What changed in this filing

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Item 1. Financial Statements

2022-05-10 compared with 2021-11-08 · 238 added, 432 removed, 1002 unchanged (40% of the section changed)

3 unchanged sentences

(Dollars in millions)

September 30,

Current assets:

2 unchanged sentences

Accounts receivable – trade, net of allowance for credit losses

of $ 50.0 at September 30, 2021 and $ 46.5 at December 31, 2020

of $ 55 at March 31, 2022 and $ 53 at December 31, 2021

Accounts receivable – related parties

23 unchanged sentences

Series A cumulative convertible preferred units (“preferred units”)

( 50,412 units outstanding at September 30, 2021 and 50,138 units outstanding

at December 31, 2020 )

( 50,412 units outstanding at March 31, 2022 and December 31, 2021 )

Partners’ equity:

Common limited partner interests ( 2,180,453,144 units issued and outstanding at

September 30, 2021 , 2,182,308,958 units issued and outstanding at December 31, 2020 )

March 31, 2022 , 2,176,379,587 units issued and outstanding at December 31, 2021 )

Treasury units, at cost

Accumulated other comprehensive loss

Accumulated other comprehensive income

Total partners’ equity

6 unchanged sentences

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

Third parties

15 unchanged sentences

Interest expense

Change in fair market value of Liquidity Option

Interest income

1 unchanged sentence

Income before income taxes

Benefit from (provision for) income taxes (see Note 15)

Provision for income taxes (see Note 16)

Net income attributable to noncontrolling interests

1 unchanged sentence

Net income attributable to common unitholders

*Amount is negligible

Earnings per unit:

7 unchanged sentences

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

Other comprehensive income (loss):

3 unchanged sentences

Changes in fair value of cash flow hedges

Reclassificatio n of losses ( gains) to ne t income

Reclassificati on of losses to ne t income

Interest rate hedging derivative instruments:

7 unchanged sentences

Comprehensive income attributable to common unitholders

*Amount is negligible

See Notes to Unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(Dollars in millions)

For the Nine Months

Ended September 30,

For the Three Months

Ended March 31,

Operating activities:

7 unchanged sentences

Distributions received from unconsolidated affiliates attributable to earnings

Net losses (gains) attributable to asset sales and related matters

Deferred income tax expense (benefit)

Net losses attributable to asset sales and related matters

Deferred income tax expense

Change in fair market value of derivative instruments

Change in fair market value of Liquidity Option

Non-cash expense related to long-term operating leases (see Note 17)

4 unchanged sentences

Capital expenditures

Cash used for business combinations, net of cash received (See Note 12)

Investments in unconsolidated affiliates

6 unchanged sentences

Repayments of debt

Debt issuance costs

Monetization of interest rate derivative instruments

3 unchanged sentences

Cash contributions from noncontrolling interests

Repurchase of common units under 2019 Buyback Program (see Note 8)

Net cash proceeds from the issuance of preferred units

Repurchase of common units under 2019 Buyback Program

Other financing activities

6 unchanged sentences

UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED EQUITY

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021

(Dollars in millions)

3 unchanged sentences

Noncontrolling

For the Three Months Ended September 30, 2021 :

Balance, June 30, 2021

Cash distributions paid to common unitholders

Cash payments made in connection with

distribution equivalent rights

Cash distributions paid to noncontrolling interests

Cash contributions from noncontrolling interests

Amortization of fair value of equity-based awards

Repurchase and cancellation of common units under

2019 Buyback Program (see Note 8)

Cash flow hedges

Balance, September 30, 2021

Partners’ Equity

Comprehensive

Income (Loss)

Noncontrolling

For the Nine Months Ended September 30, 2021 :

Balance, December 31, 2021

Cash distributions paid to common unitholders

Cash payments made in connection with

distribution equivalent rights

Cash distributions paid to noncontrolling interests

Cash contributions from noncontrolling interests

Amortization of fair value of equity-based awards

Repurchase and cancellation of common units under

2019 Buyback Program (see Note 8)

Cash flow hedges

Balance, September 30, 2021

See Notes to Unaudited Condensed Consolidated Financial Statements.

For information regarding Unit History and

Accumulated Other Comprehensive Income (Loss), see Note 8.

ENTERPRISE PRODUCTS PARTNERS L.P.

UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED EQUITY

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020

(Dollars in millions)

Partners’ Equity

Comprehensive

Income (Loss)

Noncontrolling

For the Three Months Ended September 30, 2020 :

Balance, June 30, 2020

Cash distributions paid to common unitholders

Cash payments made in connection with

distribution equivalent rights

Cash payments made in connection with distribution equivalent rights

Cash distributions paid to noncontrolling interests

1 unchanged sentence

Amortization of fair value of equity-based awards

Repurchase and cancellation of common units under

2019 Buyback Program (see Note 8)

Common units exchanged for preferred units, with common units received being immediately cancelled

Cash flow hedges

Balance, September 30, 2020

Balance, March 31, 2022

Partners’ Equity

2 unchanged sentences

Noncontrolling

For the Nine Months Ended September 30, 2020 :

Balance, December 31, 2020

Cash distributions paid to common unitholders

Cash payments made in connection with

distribution equivalent rights

Cash payments made in connection with distribution equivalent rights

Cash distributions paid to noncontrolling interests

2 unchanged sentences

Repurchase and cancellation of common units under

2019 Buyback Program (see Note 8)

Common units issued to Skyline North Americas, Inc.

connection with settlement of Liquidity Option

Treasury units acquired in connection with settlement

of Liquidity Option, at cost

Common units exchanged for preferred units, with common units received being immediately cancelled

2019 Buyback Program

Cash flow hedges

Balance, September 30, 2020

Balance, March 31, 2021

See Notes to Unaudited Condensed Consolidated Financial Statements.

For information regarding Unit History and

For information regarding Unit History,

Accumulated Other Comprehensive Income (Loss), see Note 8.

5 unchanged sentences

and its consolidated subsidiaries.

References to the “Partnership” mean Enterprise Products Partners L.P.

References to the “Partnership” or “Enterprise” mean Enterprise Products Partners L.P.

on a standalone basis.

17 unchanged sentences

We, Enterprise GP, EPCO and Dan Duncan LLC are affiliates under the collective common control of the DD LLC Trustees and the EPCO Trustees.

EPCO, together with its privately held affiliates, owned approximately 32.2 % of the Partnership’s common units outstanding at September 30, 2021.

EPCO, together with its privately held affiliates, owned approximately 32.2 % of the Partnership’s common units outstanding at March 31, 2022.

With the exception of per unit amounts, or as noted within the context of each disclosure,

21 unchanged sentences

See Note 15 for information regarding related party matters.

Our results of operations for the nine months ended September 30, 2021 are not necessarily indicative of results expected for the full year of 2021.

Our results of operations for the three months ended March 31, 2022 are not necessarily indicative of results expected for the full year of 2022.

In our opinion, the accompanying Unaudited Condensed Consolidated Financial Statements include all adjustments consisting of normal recurring accruals necessary for fair presentation.

1 unchanged sentence

Securities and Exchange Commission (“SEC”).

These Unaudited Condensed Consolidated Financial Statements and Notes thereto should be read in conjunction with the Audited Consolidated Financial Statements and Notes thereto included in our annual report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”) filed with the SEC on March 1, 2021.

These Unaudited Condensed Consolidated Financial Statements and Notes thereto should be read in conjunction with the Audited Consolidated Financial Statements and Notes thereto included in our annual report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”) filed with the SEC on February 28, 2022.

ENTERPRISE PRODUCTS PARTNERS L.P.

3 unchanged sentences

Allowance for Credit Losses

We estimate our allowance for credit losses (formerly, the allowance for doubtful accounts) at each reporting date using a current expected credit loss model, which requires the measurement of expected credit losses for financial assets (e.g., accounts receivable) based on historical experience with customers, current economic conditions, and reasonable and supportable forecasts.

We estimate our allowance for credit losses at each reporting date using a current expected credit loss model, which requires the measurement of expected credit losses for financial assets (e.g., accounts receivable) based on historical experience with customers, current economic conditions, and reasonable and supportable forecasts.

We may also increase the allowance for credit losses in response to the specific identification of customers involved in bankruptcy proceedings and similar financial difficulties.

2 unchanged sentences

Charged to costs and expenses

Charged to other accounts

Allowance for credit losses, September 30, 2021

Allowance for credit losses, March 31, 2022

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash and cash equivalents, and restricted cash reported within the Unaudited Condensed Consolidated Balance Sheets that sum to the total of the amounts shown in the Unaudited Condensed Statements of Consolidated Cash Flows.

September 30,

Cash and cash equivalents

6 unchanged sentences

Our inventory amounts by product type were as follows at the dates indicated:

September 30,

Petrochemicals and refined products

4 unchanged sentences

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

Cost of sales (1)

Lower of cost or net realizable value adjustments

recognized in cost of sales

Lower of cost or net realizable value adjustments recognized in cost of sales

Cost of sales is a component of “Operating costs and expenses” as presented on our Unaudited Condensed Statements of Consolidated Operations.

2 unchanged sentences

The historical costs of our property, plant and equipment and related balances were as follows at the dates indicated:

September 30,

Plants, pipelines and facilities (1)

32 unchanged sentences

On a weighted-average basis, the expected amortization period for these costs is 2.1 years.

Property, plant and equipment at September 30, 2021 and December 31, 2020 includes $ 79.1 million and $ 69.7 million, respectively, of asset retirement costs capitalized as an increase in the associated long-lived asset.

Property, plant and equipment at March 31, 2022 and December 31, 2021 includes $ 92 million and $ 81 million, respectively, of asset retirement costs capitalized as an increase in the associated long-lived asset.

ENTERPRISE PRODUCTS PARTNERS L.P.

6 unchanged sentences

Accretion expense (4)

ARO liability balance, September 30, 2021

ARO liability balance, March 31, 2022

Represents the initial recognition of estimated ARO liabilities during period.

2 unchanged sentences

Represents net change in ARO liability balance attributable to the passage of time and other adjustments, including true-up amounts associated with revised closure estimates.

Of the $ 167.2 million total ARO liability recorded at September 30, 2021 , $ 12.9 million was reflected as a current liability and $ 154.3 million as a long-term liability.

Of the $ 192 million total ARO liability recorded at March 31, 2022 , $ 17 million was reflected as a current liability and $ 175 million as a long-term liability.

The following table summarizes our depreciation and accretion expense and capitalized interest amounts for the periods indicated:

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

Depreciation expense (1)

1 unchanged sentence

Capitalized interest (2)

Depreciation and accretion expense is a component of “Third party and other costs” within “Costs and expenses” as presented on our Unaudited Condensed Statements of Consolidated Operations.

Depreciation and accretion expense is a component of “Costs and expenses” as presented on our Unaudited Condensed Statements of Consolidated Operations.

We capitalize interest costs incurred on funds used to construct property, plant and equipment while the asset is in its construction phase.

1 unchanged sentence

When capitalized interest is recorded, it reduces interest expense from what it would be otherwise.

Asset impairment charges

In March 2021, we entered into agreements to sell a coal bed natural gas gathering system and related Val Verde treating facility, both of which were components of our San Juan Gathering System, to a third party for $ 39.1 million in cash.

The transaction closed and was effective on April 1, 2021.

We recognized an impairment charge of $ 44.3 million attributable to this transaction, which reflects the write down of $ 37.5 million of property, plant and equipment and $ 6.8 million of intangible assets (see Note 6) to their respective fair values.

The remainder of our impairment charges for the nine month periods ended September 30, 2021 and 2020 are attributable to the complete write-off of assets that are no longer expected to be used or constructed.

Asset impairment charges related to operations are a component of “Third party and other costs” within “Operating costs and expenses” as presented on our Unaudited Condensed Statements of Consolidated Operations.

We are closely monitoring the recoverability of our long-lived assets, investments in unconsolidated affiliates and goodwill in light of the adverse economic effects of the coronavirus disease 2019 (“COVID-19”) pandemic.

If the adverse economic impacts of the pandemic persist for longer periods than currently expected, these developments could result in the recognition of non-cash impairment charges in the future.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Investments in Unconsolidated Affiliates

1 unchanged sentence

We account for these investments using the equity method.

September 30,

NGL Pipelines & Services

2 unchanged sentences

Petrochemical & Refined Products Services

The following table presents our equity in income (loss) of unconsolidated affiliates by business segment for the periods indicated:

The following table presents our equity in inc ome of u nconsolidated affiliates by business segment for the periods indicated:

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

NGL Pipelines & Services

2 unchanged sentences

Petrochemical & Refined Products Services

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Intangible Assets and Goodwill

1 unchanged sentence

The following table summarizes our intangible assets by business segment at the dates indicated:

September 30, 2021

March 31, 2022

December 31, 2021

16 unchanged sentences

Total intangible assets

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the amortization expense of our intangible assets by business segment for the periods indicated:

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

NGL Pipelines & Services

3 unchanged sentences

The following table presents our forecast of amortization expense associated with existing intangible assets for the periods indicated:

Impairment of Intangible Asset

In March 2021, we recognized an impairment charge of $ 6.8 million for the write down of contract-based intangible assets associated with the sale of a portion of our San Juan Gathering System (see Note 4).

The contract-based intangible assets were classified within our Natural Gas Pipelines & Services business segment.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Goodwill represents the excess of the purchase price of an acquired business over the amounts assigned to assets acquired and liabilities assumed in the transaction.

There has been no change in our goodwill amounts since those reported in our 2020 Form 10-K.

We are closely monitoring the recoverability of our long-lived assets, which include goodwill, in light of the COVID-19 pandemic.

The following table presents changes in the carrying amount of goodwill for the period presented:

Petrochemical

Balance at December 31, 2021

Goodwill related to acquisition (1)

Balance at March 31, 2022

This amount represents the goodwill recognized in connection with our acquisition of Navitas Midstream in February 2022.

See Note 12 for additional information regarding this acquisition.

ENTERPRISE PRODUCTS PARTNERS L.P.

2 unchanged sentences

The following table presents our consolidated debt obligations (arranged by company and maturity date) at the dates indicated:

September 30,

EPO senior debt obligations:

Commercial Paper Notes, variable-rates

Senior Notes TT, 2.80 % fixed-rate, due February 2021

Senior Notes RR, 2.85 % fixed-rate, due April 2021

Senior Notes VV, 3.50 % fixed-rate, due February 2022

31 unchanged sentences

Senior Notes CCC, 3.95 % fixed rate, due January 2060

TEPPCO senior debt obligations:

TEPPCO Senior Notes, 7.55 % fixed-rate, due April 2038

Total principal amount of senior debt obligations

20 unchanged sentences

Variable Interest Rates

The following table presents the range of interest rates and weighted-average interest rates paid on our consolidated variable-rate debt during the nine months ended September 30, 2021:

The following table presents the range of interest rates and weighted-average interest rates paid on our consolidated variable-rate debt during the three months ended March 31, 2022:

Range of Interest

5 unchanged sentences

2.95 % to 3.30 %

Amounts borrowed under EPO’s September 2021 364-Day Revolving Credit Agreement and September 2021 Multi-Year Revolving Credit Agreement bear interest, at its election, equal to:

Amounts borrowed under EPO’s September 2021 364-Day Revolving Credit Agreement and September 2021 Multi-Year Revolving Credit Agreement bear interest, at EPO’s election, equal to:

(i) LIBOR, plus an additional variable spread;

6 unchanged sentences

Scheduled Maturities of Debt

The following table presents the scheduled maturities of principal amounts of EPO’s consolidated debt obligations at September 30, 2021 for the next five years, and in total thereafter:

The following table presents the scheduled maturities of principal amounts of EPO’s consolidated debt obligations at March 31, 2022 for the next five years, and in total thereafter:

Scheduled Maturities of Debt

Commercial Paper Notes

Junior Subordinated Notes

In February 2021, EPO repaid all of the $ 750.0 million in principal amount of its Senior Notes TT using remaining cash on hand attributable to its August 2020 senior notes offering and proceeds from the issuance of short-term notes under its commercial paper program.

In March 2021, EPO redeemed all of the $ 575.0 million outstanding principal amount of its Senior Notes RR one month prior to their scheduled maturity in April 2021.

These notes were redeemed at par (i.e., at a redemption price equal to the outstanding principal amount of such notes to be redeemed, plus accrued and unpaid interest thereon) using proceeds from the issuance of short-term notes under its commercial paper program.

September 2021 364-Day Revolving Credit Agreement

In September 2021, EPO entered into a new 364-Day Revolving Credit Agreement (the “September 2021 364-Day Revolving Credit Agreement”) that replaced its September 2020 364-Day Revolving Credit Agreement.

There were no principal amounts outstanding under the September 2020 364-Day Revolving Credit Agreement when it was replaced by the September 2021 364-Day Revolving Credit Agreement.

At September 30, 2021, there were no principal amounts outstanding under the September 2021 364-Day Revolving Credit Agreement.

Under the terms of the September 2021 364-Day Revolving Credit Agreement, EPO may borrow up to $ 1.5 billion (which may be increased by up to $ 200.0 million to $ 1.7 billion at EPO’s election, provided certain conditions are met) at a variable interest rate for a term of up to 364 days, subject to the terms and conditions set forth therein.

The September 2021 364-Day Revolving Credit Agreement matures in September 2022.

To the extent that principal amounts are outstanding at the maturity date, EPO may elect to have the entire principal balance then outstanding continued as non-revolving term loans for a period of one additional year, payable in September 2023.

Borrowings under the September 2021 364-Day Revolving Credit Agreement may be used for working capital, capital expenditures, acquisitions and general company purposes.

In February 2022, EPO repaid all of the $ 750 million and $ 650 million in principal amount of its Senior Notes VV and CC, respectively, using remaining cash on hand attributable to its September 2021 senior notes offering and proceeds from the issuance of short-term notes under its commercial paper program.

March 2022 Delayed Draw Term Loan Agreement

On March 1, 2022, EPO entered into a delayed draw term loan agreement (the “March 2022 Delayed Draw Term Loan Agreement”).

Under the terms of the March 2022 Delayed Draw Term Loan Agreement, EPO could have borrowed up to an aggregate of $ 500 million by April 30, 2022 at a variable interest rate based on EPO’s senior debt credit rating.

However, because EPO elected not to borrow under the facility by April 30, 2022, the March 2022 Delayed Draw Term Loan Agreement automatically terminated at that date in accordance with its terms.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The September 2021 364-Day Revolving Credit Agreement contains customary representations, warranties, covenants (affirmative and negative) and events of default, the occurrence of which would permit the lenders to accelerate the maturity date of any amounts borrowed under this credit agreement.

The September 2021 364-Day Revolving Credit Agreement also restricts EPO’s ability to pay cash distributions to the Partnership, if an event of default (as defined in the credit agreement) has occurred and is continuing at the time such distribution is scheduled to be paid or would result therefrom.

EPO’s obligations under the September 2021 364-Day Revolving Credit Agreement are not secured by any collateral;

however, they are guaranteed by the Partnership.

September 2021 Multi-Year Revolving Credit Agreement

In September 2021, EPO entered into a new revolving credit agreement that matures in September 2026 (the “September 2021 Multi-Year Revolving Credit Agreement”).

The September 2021 Multi-Year Revolving Credit Agreement replaced EPO’s prior multi-year revolving credit agreement that was scheduled to mature in September 2024.

There were no principal amounts outstanding under the prior multi-year revolving credit agreement when it was replaced by the September 2021 Multi Year Revolving Credit Agreement.

At September 30, 2021, there were no principal amounts outstanding under the September 2021 Multi-Year Revolving Credit Agreement.

Under the terms of the September 2021 Multi-Year Revolving Credit Agreement, EPO may borrow up to $ 3.0 billion (which may be increased by up to $ 500.0 million to $ 3.5 billion at EPO’s election, provided certain conditions are met) at a variable interest rate for a term of five years, subject to the terms and conditions set forth therein.

Borrowings under the September 2021 Multi-Year Revolving Credit Agreement may be used as a backstop for commercial paper and for working capital, capital expenditures, acquisitions and general company purposes.

The September 2021 Multi-Year Revolving Credit Agreement contains customary representations, warranties, covenants (affirmative and negative) and events of default, the occurrence of which would permit the lenders to accelerate the maturity date of any amounts borrowed under this credit agreement.

The September 2021 Multi-Year Revolving Credit Agreement also restricts EPO’s ability to pay cash distributions to the Partnership, if an event of default (as defined in the credit agreement) has occurred and is continuing at the time such distribution is scheduled to be paid or would result therefrom.

EPO’s obligations under the September 2021 Multi-Year Revolving Credit Agreement are not secured by any collateral;

however, they are guaranteed by the Partnership.

September 2021 Senior Notes Offering

In September 2021, EPO issued $ 1.0 billion in principal amount of senior notes due February 2053 (“Senior Notes EEE”).

Senior Notes EEE were issued at 99.170 % of their principal amount and have a fixed rate of interest of 3.30 % per year.

Net proceeds from the issuance of these senior notes will be used for general company purposes, including for growth capital investments, and the repayment of debt (including the repayment of a portion of our $ 750.0 million in principal amount of 3.50 % Senior Notes VV and/or a portion of our $ 650.0 million in principal amount of 4.05 % Senior Notes CC, in each case at their maturity in February 2022).

EPO’s fixed-rate senior notes are unsecured obligations of EPO that rank equal with its existing and future unsecured and unsubordinated indebtedness.

They are senior to any existing and future subordinated indebtedness of EPO.

EPO’s senior notes are subject to make-whole redemption rights and were issued under indentures containing certain covenants, which generally restrict its ability (with certain exceptions) to incur debt secured by liens and engage in sale and leaseback transactions.

Letters of Credit

At September 30, 2021, EPO had $ 88.0 million of letters of credit outstanding primarily related to our commodity hedging activities.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

At March 31, 2022, EPO had $ 100 million of letters of credit outstanding primarily related to our commodity hedging activities.

Lender Financial Covenants

We were in compliance with the financial covenants of our consolidated debt agreements at September 30, 2021.

We were in compliance with the financial covenants of our consolidated debt agreements at March 31, 2022.

Parent-Subsidiary Guarantor Relationships

6 unchanged sentences

2,176,379,587

Common unit repurchases under 2019 Buyback Program

Common units issued in connection with the vesting of phantom unit awards, net

1 unchanged sentence

2,180,453,144

Common units issued in connection with the vesting of phantom unit awards, net

Common units outstanding at June 30, 2021

2,185,381,669

Common unit repurchases under 2019 Buyback Program

Common units issued in connection with the vesting of phantom unit awards, net

Common units outstanding at September 30, 2021

2,182,129,957

Registration Statements

We have a universal shelf registration statement (the “2019 Shelf”) on file with the SEC which allows the Partnership and EPO (each on a standalone basis) to issue an unlimited amount of equity and debt securities, respectively.

We have a universal shelf registration statement on file with the SEC which allows the Partnership and EPO (each on a standalone basis) to issue an unlimited amount of equity and debt securities, respectively.

In addition, the Partnership has a registration statement on file with the SEC covering the issuance of up to $ 2.5 billion of its common units in amounts, at prices and on terms based on market conditions and other factors at the time of such offerings (referred to as the Partnership’s at-the-market (“ATM”) program).

The Partnership did not issue any common units under its ATM program during the nine months ended September 30, 2021.

The Partnership’s capacity to issue additional common units under the ATM program remains at $ 2.54 billion as of September 30, 2021.

The Partnership did not issue any common units under its ATM program during the three months ended March 31, 2022 .

The Partnership’s capacity to issue additional common units under the ATM program remains at $ 2.5 billion as of March 31, 2022.

We may issue additional equity and debt securities to assist us in meeting our future liquidity requirements, including those related to capital investments.

3 unchanged sentences

No time limit has been set for completion of the program, and it may be suspended or discontinued at any time.

The Partnership repurchased an aggregate 3,367,377 and 4,077,193 common units through open market purchases during the three and nine months ended September 30, 2021, respectively .

The total cost of these repurchases, including commissions and fees, was $ 74.9 million and $ 88.8 million , respectively .

During the three and nine months ended September 30, 2020 , the Partnership repurchased 1,984,507 and 8,342,246 common units, respectively, under the 2019 Buyback Program.

The total cost of these repurchases, including commissions and fees, was $ 33.7 million and $ 173.8 million, respectively.

Units repurchased under the 2019 Buyback Program are immediately cancelled upon acquisition.

At September 30, 2021, the remaining available capacity under the 2019 Buyback Program was $ 1.64 billion.

The Partnership did not repurchase any common units during the three months ended March 31, 2022 .

During the three months ended March 31, 2021 , the Partnership repurchased 709,816 common units under the 2019 Buyback Program.

The total cost of these repurchases, including commissions and fees, was $ 14 million.

Common units repurchased under the 2019 Buyback Program are immediately cancelled upon acquisition.

At March 31, 2022, the remaining available capacity under the 2019 Buyback Program was $ 1.5 billion.

ENTERPRISE PRODUCTS PARTNERS L.P.

1 unchanged sentence

Common Units Issued in Connection With the Vesting of Phantom Unit Awards

After taking into account tax withholding requirements, the Partnership issued 3,872,044 new common units to employees in connection with the vesting of phantom unit awards during the nine months ended September 30, 2021.

After taking into account tax withholding requirements, the Partnership issued 4,051,207 new common units to employees in connection with the vesting of phantom unit awards during the three months ended March 31, 2022.

See Note 13 for information regarding our phantom unit awards.

3 unchanged sentences

This election is subject to change in future quarters depending on the Partnership’s need for equity capital.

During the nine months ended September 30, 2021 , agents of the Partnership purchased 4,754,016 common units on the open market and delivered them to participants in the DRIP and EUPP.

During the three months ended March 31, 2022 , agents of the Partnership purchased 1,574,806 common units on the open market and delivered them to participants in the DRIP and EUPP.

Apart from $ 1 million attributable to the plan discount available to all participants in the EUPP, the funds used to effect these purchases were sourced from the DRIP and EUPP participants.

No other Partnership funds were used to satisfy these obligations.

We plan to use open market purchases to satisfy DRIP and EUPP reinvestments in connection with the distribution expected to be paid on November 12, 2021.

We plan to use open market purchases to satisfy DRIP and EUPP reinvestments in connection with the distribution expected to be paid on May 12, 2022.

Preferred Units

The following table summarizes changes in the number of our Series A Cumulative Convertible Preferred Units (“preferred units”) outstanding since December 31, 2020:

Preferred units outstanding at December 31, 2020

Paid in-kind distribution to related party

Preferred units outstanding at March 31, 2021, June 30, 2021 and September 30, 2021

There were 50,412 of our Series A Cumulative Convertible Preferred Units (“preferred units”) outstanding at March 31, 2022.

We present the capital accounts attributable to our preferred unitholders as mezzanine equity on our consolidated balance sheets since the terms of the preferred units allow for cash redemption by such unitholders in the event of a Change of Control (as defined in our partnership agreement), without regard to the likelihood of such an event.

During the nine months ended September 30, 2021, the Partnership made quarterly distributions to its third party and related party preferred unitholders valued at $ 2.8 million, consisting of paid-in-kind distributions of 274 new preferred units and $ 2.5 million of cash.

In March 2021, a privately held affiliate of EPCO sold its entire ownership interest in the Partnership’s preferred units to third parties.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the three months ended March 31, 2022, the Partnership made quarterly cash distributions to its preferred unitholders of $ 1 million.

Accumulated Other Comprehensive Income (Loss)

4 unchanged sentences

Other comprehensive income (loss) for period, before reclassifications

Reclassification of losses to net income during period

Reclassification of losses (gains) to net income during period

Total other comprehensive income (loss) for period

Accumulated Other Comprehensive Income (Loss), September 30, 2021

Accumulated Other Comprehensive Income (Loss), March 31, 2022

Cash Flow Hedges

Interest Rate

Accumulated Other Comprehensive Income, December 31, 2019

Accumulated Other Comprehensive Income (Loss), December 31, 2020

Other comprehensive income (loss) for period, before reclassifications

1 unchanged sentence

Total other comprehensive income (loss) for period

Accumulated Other Comprehensive Income (Loss), September 30, 2020

The following table presents reclassifications of (income) loss out of accumulated other comprehensive income into net income during the periods indicated:

Accumulated Other Comprehensive Income (Loss), March 31, 2021

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents reclassifications of (income) loss out of accumulated other comprehensive income (loss) into net income during the periods indicated:

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

Losses (gains) on cash flow hedges:

6 unchanged sentences

Cash Distributions

On October 12, 2021, we announced that the Board declared a quarterly cash distribution of $ 0.45 per common unit, or $ 1.80 per common unit on an annualized basis, to be paid to the Partnership’s common unitholders with respect to the third quarter of 2021.

The quarterly distribution is payable on November 12, 2021 to unitholders of record as of the close of business on October 29, 2021.

The total amount to be paid is $ 989.7 million, which includes $ 7.8 million for distribution equivalent rights (“DERs”) on phantom unit awards.

On April 7, 2022, we announced that the Board declared a quarterly cash distribution of $ 0.4650 per common unit, or $ 1.86 per common unit on an annualized basis, to be paid to the Partnership’s common unitholders with respect to the first quarter of 2022.

The quarterly distribution is payable on May 12, 2022 to unitholders of record as of the close of business on April 29, 2022.

The total amount to be paid is $ 1.0 billion, which includes $ 9 million for distribution equivalent rights (“DERs”) on phantom unit awards.

The payment of quarterly cash distributions is subject to management’s evaluation of our financial condition, results of operations and cash flows in connection with such payments and Board approval.

In light of current economic conditions, management will evaluate any future increases in cash distributions on a quarterly basis.

Management will evaluate any future increases in cash distributions on a quarterly basis.

ENTERPRISE PRODUCTS PARTNERS L.P.

4 unchanged sentences

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

NGL Pipelines & Services:

28 unchanged sentences

Total consolidated revenues

Substantially all of our revenues are derived from contracts with customers as defined within ASC 606, Revenue from Contracts with Customers .

Substantially all of our revenues are derived from contracts with customers as defined within Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers .

Unbilled Revenue and Deferred Revenue

The following table provides information regarding our contract assets and contract liabilities at September 30, 2021:

The following table provides information regarding our contract assets and contract liabilities at March 31, 2022:

Contract Asset

8 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents significant changes in our unbilled revenue and deferred revenue balances for the nine months ended September 30, 2021:

The following table presents significant changes in our unbilled revenue and deferred revenue balances for the three months ended March 31, 2022:

Balance at December 31, 2021

3 unchanged sentences

Other changes

Balance at September 30, 2021

Balance at March 31, 2022

Unbilled revenues are transferred to accounts receivable once we have an unconditional right to consideration from the customer.

4 unchanged sentences

The following table presents estimated fixed future consideration from revenue contracts that contain minimum volume commitments, deficiency and similar fees and the term of the contracts exceeds one year.

These amounts represent the revenues we expect to recognize in future periods from these contracts as of September 30, 2021.

These amounts represent the revenues we expect to recognize in future periods from these contracts as of March 31, 2022.

Consideration

Three Months Ended December 31, 2021

Nine Months Ended December 31, 2022

One Year Ended December 31, 2023

12 unchanged sentences

Our Crude Oil Pipelines & Services business segment includes our crude oil pipelines, crude oil storage and marine terminals, and related crude oil marketing activities.

Our Natural Gas Pipelines & Services business segment includes our natural gas pipeline systems that provide for the gathering, treating and transportation of natural gas.

This segment also includes our natural gas marketing activities.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Our Natural Gas Pipelines & Services business segment includes our natural gas pipeline systems that provide for the gathering, treating and transportation of natural gas.

This segment also includes our natural gas marketing activities.

Our Petrochemical & Refined Products Services business segment includes our (i) propylene production facilities, which include propylene fractionation units and a PDH facility, and related pipelines and marketing activities, (ii) butane isomerization complex and related deisobutanizer operations, (iii) octane enhancement, iBDH and HPIB production facilities, (iv) refined products pipelines, terminals and related marketing activities, (v) ethylene export terminal and related operations;

10 unchanged sentences

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

Operating income

3 unchanged sentences

Asset impairment charges in operating costs and expenses

Net losses (gains) attributable to asset sales and related matters in operating costs

Net losses attributable to asset sales and related matters in operating costs

General and administrative costs

Non-refundable payments received from shippers attributable to make-up rights (2)

N on-refundable payments received from shippers attributable to make-up rights (2)

Subsequent recognition of revenues attributable to make-up rights (3)

7 unchanged sentences

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

Gross operating margin by segment:

11 unchanged sentences

Revenues from third parties:

Three months ended September 30, 2021

Three months ended September 30, 2020

Nine months ended September 30, 2021

Nine months ended September 30, 2020

Three months ended March 31, 2022

Three months ended March 31, 2021

Revenues from related parties:

Three months ended September 30, 2021

Three months ended September 30, 2020

Nine months ended September 30, 2021

Nine months ended September 30, 2020

Three months ended March 31, 2022

Three months ended March 31, 2021

Intersegment and intrasegment revenues:

Three months ended September 30, 2021

Three months ended September 30, 2020

Nine months ended September 30, 2021

Nine months ended September 30, 2020

Three months ended March 31, 2022

Three months ended March 31, 2021

Total revenues:

Three months ended September 30, 2021

Three months ended September 30, 2020

Nine months ended September 30, 2021

Nine months ended September 30, 2020

Equity in income (loss) of unconsolidated affiliates:

Three months ended September 30, 2021

Three months ended September 30, 2020

Nine months ended September 30, 2021

Nine months ended September 30, 2020

Three months ended March 31, 2022

Three months ended March 31, 2021

Equity in income of unconsolidated affiliates:

Three months ended March 31, 2022

Three months ended March 31, 2021

Segment revenues include intersegment and intrasegment transactions, which are generally based on transactions made at market-based rates.

6 unchanged sentences

Property, plant and equipment, net:

At September 30, 2021

At March 31, 2022

At December 31, 2021

Investments in unconsolidated affiliates:

At September 30, 2021

At March 31, 2022

At December 31, 2021

Intangible assets, net:

At September 30, 2021

At March 31, 2022

At December 31, 2021

At September 30, 2021

At March 31, 2022

At December 31, 2021

Segment assets:

At September 30, 2021

At March 31, 2022

At December 31, 2021

4 unchanged sentences

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

Consolidated revenues:

10 unchanged sentences

Asset impairment charges

Ne t losses (gains) attributable to asset sales and related matters

Net losses attributable to asset sales and related matters

General and administrative costs

Total consolidated costs and expenses

Represents the cost of operating our plants, pipelines and other fixed assets excluding:

depreciation, amortization and accretion charges;

Represents the cost of operating our plants, pipelines and other fixed assets excluding depreciation, amortization and accretion charges;

asset impairment charges;

9 unchanged sentences

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

BASIC EARNINGS PER COMMON UNIT

13 unchanged sentences

Diluted earnings per common unit

* Amount is negligible

Phantom units are considered participating securities for purposes of computing basic earnings per unit.

See Note 12 for information regarding the phantom units.

See Note 13 for information regarding our phantom units.

We use the “if-converted method” to determine the potential dilutive effect of the vesting of phantom unit awards and the conversion of preferred units outstanding.

1 unchanged sentence

See Note 8 for information regarding preferred units.

Business Combinations

On February 17, 2022, an affiliate of Enterprise acquired all of the member interests in Navitas Midstream Partners, LLC ("Navitas Midstream") for $ 3.2 billion in cash.

We funded the cash consideration using proceeds from the issuance of short-term notes under our commercial paper program and cash on hand.

Navitas Midstream's assets (the “Midland Basin System”) include approximately 1,750 miles of pipelines and over 1.0 Bcf/d of cryogenic natural gas processing capacity.

The acquired business expands our natural gas processing and NGL businesses to the Midland Basin in West Texas.

The acquisition of Navitas Midstream was accounted for under the acquisition method in accordance with ASC 805, Business Combinations .

The preliminary allocation of purchase consideration was based upon the estimated fair value of the tangible and identifiable intangible assets acquired and liabilities assumed in the acquisition.

The preliminary allocation was made to major categories of assets and liabilities based on management’s best estimates and supported by an independent third-party analysis.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the preliminary fair value allocation of assets acquired and liabilities assumed in the acquisition at February 17, 2022 (the effective date of the acquisition).

The allocation is provisional and subject to ongoing efforts to clarify the values assigned to tangible and identifiable intangible assets.

Purchase price for 100% interest in Navitas Midstream

Recognized amounts of identifiable assets acquired and liabilities assumed:

Assets acquired in business combination:

Current assets, including cash of $ 27 million

Property, plant and equipment

Contract-based intangible asset

Total assets acquired

Liabilities assumed in business combination:

Current liabilities

Long-term liabilities

Total liabilities assumed

Total identifiable net assets

The estimated fair value of the acquired property, plant and equipment was determined using the cost approach.

The fair value of property, plant and equipment primarily consisted of personal property of $ 1.6 billion, real property of $ 250 million and construction in progress of $ 171 million.

See Note 4 for additional information regarding our property, plant and equipment.

The contract-based intangible asset represents the estimated value we assigned to the acquired long-term contracts with customers that dedicate future lease production to our system.

The estimated fair value of the acquired contract-based intangible assets was determined using an income approach, specifically a discounted cash flow analysis.

The fair value estimate incorporates Level 3 inputs including:

(i) management’s long-term forecast of cash flows generated by the Midland Basin System based on the estimated economic life of the hydrocarbon resource basin served and resource depletion rates;

and (ii) a discount rate of 15.5 % , which is based on a benchmarking analysis with reference to the implied rate of return on the Navitas Midstream acquisition and a market participant weighted average cost of capital.

We will amortize the value assigned to this intangible asset using a units-of-production method.

The estimated useful life of the acquired contract-based intangible asset is 30 years.

We recorded $ 159 million of goodwill in connection with this transaction.

In general, we attribute this goodwill to our ability to leverage the acquired business with our existing NGL asset base to create future business opportunities.

The financial results for the processing activities of the acquired business will be reported under the NGL Pipelines & Services business segment and the gathering activities will be reported under the Natural Gas Pipelines & Services business segment.

The contribution of this newly acquired business to our consolidated revenues and net income was not material during the three months ended March 31, 2022.

Additionally, acquisition related costs were not material during the three months ended March 31, 2022.

On a historical pro forma basis, our revenues, costs and expenses, operating income, net income attributable to common unitholders and earnings per unit for the three months ended March 31, 2022 and 2021 would not have differed materially from those we actually reported had the acquisition been completed on January 1, 2021 rather than February 17, 2022.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Equity-Based Awards

2 unchanged sentences

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

Equity-classified awards:

1 unchanged sentence

Profits interest awards

Liability-classified awards

The fair value of equity-classified awards is amortized to earnings over the requisite service or vesting period.

Equity-classified awards are expected to result in the issuance of the Partnership’s common units upon vesting.

Compensation expense for liability-classified awards is recognized over the requisite service or vesting period based on the fair value of the award remeasured at each reporting date.

Liability-classified awards are settled in cash upon vesting.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Phantom Unit Awards

4 unchanged sentences

Phantom unit awards at December 31, 2021

Phantom unit awards at September 30, 2021

Phantom unit awards at March 31, 2022

Determined by dividing the aggregate grant date fair value of awards (before an allowance for forfeitures) by the number of awards issued.

6 unchanged sentences

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

Cash payments made in connection with DERs

Total intrinsic value of phantom unit awards that vested during period

For the EPCO group of companies, the unrecognized compensation cost associated with phantom unit awards was $ 185.1 million at September 30, 2021, of which our share of such cost is currently estimated to be $ 153.0 million.

For the EPCO group of companies, the unrecognized compensation cost associated with phantom unit awards was $ 284 million at March 31, 2022, of which our share of such cost is currently estimated to be $ 238 million.

Due to the graded vesting provisions of these awards, we expect to recognize our share of the unrecognized compensation cost for these awards over a weighted-average period of 2.3 years.

Profits Interest Awards

In 2016 and 2018, EPCO Holdings Inc., a privately held affiliate of EPCO, contributed a portion of the Partnership common units it owned to form limited partnerships (referred to as “Employee Partnerships”) that serve as long-term incentive arrangements for key employees of EPCO by providing them a “profits interest” (in the form of a Class B limited partner interest) in an Employee Partnership.

The Class B limited partner interests of two of the four Employee Partnerships outstanding at January 1, 2021, EPD PubCo Unit II L.P.

and EPD PrivCo Unit I L.P., vested on June 11, 2021 when the closing market price of the Partnership’s common units exceeded $ 25.41 per unit.

As a result of these vesting events, we recognized an aggregate $ 1.9 million of non-cash, compensation expense in the three months ended June 30, 2021.

The Class B limited partner interests of EPD Unit IV L.P.

and EPCO Unit II L.P.

remain outstanding.

At September 30, 2021 , our share of the total unrecognized compensation cost related to these two Employee Partnerships was $ 10.4 million , which we expect to recognize over a weighted-average period of 2.2 years.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Profits Interest Awards

EPCO has two limited partnerships (referred to as “Employee Partnerships”) that serve as long-term incentive arrangements for key employees of EPCO by providing them a profits interest in one or more of the Employee Partnerships.

At March 31, 2022 , our share of the total unrecognized compensation cost related to the Employee Partnerships was $ 8 million , which we expect to recognize over a weighted-average period of 1.7 years.

Hedging Activities and Fair Value Measurements

5 unchanged sentences

This strategy may be used in controlling our overall cost of capital associated with such borrowings.

Forward-Starting Swaps

As a result of favorable market conditions, we terminated an aggregate $ 675.0 million notional amount of forward-starting swaps in March 2021, which resulted in a net cash payment of $ 0.1 million.

Since the original swaptions associated with these forward-starting swaps were not designated as hedging instruments and were subject to mark-to-market accounting, we previously incurred an unrealized, mark-to-market loss at inception of the forward starting swaps of $ 47.6 million that was reflected as an increase in interest expense in 2019.

Immediately following exercise of the swaptions and our being put into the forward-starting swaps, these instruments were designated as cash flow hedges.

For the period from inception through the termination date in March 2021, we recognized cumulative gains on the forward-starting swaps of $ 47.5 million in accumulated other comprehensive income, of which $ 45.9 million will be reclassified to earnings (as a decrease in interest expense) over the life of the associated debt obligations.

We reclassified $ 1.6 million of the cumulative gain as a decrease in interest expense in March 2021.

We terminated an additional aggregate $ 400.0 million notional amount of forward-starting swaps in March 2021 due to favorable market conditions, which resulted in net cash proceeds of $ 75.3 million.

As cash flow hedges, gains on these derivative instruments are reflected as a component of accumulated other comprehensive income and will be reclassified to earnings (as a decrease in interest expense) over the life of the associated future debt obligations.

As a result of these terminations, we do not have any interest rate derivative instruments outstanding at September 30, 2021.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

We do not have any interest rate derivative instruments outstanding at March 31, 2022.

Commodity Hedging Activities

1 unchanged sentence

In order to manage such price risks, we enter into commodity derivative instruments such as physical forward contracts, futures contracts, fixed-for-float swaps and basis swaps.

At September 30, 2021, our predominant commodity hedging strategies consisted of (i) hedging anticipated future purchases and sales of commodity products associated with transportation, storage and blending activities, (ii) hedging natural gas processing margins and (iii) hedging the fair value of commodity products held in inventory.

The following table summarizes our portfolio of commodity derivative instruments outstanding at September 30, 2021 (volume measures as noted):

At March 31, 2022, our predominant commodity hedging strategies consisted of (i) hedging anticipated future purchases and sales of commodity products associated with transportation, storage and blending activities, (ii) hedging natural gas processing margins and (iii) hedging the fair value of commodity products held in inventory.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes our portfolio of commodity derivative instruments outstanding at March 31, 2022 (volume measures as noted):

Derivative Purpose

19 unchanged sentences

Fair value hedge

Refined products marketing:

Forecasted purchases of refined products (MMBbls)

Cash flow hedge

Forecasted sales of refined products (MMBbls)

Cash flow hedge

Crude oil marketing:

21 unchanged sentences

Volume for derivatives designated as hedging instruments reflects the total amount of volumes hedged whereas volume for derivatives not designated as hedging instruments reflects the absolute value of derivative notional volumes.

The maximum term for derivatives designated as cash flow hedges, derivatives designated as fair value hedges and derivatives not designated as hedging instruments is December 2023, January 2022 and December 2023, respectively.

Reflects the use of derivative instruments to manage risks associated with our transportation, processing and storage assets.

The carrying amount of our inventories subject to fair value hedges was $ 151.5 million and $ 144.0 million at September 30, 2021 and December 31, 2020, respectively.

The carrying amount of our inventories subject to fair value hedges was $ 98 million and $ 102 million at March 31, 2022 and December 31, 2021, respectively.

ENTERPRISE PRODUCTS PARTNERS L.P.

5 unchanged sentences

Liability Derivatives

September 30, 2021

March 31, 2022

December 31, 2021

September 30, 2021

March 31, 2022

December 31, 2021

Derivatives designated as hedging instruments

Interest rate derivatives

Current assets

Interest rate derivatives

Other liabilities

Total interest rate derivatives

Commodity derivatives

26 unchanged sentences

(v) = (iii) + (iv)

As of September 30, 2021:

As of March 31, 2022:

Commodity derivatives

As of December 31, 2021:

Interest rate derivatives

Commodity derivatives

9 unchanged sentences

(v) = (iii) + (iv)

As of September 30, 2021:

As of March 31, 2022:

Commodity derivatives

As of December 31, 2021:

Interest rate derivatives

Commodity derivatives

11 unchanged sentences

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

Commodity derivatives

4 unchanged sentences

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

Commodity derivatives

5 unchanged sentences

Change in Value Recognized in

Other Comprehensive Income (Loss) on Derivative

Other Comprehensive Income (Loss)

on Derivative

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

Interest rate derivatives

2 unchanged sentences

The fair value of these derivative instruments will be reclassified to their respective locations on the Unaudited Condensed Statement of Consolidated Operations when the forecasted transactions affect earnings.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Derivatives in Cash Flow

1 unchanged sentence

Gain (Loss) Reclassified from

Accumulated Other Comprehensive Income (Loss) to Income

Accumulated Other

Comprehensive Income (Loss)

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

Interest rate derivatives

3 unchanged sentences

Operating costs and expenses

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Over the next twelve months, we expect to reclassify $ 16 million of losses attributable to interest rate derivative instruments from accumulated other comprehensive loss to earnings as an increase in interest expense.

Likewise, we expect to reclassify $ 283.6 million of losses attributable to commodity derivative instruments from accumulated other comprehensive loss to earnings, with $ 294.3 million as a decrease in revenue and $ 10.7 million as a decrease in operating costs and expenses.

Likewise, we expect to reclassify $ 80 million of gains attributable to commodity derivative instruments from accumulated other comprehensive income to earnings, with $ 56 million as an increase in revenue and $ 24 million as a decrease in operating costs and expenses.

The following table presents the effect of our derivative instruments not designated as hedging instruments on our Unaudited Condensed Statements of Consolidated Operations for the periods indicated:

4 unchanged sentences

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

Commodity derivatives

1 unchanged sentence

Operating costs and expenses

The $ 145.1 million gain recognized for the nine months ended September 30, 2021 (as noted in the preceding table) from derivatives not designated as hedging instruments consists of $ 7.3 million of realized gains and $ 137.8 million of net unrealized mark-to-market gains attributable to commodity derivatives.

The $ 47 million gain recognized for the three months ended March 31, 2022 (as noted in the preceding table) from derivatives not designated as hedging instruments consists of $ 57 million of realized gains and $ 10 million of net unrealized mark-to-market losses attributable to commodity derivatives.

Fair Value Measurements

8 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

At September 30, 2021

At March 31, 2022

Fair Value Measurements Using

18 unchanged sentences

Financial assets:

Interest rate derivatives

Commodity derivatives:

3 unchanged sentences

Financial liabilities:

Interest rate derivatives

Commodity derivatives:

2 unchanged sentences

Total commodity derivatives

In the aggregate, the fair value of our commodity hedging portfolios at September 30, 2021 was a net derivative liability of $ 470.3 million prior to the impact of CME Rule 814.

Financial assets and liabilities recorded on the balance sheet at September 30, 2021 using significant unobservable inputs (Level 3) are not material to the Unaudited Condensed Consolidated Financial Statements.

Nonrecurring Fair Value Measurements

We did not have any significant nonrecurring fair value measurements during the nine months ended September 30, 2021 or 2020.

See Note 4 for information regarding other non-cash asset impairment charges.

In the aggregate, the fair value of our commodity hedging portfolios at March 31, 2022 was a net derivative asset of $ 109 million prior to the impact of CME Rule 814.

Financial assets and liabilities recorded on the balance sheet at March 31, 2022 using significant unobservable inputs (Level 3) are not material to the Unaudited Condensed Consolidated Financial Statements.

ENTERPRISE PRODUCTS PARTNERS L.P.

2 unchanged sentences

The carrying amounts of cash and cash equivalents (including restricted cash balances), accounts receivable, commercial paper notes and accounts payable approximate their fair values based on their short-term nature.

The estimated total fair value of our fixed-rate debt obligations was $ 33.9 billion and $ 35.0 billion at September 30, 2021 and December 31, 2020, respectively.

The aggregate carrying value of these debt obligations was $ 29.58 billion and $ 29.9 billion at September 30, 2021 and December 31, 2020, respectively.

The estimated total fair value of our fixed-rate debt obligations was $ 28.9 billion and $ 33.5 billion at March 31, 2022 and December 31, 2021, respectively.

The aggregate carrying value of these debt obligations was $ 28.2 billion and $ 29.6 billion at March 31, 2022 and December 31, 2021, respectively.

These values are primarily based on quoted market prices for such debt or debt of similar terms and maturities (Level 2) and our credit standing.

5 unchanged sentences

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

Revenues – related parties:

4 unchanged sentences

The following table summarizes our related party accounts receivable and accounts payable balances at the dates indicated:

September 30,

Accounts receivable - related parties:

8 unchanged sentences

We have an extensive and ongoing relationship with EPCO and its privately held affiliates (including Enterprise GP, our general partner), which are not a part of our consolidated group of companies.

At September 30, 2021, EPCO and its privately held affiliates (including Dan Duncan LLC and certain Duncan family trusts) beneficially owned the following limited partner interests in us:

At March 31, 2022, EPCO and its privately held affiliates (including Dan Duncan LLC and certain Duncan family trusts) beneficially owned the following limited partner interests in us:

Total Number of Limited Partner Interests Held

3 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Of the total number of Partnership common units held by EPCO and its privately held affiliates, 92,976,464 have been pledged as security under the separate credit facilities of EPCO and its privately held affiliates at September 30, 2021.

These credit facilities contain customary and other events of default, including defaults by us and other affiliates of EPCO.

2 unchanged sentences

EPCO and its privately held affiliates depend on the cash distributions they receive from us and other investments to fund their other activities and to meet their respective debt obligations.

During the nine months ended September 30, 2021 and 2020, we paid EPCO and its privately held affiliates cash distributions totaling $ 918.1 million and $ 908.2 million, respectively.

During the three months ended March 31, 2022 and 2021, we paid EPCO and its privately held affiliates cash distributions totaling $ 316 million and $ 306 million, respectively.

We have no employees.

3 unchanged sentences

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

Operating costs and expenses

2 unchanged sentences

We lease office space from privately held affiliates of EPCO at rental rates that approximate market rates.

For the three months ended September 30, 2021 and 2020 , we recognized $ 3.4 million and $ 3.3 million, respectively, of related party operating lease expense in connection with these office space leases.

For the nine months ended September 30, 2021 and 2020 , we recognized $ 10.1 million and $ 9.6 million, respectively, of related party operating lease expense in connection with these office space leases.

The following table presents the components of our consolidated benefit from (provision for) income taxes for the periods indicated (dollars in millions):

For each of the three months ended March 31, 2022 and 2021 , we recognized $ 3 million of related party operating lease expense in connection with these office space leases.

The following table presents the components of our consolidated provision for income taxes for the periods indicated (dollars in millions):

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Deferred tax benefit (expense) attributable to

Ended March 31,

Deferred tax expense attributable to

OTA Holdings, Inc.

Revised Texas Franchise Tax (“Texas Margin Tax”)

Benefit from (provision for) income taxes

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Provision for income taxes

Our federal, state and foreign income tax benefit (provision) is summarized below:

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

Current portion of income tax benefit (provision):

2 unchanged sentences

Total deferred portion

Total benefit from (provision for) income taxes

A reconciliation of the benefit from (provision for) income taxes with amounts determined by applying the statutory U.S.

Total provision for income taxes

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation of the provision for income taxes with amounts determined by applying the statutory U.S.

federal income tax rate to income before income taxes is as follows:

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

Pre-Tax Net Book Income (“NBI”)

Texas Margin Tax (1)

State income tax benefit (provision), net of federal benefit (2)

Federal income tax benefit (provision) computed by applying

the federal statutory rate to NBI of corporate entities

Federal benefit attributable to settlement of

Liquidity Option Agreement (2)

State income tax provision, net of federal benefit

Federal income tax provision computed by applying the federal

statutory rate to NBI of corporate entities

Valuation allowance (2)

Benefit from (provision for) income taxes

Provision for income taxes

Effective income tax rate

Although the Texas Margin Tax is not considered a state income tax, it has the characteristics of an income tax since it is determined by applying a tax rate to a base that considers our Texas-sourced revenues and expenses.

The total benefit recognized in income tax expense on March 5, 2020 from settlement of the Liquidity Option was $ 72.2 million, which is comprised of $ 4.4 million of state income tax benefit and $ 67.8 million of federal income tax benefit.

Management believes that it is more likely than not that the net deferred tax assets attributable to OTA will not be fully realizable.

therefore, we have provided for a valuation allowance.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Accordingly, we provided for a valuation allowance against OTA’s net deferred tax assets.

The following table presents the significant components of deferred tax assets and deferred tax liabilities at the dates indicated:

September 30,

Deferred tax liabilities:

10 unchanged sentences

Total net deferred tax liabilities

Of the loss amount presented for September 30, 2021, $ 0.1 million expires in various years between 2021 and 2037.

The remaining $ 9.3 million has an indefinite carryover period.

The loss amount presented as of March 31, 2022 has an indefinite carryover period.

All losses are subject to limitations on their utilization.

OTA Deferred Tax Liability

On March 5, 2020, the Partnership settled its obligations under a put option agreement (the “Liquidity Option Agreement” or “Liquidity Option”) with OTA and Marquard & Bahls AG, and became the owner of OTA and indirectly assumed its deferred tax liability, which reflects OTA’s outside basis difference in the limited partner interests it received from the Partnership in October 2014.

Upon settlement of the Liquidity Option, the Liquidity Option liability recorded by the Partnership was effectively replaced by the deferred tax liability of OTA calculated in accordance with ASC 740, Income Taxes .

At March 5, 2020, the Liquidity Option liability amount was $ 511.9 million.

Since the book value of the Liquidity Option liability exceeded OTA’s estimated deferred tax liability of $ 439.7 million on that date, we recognized a non-cash benefit in earnings of $ 72.2 million, which is reflected in the “Benefit from (provision for) income taxes” line on our Unaudited Condensed Statement of Consolidated Operations for the nine months ended September 30, 2020 .

OTA recognized an additional net, non-cash deferred income tax benefit of $ 85.8 million at September 30, 2020 primarily due to a decrease in the outside basis difference of its investment in the Partnership attributable to a decline in the market price of the Partnership’s common units subsequent to March 5, 2020 through September 30, 2020 .

In total, our earnings for the nine months ended September 30, 2020 reflect $ 158.0 million of net deferred income tax benefit attributable to OTA.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Commitments and Contingent Liabilities

2 unchanged sentences

We will vigorously defend the Partnership in litigation matters.

Our accruals for litigation contingencies were $ 0.2 million and $ 6.1 million at September 30, 2021 and December 31, 2020, respectively.

There were no accruals for litigation contingencies at March 31, 2022.

Our accruals for litigation contingencies were immaterial at December 31, 2021.

We have classified our accruals for litigation contingencies in our Unaudited Condensed Consolidated Balance Sheets as a component of “Other current liabilities” or “Other long-term liabilities” based on management’s estimate regarding the timing of settlement.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

PDH 1 Litigation

4 unchanged sentences

On September 2, 2016, we terminated AFW for cause and filed a lawsuit in the 151st Judicial Civil District Court of Harris County, Texas against AFW and its parent company, Amec Foster Wheeler plc, asserting claims for breach of contract, breach of warranty, fraudulent inducement, string-along fraud, gross negligence, professional negligence, negligent misrepresentation and attorneys’ fees.

Trial for the case began on April 19, 2022.

We intend to diligently prosecute these claims and seek all direct, consequential, and exemplary damages to which we may be entitled.

2 unchanged sentences

We have long-term and short-term payment obligations under debt agreements.

In total, the principal amount of our consolidated debt obligations were $ 29.82 billion and $ 30.15 billion at September 30, 2021 and December 31, 2020, respectively.

The year-to-date reduction in debt principal amount outstanding is due to EPO’s repayment of Senior Notes TT and RR, partially offset by EPO’s issuance of Senior Notes EEE.

In total, the principal amount of our consolidated debt obligations were $ 29.8 billion at March 31, 2022 and December 31, 2021.

See Note 7 for additional information regarding our scheduled future maturities of debt principal.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Lease Accounting Matters

There has been no significant change in our operating lease obligations since those disclosed in the 2021 Form 10-K.

The following table presents information regarding operating leases where we are the lessee at September 30, 2021:

The following table presents information regarding operating leases where we are the lessee at March 31, 2022:

Asset Category

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Right-of-use (“ROU”) asset amounts are a component of “Other assets” on our Unaudited Condensed Consolidated Balance Sheet.

At September 30, 2021 , lease liabilities of $ 35.5 million and $ 343.6 million were included within “Other current liabilities” and “Other long-term liabilities,” respectively.

At March 31, 2022, lease liabilities of $ 51 million and $ 350 million were included within “Other current liabilities” and “Other long-term liabilities,” respectively.

The discount rate for each category of assets represents the weighted average of either (i) the implicit rate applicable to the underlying leases (where determinable) or (ii) our incremental borrowing rate adjusted for collateralization (if the implicit rate is not determinable).

In general, the discount rates are based on either information available at the lease commencement date or January 1, 2019 for leases existing at the adoption date for ASC 842, Leases .

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table disaggregates our total operating lease expense for the periods indicated :

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

Long-term operating leases:

7 unchanged sentences

Total operating lease expense

Cash payments attributable to operating lease liabilities were $ 10.8 million and $ 9.8 million for the three months ended September 30, 2021 and 2020, respectively.

For the nine months ended September 30, 2021 and 2020, cash paid for operating lease liabilities was $ 29.2 million and $ 28.1 million, respectively.

Operating lease income for the three months ended September 30, 2021 and 2020 was $ 3.1 million and $ 2.3 million, respectively.

For the nine months ended September 30, 2021 and 2020 , operating lease income was $ 9.2 and $ 8.4 million, respectively.

Cash payments attributable to operating lease liabilities were $ 12 million and $ 9 million for the three months ended March 31, 2022 and 2021, respectively.

Operating lease income for each of the three months ended March 31, 2022 and 2021 was $ 3 million.

Purchase Obligations

We have contractual future product purchase commitments for natural gas, NGLs, crude oil, petrochemicals and refined products representing enforceable and legally binding agreements as of the reporting date.

Our product purchase commitments increased from $ 14.8 billion at December 31, 2020 to $ 22.1 billion at September 30, 2021 primarily due to an increase in crude oil and NGL prices between the two reporting dates.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Our product purchase commitments increased from $ 18.8 billion at December 31, 2021 to $ 25.9 billion at March 31, 2022 primarily due to an increase in crude oil and NGL prices between the two reporting dates.

Supplemental Cash Flow Information

The following table provides information regarding the net effect of changes in our operating accounts and cash payments for interest and income taxes for the periods indicated:

For the Nine Months

Ended September 30,

For the Three Months

Ended March 31,

Decrease (increase) in:

8 unchanged sentences

Other current liabilities

Other liabilities

Other long-term liabilities

Net effect of changes in operating accounts

Cash payments for interest, net of $ 17 and $ 20 capitalized during the

nine months ended September 30, 2021 and 2020 , respectively

Cash payments for federal and state income taxes

We incurred liabilities for construction in progress that had not been paid at September 30, 2021 and December 31, 2020 of $ 194.6 million and $ 236.1 million, respectively.

three months ended March 31, 2022 and 2021 , respectively

Cash refunds for federal and state income taxes

We incurred liabilities for construction in progress that had not been paid at March 31, 2022 and December 31, 2021 of $ 138 million and $ 183 million, respectively.

Such amounts are not included under the caption “Capital expenditures” on the Unaudited Condensed Statements of Consolidated Cash Flows.

We recognized non-cash charges totaling $ 11.3 million for involuntary conversions during the nine months ended September 30, 2021 that are a component of net losses attributable to asset sales and related matters.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements