How EPD (Enterprise Products Partners) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a midstream energy infrastructure company like EPD Income Statement Overview makes money is essential for investors and anyone interested in the business of energy transportation and storage. In this post, we break down EPD's quarterly income statement (Q2 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick EPD Overview

EPD Income Statement Overview operates a diversified portfolio of midstream energy assets, including pipelines, storage facilities, and processing plants. The company primarily transports, stores, and processes natural gas, natural gas liquids (NGLs), crude oil, and petrochemicals. Revenue comes almost entirely from fee-based transportation and storage services, with a stable, contract-driven business model that reduces exposure to commodity price swings. EPD’s business segments focus on natural gas pipelines, NGL pipelines & services, crude oil pipelines & services, and petrochemical & refined products services.

Revenue Breakdown

• Total Revenue (Q2 2025): $11.4B (−15.2% YoY)
  • Other Revenue: $11.4B (100% of total)
  • Growth is pressured by lower commodity volumes and pricing, but the fee-based model provides stability.

Gross Profit and Margins

• Gross Profit: $1.77B (15.6% gross margin)
  • Cost of Revenue: $9.59B (−18.3% YoY)
  • EPD maintains moderate margins due to its scale, operational efficiencies, and long-term contracts that insulate against market volatility.
• Most costs come from operating and maintaining pipeline infrastructure, including fuel, labor, and maintenance expenses.

Operating Income and Expenses

• Operating Income: $1.70B (+6.6% YoY, 15.0% margin)
• Operating Expenses: $68M (+19.3% YoY)
  • R&D: Not reported (typical for midstream energy companies)
  • SG&A: $68M (+19.3% YoY, 0.6% of revenue) — covers administrative, legal, and corporate overhead
  • EPD continues to control costs while expanding its asset base and maintaining operational efficiency.

Net Income

• Pre-Tax Income: $1.47B (+2.3% YoY, 12.9% margin)
• Income Tax: $16M (1.1% effective tax rate)
• Net Income: $1.44B (+2.1% YoY, 12.6% net margin)
• EPD converts a significant portion of sales into profit due to its efficient, fee-based model and low effective tax rate.

What Drives EPD's Money Machine?

• Fee-based transportation and storage: 100% of revenue comes from stable, contract-driven services, minimizing commodity price risk.
• Asset utilization: High throughput across pipelines and storage facilities ensures steady cash flow.
• Strategic investments: Ongoing expansion of pipeline and storage capacity to capture future demand in energy infrastructure.
• Future growth areas: Expansion into petrochemical and refined products logistics, though these segments are not yet major profit contributors.

Visualizing EPD's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with cost of revenue (pipeline operations and maintenance) taking the largest chunk.
• Even after significant operating and interest expenses, 12.6% of revenue drops to the bottom line.

Key Takeaways

• EPD's money comes overwhelmingly from fee-based energy transportation and storage services
• High gross and net margins illustrate the power of EPD's contract-driven, scalable infrastructure model
• Heavy investment in asset expansion, balanced by efficiency in operating costs
• Ongoing growth is driven by infrastructure expansion and stable demand for energy logistics

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FAQ About EPD's Income Statement

1. What is the main source of EPD's revenue in 2025?

EPD generates over 100% of its revenue from fee-based transportation and storage services for natural gas, NGLs, crude oil, and petrochemicals. Other revenue sources are not significant in Q2 2025.

2. How profitable is EPD in Q2 2025?

EPD reported net income of $1.44B in Q2 2025, with a net margin of approximately 12.6%, reflecting strong profitability driven by operational efficiency and a stable, contract-based business model.

3. What are the largest expense categories for EPD?

The biggest expenses on EPD's income statement are cost of revenue (pipeline operations, fuel, maintenance) and SG&A costs. SG&A expenses reached $68M in Q2 2025, as EPD prioritizes administrative efficiency and operational excellence.

4. Why does [segment/division] operate at a loss?

EPD’s segments are generally profitable due to the fee-based model. However, if a segment were to operate at a loss, it would likely be due to heavy upfront investment in new infrastructure or expansion projects, which are expected to drive long-term growth even if unprofitable in the short term.

5. How does EPD's effective tax rate compare to previous years?

EPD's effective tax rate in Q2 2025 was 1.1%, lower than previous years. This low rate is primarily due to favorable tax treatment of partnership income and deductions related to depreciation and capital expenditures.