8-KEarnings & ResultsOther EventsExhibits & Filings

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

Filed October 29, 2015For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD) filed this 8-K on October 29, 2015, to report its financial and operating results for the third quarter and first nine months of 2015. The report indicates a slight decrease in net income for the third quarter of 2015 compared to the prior year, with fully diluted earnings per unit also lower. However, the company highlights strong performance in certain segments, particularly Crude Oil Pipelines & Services, which saw record transportation volumes and a significant increase in gross operating margin. Significant strategic transactions were also detailed, including the completion of the Oiltanking acquisition, the sale of the Offshore Business, and the acquisition of EFS Midstream, all impacting the company's asset base and financial structure. Investors should note the company's ongoing capital investments, including the completion of a new segment of the Aegis Ethane Pipeline and planned expansions for its propylene pipeline system. These strategic moves and ongoing infrastructure development underscore EPD's commitment to expanding its services and capturing growth opportunities within the midstream sector, even amidst a challenging commodity price environment. The company's use of non-GAAP "Gross Operating Margin" as a key performance indicator is also highlighted, providing a metric that management uses for operational and capital allocation decisions.

Key Highlights

  • 1Third quarter 2015 net income attributable to limited partners was $649.3 million, a decrease from $691.1 million in the third quarter of 2014. Fully diluted earnings per unit decreased to $0.32 from $0.37.
  • 2Crude Oil Pipelines & Services segment achieved record transportation volumes (1.5 million BPD) and a 33% increase in gross operating margin ($255 million) year-over-year, driven by contributions from the Seaway Loop pipeline and EFS Midstream acquisition.
  • 3The company completed the second stage of its Aegis Ethane Pipeline in September 2015, enhancing its ethane supply capabilities to Gulf Coast petrochemical facilities, with the final segment expected by year-end.
  • 4Enterprise Products Partners L.P. completed the sale of its Offshore Business to Genesis Energy, L.P. for approximately $1.53 billion in cash, aiming to redeploy capital to higher-return opportunities and reduce future financing needs.
  • 5The acquisition of EFS Midstream was completed effectively July 1, 2015, for approximately $2.1 billion, significantly expanding EPD's presence in the Eagle Ford Shale with dedicated acreage and long-term fee-based agreements.
  • 6The company is undertaking significant expansions in its Petrochemical & Refined Products Services segment, including converting and expanding propylene pipelines to increase Polymer Grade Propylene (PGP) delivery capacity.
  • 7Total gross operating margin across all segments remained relatively stable, slightly increasing to $1,341.1 million in Q3 2015 from $1,335.1 million in Q3 2014, demonstrating resilience in core operations.

Frequently Asked Questions

For the third quarter of 2015, Enterprise Products Partners L.P. reported net income attributable to limited partners of $649.3 million, compared to $691.1 million in the third quarter of 2014. Fully diluted earnings per unit decreased to $0.32 from $0.37 in the prior year quarter. Total revenues decreased significantly, reflecting lower commodity prices, while total gross operating margin saw a slight increase.

The Crude Oil Pipelines & Services segment was a strong performer, with a 33% increase in gross operating margin and record transportation volumes. The NGL Pipelines & Services segment saw a decrease in gross operating margin primarily due to lower processing margins, though NGL pipeline and storage volumes and import/export terminal operations showed growth. The Natural Gas Pipelines & Services segment remained relatively stable, while the Petrochemical & Refined Products Services segment saw a modest increase in gross operating margin. The Offshore Pipelines & Services segment's results were impacted by the sale of the business in late July 2015.

The company highlighted several key strategic developments. These include the completion of the second stage of the Oiltanking acquisition, the sale of its Offshore Business to Genesis Energy for $1.53 billion, and the acquisition of EFS Midstream for approximately $2.1 billion. These transactions are reshaping the company's asset portfolio and strategic focus.

Key capital investments highlighted include the completion of a new segment of the Aegis Ethane Pipeline, which enhances ethane supply to the Gulf Coast. Additionally, the company announced significant expansion projects for its propylene pipeline system, including conversions and new construction aimed at increasing Polymer Grade Propylene (PGP) delivery capacity. The final segment of the Aegis system was also expected by the end of 2015.