Summary
Enterprise Products Partners L.P. (EPD) reported its financial results for the third quarter and the first nine months of 2016. The company experienced a slight decrease in total revenues year-over-year, largely attributed to lower crude oil and natural gas marketing revenues, partly offset by growth in NGL and petrochemical segments. Despite the revenue dip, operating income remained relatively stable due to cost management and a reduction in asset impairment charges compared to the prior year. The company's distributable cash flow generation was robust, providing ample coverage for its cash distributions to limited partners, although it was lower than the prior year's record levels. Management highlighted significant progress on growth capital projects, including the completion of an ethane export terminal and expansion of its natural gas processing capabilities in the Delaware Basin. Financially, EPD maintained a strong liquidity position and continued to manage its debt effectively. The company raised approximately $2.17 billion in net proceeds from the issuance of common units during the first nine months of the year through its at-the-market (ATM) program and distribution reinvestment plan (DRIP), which were used for general corporate purposes and to temporarily reduce outstanding debt. The Pascagoula fire and the ongoing PDH project represented notable operational events, with plans for the Pascagoula facility to return to service in Q4 2016. Overall, EPD demonstrated resilience in a challenging commodity price environment, focusing on operational efficiency and strategic growth initiatives.
Financial Highlights
43 data points| Revenue | $5.92B |
| Cost of Revenue | $4.09B |
| Gross Profit | $1.83B |
| Operating Expenses | $5.11B |
| Operating Income | $905.00M |
| Interest Expense | $250.90M |
| Net Income | $634.60M |
| Shares Outstanding (Diluted) | 2.11B |
Key Highlights
- 1Total revenues for the first nine months of 2016 decreased to $16.54 billion from $20.87 billion in the prior year, primarily due to lower crude oil and natural gas marketing revenues.
- 2Operating income remained strong at $2.66 billion for the first nine months of 2016, a slight increase from $2.61 billion in the same period of 2015.
- 3Distributable cash flow for the first nine months of 2016 was $3.07 billion, down from $4.52 billion in the prior year, but still provided a healthy 1.22x distribution coverage ratio.
- 4The company completed the construction of its large ethane export terminal on the Houston Ship Channel and began commercial service in September 2016.
- 5Capital expenditures for the first nine months of 2016 totaled $3.53 billion, including significant investments in growth projects such as the Delaware Basin natural gas processing plants.
- 6The company's liquidity remained strong, with $3.52 billion in consolidated liquidity at the end of September 2016.
- 7EPD saw a substantial increase in restricted cash, from $15.9 million at year-end 2015 to $277.3 million at the end of Q3 2016, primarily due to margin requirements for derivative instruments.