Enterprise Products Partners L.P. (EPD) Bundle
A Brief History of Enterprise Products Partners L.P.
Company Overview
Enterprise Products Partners L.P. (EPO) is a leading North American provider of midstream natural gas and natural gas liquids services. Founded in 1968, the company has grown through a series of strategic acquisitions and expansions, establishing a diverse portfolio of services including transportation, processing, fractionation, and storage.
Recent Financial Performance
As of September 30, 2024, Enterprise Products reported a net income of $4.334 billion for the nine months ended, compared to $4.052 billion in the same period the previous year. The total partners’ equity as of that date was approximately $29.158 billion. The company declared a quarterly cash distribution of $0.525 per common unit, amounting to a total payout of $1.15 billion.
Debt Management
In January 2024, EPO issued $2.0 billion in senior notes, including $1.0 billion due January 2027 at a fixed interest rate of 4.60% and another $1.0 billion due January 2034 at 4.85%. Additionally, in August 2024, EPO raised another $2.5 billion in senior notes. As of September 30, 2024, the total scheduled maturities of debt amounted to $32.221 billion.
Commodity Prices
The following table summarizes selected average index prices for natural gas and selected petrochemical products for 2023 and 2024:
| Product | 2023 Average Price | 2024 Average Price |
|---|---|---|
| Natural Gas ($/MMBtu) | $2.74 | $2.10 |
| Ethane ($/gallon) | $0.25 | $0.18 |
| Propane ($/gallon) | $0.71 | $0.77 |
| Butane ($/gallon) | $0.91 | $0.97 |
| Isobutane ($/gallon) | $1.00 | $1.16 |
| Gasoline ($/gallon) | $1.52 | $1.52 |
Operational Developments
In 2024, EPO placed into service its third natural gas processing train at Mentone in the Delaware Basin, enhancing its processing capacity significantly. Furthermore, the company has expanded its terminaling operations across multiple locations, including new facilities in Texas and New Mexico.
Acquisitions
In February 2024, EPO completed the acquisition of remaining equity interests in Whitethorn Pipeline Company LLC and Enterprise EF78 LLC for $375 million. This acquisition was part of a broader strategy to consolidate its operational footprint and improve service offerings.
Future Outlook
Enterprise Products continues to focus on strategic growth through capital investments and acquisitions, positioning itself to capitalize on the increasing demand for midstream services in North America. The company remains committed to maintaining its strong financial position while delivering value to its unitholders.
A Who Owns Enterprise Products Partners L.P. (EPD)
Ownership Structure
As of September 30, 2024, Enterprise Products Partners L.P. (EPD) has a distinct ownership structure. The common units of the partnership are publicly traded on the New York Stock Exchange under the ticker symbol "EPD". The principal owner is a voting trust controlled by Dan Duncan LLC, which is a privately held Texas limited liability company.
Key Ownership Data
Enterprise GP, a wholly owned subsidiary of Dan Duncan LLC, operates as the general partner of EPD. As of September 30, 2024, the ownership breakdown is as follows:
| Owner | Ownership Percentage | Type of Interest |
|---|---|---|
| Dan Duncan LLC (through EPCO) | 32.4% | Common Units |
| Public Unitholders | 67.6% | Common Units |
| General Partner (Enterprise GP) | Non-economic | General Partner Interest |
Common Units Outstanding
As of September 30, 2024, the total number of common units outstanding was 2,167,752,040. The changes in common units since December 31, 2023, are summarized below:
| Date | Common Units Outstanding | Change in Units |
|---|---|---|
| December 31, 2023 | 2,168,245,238 | - |
| March 31, 2024 | 2,171,558,354 | +4,679,116 |
| June 30, 2024 | 2,170,301,640 | -1,256,714 |
| September 30, 2024 | 2,167,752,040 | -1,549,600 |
Financial Performance and Distributions
For the third quarter of 2024, the partnership declared a cash distribution of $0.525 per common unit, amounting to a total distribution of approximately $1.15 billion to common unitholders. The cash distributions paid to common unitholders for the nine months ended September 30, 2024, totaled $3.374 billion.
Noncontrolling Interests
As of September 30, 2024, noncontrolling interests in consolidated subsidiaries were valued at $809 million. The presence of noncontrolling interests highlights additional stakeholders involved in the partnership's operations.
Recent Financing Activities
In January 2024, Enterprise Products Operating LLC (EPO), a subsidiary of EPD, issued $2.0 billion in senior notes. These included:
- $1.0 billion due January 2027 at a fixed interest rate of 4.60%.
- $1.0 billion due January 2034 at a fixed interest rate of 4.85%.
In August 2024, EPO issued an additional $2.5 billion in senior notes, which included:
- $1.1 billion due February 2035 at a fixed interest rate of 4.95%.
- $1.4 billion due February 2055 at a fixed interest rate of 5.55%.
These financing activities indicate the partnership's strategy to manage its capital structure and fund growth initiatives.
Conclusion of Ownership Insights
The ownership of Enterprise Products Partners L.P. is concentrated significantly under Dan Duncan LLC through its voting trust, while also maintaining a substantial public interest in its common units. This structure reflects a blend of private ownership and public investment, crucial for its operational and financial strategies.
Enterprise Products Partners L.P. (EPD) Mission Statement
Mission Statement Overview
The mission statement of Enterprise Products Partners L.P. (EPD) emphasizes its commitment to providing reliable and efficient services in the natural gas, NGL, crude oil, petrochemicals, and refined products sectors. The company aims to enhance shareholder value through operational excellence, strategic growth initiatives, and a strong focus on safety and environmental stewardship.
Core Values
- Commitment to Safety
- Integrity and Ethical Conduct
- Excellence in Operations
- Customer Focus
- Environmental Responsibility
Financial Performance
As of September 30, 2024, Enterprise Products Partners reported a net income of $4.337 billion for the nine-month period ending in 2024, compared to $4.055 billion for the same period in 2023. The operating cash flow was $5.757 billion for the nine months ended September 30, 2024. The company declared a quarterly cash distribution of $0.525 per common unit for the third quarter of 2024, amounting to $1.15 billion.
Capital Investments
Enterprise Products Partners has committed approximately $6.9 billion in growth capital projects scheduled for completion by the end of 2026. Key projects include:
- Natural gas gathering expansion in the Delaware and Midland Basins (2024 and 2025)
- Bahia NGL Pipeline (scheduled for Q3 2025)
- New ethylene export capacity at the Morgan’s Point terminal (2024 and 2025)
Debt Obligations
As of September 30, 2024, the total consolidated debt obligations amounted to $32.221 billion, with average maturity approximately 18.5 years. Recently, in August 2024, EPO issued $2.5 billion in senior notes with fixed interest rates of 4.95% and 5.55%.
| Debt Maturity Schedule | Total (in millions) | 2024 | 2025 | 2026 | 2027 | 2028 | Thereafter |
|---|---|---|---|---|---|---|---|
| Senior Notes | $29,925 | $0 | $1,150 | $1,625 | $1,575 | $1,000 | $24,575 |
| Junior Subordinated Notes | $2,296 | $0 | $0 | $0 | $0 | $0 | $2,296 |
| Total | $32,221 | $0 | $1,150 | $1,625 | $1,575 | $1,000 | $26,871 |
Market Position and Strategic Initiatives
Enterprise Products Partners holds a significant market position within the energy sector, focusing on integrated services across various segments. The company continues to pursue strategic initiatives aimed at enhancing its operational capabilities and expanding its market reach. As of September 30, 2024, the company had consolidated liquidity of $5.6 billion, which includes $4.2 billion of available borrowing capacity.
Recent Developments
In April 2024, Enterprise received a deepwater port license for the Sea Port Oil Terminal (SPOT), which aims to enhance crude oil export capabilities. Additionally, the company plans to construct a second natural gas processing train at Mentone West, expected to begin service in the first half of 2026.
How Enterprise Products Partners L.P. (EPD) Works
Business Overview
Enterprise Products Partners L.P. (EPD) operates in the midstream sector of the oil and gas industry, providing a wide range of services including natural gas processing, transportation, storage, and logistics for various energy commodities.
Financial Performance
As of the third quarter of 2024, EPD reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Total Revenues | $13.775 billion | $11.998 billion | $42.018 billion | $35.093 billion |
| Net Income | $1.432 billion | $1.350 billion | $4.337 billion | $4.055 billion |
| Earnings per Common Unit (Diluted) | $0.65 | $0.60 | $1.95 | $1.81 |
| Cash Flow from Operating Activities | $2.072 billion | $1.718 billion | $5.757 billion | $5.203 billion |
Revenue Segmentation
Enterprise’s revenues are derived from various segments, which include:
| Business Segment | Q3 2024 Revenue | Q3 2023 Revenue | YTD 2024 Revenue | YTD 2023 Revenue |
|---|---|---|---|---|
| NGL Pipelines & Services | $4.831 billion | $3.757 billion | $14.236 billion | $12.375 billion |
| Crude Oil Pipelines & Services | $5.251 billion | $5.365 billion | $16.554 billion | $13.850 billion |
| Natural Gas Pipelines & Services | $649 million | $884 million | $2.115 billion | $2.874 billion |
| Petrochemical & Refined Products Services | $3.044 billion | $1.992 billion | $9.113 billion | $5.994 billion |
Operating Costs
Operating costs and expenses for EPD are key to understanding the company's profitability:
| Cost Type | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Cost of Sales | $10.387 billion | $8.786 billion | $31.976 billion | $25.796 billion |
| Other Operating Costs | $1.018 billion | $986 million | $2.946 billion | $2.749 billion |
| Depreciation, Amortization and Accretion | $601 million | $583 million | $1.791 billion | $1.692 billion |
| Total Operating Costs | $12.094 billion | $10.425 billion | $36.953 billion | $30.432 billion |
Liquidity and Capital Resources
As of September 30, 2024, EPD had a consolidated liquidity of:
- $4.2 billion in available borrowing capacity under revolving credit facilities
- $1.4 billion in unrestricted cash on hand
The company has scheduled maturities of consolidated debt obligations as follows:
| Year | Scheduled Maturities (in millions) |
|---|---|
| 2024 | $0 |
| 2025 | $1.150 billion |
| 2026 | $1.625 billion |
| 2027 | $1.575 billion |
| 2028 | $1.000 billion |
| Thereafter | $26.871 billion |
| Total | $32.221 billion |
Recent Developments
In January 2024, EPD issued $2.0 billion in senior notes with a fixed interest rate of:
- 4.60% due January 2027
- 4.85% due January 2034
In August 2024, EPD issued $2.5 billion in senior notes with a fixed interest rate of:
- 4.95% due February 2035
- 5.55% due February 2055
These proceeds are intended for general company purposes, including growth capital investments and debt repayment.
Distribution to Unitholders
For the third quarter of 2024, EPD declared a cash distribution of:
- $0.525 per common unit
- $2.10 per unit on an annualized basis
The total distribution amount is projected to be:
- $1.15 billion
Market Conditions and Pricing
Average index prices for energy commodities affecting EPD as of Q3 2024 were:
| Commodity | Q3 2024 Price | Q3 2023 Price |
|---|---|---|
| Natural Gas | $2.15/MMBtu | $2.54/MMBtu |
| Ethane | $0.16/gallon | $0.30/gallon |
| Propane | $0.73/gallon | $0.68/gallon |
| Butane | $0.97/gallon | $0.83/gallon |
| Isobutane | $1.08/gallon | $0.94/gallon | Natural Gasoline | $1.48/gallon | $1.55/gallon |
How Enterprise Products Partners L.P. (EPD) Makes Money
Revenue Sources
Enterprise Products Partners L.P. (EPD) generates revenue primarily through four segments: NGL Pipelines & Services, Crude Oil Pipelines & Services, Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services. Below is a breakdown of revenues for the nine months ended September 30, 2024, compared to the same period in 2023:
| Segment | 2024 Revenue (in millions) | 2023 Revenue (in millions) | Increase/Decrease (in millions) |
|---|---|---|---|
| NGL Pipelines & Services | $14,236 | $12,375 | $1,861 |
| Crude Oil Pipelines & Services | $16,554 | $13,850 | $2,704 |
| Natural Gas Pipelines & Services | $2,115 | $2,874 | ($759) |
| Petrochemical & Refined Products Services | $9,113 | $5,994 | $3,119 |
| Total Consolidated Revenues | $42,018 | $35,093 | $6,925 |
Marketing Revenues
Marketing revenues have shown a significant increase, driven by higher sales volumes and prices. For the nine months ended September 30, 2024, revenues from marketing activities increased by $7.5 billion, primarily due to:
- Higher sales volumes: $7.0 billion increase
- Higher average sales prices: $508 million increase
However, revenues from the marketing of natural gas decreased by $841 million due to lower average sales prices.
Midstream Services
Midstream services also contributed positively, with an increase of $250 million compared to the previous year. Key highlights include:
- Natural gas transportation revenue increased by $77 million.
- Natural gas processing facilities revenue increased by $72 million.
- Mont Belvieu area propylene production facilities revenue increased by $44 million due to contributions from new facilities.
Operating Costs and Expenses
Operating costs and expenses for the nine months ended September 30, 2024, increased by $6.5 billion compared to the same period in 2023, driven by:
- Cost of sales associated with marketing activities increased by $6.3 billion, primarily due to higher volumes.
- Cost of sales associated with natural gas marketing decreased by $184 million.
Net Income and Earnings Per Unit
Net income attributable to common unitholders for the nine months ended September 30, 2024, was $4,278 million, compared to $3,961 million in 2023, reflecting an increase of $317 million. The earnings per unit for the same period were:
| Period | Basic Earnings per Common Unit | Diluted Earnings per Common Unit |
|---|---|---|
| 2024 | $1.95 | $1.95 |
| 2023 | $1.81 | $1.81 |
Liquidity and Capital Resources
As of September 30, 2024, EPD had consolidated liquidity of $5.6 billion, consisting of $4.2 billion of available borrowing capacity and $1.4 billion of unrestricted cash.
Debt Obligations
At September 30, 2024, EPD's total debt obligations were $32,221 million, with scheduled maturities as follows:
| Year | Amount (in millions) |
|---|---|
| Remainder of 2024 | $0 |
| 2025 | $1,150 |
| 2026 | $1,625 |
| 2027 | $1,575 |
| 2028 | $1,000 |
| Thereafter | $26,871 |
| Total | $32,221 |
Future Projects
EPD has approximately $6.9 billion of growth capital projects scheduled for completion by the end of 2026, including expansions in natural gas processing and transportation.
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Resources:
- Enterprise Products Partners L.P. (EPD) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Enterprise Products Partners L.P. (EPD)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Enterprise Products Partners L.P. (EPD)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.