Enterprise Products Partners Q2 Earnings Call Highlights

Enterprise Products Partners NYSE: EPD reported record second-quarter EBITDA and adjusted cash flow from operations, supported by elevated global demand for U.S. energy exports, higher pipeline and marine-terminal volumes, and favorable market conditions during April and May.

Co-Chief Executive Officer Jim Teague said the partnership generated $2.8 billion of EBITDA in the second quarter, up 17% from a year earlier. The company handled a record 14.7 million barrels of oil equivalent per day across its pipeline network, while marine terminal volumes rose 33% year over year to 2.8 million barrels per day. Total pipeline volumes increased 8%.

“Our export facilities, pipelines, storage assets, and fractionation complexes work together to provide our customers with reliable access to both domestic and international markets,” Teague said. He cited strong demand for U.S. energy, particularly during April and May, and said Enterprise’s operating teams accelerated construction and began commissioning the expansion of its Neches River NGL marine terminal ahead of schedule.

Cash Flow, Distribution and Capital Spending

Co-CEO Randy Fowler said adjusted cash flow from operations, before changes in working capital, rose 19% to a record $2.5 billion from $2.1 billion in the second quarter of 2025.

Enterprise declared a quarterly distribution of $0.56 per common unit, a 2.8% increase from the distribution declared for the comparable quarter last year. The distribution is scheduled to be paid Aug. 14 to unitholders of record as of July 31.

• The partnership repurchased $159 million of common units during the quarter and $275 million during the first half of 2026.
• Buybacks totaled $404 million over the trailing 12 months, bringing use of the company’s $5 billion repurchase authorization to 34%.
• Enterprise paid approximately $4.8 billion in distributions to limited partners over the trailing 12 months. Combined with buybacks, total capital returned was $5.2 billion, representing 56% of adjusted cash flow from operations.
• Total capital investments were $1.2 billion in the quarter, including $1 billion for growth projects and $140 million for sustaining capital.

Fowler said Enterprise now expects 2026 growth capital spending, net of about $600 million of asset-sale proceeds already received, to range from $2.9 billion to $3.4 billion. The increase reflects early spending on new Permian Basin gas-processing plants, a new fractionator in Mont Belvieu, and related gathering, compression and power-generation facilities.

The partnership expects approximately $3 billion of growth capital spending in 2027, with more than 80% of that amount already tied to sanctioned or announced projects, according to Fowler. Despite the higher capital-spending outlook, management said discretionary free cash flow could still approach $1 billion in 2026, as higher cash flow and EBITDA have largely offset the additional project spending.

Permian Processing and NGL Projects

Natural-gas processing inlet volumes reached 8.1 billion cubic feet per day during the quarter. Permian Basin inlet volumes increased 14% year over year to 4.3 billion cubic feet per day.

Enterprise approved construction of Plant 11, a 300 million cubic feet per day natural-gas processing plant in the Midland Basin, and Plant 13, a similarly sized facility in the Delaware Basin. It also sanctioned Frac 15, a 150,000-barrel-per-day NGL fractionator in Mont Belvieu.

Teague said Plant 13 is expected to enter service in the third quarter of 2028, Frac 15 in the first quarter of 2028, and Plant 11 in the first quarter of 2029. The processing plants are expected to supply additional Y-grade NGL volumes to Enterprise’s Shin Oak and Bahia pipeline systems, which were operating at 86% of capacity.

Natalie Gayden, senior vice president of natural gas, said the company’s current slate of facilities equates to roughly 1.7 new processing plants per year over the next three years. Management expects the longer-term pace to trend closer to two plants annually, depending on producer activity and gas-oil-ratio trends.

Exports, Commodity Markets and Balance Sheet

Enterprise expects its LPG export terminal expansion on the Houston Ship Channel to begin service by the end of 2026. Tyler Kott, senior vice president of hydrocarbon marketing, said additional LPG export capacity is coming to market over the next 12 to 18 months, which could result in lower terminal rates and less volatility. However, he said Enterprise has contracted approximately 90% of its systemwide LPG export capacity.

Kott also said the arrival of additional very large ethane carriers, or VLECs, should support increased ethane exports as customers begin lifting volumes under existing contracts. He said the company continues to see demand for U.S. ethane from multiple regions.

Management attributed approximately $200 million of second-quarter benefit to acute global demand for U.S. energy, split roughly evenly among NGLs, crude oil, and petrochemicals and other operations. Todd Olsen, vice president of government relations, said the strong cash differentials seen during the period had “largely normalized” by the time of the call.

At quarter-end, Enterprise had approximately $33.5 billion in total debt principal outstanding, with a weighted average debt life of about 17 years, a 4.7% weighted average cost of debt, and 97% of debt at fixed rates. The partnership reported about $4 billion of liquidity at quarter-end and later added a $1 billion short-term credit facility, raising total liquidity to approximately $5 billion.

Enterprise’s net leverage ratio declined to its 3.0 times target, after adjustments for hybrid debt and unrestricted cash. The company’s leverage target remains 3.0 times, plus or minus 0.25 times.

Teague Announces Retirement

Teague announced that he plans to retire after 50 years in the energy industry, including 28 years at Enterprise. He has served as co-CEO with Fowler for the past five years.

“There comes a time when you have to turn it over to the next generation,” Teague said, adding that Enterprise has “unbelievable talent” within the company. He noted that the company’s enterprise value had grown from $1.8 billion when he and Fowler joined to more than $120 billion.

About Enterprise Products Partners (NYSE:EPD)

Enterprise Products Partners L.P. NYSE: EPD is a Houston-based master limited partnership that provides midstream energy services across North America. The company owns and operates an extensive network of pipelines, storage facilities, processing plants and export terminals that transport and handle natural gas, natural gas liquids (NGLs), crude oil and refined and petrochemical products. Its core activities include gathering and transportation, fractionation of NGLs, natural gas processing, crude oil and condensate pipelines, and marine and terminal services that enable domestic distribution and exports.

Enterprise serves a diverse set of customers including producers, refiners, petrochemical companies, marketers and end users.

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