8-KEarnings & ResultsOther EventsExhibits & Filings

ENTERPRISE PRODUCTS PARTNERS L.P. 8-K Report, Financial Results (Jan 29, 2015)

Filed January 29, 2015For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD) released its fourth quarter and full-year 2014 financial and operating results on January 29, 2015. For the fourth quarter, the company reported net income attributable to limited partners of $659.8 million, or $0.34 per unit (fully diluted), compared to $698.9 million, or $0.37 per diluted unit, in the prior year's fourth quarter. This slight decrease was impacted by non-cash impairment charges and severance costs related to the Oiltanking Partners acquisition. Full-year net income attributable to limited partners increased to $2,787.4 million from $2,596.9 million in 2013, reflecting overall growth. Total consolidated assets grew significantly to $47.1 billion from $40.1 billion, while total debt increased to $21.4 billion from $17.4 billion, indicating substantial investment and expansion, partly due to the Oiltanking Partners acquisition. The company's gross operating margin, a key non-GAAP performance indicator, increased across most segments, particularly in Onshore Crude Oil Pipelines & Services and Offshore Pipelines & Services, signaling strength in its midstream infrastructure operations despite varied performance in NGL-related segments.

Key Highlights

  • 1Fourth quarter 2014 net income attributable to limited partners was $659.8 million ($0.34/unit), a decrease from $698.9 million ($0.37/unit) in Q4 2013.
  • 2Full-year 2014 net income attributable to limited partners increased to $2,787.4 million ($1.51/unit basic) from $2,596.9 million ($1.45/unit basic) in 2013.
  • 3Total consolidated assets grew to $47.1 billion as of December 31, 2014, up from $40.1 billion at the end of 2013.
  • 4Total debt principal outstanding increased to $21.4 billion from $17.4 billion year-over-year.
  • 5Gross operating margin for the fourth quarter of 2014 was $1,358.4 million, an increase from $1,290.8 million in the prior year's quarter.
  • 6The Onshore Crude Oil Pipelines & Services segment saw a significant gross operating margin increase of 40% to $228 million in Q4 2014.
  • 7Capital investments for Q4 2014 were approximately $5.7 billion, with $107 million allocated to sustaining capital projects.

Frequently Asked Questions

The decrease in net income for the fourth quarter of 2014 was primarily due to non-cash impairment charges of $16 million and severance costs and acquisition-related expenses for Oiltanking Partners totaling $21 million, which reduced net income by $0.01 and $0.01 per unit respectively on a fully diluted basis.

The consolidated results of Oiltanking Partners contributed approximately $63 million of gross operating margin and $25 million of net income for the fourth quarter of 2014. However, additional depreciation and amortization expenses related to purchase accounting reduced the net income impact on limited partners to $11 million.

The increase in total debt from $17.4 billion to $21.4 billion, alongside a significant rise in total assets, indicates substantial capital investment and expansion activities undertaken by Enterprise Products Partners L.P., likely including strategic acquisitions and infrastructure development, which is typical for growth in the midstream energy sector.

Gross operating margin for the NGL Pipelines & Services segment decreased slightly to $705 million from $737 million in Q4 2013. This was mainly due to lower processing margins and equity NGL production, partially offset by strong growth in NGL pipeline and storage, including contributions from new pipelines like ATEX.