8-KEarnings & ResultsOther EventsExhibits & Filings

ENTERPRISE PRODUCTS PARTNERS L.P. 8-K Report, Financial Results (Jan 28, 2016)

Filed January 28, 2016For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD) reported its fourth quarter and full-year 2015 financial results on January 28, 2016. For the fourth quarter, the company reported net income attributable to limited partners of $684.8 million, or $0.34 per unit, largely in line with the prior year's $659.8 million, or $0.34 per unit. Full-year 2015 net income attributable to limited partners was $2,521.2 million, or $1.26 per unit, a decrease from $2,787.4 million, or $1.47 per unit, in 2014. The company highlighted a slight decrease in total revenues and operating income for the full year 2015 compared to 2014, reflecting the challenging market environment. Despite the overall revenue decline, the company showcased resilience in its segment performance, particularly in NGL Pipelines & Services and Crude Oil Pipelines & Services, which saw increases in gross operating margin. Significant growth was observed in NGL pipeline volumes and marine terminal activity, driven by export demand. The company also announced management's recommendation for a 5.2% increase in cash distributions for 2016, targeting $1.61 per unit, and expects this growth to be supported by approximately $6.0 billion in new projects coming online. This forward-looking statement on distribution growth aims to provide investors with visibility amidst a period of uncertainty for some midstream peers.

Key Highlights

  • 1Fourth quarter 2015 net income attributable to limited partners was $684.8 million, or $0.34 per unit, flat year-over-year.
  • 2Full-year 2015 net income attributable to limited partners decreased to $2,521.2 million ($1.26 per unit) from $2,787.4 million ($1.47 per unit) in 2014.
  • 3Total revenues for the full year 2015 decreased to $27,027.9 million from $47,951.2 million in 2014.
  • 4Gross operating margin in NGL Pipelines & Services increased 4% to $730 million in Q4 2015, driven by higher NGL marketing volumes and NGL pipeline and storage growth.
  • 5Crude Oil Pipelines & Services segment gross operating margin increased 13% to $258 million in Q4 2015, benefiting from the EFS Midstream acquisition and contributions from the Seaway Crude Pipeline.
  • 6Management plans to recommend a 5.2% increase in cash distributions for 2016, to $1.61 per unit, representing a growth of $0.08 per unit compared to 2015.
  • 7Approximately $6.0 billion of new projects are expected to begin commercial operations and generate cash flow in 2016, supporting the planned distribution growth.

Frequently Asked Questions

For the fourth quarter of 2015, Enterprise Products Partners L.P. reported net income attributable to limited partners of $684.8 million ($0.34 per unit), which was in line with the prior year. For the full year 2015, net income attributable to limited partners was $2,521.2 million ($1.26 per unit), a decrease from $2,787.4 million ($1.47 per unit) in 2014. Full-year revenues also saw a significant decrease.

The NGL Pipelines & Services segment showed strength with a 4% increase in gross operating margin year-over-year, driven by NGL marketing exports and pipeline/storage growth. The Crude Oil Pipelines & Services segment also performed well, with a 13% increase in gross operating margin, boosted by the EFS Midstream acquisition and the Seaway Crude Pipeline. The Natural Gas Pipelines & Services segment saw a modest increase in gross operating margin. The Petrochemical & Refined Products Services segment experienced a decline, and the Offshore Pipelines & Services segment had no contribution due to its sale in July 2015.

Management plans to recommend a 5.2% increase in cash distributions for 2016, targeting a total of $1.61 per unit. This represents an increase of $0.08 per unit compared to the $1.53 per unit declared for 2015. This planned growth is supported by an anticipated $6.0 billion in new projects commencing operations during 2016.

The overall decline in revenues and full-year net income for 2015 compared to 2014 reflects a challenging market environment, likely influenced by lower commodity prices and reduced volumes in certain areas, such as lower imports of crude oil at marine terminals. However, the company's diversification and strategic growth initiatives, particularly in NGL exports and pipeline expansions, helped mitigate some of the negative impacts and drove segment-specific growth.