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Enterprise Products Partners Maintains Strong Leverage

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Sep. 25 2017, Published 2:19 p.m. ET

Enterprise Products Partners’ outstanding debt

Enterprise Products Partners’ (EPD) total outstanding debt has fallen from $23.7 billion at the end of 2016 to $23.4 billion as of June 30, 2017, a 5.6% fall. EPD’s debt has continued to grow in recent years, driven by its massive expansion plans. Of its current outstanding debt, $3.4 billion is due in the next 12 months. It had $4.1 billion of liquidity as of June 30, 2017. That includes borrowing capacity available under the company’s credit facilities and unrestricted cash.

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Enterprise Products Partners’ leverage

EPD’s current outstanding debt translated into a net debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) multiple of 4.4x at the end of the second quarter of 2017. Its leverage has remained within the industry standard despite huge capital spending and the gradual increase in debt in recent years. That could be attributed to the corresponding increase in its adjusted EBITDA.

In the next part of this series, we’ll look at EPD’s distribution growth plans and yield.

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