Summary
Enterprise Products Partners L.P. (EPD) reported its financial results for the second quarter and first half of 2023. The company experienced a significant decline in total revenues compared to the prior year, primarily driven by lower marketing revenues from NGLs, crude oil, natural gas, and petrochemicals, largely due to decreased average sales prices. Despite the revenue drop, the company's fee-based midstream services demonstrated resilience, with some segments showing growth. Key operational highlights include the successful placement into service of major projects such as the PDH 2 plant, Frac XII NGL fractionator, and the Poseidon natural gas processing plant in July 2023, all supported by long-term contracts. Financially, EPD maintained a strong liquidity position with $4.0 billion in consolidated liquidity as of June 30, 2023. The company also continued its common unit repurchase program, with $1.2 billion remaining capacity. Management declared a quarterly cash distribution of $0.50 per common unit, demonstrating a commitment to returning capital to unitholders, supported by a distributable cash flow of $3.7 billion for the first half of the year, providing a distribution coverage ratio of 1.7x. Overall, EPD navigated a challenging commodity price environment by focusing on its stable fee-based midstream operations and strategic growth projects.
Financial Highlights
42 data points| Revenue | $10.65B |
| Cost of Revenue | $7.68B |
| Gross Profit | $2.97B |
| Operating Expenses | $9.19B |
| Operating Income | $1.58B |
| Interest Expense | $302.00M |
| Net Income | $1.24B |
| Shares Outstanding (Diluted) | 2.20B |
Key Highlights
- 1Total revenues decreased by approximately 34% for the three months ended June 30, 2023, and 21% for the six months ended June 30, 2023, compared to the prior year periods, primarily due to lower commodity prices impacting marketing revenues.
- 2Gross operating margin for the NGL Pipelines & Services segment decreased by 17% for the three months and 9% for the six months ended June 30, 2023, year-over-year, impacted by lower processing margins and NGL marketing results.
- 3The Crude Oil Pipelines & Services segment saw a slight increase in gross operating margin by 4% for the three months and a decrease of 0.4% for the six months ended June 30, 2023, year-over-year, with the Midland-to-ECHO system showing strong performance offsetting declines in other areas.
- 4Several significant growth projects were completed and placed into service in July 2023, including the PDH 2 plant, Frac XII NGL fractionator, and the Poseidon natural gas processing plant, all supported by long-term contracts.
- 5The company maintained a strong liquidity position of $4.0 billion as of June 30, 2023, consisting of $3.8 billion in available borrowing capacity and $183 million in unrestricted cash.
- 6EPD declared a quarterly cash distribution of $0.50 per common unit, totaling $1.1 billion for the second quarter of 2023, and reported Distributable Cash Flow (DCF) of $3.7 billion for the first half of the year, resulting in a distribution coverage ratio of 1.7x.
- 7The company repurchased $92 million of common units under its 2019 Buyback Program during the first six months of 2023, with $1.2 billion remaining authorization.