10-QPeriod: Q2 FY2021

ENTERPRISE PRODUCTS PARTNERS L.P. Quarterly Report for Q2 Ended Jun 30, 2021

Filed August 9, 2021For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD) reported solid financial results for the second quarter and first six months of 2021, demonstrating a significant recovery and growth compared to the same periods in 2020. Total revenues saw a substantial increase driven by higher commodity prices and improved volumes across most segments. The company's NGL Pipelines & Services and Petrochemical & Refined Products Services segments were particularly strong performers. EPD continued its deleveraging efforts, reducing its total debt principal. The partnership also maintained a strong liquidity position and a healthy distribution coverage ratio, underscoring its financial stability. Management expressed confidence in the company's integrated, diversified, and fee-based business model to navigate current market conditions. The outlook remains positive, supported by favorable trends in hydrocarbon supply and demand.

Financial Highlights

44 data points
Beta

Revenue

$9.45B

27.6% Gross Margin

Net Income

$1.11B

11.8% Net Margin

Total Assets

$64.81B

Cash & Equivalents

$404.50M

Free Cash Flow

$1.37B

Financial Statements
Beta
Revenue$9.45B
Cost of Revenue$6.84B
Gross Profit$2.61B
Operating Expenses$8.12B
Operating Income$1.49B
Interest Expense$316.00M
Net Income$1.11B
Shares Outstanding (Diluted)2.21B

Key Highlights

  • 1Total revenues increased significantly year-over-year, driven by higher commodity prices and increased volumes, especially in NGL and Petrochemical/Refined Products segments.
  • 2Operating income saw a healthy increase, reflecting improved segment performance and efficient cost management.
  • 3The company actively managed its debt, reducing the total principal amount outstanding through debt repayments.
  • 4EPD maintained a strong liquidity position with $5.4 billion in consolidated liquidity at the end of June 2021.
  • 5Distributable Cash Flow (DCF) remained robust, supporting a consistent and covered cash distribution to unitholders.
  • 6Investments in growth capital projects were lower year-over-year as several major projects neared completion, with management providing updated capital expenditure guidance for the remainder of 2021 and 2022-2023.

Frequently Asked Questions

EPD's revenue growth was primarily driven by a significant increase in marketing revenues, fueled by higher average sales prices for NGLs, natural gas, crude oil, petrochemicals, and refined products. Additionally, higher sales volumes in several product categories and increased revenues from midstream services, particularly in natural gas processing, pipelines, and terminals, contributed to the overall revenue increase.

Enterprise Products Partners L.P. actively managed its debt by repaying a total of $1.33 billion in principal amounts of senior notes during the first six months of 2021. This resulted in a reduction in total long-term debt and an improved average maturity profile for its debt obligations.

EPD expects total capital investments for 2021 to be around $2.2 billion, with significant projects like the Chambers County natural gasoline hydrotreater, Gillis Lateral natural gas pipeline, and PDH 2 facility slated for completion by late 2021 and mid-2023, respectively. Future capital investments for 2022 and 2023 are projected at approximately $800 million and $400 million, respectively, for sanctioned projects.

While EPD had $1.72 billion in remaining capacity under its 2019 Buyback Program, the company did not report any significant common unit repurchases under the program during the second quarter of 2021. However, a small number of units were repurchased from employees to cover withholding tax requirements upon the vesting of phantom unit awards.