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ENTERPRISE PRODUCTS PARTNERS L.P. 8-K Report, Financial Results (Apr 30, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed April 30, 2024
Period End
April 30, 2024
Securities
EPDEPDU
In the record · 2016–202610-K1110-Q328-K128

EPD filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 128 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Sep ’18Sep ’18
  2. Leadership change8-K · Oct ’20Oct ’20
  3. Material agreement8-K · Sep ’22Sep ’22
  4. Material agreement8-K · Jul ’26Jul ’26

01—Abstract

Summary

Summary of the 8-K filed April 30, 2024. Cited figures are marked; the original filing is the authoritative source.

Enterprise Products Partners L.P.

(NYSE: EPD) reported first quarter 2024 results on April 30, 2024, with net income attributable to common unitholders of $1.5 billiona ($0.66 per fully diluted unit), up 5% from $0.63 in Q1 2023. Distributable Cash Flow (DCF) was $1.9 billion, flat year over year, and covered the declared distribution of $0.515 per common unit (a 5.1% increase, $2.06 annualized) 1.7 times. The partnership retained $786 million of DCF to fund growth capital and unit buybacks.

Total gross operating margin rose 7% to $2.5 billionb, driven mainly by new assets placed in service in the second half of 2023, a 17% increase in net marine terminal volumes, and higher octane enhancement margins, partially offset by weaker Rockies gas processing margins and lower propylene margins. Balance sheet and capital allocation metrics remained solid. Adjusted cash flow from operations was $2.1 billion for the quarter and $8.2 billion for the trailing twelve months, implying a payout ratio of 56% including buybacks.

Total debt principal stood at $29.7 billionc at March 31, 2024, with approximately $4.5 billion of consolidated liquidity. Management reiterated organic growth capital guidance of $3.25 to $3.75 billion for each of 2024 and 2025, and expects sustaining capex of about $550 million in 2024. Partnership unit buybacks totaled roughly $40 million in the quarter, with 48% of the $2.0 billion authorization used to date.

Operationally, equivalent pipeline volumes reached a record 12.3 million barrels per day, and marine terminal volumes hit 2.3 million BPD, with crude oil terminal volumes at a record 1.1 million BPD. New Permian gas processing capacity (Leonidas and Mentone 3) began operations near quarter-end, and Phase 1 of the Texas Western Products System entered service in March. Non-GAAP measures are used throughout, so investors should review the reconciliations provided in the exhibits.

02—Key points

Key Highlights

  1. Net income attributable to common unitholders rose 5% to $1.5 billion ($0.66 per fully diluted unit) versus $0.63 in Q1 2023.
  2. DCF was $1.9 billion, flat year over year, covering the Q1 2024 distribution 1.7 times and leaving $786 million retained for growth and buybacks.
  3. Quarterly distribution increased 5.1% to $0.515 per common unit ($2.06 annualized).
  4. Total gross operating margin increased 7% to $2.5 billion, led by the NGL Pipelines & Services segment ($1.3 billion) and new assets placed in service in H2 2023.
  5. Adjusted CFFO was $2.1 billion for the quarter and $8.2 billion for the trailing twelve months; the TTM payout ratio was 56% including buybacks.
  6. Total debt principal was $29.7 billion with approximately $4.5 billion of consolidated liquidity at March 31, 2024.
  7. Organic growth capex guidance of $3.25 to $3.75 billion per year for 2024 and 2025 was reiterated, with sustaining capex of about $550 million expected in 2024.

03—Questions

Frequently Asked Questions

  1. Is Enterprise's distribution well covered by cash flow?

    Yes. DCF of $1.9 billion covered the Q1 2024 distribution declared of $0.515 per common unit about 1.7 times, with $786 million of DCF retained to fund growth investments and unit buybacks.

  2. What drove the increase in earnings and gross operating margin?

    Primarily new assets placed in service in the second half of 2023 in the NGL Pipelines & Services segment, a 17% increase in net marine terminal volumes tied to international demand for U.S. energy, and higher octane enhancement sales volumes and margins. These were partly offset by lower Rockies natural gas processing margins (down $35 million) and a $45 million decline in propylene production margin due to extended plant downtime.

  3. How much debt does Enterprise carry and how much liquidity does it have?

    Total debt principal outstanding was $29.7 billion at March 31, 2024, up from $28.9 billion a year earlier. Consolidated liquidity was approximately $4.5 billion, consisting of available revolving credit capacity and unrestricted cash.

  4. What are the company's capital spending plans?

    Organic growth capital investments are expected to be $3.25 to $3.75 billion in each of 2024 and 2025, and sustaining capex is expected to be about $550 million in 2024. Q1 2024 total capital investments were $1.1 billion, including $875 million of growth capex.

  5. How active is the unit buyback program?

    Enterprise repurchased about $40 million of common units in Q1 2024. Including these purchases, roughly 48% of the $2.0 billion authorized buyback program has been used.

04—Continue

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