10-QPeriod: Q1 FY2013

ENTERPRISE PRODUCTS PARTNERS L.P. Quarterly Report for Q1 Ended Mar 31, 2013

Filed May 8, 2013For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD) reported a solid first quarter of 2013, demonstrating growth in revenues and operating income compared to the same period in the prior year. Total revenues increased to $11.38 billion from $11.25 billion in Q1 2012, driven by higher sales volumes and prices in crude oil and natural gas marketing, as well as increased volumes in petrochemical and refined products. While NGL marketing revenues saw a decrease due to lower prices, the company's midstream services, particularly in the Eagle Ford Shale, showed significant growth. The company generated strong operating income of $957.7 million, a substantial increase from $748.9 million in Q1 2012, reflecting improved segment performance and equity earnings from unconsolidated affiliates. EPD also managed its expenses effectively, with total operating costs and expenses seeing a slight decrease year-over-year. The company's robust liquidity position was further strengthened by recent debt and equity issuances, providing ample resources for ongoing capital projects and future growth initiatives.

Financial Highlights

41 data points
Beta

Revenue

$11.38B

14.9% Gross Margin

Net Income

$753.50M

6.6% Net Margin

Total Assets

$38.10B

Cash & Equivalents

$1.28B

Free Cash Flow

$368.30M

Financial Statements
Beta
Revenue$11.38B
Cost of Revenue$9.69B
Gross Profit$1.69B
Operating Expenses$10.47B
Operating Income$957.70M
Interest Expense$195.90M
Net Income$753.50M
Shares Outstanding (Diluted)1.82B

Key Highlights

  • 1Total revenues for the first quarter of 2013 increased to $11.38 billion from $11.25 billion in Q1 2012.
  • 2Operating income significantly improved to $957.7 million, up from $748.9 million in the prior year's quarter.
  • 3Net income attributable to limited partners rose to $753.5 million ($0.83 per diluted unit) from $651.3 million ($0.73 per diluted unit) in Q1 2012.
  • 4The company announced plans for significant expansion of its crude oil storage and distribution infrastructure in Southeast Texas.
  • 5EPD completed an expansion of its Houston Ship Channel LPG export terminal, increasing its export loading capacity.
  • 6The company had $4.78 billion in consolidated liquidity at the end of the quarter, supported by strong operating cash flows and recent financing activities.
  • 7Capital spending for the quarter was $914.3 million, with significant investments in growth projects like those in the Eagle Ford Shale and at Mont Belvieu.

Frequently Asked Questions

Enterprise Products Partners L.P. (EPD) reported an increase in total revenues to $11.38 billion in Q1 2013 from $11.25 billion in Q1 2012. Profitability also saw a significant improvement, with operating income rising to $957.7 million from $748.9 million in the prior year's quarter. Net income attributable to limited partners increased to $753.5 million, or $0.83 per diluted unit, from $651.3 million, or $0.73 per diluted unit, in Q1 2012.

Revenue growth was primarily driven by increased sales in crude oil marketing (up $296.1 million year-over-year) and natural gas marketing (up $66.9 million year-over-year), largely due to higher sales prices. Additionally, revenues from petrochemicals and refined products increased by $196.0 million due to higher sales volumes, particularly from the octane enhancement facility and refined products marketing activities. Midstream asset services also contributed positively, benefiting from new assets in the Eagle Ford Shale basin.

In Q1 2013, EPD announced plans to significantly expand its crude oil storage and distribution infrastructure in Southeast Texas, adding approximately 4.0 MMBbls of storage capacity and associated pipelines. They also announced plans to build a new 270-mile Aegis Pipeline to deliver ethane to petrochemical plants on the U.S. Gulf Coast, expected to begin operations in 2014. Operation also began at an expanded LPG export facility on the Houston Ship Channel in March 2013.

EPD maintained a strong liquidity position with $4.78 billion in consolidated liquidity at the end of Q1 2013, comprising unrestricted cash and revolving credit facility borrowing capacity. The company actively manages its debt through issuances and maturities; in March 2013, it issued $2.25 billion in senior notes to repay existing debt and fund general corporate purposes. EPD expects to continue using a mix of equity and debt issuances to fund its capital expenditures and meet its liquidity needs.