10-QPeriod: Q1 FY2015

ENTERPRISE PRODUCTS PARTNERS L.P. Quarterly Report for Q1 Ended Mar 31, 2015

Filed May 8, 2015For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD) reported its first quarter 2015 financial results, showcasing a decrease in total revenues to $7.47 billion from $12.91 billion in the prior year's quarter. This decline was primarily driven by lower commodity prices, particularly for crude oil and natural gas. Despite the revenue drop, the company's operating income remained robust at $896 million. Net income attributable to limited partners was $636.1 million, or $0.32 per diluted unit, compared to $798.8 million, or $0.43 per diluted unit, in Q1 2014. The company highlighted significant strategic developments, including the completion of the Oiltanking acquisition in February 2015, which expanded its asset base. EPD also announced plans for new pipeline construction and processing facilities to support growing production in key basins. The company maintained strong liquidity with $3.69 billion available at the end of the quarter and demonstrated solid operational execution across its diverse midstream infrastructure segments.

Financial Highlights

40 data points
Beta

Revenue

$7.47B

24.0% Gross Margin

Net Income

$636.10M

8.5% Net Margin

Total Assets

$46.51B

Cash & Equivalents

$81.10M

Free Cash Flow

$141.20M

Financial Statements
Beta
Revenue$7.47B
Cost of Revenue$5.68B
Gross Profit$1.79B
Operating Expenses$6.67B
Operating Income$896.00M
Interest Expense$239.10M
Net Income$636.10M
Shares Outstanding (Diluted)1.97B

Key Highlights

  • 1Total revenues decreased by approximately 42% year-over-year to $7.47 billion, mainly due to lower commodity prices.
  • 2Net income attributable to limited partners was $636.1 million, down from $798.8 million in the prior year's quarter.
  • 3Diluted earnings per unit decreased to $0.32 from $0.43 in the first quarter of 2014.
  • 4Operating income remained strong at $896 million, reflecting the resilience of EPD's midstream services.
  • 5The company completed the acquisition of Oiltanking in February 2015, expanding its footprint and asset base.
  • 6EPD announced plans for significant growth projects, including a new crude oil pipeline from Midland to Houston and a natural gas processing facility in the Delaware Basin.
  • 7Liquidity remained strong with $3.69 billion available at the end of the quarter, comprised of $81.1 million in unrestricted cash and $3.61 billion in available borrowing capacity.

Frequently Asked Questions

The substantial decrease in revenues was primarily driven by a sharp decline in energy commodity prices. For instance, WTI crude oil averaged $48.63 per barrel in Q1 2015, down from $98.68 in Q1 2014. Natural gas prices also fell significantly, impacting sales and marketing revenues.

The completion of the Oiltanking acquisition in February 2015 for approximately $5.9 billion expanded Enterprise Products Partners' asset base. This transaction led to an increase in goodwill by $1.45 billion and an increase in common units outstanding. The acquisition is expected to contribute to future growth and diversification of the company's operations.

Enterprise Products Partners is actively pursuing growth projects. The company expects to spend approximately $2.5 billion in growth capital projects for the remainder of 2015, including expansions at its Houston Ship Channel LPG export terminal and new pipeline projects like the Midland-to-Houston crude oil pipeline. Additionally, they announced plans for a new natural gas processing facility in the Delaware Basin.

Enterprise Products Partners' total debt obligations were $21.62 billion at March 31, 2015. The company refinanced existing debt and issued new senior notes in May 2015 to manage its debt profile and fund its capital expenditures. They confirmed compliance with all financial covenants related to their debt agreements.