8-KEarnings & ResultsOther EventsExhibits & Filings

ENTERPRISE PRODUCTS PARTNERS L.P. 8-K Report, Financial Results (Aug 1, 2013)

Filed August 1, 2013For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD) filed an 8-K on August 1, 2013, reporting its financial and operating results for the second quarter and the first half of 2013. The report highlights a slight decrease in net income attributable to limited partners to $552.5 million for Q2 2013, down from $566.3 million in Q2 2012, with fully diluted earnings per unit at $0.60 compared to $0.64 year-over-year. These results were impacted by various non-cash charges including asset impairments and deferred tax expenses. Despite the dip in net income, the company demonstrated strong revenue growth, with Q2 2013 revenues increasing by 14% to $11.1 billion year-over-year, driven by higher sales volumes. Gross operating margin also saw a significant increase of 10.7% to $1.1 billion in Q2 2013. The company also announced several strategic growth initiatives, including joint venture formation for new NGL fractionators, planned expansion of refined products export facilities on the Texas Gulf Coast, and significant expansion of crude oil storage and distribution infrastructure in Southeast Texas to capitalize on growing domestic production.

Key Highlights

  • 1Q2 2013 net income attributable to limited partners was $552.5 million, a slight decrease from $566.3 million in Q2 2012.
  • 2Fully diluted earnings per unit for Q2 2013 were $0.60, down from $0.64 in Q2 2012, impacted by non-cash charges like asset impairments.
  • 3Total revenues for Q2 2013 increased 14% to $11.1 billion, driven by higher sales volumes.
  • 4Total gross operating margin for Q2 2013 rose 10.7% to $1.1 billion, indicating improved core operational profitability.
  • 5Significant growth was observed in the Onshore Crude Oil Pipelines & Services segment, with gross operating margin up $101 million due to increased volumes and pipeline expansions.
  • 6The company is expanding its refined products export capabilities on the Texas Gulf Coast with new facilities expected to commence service in early 2014.
  • 7Enterprise announced plans to expand crude oil storage and distribution infrastructure in Southeast Texas, aiming to serve growing domestic production and regional refineries.

Frequently Asked Questions

The decrease in net income was primarily due to non-cash charges. These included $27 million for asset impairments, $13 million for deferred tax expenses related to Texas margin tax changes, and $6 million in non-cash losses from asset sales. In contrast, Q2 2012 benefited from $45 million in non-cash gains from asset sales and insurance recoveries.

The Onshore Crude Oil Pipelines & Services segment showed strong growth, with gross operating margin increasing by $101 million. The Petrochemical & Refined Products Services segment also saw an increase, driven by a rate case settlement and higher transportation volumes. However, the NGL Pipelines & Services segment experienced a slight decrease in gross operating margin due to lower processing margins, though NGL pipeline and fractionation businesses showed growth.

Enterprise announced the formation of a joint venture for two new NGL fractionators at Mont Belvieu, the development of refined products export facilities on the Texas Gulf Coast, and a significant expansion of crude oil storage and distribution infrastructure in Southeast Texas to accommodate increasing domestic production.

The increase in revenues to $11.1 billion in Q2 2013 (a 14% rise year-over-year) was primarily driven by higher sales volumes across various products and services. While higher volumes contribute to revenue, changes in commodity prices and operating costs, as well as the aforementioned non-cash charges, impacted the net income figure.