Summary
Enterprise Products Partners L.P. (EPD) reported its financial results for the third quarter and the first nine months of 2020. The company experienced a year-over-year decrease in total revenues for both periods, largely driven by lower marketing revenues across crude oil, natural gas, and NGLs, attributed to lower commodity prices and volumes, influenced by the broader economic impact of the COVID-19 pandemic. Despite revenue challenges, EPD demonstrated resilience through its diversified and fee-based business model. The company maintained a strong liquidity position, with significant available borrowing capacity and cash on hand. Capital expenditures were managed, with a revised lower forecast for 2020 reflecting strategic adjustments to the challenging market environment. EPD's segment performance showed mixed results. NGL Pipelines & Services saw an increase in gross operating margin, primarily driven by higher fractionation volumes. Crude Oil Pipelines & Services experienced a decrease in gross operating margin due to lower volumes and marketing margins. Natural Gas Pipelines & Services saw a decline in gross operating margin, influenced by lower processing margins and volumes, while Petrochemical & Refined Products Services reported an increase in gross operating margin, supported by higher refined products pipeline and marketing revenues. The company also successfully managed its debt, with a long average maturity and strategic issuances to manage its capital structure.
Financial Highlights
43 data points| Revenue | $6.92B |
| Cost of Revenue | $4.31B |
| Gross Profit | $2.61B |
| Operating Expenses | $5.62B |
| Operating Income | $1.38B |
| Interest Expense | $320.50M |
| Net Income | $1.05B |
| Shares Outstanding (Diluted) | 2.20B |
Key Highlights
- 1Total revenues decreased year-over-year for both the three and nine months ended September 30, 2020, impacted by lower commodity prices and volumes, particularly in marketing segments.
- 2Despite revenue declines, the company maintained a strong liquidity position with $6.03 billion in consolidated liquidity at September 30, 2020.
- 3Gross operating margin in NGL Pipelines & Services increased due to higher fractionation volumes, while Crude Oil Pipelines & Services saw a decrease driven by lower volumes and marketing margins.
- 4Capital expenditures for 2020 were revised downwards to approximately $3.2 billion, reflecting adjustments to the challenging market conditions.
- 5The company issued $4.25 billion in senior notes during the first nine months of 2020 to manage its debt and fund operations.
- 6EPD's business model is diversified and largely fee-based, which management believes positions it to navigate the current challenging industry environment.
- 7The company announced a quarterly cash distribution of $0.4450 per common unit for the third quarter of 2020.