Summary
Enterprise Products Partners L.P. (EPD) reported its first quarter 2020 results, showing a net income of $1.35 billion, or $0.61 per unit, an increase from the prior year's $1.26 billion, or $0.57 per unit. This growth was driven by strong performance in its NGL Pipelines & Services segment, which saw a significant increase in gross operating margin, bolstered by higher LPG export volumes and contributions from expansion projects. The company also benefited from the settlement of a liquidity option, which resulted in a one-time tax benefit that boosted net income. Despite a challenging macroeconomic environment marked by the COVID-19 pandemic and volatile energy prices, EPD maintained a strong liquidity position. The company generated substantial operating cash flow, reduced its capital expenditures slightly year-over-year, and managed its debt effectively, including issuing $3.0 billion in senior notes. Management expressed confidence in its ability to navigate the current economic conditions due to its predominantly fee-based business model, strong customer base, and disciplined capital allocation, including a 1.7% increase in its quarterly cash distribution to $0.4450 per unit.
Financial Highlights
44 data points| Revenue | $7.48B |
| Cost of Revenue | $4.82B |
| Gross Profit | $2.66B |
| Operating Expenses | $6.12B |
| Operating Income | $1.51B |
| Interest Expense | $317.50M |
| Net Income | $1.34B |
| Shares Outstanding (Diluted) | 2.20B |
Key Highlights
- 1Net income increased to $1.35 billion in Q1 2020, up from $1.26 billion in Q1 2019, with earnings per unit rising to $0.61 from $0.57.
- 2Total revenues decreased to $7.48 billion from $8.54 billion, primarily due to lower marketing revenues, especially in crude oil and natural gas.
- 3Gross operating margin for NGL Pipelines & Services increased by 8.6% year-over-year, driven by higher LPG export volumes and pipeline expansions.
- 4The company settled a liquidity option in March 2020, acquiring OTA and realizing a non-cash benefit of $187.2 million related to the associated deferred tax liability.
- 5EPD issued $3.0 billion in senior notes in January 2020 to manage its debt and fund general corporate purposes.
- 6The company maintained strong liquidity, ending the quarter with $7.0 billion in consolidated liquidity, including $2.0 billion in cash.
- 7The quarterly cash distribution was increased by 1.7% to $0.4450 per unit, reflecting management's confidence in its financial position.