8-KEarnings & ResultsOther EventsExhibits & Filings

ENTERPRISE PRODUCTS PARTNERS L.P. 8-K Report, Financial Results (Jan 30, 2014)

Filed January 30, 2014For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD) reported strong fourth quarter and full-year 2013 financial and operational results, demonstrating significant growth and strategic progress. The company's net income attributable to limited partners increased year-over-year for both the quarter and the full year, with earnings per unit also showing positive momentum. A key driver of this performance was the NGL Pipelines & Services segment, which achieved record gross operating margin, boosted by strong performance in NGL fractionation and pipeline volumes, particularly from the Eagle Ford shale and new facilities like Fractionators VII and VIII. Looking ahead, EPD highlighted several significant developments, including the commencement of operations for its Appalachia-to-Texas (ATEX) Pipeline and the expansion of its Houston Ship Channel LPG export terminal. The company also announced an increase in its quarterly cash distribution, reflecting confidence in its financial health and future growth prospects. These initiatives underscore EPD's strategy to capitalize on growing domestic NGL production and meet increasing demand for energy infrastructure and export capabilities.

Key Highlights

  • 1Net income attributable to limited partners grew to $699 million in Q4 2013 from $616 million in Q4 2012, with fully diluted earnings per unit rising to $0.75 from $0.68.
  • 2Total gross operating margin increased to $1.3 billion in Q4 2013 from $1.2 billion in Q4 2012, indicating improved operational profitability.
  • 3The NGL Pipelines & Services segment reported a record gross operating margin of $737 million in Q4 2013, up from $632 million in Q4 2012, driven by record NGL fractionation and increased NGL pipeline volumes.
  • 4The ATEX Pipeline, designed to transport ethane from the Marcellus and Utica Shale regions, commenced operations in January 2014 with an initial capacity of 125 MBPD, expandable to 265 MBPD.
  • 5EPD announced an increase in its quarterly cash distribution to $0.70 per common unit for Q4 2013, a 6.1% increase year-over-year.
  • 6Significant expansions were announced for the Houston Ship Channel LPG export terminal, aiming to more than double its capacity for loading propane and butane cargoes, and for the Mid-America Pipeline System's Rocky Mountain expansion.
  • 7The company placed its eighth NGL fractionator at the Mont Belvieu complex into service in November 2013, increasing total fractionation capacity to approximately 670 MBPD.

Frequently Asked Questions

The strong performance in the fourth quarter of 2013 was primarily driven by record gross operating margin in the NGL Pipelines & Services segment, fueled by increased NGL fractionation volumes from new facilities (Fractionators VII and VIII) and higher NGL pipeline volumes, particularly from South Texas and the expansion of the Houston Ship Channel LPG export terminal. The Onshore Crude Oil Pipelines & Services segment also saw a significant increase in gross operating margin due to higher volumes.

Key strategic developments include the commencement of operations for the Appalachia-to-Texas (ATEX) Pipeline, which connects Marcellus and Utica Shale ethane to Mont Belvieu; significant expansion plans for the Houston Ship Channel LPG export terminal; the completion of an expansion project for the Mid-America Pipeline System's Rocky Mountain pipeline; and the start-up of the eighth NGL fractionator at Mont Belvieu. These initiatives highlight EPD's focus on expanding its NGL and crude oil infrastructure and export capabilities.

Enterprise Products Partners L.P. increased its quarterly cash distribution to $0.70 per common unit for the fourth quarter of 2013, which represents an annualized rate of $2.80 per unit. This distribution, paid on February 7, 2014, was a 6.1% increase compared to the $0.66 per common unit distribution paid for the fourth quarter of 2012.

The company anticipates that several new pipeline projects, including ATEX, Texas Express Pipeline, and Front Range Pipeline, may experience periods where shippers cannot meet their minimum volume commitments during 2014. This is expected due to factors such as producer drilling programs, timing of new well start-ups, and ethane rejection in supply basins served by these pipelines.