increase from $1.33 billion in the prior year. Total revenues decreased slightly to $31.51 billion from $32.73 billion, primarily due to lower commodity prices. The company saw significant growth in its gross operating margin, which rose by 16.4% to $3.23 billion.

The NGL Pipelines & Services and Onshore Crude Oil Pipelines & Services segments were key drivers of growth, with significant increases in gross operating margin. The NGL segment benefited from higher NGL transportation, fractionation, and marketing volumes, while the Crude Oil segment saw growth from higher transportation volumes, particularly due to new pipeline projects like the Eagle Ford Expansion and the Seaway Pipeline reversal.

EPD continued its strategy of investing in growth capital projects, deploying $3.08 billion in the first nine months of 2012 across its midstream infrastructure network. The company maintained a strong liquidity position with $3.43 billion available. It also actively managed its debt structure, issuing new notes and repaying maturing debt, and utilized its shelf registration statement for equity issuances to fund growth initiatives.

Yes, Enterprise Products Partners L.P. completed the liquidation of its investment in Energy Transfer Equity during the first half of 2012, realizing aggregate gains of $68.8 million, which positively impacted other income. The company also collected $30.0 million in insurance proceeds related to a 2011 incident at its Mont Belvieu facility, recognized as a gain within operating costs and expenses.