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EPD > SEC Filings for EPD > Form 8-K on 1-Aug-2013All Recent SEC Filings

Show all filings for ENTERPRISE PRODUCTS PARTNERS L P

Form 8-K for ENTERPRISE PRODUCTS PARTNERS L P


1-Aug-2013

Results of Operations and Financial Condition, Other Events, Fin


Item 2.02 Results of Operations and Financial Condition.

On August 1, 2013, Enterprise Products Partners L.P. ("Enterprise") (NYSE:EPD) issued a press release announcing its financial and operating results for the three and six months ended June 30, 2013, and will hold a webcast conference call discussing those results. A copy of the earnings press release is furnished as Exhibit 99.1 to this Current Report, which is hereby incorporated by reference into this Item 2.02. The webcast conference call will be archived and available for replay on Enterprise's website at www.enterpriseproducts.com for 90 days.



Item 8.01 Other Events.
Condensed Consolidated Financial Highlights - Second Quarter 2013 Results
(Unaudited)
On August 1, 2013, Enterprise announced its consolidated financial results for
the three and six months ended June 30, 2013.  The following table presents
condensed consolidated financial highlights for the periods and at the dates
indicated (dollars in millions, except per unit amounts):
                                               Three Months Ended June 30,           Six Months Ended June 30,
                                                2013                 2012              2013               2012
                                                       (Unaudited)                          (Unaudited)
Selected Income Statement Data:
  Revenues                                 $     11,149.3       $      9,789.8     $    22,532.4       $ 21,042.3
  Costs and expenses                             10,412.7              9,052.0          20,882.6         19,565.5
  Equity in income of unconsolidated
affiliates                                           37.6                 11.3              82.1             21.2
  Operating income                                  774.2                749.1           1,731.9          1,498.0
  Interest expense                                  200.2                186.6             396.1            373.1
  Benefit from (provision for) income
taxes                                               (20.4 )               (8.5 )           (26.8 )           25.9
  Net income                                        553.3                567.2           1,308.6          1,222.7
  Net income attributable to
noncontrolling interests                              0.8                  0.9               2.6              5.1
  Net income attributable to limited
partners                                            552.5                566.3           1,306.0          1,217.6
  Earnings per unit, fully diluted                   0.60                 0.64              1.43             1.37

Non-GAAP Gross Operating Margin by
Segment:
  NGL Pipelines & Services                 $        544.9       $        565.8     $     1,137.4       $  1,220.7
  Onshore Natural Gas Pipelines &
Services                                            197.7                175.8             388.5            382.0
  Onshore Crude Oil Pipelines & Services            197.2                 95.8             433.6            135.1
  Offshore Pipelines & Services                      39.7                 38.3              80.2             90.4
  Petrochemical & Refined Products
Services                                            162.7                157.3             333.6            255.1
  Other                                                --                   --                --              2.4
  Total gross operating margin             $      1,142.2       $      1,033.0     $     2,373.3       $  2,085.7

                                              June 30,           December 31,
                                                2013                 2012
                                            (Unaudited)
Selected Balance Sheet Data:
  Cash and cash equivalents
(unrestricted)                             $         45.3       $         16.1
  Total assets                                   37,799.7             35,934.4
  Total debt principal outstanding,
including
   current maturities                            16,967.7             16,179.3
  Partners' equity                               14,155.9             13,187.7
  Noncontrolling interests                          196.9                108.3

For the second quarter of 2013, distributions received from unconsolidated affiliates were $68 million and depreciation, amortization and accretion expenses totaled $308 million. In addition, during the second quarter of 2013, our total capital spending was approximately $1.1 billion, of which $75 million was attributable to sustaining capital projects. We received $69 million from the sale of assets during the second quarter of 2013.


The foregoing information has not been reviewed by our independent auditors and is subject to revision as we prepare our unaudited condensed consolidated financial statements as of and for the quarterly period ended June 30, 2013.
This information is not a comprehensive statement of our financial results for the quarterly period ended June 30, 2013, and our actual results may differ materially from these estimates as a result of the completion of our financial closing process, final adjustments (if any) and other developments arising between now and the time that our financial results for the quarterly period ended June 30, 2013 are finalized.

Highlights of Second Quarter of 2013 Results. Net income attributable to limited partners for the second quarter of 2013 was $553 million compared to $566 million for the second quarter of 2012. Earnings per unit for the second quarter of 2013 were $0.60 per unit on a fully diluted basis compared to $0.64 per unit on a fully diluted basis for the second quarter of 2012. Net income for the second quarter of 2013 was reduced by $27 million, or $0.03 per unit on a fully diluted basis, for non-cash charges related to asset impairments; $13 million, or $0.01 per unit on a fully diluted basis, to record the deferred tax expense and liability with respect to recent changes to the Texas margin tax; and non-cash losses of $6 million, or a loss of $0.01 per unit on a fully diluted basis, related to the sales of assets. The second quarter of 2012 included non-cash gains of $45 million, or $0.05 per unit on a fully diluted basis, related to sales of assets and insurance recoveries.

Revenues for the second quarter of 2013 increased 14 percent to $11.1 billion from $9.8 billion in the same quarter of 2012 primarily attributable to higher sales volumes. Changes in our revenues and operating costs and expenses quarter-to-quarter are explained in part by changes in energy commodity prices.
In general, higher energy commodity prices result in an increase in our revenues attributable to the sale of NGLs, natural gas, crude oil, petrochemicals and refined products; however, these higher commodity prices also increase the associated cost of sales as purchase costs rise.

Gross operating margin for the second quarter of 2013 was $1.1 billion compared to $1.0 billion for the second quarter of last year. The following information highlights significant changes in our comparative segment results (i.e., gross operating margin amounts) and the primary drivers of such changes.

NGL Pipelines & Services - Gross operating margin for the NGL Pipelines & Services segment was $545 million for the second quarter of 2013 compared to $566 million for the second quarter of 2012.

Enterprise's natural gas processing and related NGL marketing business generated gross operating margin of $264 million for the second quarter of 2013 compared to $339 million for the second quarter of 2012. This decrease was largely due to lower system-wide natural gas processing margins as a result of higher natural gas prices and lower NGL prices in the second quarter of 2013 compared to the second quarter of last year. Our three processing plants in the Rocky Mountains (Meeker, Pioneer and Chaco) reported a $91 million decrease in gross operating margin compared to the second quarter of 2012. The effects of lower processing margins were partially offset by an aggregate $23 million increase in gross operating margin from the partnership's NGL marketing business and processing plants in South Texas on increases in fee-based processing volumes and equity NGL production (the NGLs that Enterprise earns title to as a result of providing processing services).

Enterprise's natural gas processing plants reported a 0.3 billion cubic feet per day ("Bcfd") increase in fee-based processing volumes to 4.6 Bcfd in the second quarter of 2013 compared to the second quarter of 2012. Equity NGL production was 118 thousand barrels per day ("MBPD") for the second quarter of 2013 compared to 96 MBPD for the second quarter of 2012. Fee-based natural gas processing volumes and equity NGL production from the partnership's processing plants in South Texas increased by 0.6 Bcfd and 32 MBPD, respectively, to 2.2 Bcfd and 40 MBPD, respectively, compared to the second quarter of 2012. These increases in South Texas volumes were primarily due to production growth from the Eagle Ford shale and the start-up of three natural gas processing plants at our Yoakum facility. The first and second plants began commercial operations in May 2012 and August 2012, respectively, while the third plant began operations in March 2013. The increase in fee-based processing volumes and equity NGL production from the South Texas plants more than offset a 0.2 Bcfd and 9 MBPD decrease in fee-based processing volumes and equity NGL production, respectively, from Enterprise's natural gas processing plants in the Rocky Mountains due to lower production and reduced recoveries of ethane.

Gross operating margin from the partnership's NGL pipelines and storage business increased $30 million, or 19 percent, to $188 million for the second quarter of 2013 from $158 million for the second quarter of 2012.


NGL pipeline volumes increased by 304 MBPD, or 12 percent, in the second quarter of 2013 to a record 2.7 million barrels per day ("BPD") compared to the second quarter of 2012. The partnership's South Texas NGL pipeline system reported a $21 million increase in gross operating margin on a 125 MBPD increase in volume due to Eagle Ford shale production growth. Enterprise's LPG export terminal on the Houston Ship Channel and its related pipeline reported a combined $12 million increase in gross operating margin on a 202 MBPD increase in aggregate volume. The expansion of the LPG export terminal was completed in March 2013.

Enterprise's NGL fractionation business reported a $24 million, or 35 percent, increase in gross operating margin to $93 million for the second quarter of 2013 from $69 million reported for the same quarter of 2012. Our Mont Belvieu fractionators reported a $19 million increase in gross operating margin reflecting higher volumes and revenues associated with our sixth NGL fractionator that began service in October 2012. Fractionation volumes for the second quarter of 2013 increased to 678 MBPD from 654 MBPD in the second quarter of 2012.

Onshore Natural Gas Pipelines & Services - Enterprise's Onshore Natural Gas Pipelines & Services segment reported gross operating margin of $198 million for the second quarter of 2013 compared to $176 million for the second quarter of 2012. For the second quarter of 2013, the Texas Intrastate pipeline system reported a $22 million increase in gross operating margin on higher revenues and a 311 billion British thermal units per day ("BBtud") increase in volumes as a result of increases in Eagle Ford shale production compared to the second quarter of 2012. Aggregate gross operating margin from the San Juan, Carlsbad and South Texas natural gas gathering systems for the second quarter of 2013 increased by $7 million compared to the second quarter of 2012, which was partially offset by an aggregate $5 million decrease in gross operating margin from our Jonah and Haynesville gathering systems compared to the second quarter of last year.

Total onshore natural gas pipeline volumes were 13.3 trillion British thermal units per day ("TBtud") for the second quarter of 2013 compared to 13.8 TBtud for the second quarter of 2012. The increase in natural gas volumes on the Texas Intrastate pipeline was more than offset by an aggregate decrease of 547 BBtud in volumes on the Jonah, Piceance Basin and San Juan gathering systems in the Rocky Mountains and a 231 BBtud decrease on the Haynesville gathering system in North Louisiana.

Onshore Crude Oil Pipelines & Services - Gross operating margin from Enterprise's Onshore Crude Oil Pipelines & Services segment increased $101 million to $197 million for the second quarter of 2013 from $96 million for the second quarter of 2012. Total onshore crude oil pipeline volumes increased by 420 MBPD, or 58 percent, to a record 1.1 million BPD for the second quarter of 2013 from 725 MBPD for the second quarter of 2012.

Enterprise's South Texas crude oil pipeline system reported a $59 million increase in gross operating margin on a 154 percent, or 162 MBPD, increase in volume compared to the second quarter of last year due to the start-up of our Eagle Ford crude oil pipeline extension, which began operations in June 2012.
Enterprise's share of equity income from the Seaway crude oil pipeline increased by $26 million for the second quarter of 2013 compared to the same quarter of 2012 due to an increase in volumes attributable to capital investments made to reverse the direction of Seaway to enable the delivery of crude oil from the storage hub in Cushing, Oklahoma to the Gulf Coast, which commenced during the second quarter of last year, and the addition of pump stations that increased the pipeline's capacity beginning in the first quarter of 2013. Enterprise's crude oil marketing business reported a $12 million increase in gross operating margin due to a mark-to-market gain on certain financial instruments that economically hedge pipeline basis differentials and higher sales volumes.

Offshore Pipelines & Services - Gross operating margin for the Offshore Pipelines & Services segment was $40 million for the second quarter of 2013 compared to $38 million for the same quarter of 2012.

The Independence Hub platform and Trail pipeline reported aggregate gross . . .



Item 9.01 Financial Statements and Exhibits.

(d)  Exhibits.

Exhibit No.      Description

                 Enterprise Products Partners L.P. press release dated August 1,
99.1             2013.


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