What changed in this filing

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Item 1. Financial Statements

2022-08-09 compared with 2022-05-10 · 277 added, 156 removed, 1084 unchanged (29% of the section changed)

7 unchanged sentences

Accounts receivable – trade, net of allowance for credit losses

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

of $ 54 at June 30, 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 March 31, 2022 and December 31, 2021 )

( 50,412 units outstanding at June 30, 2022 and December 31, 2021 )

Partners’ equity:

Common limited partner interests ( 2,179,249,380 units issued and outstanding at

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

June 30, 2022 , 2,176,379,587 units issued and outstanding at December 31, 2021 )

Treasury units, at cost

8 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Third parties

31 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Other comprehensive income (loss):

3 unchanged sentences

Changes in fair value of cash flow hedges

Reclassificati on of losses to ne t income

Reclassificatio n of losses ( gains) to ne t income

Interest rate hedging derivative instruments:

2 unchanged sentences

Total cash flow hedges

Total other comprehens ive income (loss)

Total other comprehens ive loss

Comprehensive income

6 unchanged sentences

(Dollars in millions)

For the Three Months

Ended March 31,

For the Six Months

Ended June 30,

Operating activities:

4 unchanged sentences

Other amortization expense

Impairment of assets other than goodwill (see Note 4)

Impairment of assets other than goodwill

Equity in income of unconsolidated affiliates

32 unchanged sentences

UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED EQUITY

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022

(Dollars in millions)

3 unchanged sentences

Noncontrolling

For the Three Months Ended June 30, 2022 :

Balance, March 31, 2022

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

Cash flow hedges

Balance, June 30, 2022

Partners’ Equity

Comprehensive

Income (Loss)

Noncontrolling

For the Six Months Ended June 30, 2022 :

Balance, December 31, 2021

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

Cash flow hedges

Balance, June 30, 2022

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 SIX MONTHS ENDED JUNE 30, 2021

(Dollars in millions)

Partners’ Equity

Comprehensive

Income (Loss)

Noncontrolling

For the Three Months Ended June 30, 2021 :

Balance, March 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

Cash flow hedges

Balance, June 30, 2021

Partners’ Equity

2 unchanged sentences

Noncontrolling

For the Six Months Ended June 30, 2021 :

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

4 unchanged sentences

Cash flow hedges

Balance, March 31, 2021

Balance, June 30, 2021

See Notes to Unaudited Condensed Consolidated Financial Statements.

For information regarding Unit History,

For information regarding Unit History and

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

25 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 March 31, 2022.

EPCO, together with its privately held affiliates, owned approximately 32.2 % of the Partnership’s common units outstanding at June 30, 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 three months ended March 31, 2022 are not necessarily indicative of results expected for the full year of 2022.

Our results of operations for the six months ended June 30, 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.

Although we believe the disclosures in these financial statements are adequate and make the information presented not misleading, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the U.S.

generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the U.S.

Securities and Exchange Commission (“SEC”).

10 unchanged sentences

Charged to costs and expenses

Allowance for credit losses, March 31, 2022

Charged to other accounts

Allowance for credit losses, June 30, 2022

Cash, Cash Equivalents and Restricted Cash

14 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

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.

36 unchanged sentences

On a weighted-average basis, the expected amortization period for these costs is 1.8 years.

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.

Property, plant and equipment at June 30, 2022 and December 31, 2021 includes $ 114 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, March 31, 2022

ARO liability balance, June 30, 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 $ 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.

Of the $ 219 million total ARO liability recorded at June 30, 2022 , $ 16 million was reflected as a current liability and $ 203 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 March 31,

Ended June 30,

For the Six Months

Ended June 30,

Depreciation expense (1)

12 unchanged sentences

Petrochemical & Refined Products Services

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

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

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

NGL Pipelines & Services

7 unchanged sentences

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

March 31, 2022

June 30, 2022

December 31, 2021

18 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

NGL Pipelines & Services

3 unchanged sentences

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

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.

3 unchanged sentences

Goodwill related to acquisition (1)

Balance at March 31, 2022

Balance at June 30, 2022

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

61 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 three months ended March 31, 2022:

The following table presents the range of interest rates and weighted-average interest rates paid on our consolidated variable-rate debt during the six months ended June 30, 2022:

Range of Interest

14 unchanged sentences

Scheduled Maturities of Debt

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:

The following table presents the scheduled maturities of principal amounts of EPO’s consolidated debt obligations at June 30, 2022 for the next five years, and in total thereafter:

Scheduled Maturities of Debt

6 unchanged sentences

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.

Expected Renewal of September 2021 364-Day Revolving Credit Agreement

EPO’s September 2021 364-Day Revolving Credit Agreement is scheduled to mature in September 2022.

As a result, EPO expects to renew this credit agreement during the third quarter of 2022.

At June 30, 2022, there were no principal amounts outstanding under the September 2021 364-Day Revolving Credit Agreement.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Partial Redemption of Junior Subordinated Notes D

On August 1, 2022, EPO called for redemption $ 350 million of the $ 700 million outstanding principal amount of its Junior Subordinated Notes D.

The redemption date for such notes is August 31, 2022.

These notes are redeemable at EPO’s election on or after August 16, 2022 at a redemption price equal to 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest thereon to, but not including, the redemption date.

The redemption is expected to be made using cash on hand and proceeds from the issuance of short-term notes under EPO’s commercial paper program.

Letters of Credit

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

At June 30, 2022, EPO had $ 117 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 March 31, 2022.

We were in compliance with the financial covenants of our consolidated debt agreements at June 30, 2022.

Parent-Subsidiary Guarantor Relationships

9 unchanged sentences

2,180,453,144

Common unit repurchases under 2019 Buyback Program

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

Common units outstanding at June 30, 2022

2,179,249,380

Registration Statements

1 unchanged sentence

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 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.

The Partnership did not issue any common units under its ATM program during the six months ended June 30, 2022 .

The Partnership’s capacity to issue additional common units under the ATM program remains at $ 2.5 billion as of June 30, 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 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.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the three and six months ended June 30, 2022, the Partnership repurchased 1,408,121 common units under the 2019 Buyback Program through open market purchases .

The total cost of these repurchases, including commissions and fees, was $ 35 million.

During the six months ended June 30, 2021 , the Partnership repurchased 709,816 common units under the 2019 Buyback Program through open market purchases .

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 June 30, 2022, the remaining available capacity under the 2019 Buyback Program was $ 1.5 billion.

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

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.

After taking into account tax withholding requirements, the Partnership issued 4,255,564 new common units to employees in connection with the vesting of phantom unit awards during the six months ended June 30, 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 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.

During the six months ended June 30, 2022 , agents of the Partnership purchased 3,240,990 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 May 12, 2022.

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

Preferred Units

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

There were 50,412 of our Series A Cumulative Convertible Preferred Units (“preferred units”) outstanding at June 30, 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 three months ended March 31, 2022, the Partnership made quarterly cash distributions to its preferred unitholders of $ 1 million.

During the six months ended June 30, 2022, the Partnership made quarterly cash distributions to its preferred unitholders of $ 2 million.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Accumulated Other Comprehensive Income (Loss)

6 unchanged sentences

Total other comprehensive income (loss) for period

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

Accumulated Other Comprehensive Income (Loss), June 30, 2022

Cash Flow Hedges

4 unchanged sentences

Total other comprehensive income (loss) for period

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:

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

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

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Losses (gains) on cash flow hedges:

6 unchanged sentences

Cash Distributions

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.

On July 7, 2022, we announced that the Board declared a quarterly cash distribution of $ 0.4750 per common unit, or $ 1.90 per common unit on an annualized basis, to be paid to the Partnership’s common unitholders with respect to the second quarter of 2022.

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

The total amount to be paid is $ 1.04 billion, which includes $ 9 million for distribution equivalent rights (“DERs”) on phantom unit awards.

7 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

NGL Pipelines & Services:

30 unchanged sentences

Unbilled Revenue and Deferred Revenue

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

The following table provides information regarding our contract assets and contract liabilities at June 30, 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 three months ended March 31, 2022:

The following table presents significant changes in our unbilled revenue and deferred revenue balances for the six months ended June 30, 2022:

Balance at December 31, 2021

3 unchanged sentences

Other changes

Balance at March 31, 2022

Balance at June 30, 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 March 31, 2022.

These amounts represent the revenues we expect to recognize in future periods from these contracts as of June 30, 2022.

Consideration

Nine Months Ended December 31, 2022

Six Months Ended December 31, 2022

One Year Ended December 31, 2023

28 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Operating income

5 unchanged sentences

General and administrative costs

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

Non-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 March 31,

Ended June 30,

For the Six Months

Ended June 30,

Gross operating margin by segment:

11 unchanged sentences

Revenues from third parties:

Three months ended March 31, 2022

Three months ended March 31, 2021

Three months ended June 30, 2022

Three months ended June 30, 2021

Six months ended June 30, 2022

Six months ended June 30, 2021

Revenues from related parties:

Three months ended March 31, 2022

Three months ended March 31, 2021

Three months ended June 30, 2022

Three months ended June 30, 2021

Six months ended June 30, 2022

Six months ended June 30, 2021

Intersegment and intrasegment revenues:

Three months ended March 31, 2022

Three months ended March 31, 2021

Three months ended June 30, 2022

Three months ended June 30, 2021

Six months ended June 30, 2022

Six months ended June 30, 2021

Total revenues:

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

Three months ended June 30, 2022

Three months ended June 30, 2021

Six months ended June 30, 2022

Six months ended June 30, 2021

Equity in income loss of unconsolidated affiliates:

Three months ended June 30, 2022

Three months ended June 30, 2021

Six months ended June 30, 2022

Six months ended June 30, 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 March 31, 2022

At June 30, 2022

At December 31, 2021

Investments in unconsolidated affiliates:

At March 31, 2022

At June 30, 2022

At December 31, 2021

Intangible assets, net:

At March 31, 2022

At June 30, 2022

At December 31, 2021

At March 31, 2022

At June 30, 2022

At December 31, 2021

Segment assets:

At March 31, 2022

At June 30, 2022

At December 31, 2021

4 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Consolidated revenues:

10 unchanged sentences

Asset impairment charges

Net losses attributable to asset sales and related matters

Ne t 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;

and net losses (or gains) attributable to asset sales and related matters.

and net losses attributable to asset sales and related matters.

Fluctuations in our product sales revenues and cost of sales amounts are explained in large part by changes in energy commodity prices.

7 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

BASIC EARNINGS PER COMMON UNIT

14 unchanged sentences

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

See Note 13 for information regarding our phantom units.

See Note 13 for information regarding the 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.

15 unchanged sentences

Recognized amounts of identifiable assets acquired and liabilities assumed:

Assets acquired in business combination:

Current assets, including cash of $ 27 million

Cash and cash equivalents

Property, plant and equipment

Contract-based intangible asset

Total assets acquired

Liabilities assumed in business combination:

Current liabilities

Long-term liabilities

Total liabilities assumed

Assumed liabilities, net of acquired other assets (1)

Total identifiable net assets

Assumed liabilities primarily include accounts payable, other current liabilities, lease liabilities and asset retirement obligations.

Acquired other assets primarily include accounts receivable, other current assets and right-of-use (“ROU”) assets.

None of these amounts were considered individually significant.

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

10 unchanged sentences

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.

The financial results for the processing activities of the acquired business will continue to be reported under the NGL Pipelines & Services business segment and the gathering activities will continue to 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 and six months ended June 30, 2022.

Additionally, acquisition related costs were not material during the three and six months ended June 30, 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 and six months ended June 30, 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.

4 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Equity-classified awards:

9 unchanged sentences

Phantom unit awards at December 31, 2021

Phantom unit awards at March 31, 2022

Phantom unit awards at June 30, 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 March 31,

Ended June 30,

For the Six Months

Ended June 30,

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 $ 284 million at March 31, 2022, of which our share of such cost is currently estimated to be $ 238 million.

For the EPCO group of companies, the unrecognized compensation cost associated with phantom unit awards was $ 238 million at June 30, 2022, of which our share of such cost is currently estimated to be $ 197 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 2.1 years.

3 unchanged sentences

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.

At June 30, 2022 , our share of the total unrecognized compensation cost related to the Employee Partnerships was $ 7 million , which we expect to recognize over a weighted-average period of 1.4 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.

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

We do not have any interest rate derivative instruments outstanding at June 30, 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 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.

At June 30, 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):

The following table summarizes our portfolio of commodity derivative instruments outstanding at June 30, 2022 (volume measures as noted):

Derivative Purpose

41 unchanged sentences

Mark-to-market

Commercial energy risk management activities (TWh) (3)

Mark-to-market

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, May 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 $ 98 million and $ 102 million at March 31, 2022 and December 31, 2021, respectively.

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

The carrying amount of our inventories subject to fair value hedges was $ 220 million and $ 102 million at June 30, 2022 and December 31, 2021, respectively.

ENTERPRISE PRODUCTS PARTNERS L.P.

5 unchanged sentences

Liability Derivatives

March 31, 2022

June 30, 2022

December 31, 2021

March 31, 2022

June 30, 2022

December 31, 2021

28 unchanged sentences

(v) = (iii) + (iv)

As of March 31, 2022:

As of June 30, 2022:

Commodity derivatives

11 unchanged sentences

(v) = (iii) + (iv)

As of March 31, 2022:

As of June 30, 2022:

Commodity derivatives

13 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Commodity derivatives

4 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

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 March 31,

Ended June 30,

For the Six Months

Ended June 30,

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)

Accumulated Other Comprehensive Income (Loss) to Income

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

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 $ 9 million of losses attributable to interest rate derivative instruments from accumulated other comprehensive loss to earnings as an increase in interest expense.

6 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Commodity derivatives

1 unchanged sentence

Operating costs and expenses

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.

The $ 52 million net gain recognized for the six months ended June 30, 2022 (as noted in the preceding table) from derivatives not designated as hedging instruments consists of $ 96 million of net realized gains and $ 44 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 March 31, 2022

At June 30, 2022

Fair Value Measurements Using

27 unchanged sentences

Total commodity derivatives

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.

In the aggregate, the fair value of our commodity hedging portfolios at June 30, 2022 was a net derivative liability of $ 92 million prior to the impact of CME Rule 814.

Financial assets and liabilities recorded on the balance sheet at June 30, 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 $ 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.

The estimated total fair value of our fixed-rate debt obligations was $ 25.7 billion and $ 33.5 billion at June 30, 2022 and December 31, 2021, respectively.

The aggregate carrying value of these debt obligations was $ 28.2 billion and $ 29.6 billion at June 30, 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 March 31,

Ended June 30,

For the Six Months

Ended June 30,

Revenues – related parties:

14 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 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:

At June 30, 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 March 31, 2022.

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 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.

During the six months ended June 30, 2022 and 2021, we paid EPCO and its privately held affiliates cash distributions totaling $ 632 million and $ 612 million, respectively.

We have no employees.

3 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

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 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.

For each of the three months ended June 30, 2022 and 2021 , we recognized $ 4 million of related party operating lease expense in connection with these office space leases.

For each of the six months ended June 30, 2022 and 2021, we recognized $ 7 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 March 31,

Ended June 30,

For the Six Months

Ended June 30,

Deferred tax expense attributable to

4 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Current portion of income tax benefit (provision):

8 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Pre-Tax Net Book Income (“NBI”)

1 unchanged sentence

State income tax provision, net of federal benefit

Federal income tax provision computed by applying the federal

statutory rate to NBI of corporate entities

Federal income tax provision computed by applying

the federal statutory rate to NBI of corporate entities

Valuation allowance (2)

17 unchanged sentences

Total net deferred tax liabilities

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

The loss amount presented as of June 30, 2022 has an indefinite carryover period.

All losses are subject to limitations on their utilization.

3 unchanged sentences

We will vigorously defend the Partnership in litigation matters.

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

There were no accruals for litigation contingencies at June 30, 2022.

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

8 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.

Trial for the case began on April 19, 2022, and closing arguments were completed on July 22, 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 $ 29.8 billion at March 31, 2022 and December 31, 2021.

In total, the principal amount of our consolidated debt obligations were $ 29.1 billion and $ 29.8 billion at June 30, 2022 and December 31, 2021, respectively.

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

1 unchanged sentence

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 March 31, 2022:

The following table presents information regarding operating leases where we are the lessee at June 30, 2022:

Asset Category

2 unchanged sentences

Office and warehouse space

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

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

ROU asset amounts are a component of “Other assets” on our Unaudited Condensed Consolidated Balance Sheet.

At June 30, 2022, lease liabilities of $ 55 million and $ 345 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).

4 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Long-term operating leases:

7 unchanged sentences

Total operating lease expense

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.

Cash payments attributable to operating lease liabilities were $ 16 million and $ 9 million for the three months ended June 30, 2022 and 2021, respectively.

For the six months ended June 30, 2022 and 2021, cash paid for operating lease liabilities was $ 28 million and $ 18 million, respectively.

Operating lease income for each of the three months ended June 30, 2022 and 2021 was $ 3 million.

For each of the six months ended June 30, 2022 and 2021 , operating lease income was $ 6 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 $ 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.

Our product purchase commitments increased from $ 18.8 billion at December 31, 2021 to $ 27.0 billion at June 30, 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 Three Months

Ended March 31,

For the Six Months

Ended June 30,

Decrease (increase) in:

11 unchanged sentences

Cash payments for interest, net of $ 38 and $ 41 capitalized during the

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.

six months ended June 30, 2022 and 2021 , respectively

Cash payments (refunds) for federal and state income taxes

We incurred liabilities for construction in progress that had not been paid at June 30, 2022 and December 31, 2021 of $ 194 million and $ 183 million, respectively.

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

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