Enterprise Products Partners L.P.(EPD) - 2025 Q2 - Quarterly Results

Enterprise Reports Second Quarter 2025 Earnings Second Quarter 2025 Financial and Operational Highlights Enterprise reported stable net income of $1.4 billion, 7% DCF growth to $1.9 billion, and record operational volumes in Q2 2025 Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income (Common Unitholders) | $1.4 billion | $1.4 billion | 0% | | Diluted EPS | $0.66 | $0.64 | +3.1% | | Distributable Cash Flow (DCF) | $1.9 billion | $1.8 billion | +7% | | Adjusted CFFO | $2.1 billion | $2.1 billion | 0% | - Distributions declared for Q2 2025 increased by 3.8% year-over-year to $0.545 per common unit[4] - DCF covered this distribution 1.6 times, resulting in $748 million of retained DCF[4] Q2 2025 Volume Highlights | Volume Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Natural gas pipeline volumes (TBtus/d) | 20.4 | 18.7 | +9.1% | | Crude oil pipeline volumes (million BPD) | 2.6 | 2.5 | +4.0% | | Natural gas processing plant inlet volumes (Bcf/d) | 7.8 | 7.5 | +4.0% | | NGL pipeline transportation volumes (million BPD) | 4.6 | 4.3 | +5.1% | - Total capital investments in Q2 2025 were $1.3 billion, including $1.2 billion for growth projects[5][6] - The company repurchased approximately $110 million of its common units[5][6] - As of June 30, 2025, total debt principal was $33.1 billion, and the company had consolidated liquidity of approximately $5.1 billion[7] Management Commentary and Outlook Management reported solid Q2 earnings and cash flow, with $6 billion in organic growth projects expected online in H2 2025 - CEO A. J. "Jim" Teague noted that the company delivered solid earnings and cash flow despite a seasonally weaker quarter with macroeconomic, geopolitical, and commodity price headwinds[13] - The company has approximately $6 billion of organic growth capital projects slated to enter commercial service in the second half of 2025[14] - Key growth projects coming online include: - Two new 300 MMcf/d gas processing facilities in the Permian Basin (Mentone West 1 and Orion)[14][15] - The Neches River Terminal (NRT) for hydrocarbon exports, with a dock and ethane refrigeration train commissioned in July[14][15] - Frac 14 and the Bahia pipeline, expected to be commissioned in Q4 2025[14][15] Review of Second Quarter 2025 Results by Segment Total gross operating margin increased to $2.5 billion, driven by Natural Gas Pipelines & Services, offsetting declines in other segments Gross Operating Margin by Segment (in millions) | Segment | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | NGL Pipelines & Services | $1,297 | $1,325 | -2.1% | | Crude Oil Pipelines & Services | $403 | $417 | -3.4% | | Natural Gas Pipelines & Services | $417 | $293 | +42.3% | | Petrochemical & Refined Products Services | $354 | $392 | -9.7% | | Total Segment Gross Operating Margin | $2,471 | $2,427 | +1.8% | NGL Pipelines & Services NGL Pipelines & Services gross operating margin remained flat at $1.3 billion, with processing declines offsetting pipeline gains - Natural gas processing GOM decreased by $45 million to $341 million, primarily due to lower margins and a $16 million MTM loss, despite record fee-based processing volumes of 7.3 Bcf/d[17] - NGL pipelines and storage GOM increased by $31 million to $732 million, driven by a 5% increase in pipeline volumes and an 8% increase in marine terminal volumes[18] - NGL fractionation GOM decreased by $14 million to $224 million due to lower ancillary service revenues and higher operating costs, while fractionation volumes remained flat[20] Crude Oil Pipelines & Services Crude Oil Pipelines & Services gross operating margin decreased to $403 million due to lower marketing sales and marine terminal volumes - The segment's GOM decreased by a net $14 million, primarily due to lower sales volumes from marketing activities[20] - Total crude oil pipeline volumes were a record 2.6 million BPD, up from 2.5 million BPD in Q2 2024[20] - However, marine terminal volumes fell to 811 MBPD from 977 MBPD[20] Natural Gas Pipelines & Services Natural Gas Pipelines & Services gross operating margin surged 42% to $417 million, driven by marketing gains and record pipeline volumes - Gross operating margin from the natural gas marketing business increased by $75 million, primarily due to a $55 million increase in MTM earnings and higher sales margins[22] - Permian natural gas gathering systems reported a $24 million net increase in GOM due to a 1.0 TBtus/d increase in gathering volumes[22] - The Texas Intrastate System's GOM increased by $21 million due to higher transportation-related revenues as pipeline volumes grew[22] Petrochemical & Refined Products Services Petrochemical & Refined Products Services gross operating margin declined to $354 million, primarily due to lower octane enhancement margins - Gross operating margin from octane enhancement and related operations decreased by $49 million due to lower average sales margins[27] - Propylene production and related activities reported a $4 million increase in GOM, driven by an 11 MBPD increase in production volumes as PDH facilities had significantly less downtime compared to Q2 2024[27] - Total segment pipeline volumes reached a record 1.0 million BPD, an increase from 960 MBPD in Q2 2024[23] Financial Statements and Non-GAAP Reconciliations This section presents unaudited Q2 2025 financial statements, including GAAP and non-GAAP reconciliations for key metrics Condensed Statements of Consolidated Operations (Unaudited, $ in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenues | $11,363 | $13,483 | | Operating Income | $1,795 | $1,765 | | Net Income | $1,454 | $1,422 | | Net Income Attributable to Common Unitholders | $1,435 | $1,405 | Key Non-GAAP Financial Measures (Unaudited, $ in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Non-GAAP Distributable Cash Flow (DCF) | $1,939 | $1,812 | | Non-GAAP Adjusted EBITDA | $2,408 | $2,389 | | Non-GAAP Adjusted Cash flow from operations | $2,111 | $2,065 | | Non-GAAP Adjusted Free Cash Flow | $812 | $814 | - The report provides detailed reconciliations for non-GAAP measures to their most directly comparable GAAP measures, including DCF to Net Cash Flow Provided by Operating Activities, and Gross Operating Margin to Operating Income[24][47][55] Average Commodity Prices | Commodity | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | WTI Crude Oil ($/barrel) | $63.87 | $80.57 | | Natural Gas ($/MMBtu) | $3.44 | $1.89 | | Weighted-average NGL ($/gallon) | $0.58 | $0.59 |