8-KEarnings & ResultsOther EventsExhibits & Filings

ENTERPRISE PRODUCTS PARTNERS L.P. 8-K Report, Financial Results (Jan 30, 2017)

Filed January 30, 2017For Securities:EPDEPDU

Summary

Enterprise Products Partners L.P. (EPD) announced its fourth quarter and full-year 2016 financial and operating results on January 30, 2017. For the fourth quarter of 2016, the company reported total revenues of $6,478.8 million, a slight increase from $6,155.0 million in the fourth quarter of 2015. Net income attributable to limited partners was $658.8 million for the quarter, down from $684.8 million in the prior year's quarter. For the full year 2016, revenues were $23,022.3 million, a decrease from $27,027.9 million in 2015, with net income attributable to limited partners at $2,513.1 million, slightly down from $2,521.2 million in 2015. A significant development highlighted is the planned construction of a new isobutane dehydrogenation (iBDH) unit at Mont Belvieu, expected to be completed in Q4 2019. This project, underwritten by long-term contracts, aims to produce isobutylene for downstream facilities and address increasing market demand for on-purpose olefins. The company also reported a significant impact from the Pascagoula natural gas processing plant outage, estimated at $31 million in lost operating margin and increased expenses during Q4 2016, though it has since resumed operations at pre-incident levels.

Key Highlights

  • 1Fourth quarter 2016 revenues increased slightly to $6.48 billion from $6.16 billion in Q4 2015, while full-year 2016 revenues decreased to $23.02 billion from $27.03 billion in 2015.
  • 2Net income attributable to limited partners for Q4 2016 was $658.8 million, a decrease from $684.8 million in Q4 2015. Full-year 2016 net income attributable to limited partners was $2,513.1 million, a slight decrease from $2,521.2 million in 2015.
  • 3The NGL Pipelines & Services segment saw a 7% increase in gross operating margin for Q4 2016, driven by strong performance in NGL pipelines and storage, and LPG export terminals.
  • 4The Pascagoula natural gas processing plant outage in Q4 2016 resulted in an estimated $31 million negative impact on operating margin and expenses; the plant has since resumed operations.
  • 5Enterprise announced plans to construct a new isobutane dehydrogenation (iBDH) unit at Mont Belvieu, expected online in Q4 2019, to produce isobutylene and meet growing demand for on-purpose olefins.
  • 6The company's cash and cash equivalents increased significantly to $63.1 million as of December 31, 2016, up from $19.0 million at the end of 2015.
  • 7Total assets grew to $52.2 billion, and total debt principal outstanding increased to $23.9 billion as of December 31, 2016.

Frequently Asked Questions

For the fourth quarter of 2016, EPD reported revenues of $6,478.8 million and net income attributable to limited partners of $658.8 million. For the full year 2016, revenues were $23,022.3 million and net income attributable to limited partners was $2,513.1 million. While Q4 revenues saw a slight increase year-over-year, full-year revenues declined. Net income attributable to limited partners slightly decreased for both the quarter and the full year compared to 2015.

The planned iBDH unit at Mont Belvieu, expected in Q4 2019, is a strategic move to produce isobutylene, a key feedstock for lubricants, rubber, and gasoline blendstock. This 'on-purpose' olefin production addresses market demand shifts and complements EPD's existing facilities, supported by long-term contracts with investment-grade customers.

The fire damage at the Pascagoula natural gas processing plant during Q4 2016 resulted in an estimated $31 million negative impact due to higher operating expenses and lost gross operating margin. The plant resumed operations on December 15, 2016, and has since returned to its pre-incident volume levels.

The NGL Pipelines & Services segment's gross operating margin increased by 7% in Q4 2016 compared to Q4 2015. This growth was primarily driven by increased volumes on NGL pipelines and storage, strong performance at LPG export terminals, and contributions from new facilities, partially offset by lower margins in natural gas processing due to the Pascagoula outage.