10-QPeriod: Q1 FY2023

ENTERPRISE PRODUCTS PARTNERS L.P. Quarterly Report for Q1 Ended Mar 31, 2023

Filed May 10, 2023For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD) reported its first-quarter 2023 financial results, showcasing resilience and solid operational performance. Total revenues were $12.44 billion, a slight decrease from $13.01 billion in the prior year's comparable quarter, primarily driven by lower marketing revenues. However, the company demonstrated strong operational execution, with a 3% increase in gross operating margin to $2.34 billion, driven by growth in Natural Gas Pipelines & Services and Petrochemical & Refined Products Services segments. Net income attributable to common unitholders rose to $1.39 billion ($0.63 per diluted unit) from $1.30 billion ($0.59 per diluted unit) in Q1 2022. Distributable Cash Flow (DCF) was robust at $1.94 billion, supporting a declared quarterly distribution of $0.49 per common unit. The company also continued its strategic capital deployment, with significant investments in growth projects, including expansions in the Permian Basin and new processing facilities. EPD maintained a strong liquidity position with $4.0 billion available.

Financial Highlights

44 data points
Beta

Revenue

$12.44B

25.0% Gross Margin

Net Income

$1.39B

11.2% Net Margin

Total Assets

$67.33B

Cash & Equivalents

$76.00M

Free Cash Flow

$930.00M

Financial Statements
Beta
Revenue$12.44B
Cost of Revenue$9.33B
Gross Profit$3.11B
Operating Expenses$10.81B
Operating Income$1.73B
Interest Expense$314.00M
Net Income$1.39B
Shares Outstanding (Diluted)2.19B

Key Highlights

  • 1Total revenues for Q1 2023 were $12.44 billion, a slight decrease year-over-year, mainly due to lower marketing revenues, though offset by higher sales volumes in certain segments.
  • 2Gross operating margin increased by 3% to $2.34 billion in Q1 2023, indicating strong operational performance and effective cost management.
  • 3Net income attributable to common unitholders increased to $1.39 billion ($0.63 per diluted unit) compared to $1.30 billion ($0.59 per diluted unit) in Q1 2022.
  • 4Distributable Cash Flow (DCF) remained strong at $1.94 billion, covering declared cash distributions of $1.08 billion ($0.49 per unit) with a coverage ratio of 1.8x.
  • 5Capital expenditures for growth projects were $542 million in Q1 2023, with significant investments in natural gas processing and gathering in the Permian Basin and the PDH 2 facility.
  • 6The company maintained a strong liquidity position with $4.0 billion in consolidated liquidity as of March 31, 2023, including $3.9 billion in available borrowing capacity.
  • 7EPD repurchased approximately 0.68 million common units for $17 million under its 2019 Buyback Program, demonstrating a commitment to returning capital to unitholders.

Frequently Asked Questions

Enterprise Products Partners L.P. (EPD) demonstrated a solid financial performance in the first quarter of 2023. While total revenues saw a slight decrease year-over-year due to lower marketing revenues, the company achieved an increase in gross operating margin and net income attributable to common unitholders, highlighting operational strength. Distributable Cash Flow remained robust, comfortably covering distributions.

The NGL Pipelines & Services segment's gross operating margin saw a slight decrease, primarily impacted by lower natural gas processing margins. However, the Crude Oil Pipelines & Services segment experienced a decrease in gross operating margin due to lower deficiency revenues. The Natural Gas Pipelines & Services segment showed significant growth in gross operating margin, driven by higher transportation fees and volumes. The Petrochemical & Refined Products Services segment also saw an increase in gross operating margin, mainly from octane enhancement and refined products pipelines.

EPD continues to invest in growth projects, with $542 million allocated to growth capital in Q1 2023, focusing on natural gas processing and gathering expansions in the Permian Basin. The company maintains a strong liquidity position with $4.0 billion available, providing flexibility for future investments and operations. Management expects total capital investments for 2023 to be between $2.8 billion and $3.2 billion.

EPD has a well-laddered debt maturity profile with an average maturity of approximately 19.9 years for its consolidated debt obligations. The company reaffirmed its commitment to returning capital by declaring a quarterly cash distribution of $0.49 per common unit. Additionally, it repurchased $17 million of its common units under the 2019 Buyback Program.