Summary
Enterprise Products Partners L.P. (EPD) filed an 8-K on November 2, 2017, reporting its financial and operating results for the third quarter and first nine months of 2017. The report indicates that while overall net income saw a slight decrease in the third quarter compared to the prior year ($621.3 million vs. $634.6 million), the first nine months showed an increase ($2,058.3 million vs. $1,883.3 million). The company also reported an increase in revenues for both periods. Notably, the NGL Pipelines & Services segment showed robust growth, with a 10% increase in gross operating margin year-over-year for the quarter, driven by higher volumes and processing margins, partially offset by hurricane impacts and hedging losses. However, the Crude Oil Pipelines & Services segment experienced a significant decline in gross operating margin, down 25% for the quarter, primarily due to non-cash mark-to-market losses on financial instruments and lower marketing margins, as well as hurricane-related disruptions. The company also highlighted its capital investments during the quarter, totaling approximately $1.0 billion, including sustaining capital expenditures. Investors should note the preliminary nature of some of the financial information presented, as it is subject to completion of the financial closing process.
Key Highlights
- 1Third-quarter 2017 revenues increased to $6,886.9 million from $5,920.4 million in the prior year's third quarter.
- 2Net income for the first nine months of 2017 increased to $2,058.3 million, up from $1,883.3 million in the same period of 2016.
- 3The NGL Pipelines & Services segment demonstrated strength with a 10% increase in gross operating margin for Q3 2017, driven by higher volumes and processing margins.
- 4The Crude Oil Pipelines & Services segment saw a significant 25% decrease in gross operating margin for Q3 2017, largely due to non-cash mark-to-market losses and lower marketing margins.
- 5Hurricane Harvey had an estimated negative impact of $7 million on NGL Pipelines & Services gross operating margin and approximately $2 million on Crude Oil Pipelines & Services gross operating margin for Q3 2017.
- 6Total capital investments for the third quarter of 2017 were approximately $1.0 billion, including $54 million in sustaining capital expenditures.
- 7Earnings per unit (fully diluted) for Q3 2017 were $0.28, a decrease from $0.30 in Q3 2016, while for the nine months ended September 30, 2017, it increased to $0.94 from $0.89 in the prior year.