Enterprise Declares Quarterly Distribution

Rhea-AI Summary

Enterprise Products Partners (NYSE: EPD) declared a quarterly cash distribution of $0.525 per unit for Q2 2024, translating to $2.10 per unit annually. This is a 5% increase over the previous year's Q2 distribution. The distribution will be paid on August 14, 2024, to unitholders of record as of July 31, 2024.

Additionally, Enterprise repurchased $40 million worth of common units in Q2 2024, utilizing 50% of its $2 billion buyback program. The company will announce its Q2 2024 earnings on July 30, 2024, followed by a conference call at 9 a.m. CDT.

Enterprise Products Partners operates over 50,000 miles of pipelines and substantial storage capacities for various energy products. The press release also includes a qualified notice regarding tax withholding for non-U.S. unitholders.

Positive

• Quarterly cash distribution increased by 5% to $0.525 per unit.
• Enterprise repurchased $40 million worth of common units in Q2 2024.
• Completed 50% of its $2 billion buyback program.

Negative

• Distributions to non-U.S. investors subject to federal income tax withholding at the highest applicable rate.

Insights

Financial Analyst

The announcement of a $0.525 per unit quarterly cash distribution is significant as it represents a 5% year-over-year increase. This increase demonstrates Enterprise Products Partners L.P.'s ability to generate consistent cash flow and reward its unitholders. It's also worth noting that the company has executed $40 million in common unit repurchases in the second quarter 2024, which indicates a commitment to returning value to shareholders.

The repurchase program being 50% utilized shows that the company is actively working towards shareholder value maximization through capital return strategies. This also implies a level of confidence in the company's financial health and future prospects.

Retail investors should consider the implications of the increased distribution in terms of dividend yield. For example, with the unit price at $30, the annualized distribution of $2.10 per unit would result in a yield of 7%, which is attractive compared to other income-generating investments.

Overall, the announcement of the distribution increase and the execution of the buyback program strengthens the financial outlook for Enterprise Products Partners and enhances the attractiveness of its units to both income-focused and growth-oriented investors.

Market Research Analyst

Enterprise Products Partners L.P.'s decision to increase the quarterly distribution by 5% and undertake significant unit repurchases suggests a positive outlook for the midstream energy sector. Rising distributions are often seen as a sign of confidence from the management in the company's ongoing operations and cash flow stability.

The midstream energy market benefits from stable, fee-based revenue streams since these companies typically operate essential infrastructure for the transportation and storage of energy products. Thus, EPD's strong and increasing distributions might be appealing for investors looking for reliable dividend income amidst a sector with relatively lower volatility compared to upstream energy operations.

However, investors should also be mindful of external factors such as energy price fluctuations, regulatory changes and economic conditions that might impact sector performance. Nevertheless, EPD's strategic actions position it favorably within the competitive landscape.

HOUSTON--(BUSINESS WIRE)-- Enterprise Products Partners L.P. (NYSE: EPD) (“Enterprise”) announced today that the board of directors of its general partner declared a quarterly cash distribution to be paid to Enterprise common unitholders with respect to the second quarter of 2024 of $0.525 per unit, or $2.10 per unit on an annualized basis.

The quarterly distribution will be paid Wednesday, August 14, 2024, to common unitholders of record as of the close of business Wednesday, July 31, 2024. This distribution represents a 5.0 percent increase over the distribution declared with respect to the second quarter of 2023.

Enterprise repurchased $40 million of its common units in the open market during the second quarter of 2024. Inclusive of these purchases, the partnership has utilized 50 percent of its authorized $2.0 billion buyback program.

Enterprise will announce its earnings for the second quarter of 2024 on Tuesday, July 30, 2024, before the New York Stock Exchange opens for trading. Following the announcement, the partnership will host a conference call at 9 a.m. CDT with analysts and investors to discuss earnings. The call will be webcast live on the Internet and may be accessed through the “Investors” section of the partnership’s website at www.enterpriseproducts.com. A replay of the webcast will be available following the conference call and may be accessed approximately one hour after completion of the call.

Enterprise Products Partners L.P. is one of the largest publicly traded partnerships and a leading North American provider of midstream energy services to producers and consumers of natural gas, NGLs, crude oil, refined products and petrochemicals. 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 that operates on key U.S. inland and intracoastal waterway systems. The partnership’s assets currently include more than 50,000 miles of pipelines; over 300 million barrels of storage capacity for NGLs, crude oil, petrochemicals and refined products; and 14 billion cubic feet of natural gas storage capacity.

Qualified Notice for Non-U.S. Unitholder Income Tax Withholding

This release is intended to serve as qualified notice under Treasury Regulation Section 1.1446-4(b)(4) and (d). Brokers and nominees should treat one hundred percent of Enterprise’s distributions to non-U.S. investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, Enterprise’s distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. For purposes of Treasury Regulation section 1.1446(f)-4(c)(2)(iii), brokers and nominees should treat one hundred percent of the distributions as being in excess of cumulative net income for purposes of determining the amount to withhold. Nominees, and not Enterprise Products Partners L.P., are treated as withholding agents responsible for any necessary withholding on amounts received by them on behalf of foreign investors.

This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission. All statements, other than statements of historical fact, included herein that address activities, events, developments or transactions that Enterprise and its general partner expect, believe or anticipate will or may occur in the future are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from expectations, including required approvals by regulatory agencies, the possibility that the anticipated benefits from such activities, events, developments or transactions cannot be fully realized, the possibility that costs or difficulties related thereto will be greater than expected, the impact of competition, and other risk factors included in Enterprise’s reports filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. Except as required by law, Enterprise does not intend to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240710321927/en/

Libby Strait, Investor Relations (713) 381-4754 or (866) 230-0745

Rick Rainey, Media Relations (713) 381-3635

Source: Enterprise Products Partners L.P.

FAQ

What is the new quarterly distribution announced by Enterprise Products Partners (EPD) for Q2 2024?

The new quarterly distribution is $0.525 per unit, a 5% increase compared to Q2 2023.

When will the Q2 2024 distribution be paid to Enterprise Products Partners (EPD) common unitholders?

The Q2 2024 distribution will be paid on August 14, 2024.

What is the record date for Enterprise Products Partners (EPD) Q2 2024 distribution?

The record date is July 31, 2024.

How much of its buyback program has Enterprise Products Partners (EPD) completed as of Q2 2024?

Enterprise has completed 50% of its authorized $2 billion buyback program.

When will Enterprise Products Partners (EPD) announce its Q2 2024 earnings?

Enterprise will announce its Q2 2024 earnings on July 30, 2024.

What is the tax implication for non-U.S. investors receiving distributions from Enterprise Products Partners (EPD)?

Distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable rate.