Enterprise Declares Quarterly Distribution

Rhea-AI Summary

Enterprise Products Partners L.P. (EPD) announced a 5.1% increase in quarterly cash distribution for the fourth quarter of 2023, totaling $0.515 per unit. The company repurchased $96 million of its common units in Q4 2023 and has utilized 46% of its authorized $2.0 billion buyback program. It will announce its Q4 2023 earnings on February 1, 2024, and host a conference call with analysts and investors.

Positive

• 5.1% increase in quarterly cash distribution for Q4 2023
• Repurchased $96 million of common units in Q4 2023
• Utilized 46% of authorized $2.0 billion buyback program

Negative

• None.

Insights

Financial Analyst

The announcement of a 5.1 percent increase in quarterly cash distribution by Enterprise Products Partners L.P. is a positive signal to investors, indicating a robust financial position and confidence in the company's revenue-generating capabilities. The increase is notably higher than the standard inflation rate, suggesting that the company is not only maintaining but also increasing real investor returns. The 3 percent sequential increase from the previous quarter further reinforces this perspective.

Moreover, the repurchase of $96 million in common units during the fourth quarter and a total of $187 million for the year, reflects a shareholder-friendly capital allocation policy. This buyback program, which has used 46 percent of its $2.0 billion authorization, can be seen as a move to enhance shareholder value by reducing the number of shares outstanding, potentially leading to an increase in earnings per share and a stronger demand for the remaining shares.

However, investors should consider the impact of such distribution increases and buybacks on the company's long-term growth prospects and whether they align with the company's capital expenditure needs, especially in the capital-intensive midstream energy sector.

Market Research Analyst

Enterprise Products Partners L.P. operates within the midstream energy sector, which is known for its high barriers to entry due to the significant infrastructure investments required. The company's extensive assets, including 50,000 miles of pipelines and substantial storage capacities, position it as a key player in the North American market. Midstream companies like Enterprise are critical to the energy supply chain, providing essential services that enable the flow of energy commodities.

The increased distribution and buyback strategy may be interpreted as a sign of underlying strength in the midstream sector, likely driven by stable demand for energy services. However, it is important for market participants to assess the sustainability of these financial strategies against the backdrop of fluctuating energy prices and potential regulatory changes that could affect the sector's profitability.

Tax Expert

The qualified notice for non-U.S. unitholder income tax withholding is a critical piece of information for international investors. It indicates that all of Enterprise’s distributions to non-U.S. investors are considered effectively connected with a U.S. trade or business and are subject to federal income tax withholding at the highest applicable rate. This could affect the net income for international investors and might influence their investment decisions.

Brokers and nominees should be aware of their responsibilities as withholding agents and non-U.S. investors should be prepared for the tax implications of their investments. It is essential for these stakeholders to understand the tax regulations to avoid any compliance issues and ensure accurate reporting and withholding of taxes.

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 fourth quarter of 2023 of $0.515 per unit, or $2.06 per unit on an annualized basis.

The quarterly distribution will be paid Wednesday, February 14, 2024, to common unitholders of record as of the close of business Wednesday, January 31, 2024. This distribution represents a 5.1 percent increase over the distribution declared with respect to the fourth quarter of 2022, and a 3 percent increase over the distribution declared with respect to the third quarter of 2023.

Enterprise repurchased $96 million of its common units in the open market during the fourth quarter of 2023 for a total of $187 million of common units repurchased in 2023. Inclusive of these purchases, the partnership has utilized 46 percent of its authorized $2.0 billion buyback program.

Enterprise will announce its earnings for the fourth quarter of 2023 on Thursday, February 1, 2024, before the New York Stock Exchange opens for trading. Following the announcement, the partnership will host a conference call at 9 a.m. CST 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 260 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/20240108935999/en/

Randy Burkhalter, Investor Relations, (713) 381-6812 or (866) 230-0745

Rick Rainey, Media Relations (713) 381-3635

Source: Enterprise Products Partners L.P.

FAQ

How much was the quarterly cash distribution for the fourth quarter of 2023?

The quarterly cash distribution for the fourth quarter of 2023 was $0.515 per unit.

What percentage increase does the quarterly distribution represent compared to Q4 2022?

The quarterly distribution represents a 5.1% increase over the distribution declared with respect to the fourth quarter of 2022.

When will Enterprise Products Partners L.P. announce its Q4 2023 earnings?

Enterprise will announce its Q4 2023 earnings on February 1, 2024.

How much of its authorized buyback program has Enterprise utilized?

Enterprise has utilized 46% of its authorized $2.0 billion buyback program.

What did Enterprise repurchase in Q4 2023?

Enterprise repurchased $96 million of its common units in the open market during the fourth quarter of 2023.