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[Executive Summary](index=1&type=section&id=Executive%20Summary) Enterprise reported a slight decrease in net income for Q1 2025, offset by a 5% increase in Distributable Cash Flow and a 3.9% rise in distributions, alongside $60 million in unit repurchases and $3.6 billion in liquidity [Q1 2025 Financial Performance Highlights](index=1&type=section&id=Q1%202025%20Financial%20Performance%20Highlights) Enterprise reported a slight decrease in net income and earnings per common unit for Q1 2025 compared to Q1 2024, but achieved a 5% increase in Distributable Cash Flow (DCF) and a 3.9% increase in distributions declared | Metric | Q1 2025 | Q1 2024 | Change (YoY) | | :------------------------------------ | :------ | :------ | :----------- | | Net income attributable to common unitholders | $1.4 billion | $1.5 billion | -6.67% | | Fully diluted earnings per common unit | $0.64 | $0.66 | -3.03% | | Distributable Cash Flow (DCF) | $2.0 billion | $1.9 billion | +5.26% | | Distributions declared per common unit | $0.535 | N/A | +3.9% | - DCF provided **1.7 times coverage** of the distribution declared for Q1 2025, with **$842 million** of DCF retained[3](index=3&type=chunk) [Capital Investments, Buybacks, and Liquidity](index=1&type=section&id=Capital%20Investments%2C%20Buybacks%2C%20and%20Liquidity) The company repurchased approximately $60 million of common units in Q1 2025, utilizing 60% of its authorized $2.0 billion buyback program, while total capital investments were $1.1 billion and consolidated liquidity remained at approximately $3.6 billion | Metric | Q1 2025 | | :------------------------------------------ | :------ | | Common unit repurchases | **~$60 million** | | Authorized buyback program utilized | **~60%** of **$2.0 billion** | | Adjusted cash flow from operations (Adjusted CFFO) | **$2.1 billion** | | Total capital investments | **$1.1 billion** | | Growth capital projects | **$960 million** | | Sustaining capital expenditures | **$102 million** | | Total debt principal outstanding (March 31, 2025) | **$31.9 billion** | | Consolidated liquidity (March 31, 2025) | **~$3.6 billion** | - Expectations for organic growth capital investments are in the range of **$4.0 billion to $4.5 billion** in 2025, and **$2.0 billion to $2.5 billion** in 2026[6](index=6&type=chunk) [Conference Call Information](index=2&type=section&id=Conference%20Call%20Information) Enterprise will host a conference call on April 29, 2025, at 9:00 a.m. CT to discuss its first quarter 2025 earnings, which will be webcast live on the partnership's website - Conference call to discuss Q1 2025 earnings will be held on Tuesday, April 29, 2025, at 9:00 a.m. CT[1](index=1&type=chunk)[8](index=8&type=chunk) - The call will be webcast live and accessible via the partnership's website at www.enterpriseproducts.com[8](index=8&type=chunk) [First Quarter 2025 Financial and Operational Highlights](index=2&type=section&id=First%20Quarter%202025%20Financial%20and%20Operational%20Highlights) This section provides a comprehensive overview of the company's financial and operational performance for the first quarter of 2025 [Key Financial Metrics](index=2&type=section&id=Key%20Financial%20Metrics) The company's Q1 2025 financial highlights show a slight decline in operating income, net income, and EPS compared to Q1 2024, while DCF and Operational DCF increased | Metric | Q1 2025 ($ millions, except per unit) | Q1 2024 ($ millions, except per unit) | Change (YoY) | | :-------------------------------- | :------------------------------------ | :------------------------------------ | :----------- | | Operating income | $1,761 | $1,822 | -3.35% | | Net income | $1,406 | $1,483 | -5.19% | | Fully diluted earnings per common unit | $0.64 | $0.66 | -3.03% | | Total gross operating margin | $2,431 | $2,490 | -2.37% | | Adjusted EBITDA | $2,444 | $2,469 | -1.01% | | Adjusted CFFO | $2,111 | $2,147 | -1.68% | | Adjusted FCF | $1,055 | $1,079 | -2.22% | | DCF | $2,013 | $1,915 | +5.12% | | Operational DCF | $2,009 | $1,942 | +3.45% | - Operating income, net income, and gross operating margin for Q1 2025 include mark-to-market (MTM) losses on financial instruments of **$42 million**, compared to **$4 million** in Q1 2024[9](index=9&type=chunk) [Key Operational Volumes](index=2&type=section&id=Key%20Operational%20Volumes) Enterprise experienced significant volume growth in natural gas and NGL pipelines and processing, with record natural gas processing plant inlet volumes and natural gas pipeline volumes, while marine terminal volumes for crude oil and refined products saw declines | Metric | Q1 2025 | Q1 2024 | Change (YoY) | | :------------------------------------------------ | :------ | :------ | :----------- | | Equivalent pipeline transportation volumes (million BPD) | 13.2 | 12.5 | +5.60% | | NGL, crude oil, refined products & petrochemical pipeline volumes (million BPD) | 7.9 | 7.6 | +3.95% | | Marine terminal volumes (million BPD) | 2.0 | 2.3 | -13.04% | | Natural gas pipeline volumes (TBtus/d) | 20.3 | 18.9 | +7.41% | | NGL fractionation volumes (MBPD) | 1,652 | 1,642 | +0.61% | | Propylene plant production volumes (MBPD) | 113 | 106 | +6.60% | | Natural gas processing plant inlet volumes (Bcf/d) | 7.7 | 7.1 | +8.45% | | Fee-based natural gas processing volumes (Bcf/d) | 7.2 | 6.4 | +12.50% | | Equity NGL-equivalent production volumes (MBPD) | 225 | 185 | +21.62% | [Management Commentary](index=3&type=section&id=Management%20Commentary) Management provides insights into the company's Q1 2025 performance, growth projects, and strategic outlook [CEO's Remarks on Performance and Growth Projects](index=3&type=section&id=CEO%27s%20Remarks%20on%20Performance%20and%20Growth%20Projects) The co-chief executive officer highlighted strong Q1 2025 performance driven by Permian volume growth and consistent energy demand, leading to record natural gas processing and pipeline volumes, a 5% increase in DCF, and $6 billion in major organic growth projects scheduled for completion in 2025 - Performance benefited from Permian-driven volume growth and consistent domestic and international energy demand[13](index=13&type=chunk) - Reported record inlet natural gas processing volumes of **7.7 billion cubic feet per day** and record natural gas pipeline volumes of **20.3 trillion Btus per day**[13](index=13&type=chunk) - Distributable cash flow for Q1 2025 increased to **$2.0 billion**, a **5% increase** compared to Q1 2024, providing **1.7 times coverage** of the distribution and enabling **$842 million** to be retained for reinvestment[13](index=13&type=chunk) - Enterprise increased its cash distribution to partners by **3.9%** to **$0.535 per unit** for Q1 2025[13](index=13&type=chunk) - Approximately **$6 billion** of major organic growth projects are scheduled for completion and cash flow generation in 2025, including two Permian natural gas processing plants, NGL fractionator 14, the first phase of an NGL export facility, Bahia NGL pipeline, and enhancements at Morgan's Point marine terminal[13](index=13&type=chunk) [Segment Performance Review](index=3&type=section&id=Review%20of%20First%20Quarter%202025%20Results) A detailed review of the gross operating margin and key drivers for each business segment in Q1 2025 [NGL Pipelines & Services](index=3&type=section&id=NGL%20Pipelines%20%26%20Services) The NGL Pipelines & Services segment reported a gross operating margin of $1.4 billion for Q1 2025, an increase from Q1 2024, primarily driven by growth in natural gas processing and NGL pipelines and storage, despite a decrease in NGL fractionation margin | Metric | Q1 2025 ($ millions) | Q1 2024 ($ millions) | Change (YoY) | | :------------------------ | :------------------- | :------------------- | :----------- | | Gross operating margin | $1,418 | $1,340 | +5.82% | [Natural Gas Processing & NGL Marketing](index=3&type=section&id=Natural%20Gas%20Processing%20%26%20NGL%20Marketing) Gross operating margin from natural gas processing and related NGL marketing activities increased to $373 million, driven by record natural gas processing plant inlet volumes (up 8%) and fee-based volumes (up 12%), particularly from Permian facilities | Metric | Q1 2025 ($ millions) | Q1 2024 ($ millions) | Change (YoY) | | :------------------------------------------------ | :------------------- | :------------------- | :----------- | | Gross operating margin (Natural Gas Processing & NGL Marketing) | $373 | $358 | +4.19% | | Natural gas processing plant inlet volumes (Bcf/d) | 7.7 | 7.1 | +8.45% | | Total fee-based natural gas processing volumes (Bcf/d) | 7.2 | 6.4 | +12.50% | | Total equity NGL-equivalent production volumes (MBPD) | 225 | 185 | +21.62% | - Gross operating margin from Permian natural gas processing facilities increased **$46 million** due to higher processing and equity NGL-equivalent production volumes, with new plants (Leonidas, Mentone 3) contributing to an **824 MMcf/d** increase in Permian Basin processing plant inlet volumes[17](index=17&type=chunk) - Gross operating margin from NGL marketing activities decreased **$20 million** primarily due to lower average sales margins, partially offset by higher sales volumes[17](index=17&type=chunk) [NGL Pipelines & Storage](index=4&type=section&id=NGL%20Pipelines%20%26%20Storage) Gross operating margin for NGL pipelines and storage increased by $82 million, supported by a 5% increase in total NGL pipeline transportation volumes and an 11% increase in NGL marine terminal volumes, with key contributions from Permian/Rocky Mountain pipelines and the Morgan's Point Ethane Export Terminal | Metric | Q1 2025 ($ millions) | Q1 2024 ($ millions) | Change (YoY) | | :------------------------------------------ | :------------------- | :------------------- | :----------- | | Gross operating margin (NGL pipelines & storage) | $831 | $749 | +10.95% | | Total NGL pipeline transportation volumes (million BPD) | 4.4 | 4.2 | +4.76% | | Total NGL marine terminal volumes (MBPD) | 994 | 895 | +11.06% | - Combined pipelines serving the Permian and Rocky Mountain regions reported a **$22 million** increase in gross operating margin, driven by a **74 MBPD** increase in transportation volumes[17](index=17&type=chunk) - Morgan's Point Ethane Export Terminal's gross operating margin increased **$19 million** due to a **68 MBPD** increase in export volumes[17](index=17&type=chunk) [NGL Fractionation](index=5&type=section&id=NGL%20Fractionation) The NGL fractionation business saw a decrease in gross operating margin to $214 million, despite a slight increase in total fractionation volumes, primarily due to higher operating costs and lower ancillary service revenues at the Mont Belvieu area complex | Metric | Q1 2025 ($ millions) | Q1 2024 ($ millions) | Change (YoY) | | :-------------------------------- | :------------------- | :------------------- | :----------- | | Gross operating margin (NGL fractionation) | $214 | $233 | -8.15% | | Total NGL fractionation volumes (million BPD) | 1.7 | 1.6 | +6.25% | - Gross operating margin from the Mont Belvieu area NGL fractionation complex decreased **$15 million** primarily due to higher operating costs and lower ancillary service revenues, despite a **10 MBPD** increase in volumes[18](index=18&type=chunk) [Crude Oil Pipelines & Services](index=5&type=section&id=Crude%20Oil%20Pipelines%20%26%20Services) The Crude Oil Pipelines & Services segment experienced a decrease in gross operating margin to $374 million, primarily due to lower sales volumes and average sales margins, and a significant drop in crude oil marine terminal volumes | Metric | Q1 2025 ($ millions) | Q1 2024 ($ millions) | Change (YoY) | | :------------------------------------ | :------------------- | :------------------- | :----------- | | Gross operating margin | $374 | $411 | -8.99% | | Total crude oil pipeline transportation volumes (million BPD) | 2.5 | 2.5 | 0.00% | | Total crude oil marine terminal volumes (MBPD) | 736 | 1,100 | -33.10% | - Combined gross operating margin from crude oil assets and marketing decreased a net **$37 million** primarily due to lower sales volumes and lower average sales margins[18](index=18&type=chunk) [Natural Gas Pipelines & Services](index=5&type=section&id=Natural%20Gas%20Pipelines%20%26%20Services) The Natural Gas Pipelines & Services segment reported a strong increase in gross operating margin to $357 million, driven by record natural gas transportation volumes (up 7.4%) and a significant contribution from Permian natural gas gathering systems, including the acquired Pinon Midstream system | Metric | Q1 2025 ($ millions) | Q1 2024 ($ millions) | Change (YoY) | | :------------------------------------ | :------------------- | :------------------- | :----------- | | Gross operating margin | $357 | $312 | +14.42% | | Total natural gas transportation volumes (TBtus/d) | 20.3 | 18.9 | +7.41% | - Permian natural gas gathering, including Delaware Basin and Midland Basin Gathering Systems, reported a combined **$37 million net increase** in gross operating margin, primarily due to higher treating and other revenues and a **1.3 TBtus/d** increase in gathering volumes[18](index=18&type=chunk) - The Delaware Basin Gathering System was expanded in October 2024 by acquiring the Pinon Midstream sour gas gathering and treating system[18](index=18&type=chunk) [Petrochemical & Refined Products Services](index=6&type=section&id=Petrochemical%20%26%20Refined%20Products%20Services) The Petrochemical & Refined Products Services segment saw a substantial decrease in gross operating margin to $315 million, primarily due to lower margins in octane enhancement and propylene production, despite increased pipeline transportation volumes | Metric | Q1 2025 ($ millions) | Q1 2024 ($ millions) | Change (YoY) | | :------------------------------------ | :------------------- | :------------------- | :----------- | | Gross operating margin | $315 | $444 | -29.05% | | Total segment pipeline transportation volumes (MBPD) | 949 | 870 | +9.08% | | Total marine terminal volumes (MBPD) | 311 | 350 | -11.14% | - Gross operating margin from octane enhancement and related plant operations decreased **$83 million** due to lower average sales margins and lower deficiency revenues[21](index=21&type=chunk) - Propylene production and related activities reported a **$52 million decrease** in gross operating margin, driven by lower average propylene sales margins and maintenance downtime for the PDH 1 facility[21](index=21&type=chunk) - Gross operating margin from refined products pipelines and related activities increased **$33 million** due to higher transportation volumes and revenues, including a **$13 million contribution** from the TW Products System[21](index=21&type=chunk) [Non-GAAP Financial Measures Explanation](index=7&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) The report utilizes several non-GAAP financial measures, including total gross operating margin, Adjusted CFFO, FCF, Adjusted FCF, DCF, Operational DCF, and Adjusted EBITDA, to provide additional insights into the company's performance and liquidity - Non-GAAP financial measures used include total gross operating margin, Adjusted CFFO, FCF, Adjusted FCF, DCF, Operational DCF, and Adjusted EBITDA[22](index=22&type=chunk) - These measures are defined and reconciled later in the press release and are not considered alternatives to GAAP measures such as net income or operating income[22](index=22&type=chunk) - Non-GAAP measures may not be comparable to similarly titled measures of other companies[22](index=22&type=chunk) [Company Information and Forward-Looking Statements](index=7&type=section&id=Company%20Information%20and%20Use%20of%20Forward-Looking%20Statements) This section provides an overview of the company and important disclaimers regarding forward-looking statements [Company Overview](index=7&type=section&id=Company%20Overview) Enterprise Products Partners L.P. is a leading North American midstream energy services provider, offering a wide range of services for natural gas, NGLs, crude oil, refined products, and petrochemicals, supported by extensive pipeline and storage infrastructure - Enterprise Products Partners L.P. is one of the largest publicly traded partnerships and a leading North American provider of midstream energy services[23](index=23&type=chunk) - Services include natural gas gathering, treating, processing, transportation and storage; NGL transportation, fractionation, storage and marine terminals; crude oil gathering, transportation, storage and marine terminals; petrochemical and refined products transportation, storage and marine terminals; and a marine transportation business[23](index=23&type=chunk) - The partnership's assets include over **50,000 miles** of pipelines, over **300 million barrels** of storage capacity, and **14 billion cubic feet** of natural gas storage capacity[23](index=23&type=chunk) [Forward-Looking Statements Disclaimer](index=7&type=section&id=Forward-Looking%20Statements%20Disclaimer) The press release contains forward-looking statements regarding future results, capital expenditures, and market conditions, which are subject to various risks and uncertainties, and actual outcomes may differ materially - The press release includes forward-looking statements concerning future results, capital expenditures, project completions, liquidity, and financial market conditions[24](index=24&type=chunk) - These statements involve risks and uncertainties such as insufficient cash from operations, adverse market conditions, governmental regulations, and other factors discussed in SEC filings[24](index=24&type=chunk) - The partnership disclaims any intention or obligation to update publicly or revise such statements[24](index=24&type=chunk) [Detailed Financial Data and Reconciliations](index=8&type=section&id=Detailed%20Financial%20Data%20and%20Reconciliations) This section presents detailed financial statements, operational data, commodity price trends, and reconciliations of non-GAAP financial measures [Condensed Statements of Consolidated Operations](index=8&type=section&id=Condensed%20Statements%20of%20Consolidated%20Operations) This section presents the condensed consolidated income statement, cash flow summary, and key non-GAAP metrics for the three and twelve months ended March 31, 2025 and 2024, showing revenues, costs, net income, and various cash flow measures | Metric | Q1 2025 ($ millions) | Q1 2024 ($ millions) | 12 Months Ended March 31, 2025 ($ millions) | | :------------------------------------ | :------------------- | :------------------- | :------------------------------------------ | | Revenues | $15,417 | $14,760 | $56,876 | | Operating costs and expenses | $13,690 | $12,974 | $49,761 | | Operating income | $1,761 | $1,822 | $7,277 | | Net income | $1,406 | $1,483 | $5,893 | | Net income attributable to common unitholders | $1,393 | $1,456 | $5,834 | | Earnings per common unit (fully diluted) | $0.64 | $0.66 | $2.66 | | Net cash flow provided by operating activities | $2,314 | $2,111 | $8,318 | | Net cash flow used in investing activities | $1,047 | $1,038 | $5,442 | | Net cash flow used in financing activities | $1,651 | $1,009 | $2,806 | | Total debt principal outstanding (end of period) | $31,887 | $29,721 | $31,887 | | Non-GAAP Distributable Cash Flow | $2,013 | $1,915 | $7,937 | | Non-GAAP Adjusted EBITDA | $2,444 | $2,469 | $9,874 | | Non-GAAP total gross operating margin | $2,431 | $2,490 | $9,925 | [Selected Operating Data](index=9&type=section&id=Selected%20Operating%20Data) This table provides detailed operational volumes across NGL, crude oil, natural gas, and petrochemical & refined products segments for the three and twelve months ended March 31, 2025 and 2024, showing specific transportation, terminal, fractionation, and production volumes | Metric | Q1 2025 | Q1 2024 | 12 Months Ended March 31, 2025 | | :---------------------------------------------------------------- | :------ | :------ | :----------------------------- | | NGL pipeline transportation volumes (MBPD) | 4,447 | 4,238 | 4,476 | | NGL marine terminal volumes (MBPD) | 994 | 895 | 940 | | NGL fractionation volumes (MBPD) | 1,652 | 1,642 | 1,670 | | Equity NGL-equivalent production volumes (MBPD) | 225 | 185 | 213 | | Fee-based natural gas processing volumes (MMcf/d) | 7,181 | 6,421 | 6,921 | | Natural gas processing inlet volumes (MMcf/d) | 7,719 | 7,144 | 7,633 | | Crude oil pipeline transportation volumes (MBPD) | 2,484 | 2,456 | 2,536 | | Crude oil marine terminal volumes (MBPD) | 736 | 1,094 | 867 | | Natural gas pipeline transportation volumes (BBtus/d) | 20,310 | 18,934 | 19,616 | | Propylene production volumes (MBPD) | 113 | 106 | 114 | | Pipeline transportation volumes, primarily refined products and petrochemicals (MBPD) | 949 | 870 | 966 | | Equivalent pipeline transportation volumes (MBPD) | 13,225 | 12,547 | 13,140 | [Commodity Price Trends](index=10&type=section&id=Commodity%20Price%20Trends) This section provides quarterly average market prices for natural gas, various NGLs, and crude oil, highlighting that the weighted-average indicative market price for NGLs increased in Q1 2025 compared to Q1 2024 [Natural Gas and NGL Prices](index=10&type=section&id=Natural%20Gas%20and%20NGL%20Prices) This section details the quarterly average market prices for natural gas and various NGLs | Commodity | Q1 2025 | Q1 2024 | | :-------------------------- | :------ | :------ | | Natural Gas, $/MMBtu | $3.65 | $2.25 | | Ethane, $/gallon | $0.27 | $0.19 | | Propane, $/gallon | $0.90 | $0.84 | | Normal Butane, $/gallon | $1.06 | $1.03 | | Isobutane, $/gallon | $1.07 | $1.14 | | Natural Gasoline, $/gallon | $1.53 | $1.54 | | Polymer Grade Propylene, $/pound | $0.45 | $0.55 | | Refinery Grade Propylene, $/pound | $0.33 | $0.18 | [Crude Oil Prices](index=10&type=section&id=Crude%20Oil%20Prices) This section presents the quarterly average market prices for different crude oil benchmarks | Crude Oil | Q1 2025 ($/barrel) | Q1 2024 ($/barrel) | | :---------- | :----------------- | :----------------- | | WTI | $71.42 | $76.96 | | Midland | $72.52 | $78.55 | | Houston | $72.81 | $78.85 | - The weighted-average indicative market price for NGLs at Mont Belvieu, Texas, was **$0.67 per gallon** during Q1 2025, up from **$0.62 per gallon** during Q1 2024[39](index=39&type=chunk) - Fluctuations in energy commodity prices largely explain changes in consolidated revenues and cost of sales, but comparable increases in purchase prices mean an increase in sales prices may not result in an increase in gross operating margin or cash available for distribution[39](index=39&type=chunk) [Free Cash Flow (FCF) and Adjusted FCF Reconciliation](index=11&type=section&id=Free%20Cash%20Flow%20(FCF)%20and%20Adjusted%20FCF%20Reconciliation) This exhibit reconciles GAAP net cash flow provided by operating activities to non-GAAP FCF and Adjusted FCF, providing measures of cash generated after accounting for capital expenditures, with FCF at $1.258 billion and Adjusted FCF at $1.055 billion for Q1 2025 | Metric | Q1 2025 ($ millions) | Q1 2024 ($ millions) | 12 Months Ended March 31, 2025 ($ millions) | | :------------------------------------------ | :------------------- | :------------------- | :------------------------------------------ | | Net cash flow provided by operating activities (GAAP) | $2,314 | $2,111 | $8,318 | | FCF (non-GAAP) | $1,258 | $1,043 | $2,881 | | Adjusted FCF (non-GAAP) | $1,055 | $1,079 | $3,148 | - FCF is a non-GAAP measure reflecting cash available for reducing debt, investing in additional capital projects, and/or paying distributions[40](index=40&type=chunk) - Adjusted FCF is FCF excluding the net effect of changes in operating accounts, providing insight without fluctuations caused by timing of collections or payments[40](index=40&type=chunk) [Adjusted Cash Flow from Operations (Adjusted CFFO) Reconciliation](index=12&type=section&id=Adjusted%20Cash%20Flow%20from%20Operations%20(Adjusted%20CFFO)%20Reconciliation) This exhibit reconciles GAAP net cash flow provided by operating activities to non-GAAP Adjusted CFFO, which was $2.111 billion for Q1 2025, representing cash generated from operations before the net effect of changes in operating accounts | Metric | Q1 2025 ($ millions) | Q1 2024 ($ millions) | 12 Months Ended March 31, 2025 ($ millions) | | :------------------------------------------ | :------------------- | :------------------- | :------------------------------------------ | | Net cash flow provided by operating activities (GAAP) | $2,314 | $2,111 | $8,318 | | Adjusted CFFO (non-GAAP) | $2,111 | $2,147 | $8,585 | - Adjusted CFFO is a non-GAAP measure representing net cash flow provided by operating activities before the net effect of changes in operating accounts, used to measure cash for capital investments or investor returns without timing fluctuations[41](index=41&type=chunk) [Distributable Cash Flow (DCF) and Operational DCF Reconciliation](index=13&type=section&id=Distributable%20Cash%20Flow%20(DCF)%20and%20Operational%20DCF%20Reconciliation) This exhibit reconciles GAAP net income attributable to common unitholders to non-GAAP DCF and Operational DCF, which were $2.013 billion and $2.009 billion respectively for Q1 2025, serving as key liquidity measures for common unitholders | Metric | Q1 2025 ($ millions) | Q1 2024 ($ millions) | 12 Months Ended March 31, 2025 ($ millions) | | :------------------------------------------ | :------------------- | :------------------- | :------------------------------------------ | | Net income attributable to common unitholders (GAAP) | $1,393 | $1,456 | $5,834 | | Operational DCF (non-GAAP) | $2,009 | $1,942 | $7,925 | | DCF (non-GAAP) | $2,013 | $1,915 | $7,937 | - DCF is an important non-GAAP liquidity measure indicating the ability to provide a cash return on investment and sustain or increase quarterly cash distributions[44](index=44&type=chunk) - Operational DCF is a supplemental non-GAAP liquidity measure that quantifies cash available for distribution generated from normal operations, excluding asset sales and interest rate derivative monetization[45](index=45&type=chunk) [Adjusted EBITDA Reconciliation](index=14&type=section&id=Adjusted%20EBITDA%20Reconciliation) This exhibit reconciles GAAP net income to non-GAAP Adjusted EBITDA, which was $2.444 billion for Q1 2025, a measure used by management and external users to assess financial performance without regard to financing methods or capital structures | Metric | Q1 2025 ($ millions) | Q1 2024 ($ millions) | 12 Months Ended March 31, 2025 ($ millions) | | :------------------------------------------ | :------------------- | :------------------- | :------------------------------------------ | | Net income (GAAP) | $1,406 | $1,483 | $5,893 | | Adjusted EBITDA (non-GAAP) | $2,444 | $2,469 | $9,874 | - Adjusted EBITDA is commonly used by management and external users to assess financial performance, the ability of assets to generate cash for debt, and the viability of projects[48](index=48&type=chunk) - Adjusted EBITDA may not be comparable to similarly titled measures of other companies[49](index=49&type=chunk) [Gross Operating Margin Reconciliation](index=15&type=section&id=Gross%20Operating%20Margin%20Reconciliation) This exhibit reconciles non-GAAP total gross operating margin to GAAP total operating income, with total gross operating margin reported at $2.431 billion for Q1 2025, serving as a key performance measure of core profitability | Metric | Q1 2025 ($ millions) | Q1 2024 ($ millions) | 12 Months Ended March 31, 2025 ($ millions) | | :------------------------------------------ | :------------------- | :------------------- | :------------------------------------------ | | Total gross operating margin (non-GAAP) | $2,431 | $2,490 | $9,925 | | Total operating income (GAAP) | $1,761 | $1,822 | $7,277 | - Gross operating margin is an important performance measure of the core profitability of operations and forms the basis of internal financial reporting[52](index=52&type=chunk) - Total gross operating margin represents GAAP operating income exclusive of depreciation, amortization, impairment charges, asset sales gains/losses, and general and administrative costs[53](index=53&type=chunk) [Other Financial Information](index=16&type=section&id=Other%20Financial%20Information) This section provides additional financial details, including a summary of capital investments and the mark-to-market impact on gross operating margin for the periods indicated [Capital Investments](index=16&type=section&id=Capital%20Investments) This section provides a summary of the company's capital expenditures and total capital investments | Metric | Q1 2025 ($ millions) | Q1 2024 ($ millions) | 12 Months Ended March 31, 2025 ($ millions) | | :------------------------ | :------------------- | :------------------- | :------------------------------------------ | | Capital expenditures | $1,062 | $1,047 | $4,559 | | Total capital investments | $1,066 | $1,055 | $5,535 | [Mark-to-Market Impact on Gross Operating Margin](index=16&type=section&id=Mark-to-Market%20Impact%20on%20Gross%20Operating%20Margin) This section details the mark-to-market impact on gross operating margin across various segments | Segment | Q1 2025 ($ millions) | Q1 2024 ($ millions) | | :-------------------------------------- | :------------------- | :------------------- | | NGL Pipelines & Services | ($5) | ($7) | | Crude Oil Pipelines & Services | ($2) | $4 | | Natural Gas Pipelines & Services | ($33) | ($2) | | Petrochemical & Refined Products Services | ($2) | $1 | | Total mark-to-market impact on gross operating margin | ($42) | ($4) |

Industry Overview - Pipeline companies are well positioned despite disruptions in energy markets, functioning similarly to toll-road businesses where energy prices have a moderate impact on results [1] - Demand for natural gas is increasing due to rising power consumption from artificial intelligence (AI) and export demand for LNG to Asia and Europe [1] Company Summaries Energy Transfer - Energy Transfer operates one of the largest integrated midstream systems in the U.S., particularly in the Permian Basin, which has low breakeven costs [3] - The company plans to increase growth capital expenditures from $3 billion in 2024 to $5 billion in 2025, with key projects like the Hugh Brinson Pipeline to support growing power demand in Texas [4] - Energy Transfer has a robust project backlog and offers a 7.9% yield with plans to grow distributions at a rate of 3% to 5% [5] Enterprise Products Partners - Enterprise Products Partners has increased its distribution for 26 consecutive years and is also well positioned in the Permian Basin [6] - The company plans to spend $4 billion to $4.5 billion on growth projects this year, up from $3.9 billion last year [6] - Enterprise has $7.6 billion in growth projects under construction, with $6 billion expected to come online this year, and offers a 7.1% yield with a 1.7 times coverage ratio [7] The Williams Companies - The Williams Companies owns the Transco pipeline system, which is valuable for transporting natural gas from Appalachia to the Gulf Coast [9] - Transco provides expansion opportunities, particularly as utilities switch from coal to natural gas, with seven expansion projects planned between 2025 and 2029 [10] - The company currently has a 3.5% yield and plans to grow its dividend by over 5% this year [11] Kinder Morgan - Kinder Morgan handles around 40% of U.S. natural gas production and has a strong presence in the Permian Basin [12] - The project backlog has increased from $3 billion at the end of 2023 to $8.8 billion by Q1 2025, with a projected return of 16.7% on these investments [13] - The stock offers a 4.5% yield and has improved its leverage from 5.1 times in 2017 to 4 times in 2024 [14]

Core Viewpoint - Enterprise Products Partners (EPD) is expected to report quarterly earnings of $0.69 per share, a 4.6% increase year-over-year, while revenues are forecasted to decline by 4.5% to $14.09 billion [1]. Earnings Estimates - The consensus EPS estimate has been revised 0.7% higher in the last 30 days, indicating a collective reevaluation by analysts [2]. - Revisions to earnings estimates are significant indicators for predicting investor actions regarding the stock, with empirical research showing a strong correlation between earnings estimate trends and short-term stock price performance [3]. Key Metrics Projections - Analysts project 'NGL Pipelines & Services net - NGL fractionation volumes per day' to reach 1,613.15 million barrels of oil, up from 1,557 million barrels in the same quarter last year [5]. - 'NGL Pipelines & Services net - Fee-based natural gas processing per day' is expected to be 7,062.97 million barrels of oil, compared to 6,363 million barrels in the same quarter last year [6]. - 'NGL Pipelines & Services net - NGL pipeline transportation volumes per day' is forecasted at 4,458.61 million barrels of oil, up from 4,157 million barrels in the same quarter last year [7]. - 'Natural Gas Pipelines & Services net - Natural gas transportation volumes per day' is estimated at 20,175.16 BBtu/D, compared to 18,600 BBtu/D a year ago [7]. - 'Petrochemical Services net - Butane isomerization volumes per day' is projected to be 120.07 million barrels of oil, slightly up from 117 million barrels last year [8]. - 'Petrochemical Services net - Propylene fractionation volumes per day' is expected to reach 104.11 million barrels of oil, compared to 96 million barrels last year [9]. - 'Petrochemical Services net - Octane enhancement and related plant sales volumes per day' is estimated at 31.03 million barrels of oil, down from 35 million barrels last year [10]. - 'NGL Pipelines & Services net - Equity NGL production per day' is projected at 196.18 million barrels of oil, up from 185 million barrels last year [11]. Gross Operating Margin Estimates - 'Gross operating margin- NGL Pipelines & Services' is expected to reach $1.46 billion, compared to $1.34 billion in the same quarter last year [11]. - 'Gross operating margin- Crude Oil Pipelines & Services' is estimated at $411.62 million, slightly up from $411 million a year ago [12]. - 'Gross operating margin- Natural Gas Pipelines & Services' is projected at $342.12 million, compared to $312 million last year [12]. - 'Gross operating margin- Petrochemical & Refined Products Services' is expected to be $352.84 million, down from $444 million last year [13]. Stock Performance - Shares of Enterprise Products have shown a return of -7.8% over the past month, compared to a -4.8% change in the Zacks S&P 500 composite [13].

Core Insights - Abbott's diversified business portfolio is positioned to drive momentum in 2025 despite foreign exchange challenges [1] - The stock currently holds a Zacks Rank 3 (Hold) [1] Factors Driving Abbott Shares - Abbott's Established Pharmaceuticals Division (EPD) saw an 8% organic sales increase in Q1 2025, leveraging its presence in emerging markets [2] - The company has secured rights to 15 biosimilar products and recently agreed to commercialize four additional biosimilars across various regions, enhancing its position in the branded generic pharmaceutical market [2] Diagnostics Business Expansion - Abbott's Diagnostics business accounted for 20% of total revenues in Q1 2025, with a 6.5% growth in Core Laboratory Diagnostics (excluding China) [3] Diabetes Care Growth - The FreeStyle Libre continuous glucose monitoring system has achieved global leadership, with sales in Diabetes Care growing 21.6% to over $1.7 billion in Q1 2025 [4][5] Stock Performance - Year-to-date, Abbott shares have gained 17.7%, outperforming the industry's 1.7% improvement, driven by expansion in high-growth areas and new product launches [6] Concerns for Abbott - Foreign exchange impacts were unfavorable, contributing to a 2.8% decline in sales year-over-year in Q1 2025 [7] - Rising raw material and freight costs, along with a challenging macroeconomic environment, may affect Abbott's business in the coming months [8] - Selling, general, and administrative expenses increased by 3.4% in Q1 2025 [9]

Core Viewpoint - UPS has experienced significant stock decline and operational challenges, while Enterprise Products Partners presents a more stable investment opportunity with strong growth potential and high dividend yield [1][2][7]. UPS Overview - UPS operates in over 200 countries, delivering an average of 22.4 million packages daily and employing nearly half a million people [1]. - The company has been a member of the S&P 500 for 23 years and has raised its dividend annually for 16 consecutive years [1]. Recent Performance of UPS - Over the past two years, UPS's stock has plummeted by more than 50% due to decelerating deliveries, shrinking operating margins, and declining EPS [2]. - In 2023, UPS's revenue declined by 9%, adjusted operating margin shrank by 290 basis points to 10.9%, and EPS plunged by 41% [4]. - For 2024, revenue growth flatlined, adjusted operating margin dropped another 90 basis points to 9.8%, and EPS fell by 13% [4]. Future Projections for UPS - From 2024 to 2027, analysts expect UPS's revenue to grow at a compound annual growth rate (CAGR) of less than 1%, while EPS is projected to grow at a CAGR of 11% [5]. - If UPS matches analysts' estimates and trades at 13 times forward earnings by the beginning of 2027, its stock price could rise about 23% to $119, driving its market cap to just over $100 billion [6]. Enterprise Products Partners Overview - Enterprise Products Partners builds pipelines for transporting natural gas, natural gas liquids, and crude oil, operating over 50,000 miles of pipeline across the U.S. with a combined storage capacity of over 300 million barrels of oil [8]. - As a midstream company, Enterprise generates revenue by charging upstream extraction and downstream refining companies "tolls" to use its pipelines, making it less affected by fluctuating fuel prices [9]. Growth Potential of Enterprise Products Partners - Enterprise is well-insulated from inflation and macro headwinds, benefiting from the Trump Administration's promotion of domestic fossil fuels [10]. - The company is a master limited partnership (MLP), reporting profits in earnings per unit (EPU) and returning most of its EPU to investors as distributions [11]. - From 2014 to 2024, Enterprise's EPU grew at a steady CAGR of 6%, with a current forward distribution of $2.14 per share, equating to a forward yield of 6.9% [12]. Future Projections for Enterprise Products Partners - Analysts expect Enterprise's EPU to continue growing at a CAGR of 6% from 2024 to 2027, driven by pipeline expansions in oil-rich locations [12]. - At $31, Enterprise trades at just 11 times this year's EPU estimate, and if it trades at 15 times forward earnings by Q1 2027, its stock price could rise 53% to nearly $48, boosting its market cap to $102.5 billion [13].

Core Viewpoint - Enterprise Products Partners (EPD) is experiencing a mixed performance in the market, with a recent stock price of $30.70 and a notable decline over the past month, while upcoming earnings are anticipated to show slight growth in EPS but a decrease in revenue [1][2]. Company Performance - EPD's stock price remained unchanged at $30.70, underperforming compared to the S&P 500's gain of 1.67% on the same day [1]. - Over the past month, EPD shares have decreased by 8.36%, which is better than the Oils-Energy sector's decline of 10.69% but worse than the S&P 500's loss of 6.57% [1]. Upcoming Earnings - The company is set to release its earnings report on April 29, 2025, with an expected EPS of $0.70, reflecting a 6.06% increase from the same quarter last year [2]. - Revenue is projected to be $14.19 billion, indicating a 3.83% decrease compared to the equivalent quarter last year [2]. Full Year Estimates - For the full year, earnings are estimated at $2.91 per share and revenue at $57.77 billion, showing increases of 8.18% and 2.76% respectively from the previous year [3]. - Recent analyst estimate revisions suggest a positive outlook for EPD's business and profitability [3]. Analyst Ratings - EPD currently holds a Zacks Rank of 2 (Buy), with a 0.21% increase in the consensus EPS estimate over the last 30 days [5]. - The Zacks Rank system has a strong track record, with 1 stocks averaging a 25% annual return since 1988 [5]. Valuation Metrics - EPD is trading at a Forward P/E ratio of 10.54, which is lower than the industry average of 11.83 [6]. - The company has a PEG ratio of 1.25, compared to the Oil and Gas - Production Pipeline - MLB industry's average PEG ratio of 1.04 [7]. Industry Context - The Oil and Gas - Production Pipeline - MLB industry is ranked 22 in the Zacks Industry Rank, placing it in the top 9% of over 250 industries [8]. - Higher-rated industries tend to outperform lower-rated ones by a factor of 2 to 1 [8].

Core Viewpoint - Energy Transfer (ET) offers an attractive yield of approximately 7.6%, significantly higher than the broader market's yield of 1.3% and the average energy stock's yield of around 3% [1] Company Overview - Energy Transfer operates as a midstream business, owning energy infrastructure such as pipelines and storage assets that facilitate the movement of oil and natural gas globally [2] - The company charges fees for the use of its energy assets, functioning similarly to a toll on a bridge [2] Industry Context - The midstream sector is essential for the energy industry, as it ensures the movement of oil and gas regardless of price fluctuations, leading to relatively reliable cash flows throughout economic cycles [3] Comparison with Peers - Energy Transfer's business model is not unique; for instance, Enterprise Products Partners (EPD) operates similarly but offers a lower yield of 6.9%, which may be a more prudent choice for investors [4] - Enterprise Products Partners has a history of increasing its distribution consistently, even during uncertain times, contrasting with Energy Transfer's past distribution cut [7][8] Reliability Concerns - Energy Transfer's distribution has been increasing since 2021 after a significant cut in 2020, which raised concerns about its reliability among dividend investors [5] - The lack of explanation for the 2020 distribution cut and the subsequent focus on debt reduction during uncertain times has led to skepticism regarding Energy Transfer's commitment to consistent payouts [5][8] Investor Considerations - For dividend investors prioritizing income consistency, Enterprise Products Partners may be viewed as a better option due to its track record of regular increases, despite its lower yield [9]

Core Viewpoint - The stock market has experienced significant volatility, with the S&P 500 down nearly 13% and the Nasdaq down almost 17%, primarily due to recession concerns driven by tariffs. Amid this environment, investing in resilient companies like Enterprise Products Partners (EPD) can help protect portfolios during market downturns [1][2]. Group 1: Recession Resistance - Enterprise Products Partners is one of the largest energy midstream companies in the U.S., operating critical infrastructure for energy commodities, which tends to have stable demand even during economic downturns [3]. - The company has a demand-based business model, with most assets under long-term, fixed-rate contracts or government-regulated rate structures, ensuring consistent cash flows that are resilient during recessions [4]. Group 2: Inflation Protection - Concerns about stagflation due to tariffs are mitigated by Enterprise Products Partners' business model, as approximately 90% of its long-term contracts include escalation provisions that protect cash flow from inflation [5]. Group 3: Financial Profile - Enterprise Products Partners has a strong financial profile, being the only midstream energy company with an A-rated credit, allowing it to borrow at lower costs and better terms compared to competitors [7]. - The company maintains a low leverage ratio of 3.1, providing financial flexibility to capitalize on opportunities during downturns [8]. Group 4: Cash Distributions - The company generates resilient, inflation-protected cash flows, enabling it to offer a distribution yield of 7.2%, significantly higher than the S&P 500's yield of less than 1.5% [9]. - Enterprise Products Partners has raised its distribution payment for 26 consecutive years, demonstrating the durability of its business model through various economic cycles [10]. - The company has $7.6 billion in major capital projects under construction, with $6 billion expected to enter commercial service this year, which will support future distribution growth [11].

Core Viewpoint - The article emphasizes the importance of identifying stocks with attractive dividends amidst market volatility, particularly due to the impact of tariffs on stock performance. Group 1: Energy Transfer and Enterprise Products Partners - Energy Transfer and Enterprise Products Partners are two major midstream master limited partnerships (MLPs) in the U.S. with strong distributions well covered by their distributable cash flow [2][3] - Energy Transfer has a forward yield of 8.3%, while Enterprise Products Partners has a yield of 7.4% [2] - Both companies benefit from increasing natural gas demand and have a fee-based business model, which helps protect cash flow during economic downturns [3] - They are currently in growth mode, but tariffs on products like steel may increase project costs, potentially affecting project returns [4] - Energy Transfer trades at an enterprise value (EV)-to-EBITDA multiple of 8.1 times, while Enterprise trades at 9.8 times, both below the historical average of 13.7 times [5] Group 2: Philip Morris International - Philip Morris International is a growth stock in a defensive industry with a current yield of 3.6% [6] - The company has minimal exposure to tariffs, as its products are primarily sold and manufactured outside the U.S. [7] - Growth is driven by its smokeless portfolio, particularly Zyn and IQOS, with Zyn volumes increasing by 46% last quarter [8] - Zyn has six times the product contribution level compared to traditional cigarettes, while IQOS has 2 to 2.5 times [9] - The stock is attractively valued with a forward P/E ratio of just over 21 times and a PEG ratio under 0.4, indicating it is undervalued [10] Group 3: Verizon - Verizon Communications offers a 6.4% yield and is considered attractive due to the essential nature of its services during economic downturns [11] - The company has experienced modest overall revenue growth but strong subscriber growth in wireless and broadband [12] - Verizon is leveraging its network for the AI market with its AI Connect solution, which is being utilized by major companies like Alphabet and Meta Platforms [13] - The company generated $19.8 billion in free cash flow last year, significantly exceeding its $11.2 billion in dividends, allowing for potential dividend increases and investments [14]