10-QPeriod: Q3 FY2021

ENTERPRISE PRODUCTS PARTNERS L.P. Quarterly Report for Q3 Ended Sep 30, 2021

Filed November 8, 2021For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD) reported a strong financial performance for the nine months ended September 30, 2021, with total revenues increasing significantly to $29.4 billion, up from $20.2 billion in the prior year period. This growth was primarily driven by higher marketing revenues across NGLs, natural gas, petrochemicals, and refined products, reflecting higher average sales prices for these commodities. The company also saw substantial growth in midstream service revenues across its segments, particularly in natural gas processing and crude oil transportation. Despite increased operating costs, largely due to higher commodity purchase prices and increased maintenance expenses, EPD's operating income improved year-over-year to $4.7 billion. The company maintained a healthy distributable cash flow (DCF) of $4.95 billion for the nine-month period, covering its distributions by 1.7x, indicating strong cash generation to support unitholder returns and reinvestment in growth projects. EPD also continues to focus on its long-term strategy, including investments in renewable energy and exploring carbon capture opportunities.

Financial Highlights

44 data points
Beta

Revenue

$10.83B

25.1% Gross Margin

Net Income

$1.15B

10.6% Net Margin

Total Assets

$67.32B

Cash & Equivalents

$2.21B

Free Cash Flow

$1.86B

Financial Statements
Beta
Revenue$10.83B
Cost of Revenue$8.11B
Gross Profit$2.72B
Operating Expenses$9.46B
Operating Income$1.51B
Interest Expense$316.00M
Net Income$1.15B
Shares Outstanding (Diluted)2.20B

Key Highlights

  • 1Total revenues for the nine months ended September 30, 2021 increased by approximately 46% to $29.4 billion, compared to $20.2 billion in the same period of 2020, driven by higher commodity prices and volumes in marketing and increased midstream service revenues.
  • 2Operating income for the nine months ended September 30, 2021 rose to $4.7 billion, an increase of 8.6% from $4.3 billion in the prior year, demonstrating improved profitability despite higher operating costs.
  • 3Distributable Cash Flow (DCF) for the nine months ended September 30, 2021 was $4.95 billion, a 3.6% increase from $4.78 billion in the prior year, supporting a distribution coverage ratio of 1.7x.
  • 4The company's cash position strengthened, with cash and cash equivalents (including restricted cash) increasing to $2.36 billion at September 30, 2021, from $1.16 billion at December 31, 2020.
  • 5EPD repurchased approximately $88.8 million of its common units under its $2.0 billion buyback program during the first nine months of 2021, indicating a commitment to returning capital to unitholders.
  • 6The company reported strong performance in its NGL Pipelines & Services segment, with gross operating margin increasing to $3.21 billion for the nine months ended September 30, 2021.
  • 7EPD is progressing strategic initiatives, including a collaboration with Chevron to explore carbon storage opportunities and a power purchase agreement to increase its use of renewable energy.

Frequently Asked Questions

The significant increase in revenue was primarily driven by higher marketing revenues across all product categories (NGLs, natural gas, petrochemicals, and refined products), which benefited from higher average sales prices. Additionally, midstream service revenues across segments such as natural gas processing and crude oil transportation also contributed positively to the revenue growth.

While operating costs increased due to higher commodity purchase prices and increased maintenance expenses, the company's operating income still grew. This suggests that the revenue growth outpaced the cost increases, and the company benefited from its diversified business model and a focus on fee-based services which can offer more stable margins.

EPD expects to continue investing in growth capital projects, with approximately $2.9 billion scheduled to be placed into service by the end of 2023. For 2021, total capital investments are expected to be around $2.2 billion. The company declared a quarterly cash distribution of $0.45 per common unit, indicating its continued commitment to returning capital to unitholders, supported by strong distributable cash flow.

The issuance of $1.0 billion in senior notes in September 2021 provides EPD with additional capital for general corporate purposes, including growth capital investments and debt repayment. This strategic financing helps manage the company's debt profile and supports its ongoing capital expenditure plans.