Enterprise Products Partners LP (EPD) Q3 2025 Earnings Call Highlights: Strong Cash Flow and ...

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Adjusted EBITDA: $2.4 billion for the third quarter. Distributable Cash Flow: $1.8 billion, providing 1.5 times coverage. Net Income: $1.3 billion or $0.61 per common unit. Adjusted Cash Flow from Operations: $2.1 billion for the third quarter. Distribution per Common Unit: $0.5450, a 3.8% increase over the prior year. Common Unit Buyback: Approximately 2.5 million units for $80 million in the third quarter. Total Capital Investments: $2 billion in the third quarter, including $1.2 billion for growth projects. Total Debt Principal Outstanding: Approximately $33.9 billion as of September 30, 2025. Weighted Average Cost of Debt: 4.7% with 96% fixed rate. Consolidated Liquidity: $3.6 billion as of September 30, 2025. Leverage Ratio: 3.3 times on a net basis.

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Release Date: October 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Enterprise Products Partners LP (NYSE:EPD) reported adjusted EBITDA of $2.4 billion for the third quarter, generating $1.8 billion of distributable cash flow with a coverage ratio of 1.5 times. The company announced a $3 billion increase to its buyback program, raising it from $2 billion to $5 billion, enhancing flexibility for capital returns. EPD's PDH plants are showing promising performance, with PDH 1 averaging 95% of nameplate capacity and PDH 2 resuming operations after addressing technical issues. The company is nearing the completion of a multiyear, multibillion-dollar capital deployment cycle, positioning it for long-term growth from strategic investments in pipelines and marine terminals. EPD declared a distribution of $0.5450 per common unit for the third quarter, marking a 3.8% increase over the previous year, demonstrating a commitment to returning capital to unitholders.

Negative Points

Third-quarter results were lighter than expected, with some anticipated projects delayed, impacting immediate financial performance. The company's leverage ratio is currently above its target range due to capital expenditures on large projects, with expectations to return to target by year-end 2026. There were minor maintenance issues affecting LPG terminal volumes, resulting in lower implied volumes for the third consecutive quarter. The integration of recently acquired assets from Occidental is ongoing, with full revenue and EBITDA contributions expected in 2027. The company faces challenges with coking in the PDH 2 reactor, although efforts are underway to resolve these issues with the technology licensor.

Story Continues

Q & A Highlights

Q: With many Permian gas pipelines coming online next year, do you think this will drive producers to produce more gas, and is it a constraint? A: Anthony C. Chovanec, Executive VP, Fundamentals & Commodity Risk Assessment, stated that the Permian Basin is primarily an oil basin. More gas pipelines and NGL transportation takeaway are healthy for producers and the basin overall.

Q: As LPG exports ramp up, do you see Asia's residential and petrochemical demand as an unlimited sink for LPG, or will price pressure be required? A: Tug C. Hanley, Senior VP, Hydrocarbon Marketing, explained that both residential and petrochemical demand are growing internationally. The U.S. will export what's needed to balance the market, and price will adjust based on global demand.

Q: Can you provide more details on the capital allocation outlook for the next couple of years, especially regarding buybacks? A: W. Randall Fowler, Co-CEO & CFO, mentioned that organic growth CapEx is expected to be in the $2 billion to $2.5 billion range. Free cash flow will be split between buybacks and debt paydown, with buybacks having both programmatic and opportunistic components.

Q: How do you view the macro environment given the completion of a big capital buildout phase and pivoting to cash returns? A: W. Randall Fowler, Co-CEO & CFO, clarified that the shift is due to the completion of large capital-intensive projects rather than a change in macroeconomic views. The company has historically seen CapEx flex up during large projects and then return to a mid-cycle range.

Q: Regarding the Permian NGL pipelines, is the business model primarily transporting NGLs from your own plants, or is there significant third-party volume? A: Justin M. Kleiderer, VP, Hydrocarbon Marketing, stated that the majority of NGL volumes are from their own gathering and processing facilities. In 2025, two-thirds of the volume was from their facilities, and this trend is expected to continue.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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