Enterprise Products Partners L.P.(EPD) - 2025 Q1 - Quarterly Results

Executive Summary 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 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] Capital Investments, Buybacks, and Liquidity 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 $2.5 billion in 2026[6] Conference Call Information Enterprise will host a conference call on April 29, 2025, at 9:00 a.m. CT to discuss its first quarter 2025 earnings, which will be webcast live on the partnership's website - Conference call to discuss Q1 2025 earnings will be held on Tuesday, April 29, 2025, at 9:00 a.m. CT[1][8] - The call will be webcast live and accessible via the partnership's website at www.enterpriseproducts.com[8](index=8&type=chunk) First Quarter 2025 Financial and Operational Highlights This section provides a comprehensive overview of the company's financial and operational performance for the first quarter of 2025 Key Financial Metrics The company's Q1 2025 financial highlights show a slight decline in operating income, net income, and EPS compared to Q1 2024, while DCF and Operational DCF increased | Metric | Q1 2025 ($ 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] Key Operational Volumes 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 Management provides insights into the company's Q1 2025 performance, growth projects, and strategic outlook CEO's Remarks on Performance and Growth Projects 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] - 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] - 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] - Enterprise increased its cash distribution to partners by 3.9% to $0.535 per unit for Q1 2025[13] - 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] Segment Performance Review A detailed review of the gross operating margin and key drivers for each business segment in Q1 2025 NGL Pipelines & Services 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 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] - Gross operating margin from NGL marketing activities decreased $20 million primarily due to lower average sales margins, partially offset by higher sales volumes[17] NGL Pipelines & Storage 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] - Morgan's Point Ethane Export Terminal's gross operating margin increased $19 million due to a 68 MBPD increase in export volumes[17] NGL Fractionation 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] Crude Oil Pipelines & Services 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] Natural Gas Pipelines & Services 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] - The Delaware Basin Gathering System was expanded in October 2024 by acquiring the Pinon Midstream sour gas gathering and treating system[18] Petrochemical & Refined Products Services 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] - 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] - 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] Non-GAAP Financial Measures Explanation 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] - 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] - Non-GAAP measures may not be comparable to similarly titled measures of other companies[22] Company Information and Forward-Looking Statements This section provides an overview of the company and important disclaimers regarding forward-looking statements Company Overview 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] - 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] - 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] Forward-Looking Statements Disclaimer 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] - 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] - The partnership disclaims any intention or obligation to update publicly or revise such statements[24] Detailed Financial Data and Reconciliations This section presents detailed financial statements, operational data, commodity price trends, and reconciliations of non-GAAP financial measures Condensed Statements of Consolidated Operations 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 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 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 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 | $0.18 | Crude Oil Prices This section presents the quarterly average market prices for different crude oil benchmarks | Crude Oil | Q1 2025 ($/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] - 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] Free Cash Flow (FCF) and Adjusted FCF Reconciliation 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] - 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] Adjusted Cash Flow from Operations (Adjusted CFFO) Reconciliation 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] Distributable Cash Flow (DCF) and Operational DCF Reconciliation 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] - 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] Adjusted EBITDA Reconciliation 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] - Adjusted EBITDA may not be comparable to similarly titled measures of other companies[49] Gross Operating Margin Reconciliation 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 | $7,277 | - Gross operating margin is an important performance measure of the core profitability of operations and forms the basis of internal financial reporting[52] - Total gross operating margin represents GAAP operating income exclusive of depreciation, amortization, impairment charges, asset sales gains/losses, and general and administrative costs[53] Other Financial Information This section provides additional financial details, including a summary of capital investments and the mark-to-market impact on gross operating margin for the periods indicated Capital Investments This section provides a summary of the company's capital expenditures and total capital investments | Metric | Q1 2025 ($ 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 | $5,535 | Mark-to-Market Impact on Gross Operating Margin This section details the mark-to-market impact on gross operating margin across various segments | Segment | Q1 2025 ($ 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) |