10-QPeriod: Q3 FY2013

ENTERPRISE PRODUCTS PARTNERS L.P. Quarterly Report for Q3 Ended Sep 30, 2013

Filed November 12, 2013For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD) reported solid financial results for the nine months ended September 30, 2013, with total revenues increasing to $34.6 billion and net income attributable to limited partners reaching $1.9 billion. This represents a notable increase over the same period in the prior year, driven by strong performance across several key segments, particularly crude oil pipelines and services, and NGL fractionation. The company highlighted significant operational progress, including the commencement of operations for the Texas Express Pipeline and related gathering systems in October 2013, which is crucial for NGL takeaway capacity. EPD also announced plans for a second LPG export terminal and an expansion of its existing Houston Ship Channel terminal, alongside the start-up of its seventh NGL fractionator at Mont Belvieu. These strategic growth initiatives underscore EPD's commitment to expanding its midstream infrastructure and capitalizing on the increasing North American NGL and crude oil production. Financially, EPD maintained a healthy liquidity position with $3.86 billion in consolidated liquidity. Capital expenditures for the nine months were $3.16 billion, primarily focused on growth projects. The company's debt levels increased as expected to support these investments, with total debt principal outstanding at $17.53 billion. EPD's consistent increase in quarterly unit distribution reflects its confidence in ongoing operations and cash flow generation.

Financial Highlights

42 data points
Beta

Revenue

$12.09B

14.2% Gross Margin

Net Income

$592.00M

4.9% Net Margin

Total Assets

$40.13B

Cash & Equivalents

$9.60M

Free Cash Flow

-$130.60M

Financial Statements
Beta
Revenue$12.09B
Cost of Revenue$10.37B
Gross Profit$1.72B
Operating Expenses$11.32B
Operating Income$819.90M
Interest Expense$208.30M
Net Income$592.00M
Shares Outstanding (Diluted)1.85B

Key Highlights

  • 1Total revenues increased to $34.6 billion for the nine months ended September 30, 2013, up from $31.5 billion in the prior year's comparable period.
  • 2Net income attributable to limited partners rose to $1.9 billion for the nine months ended September 30, 2013, compared to $1.8 billion in the prior year.
  • 3Gross operating margin increased to $3.5 billion for the nine months ended September 30, 2013, from $3.2 billion in the same period of 2012.
  • 4The Texas Express Pipeline and related gathering systems commenced operations in October 2013, enhancing NGL takeaway capacity.
  • 5EPD announced plans for a second LPG export terminal and an expansion of its existing Houston Ship Channel terminal, increasing export capacity.
  • 6The company placed its seventh NGL fractionator at Mont Belvieu into service in September 2013, increasing total NGL fractionation capacity.
  • 7Consolidated liquidity remained strong at $3.86 billion as of September 30, 2013, with capital expenditures totaling $3.16 billion for the nine-month period.

Frequently Asked Questions

Revenue growth was primarily driven by higher sales volumes in crude oil marketing ($2.07 billion increase), NGL marketing ($430.2 million increase), and midstream asset services ($251.7 million increase), partially offset by lower sales prices in some categories. The commencement of new assets in the Eagle Ford Shale and Mont Belvieu complex also contributed significantly.

The company's capital spending for the nine months was $3.16 billion, largely focused on growth projects such as the Texas Express Pipeline and expansions at Mont Belvieu. Total debt principal increased to $17.53 billion to support these investments. Liquidity remained robust at $3.86 billion, with the company accessing capital markets through debt issuances and equity programs.

Key growth initiatives include the commencement of operations for the Texas Express Pipeline, plans for a second LPG export terminal, expansion of the Houston Ship Channel LPG export terminal, and the start-up of a new NGL fractionator. These projects are expected to enhance NGL takeaway, increase export capabilities, and improve fractionation capacity, capitalizing on growing North American NGL and crude oil production.

All segments showed growth in gross operating margin for the nine months ended September 30, 2013, compared to the prior year. Notably, Onshore Crude Oil Pipelines & Services saw a significant increase ($326.9 million), and NGL Pipelines & Services and Petrochemical & Refined Products Services also reported growth, driven by increased volumes and new assets coming online, despite some margin pressures in specific areas like NGL marketing due to ethane oversupply.