What changed in this filing

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Item 1. Financial Statements

2023-05-10 compared with 2022-11-08 · 240 added, 384 removed, 995 unchanged (39% 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 $ 55 at September 30, 2022 and $ 53 at December 31, 2021

of $ 53 at March 31, 2023 and $ 54 at December 31, 2022

Accounts receivable – related parties

23 unchanged sentences

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

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

( 50,412 units outstanding at March 31, 2023 and December 31, 2022 )

Partners’ equity:

Common limited partner interests ( 2,174,508,951 units issued and outstanding at

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

March 31, 2023 , 2,170,806,347 units issued and outstanding at December 31, 2022 )

Treasury units, at cost

8 unchanged sentences

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

Third parties

31 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 (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 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 attributable to asset sales and related matters

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

Deferred income tax expense

2 unchanged sentences

Net effect of changes in operating accounts (see Note 17)

Other operating activities

Net cash flows provided by operating activities

2 unchanged sentences

Cash used for business combinations, net of cash received (See Note 17)

Investments in unconsolidated affiliates

Distributions received from unconsolidated affiliates attributable to the return of capital

Proceeds from asset sales

Proceeds from asset sales and other matters

Other investing activities

18 unchanged sentences

UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED EQUITY

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022

(Dollars in millions)

3 unchanged sentences

Noncontrolling

For the Three Months Ended September 30, 2022 :

Balance June 30, 2022

Cash distributions paid to common unitholders

Cash payments made in connection with

distribution equivalent rights

Cash distributions paid to noncontrolling interests

Amortization of fair value of equity-based awards

Repurchase and cancellation of common units under

2019 Buyback Program

Cash flow hedges

Balance, September 30, 2022

Partners’ Equity

Comprehensive

Income (Loss)

Noncontrolling

For the Nine Months Ended September 30, 2022 :

Balance, December 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, September 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 NINE MONTHS ENDED SEPTEMBER 30, 2021

(Dollars in millions)

Partners’ Equity

Comprehensive

Income (Loss)

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 payments made in connection with distribution equivalent rights

Cash distributions paid to noncontrolling interests

Cash contributions from noncontrolling interests

Repurchase and cancellation of common units under 2019 Buyback Program

Amortization of fair value of equity-based awards

Repurchase and cancellation of common units under

2019 Buyback Program

Cash flow hedges

Balance, September 30, 2021

Balance, March 31, 2023

Partners’ Equity

2 unchanged sentences

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 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, September 30, 2021

Balance, March 31, 2022

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.

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 32.3 % of the Partnership’s common units outstanding at September 30, 2022.

EPCO, together with its privately held affiliates, owned approximately 32.3 % of the Partnership’s common units outstanding at March 31, 2023.

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

12 unchanged sentences

natural gas gathering, treating, processing, transportation and storage;

NGL transportation, fractionation, storage, and marine terminals (including those used to export liquefied petroleum gases, or “LPG,” and ethane);

NGL transportation, fractionation, storage, and marine terminals (including those used to export liquefied petroleum gases (“LPG”) and ethane);

crude oil gathering, transportation, storage, and marine terminals;

6 unchanged sentences

See Note 14 for information regarding related party matters.

Our results of operations for the nine months ended September 30, 2022 are not necessarily indicative of results expected for the full year of 2022.

Our results of operations for the three months ended March 31, 2023 are not necessarily indicative of results expected for the full year of 2023.

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

14 unchanged sentences

Charged to other accounts

Allowance for credit losses, September 30, 2022

Allowance for credit losses, March 31, 2023

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 1.2 years.

Property, plant and equipment at September 30, 2022 and December 31, 2021 includes $ 113 million and $ 81 million, respectively, of asset retirement costs capitalized as an increase in the associated long-lived asset.

Property, plant and equipment at March 31, 2023 and December 31, 2022 includes $ 116 million and $ 117 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, 2022

ARO liability balance, March 31, 2023

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 $ 219 million total ARO liability recorded at September 30, 2022 , $ 13 million was reflected as a current liability and $ 206 million as a long-term liability.

Of the $ 238 million total ARO liability recorded at March 31, 2023 , $ 20 million was reflected as a current liability and $ 218 million as a long-term liability.

The following table summarizes our depreciation 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)

7 unchanged sentences

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 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

7 unchanged sentences

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

September 30, 2022

March 31, 2023

December 31, 2022

18 unchanged sentences

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

NGL Pipelines & Services

4 unchanged sentences

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.

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 September 30, 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.

There has been no change in our goodwill amounts since those reported in our 2022 Form 10-K.

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 VV, 3.50 % fixed-rate, due February 2022

Senior Notes CC, 4.05 % fixed-rate, due February 2022

Senior Notes HH, 3.35 % fixed-rate, due March 2023

September 2022 $1.5 Billion 364-Day Revolving Credit Agreement, variable-rate, due September 2023 (1)

Senior Notes JJ, 3.90 % fixed-rate, due February 2024

March 2023 $1.5 Billion 364-Day Revolving Credit Agreement, variable-rate, due March 2024 (1)

Senior Notes MM, 3.75 % fixed-rate, due February 2025

Senior Notes FFF, 5.05 % fixed-rate, due January 2026

Senior Notes PP, 3.70 % fixed-rate, due February 2026

September 2021 $3.0 Billion Multi-Year Revolving Credit Agreement, variable-rate, due September 2026 (2)

Senior Notes SS, 3.95 % fixed-rate, due February 2027

March 2023 $2.7 Billion Multi-Year Revolving Credit Agreement, variable-rate, due March 2028 (2)

Senior Notes WW, 4.15 % fixed-rate, due October 2028

1 unchanged sentence

Senior Notes AAA, 2.80 % fixed-rate, due January 2030

Senior Notes GGG, 5.35 % fixed-rate, due January 2033

Senior Notes D, 6.875 % fixed-rate, due March 2033

21 unchanged sentences

EPO Junior Subordinated Notes C, variable-rate, due June 2067 (3)(7)

EPO Junior Subordinated Notes D, fixed/variable-rate, due August 2077 (4)

EPO Junior Subordinated Notes D, variable-rate, due August 2077 (4)(7)

EPO Junior Subordinated Notes E, fixed/variable-rate, due August 2077 (5)(7)

8 unchanged sentences

Variable rate is reset quarterly and based on 3-month London Interbank Offered Rate (“LIBOR”) plus 2.778 %.

Fixed rate of 4.875 % through August 15, 2022;

thereafter, a variable rate reset quarterly and based on 3-month LIBOR plus 2.986 %.

Variable rate is reset quarterly and based on 3-month LIBOR plus 2.986 %.

Fixed rate of 5.250 % through August 15, 2027;

2 unchanged sentences

thereafter, a variable rate reset quarterly and based on 3-month LIBOR plus 2.57 %.

See discussion below in “Variable Interest Rates” regarding the LIBOR replacement and LIBOR replacement rate.

References to “TEPPCO” mean TEPPCO Partners, L.P.

3 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, 2022:

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, 2023:

Range of Interest

6 unchanged sentences

EPO Junior Subordinated Notes D

Amounts borrowed under EPO’s September 2022 $1.5 Billion 364-Day Revolving Credit Agreement and September 2021 $3.0 Billion Multi-Year Revolving Credit Agreement bear interest, at EPO’s election, equal to:

(i) the Secured Overnight Financing Rate ("SOFR") or LIBOR, as applicable, plus an additional variable spread;

or (ii) an alternate base rate, which is the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 0.5%, or (c) Adjusted Term SOFR or LIBOR, as applicable, for an interest period of one month in effect on such day plus 1%, and a variable spread.

7.63 % to 7.86 %

Amounts borrowed under EPO’s March 2023 $1.5 Billion 364-Day Revolving Credit Agreement and March 2023 $2.7 Billion Multi-Year Revolving Credit Agreement bear interest, at EPO’s election, equal to:

(i) the Secured Overnight Financing Rate (“SOFR”), plus an additional variable spread;

or (ii) an alternate base rate, which is the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 0.5%, or (c) Adjusted Term SOFR, for an interest period of one month in effect on such day plus 1%, and a variable spread.

The applicable spreads are determined based on EPO's debt ratings.

1 unchanged sentence

announced a desire to phase out LIBOR as a benchmark by the end of June 2023.

Financial industry working groups are developing replacement rates and methodologies to transition existing agreements that depend on LIBOR as a reference rate.

We currently do not expect the transition from LIBOR to have a material financial impact on us.

In December 2022, the Board of Governors of the Federal Reserve System approved a final rule to implement the Adjustable Interest Rate (LIBOR) Act, which established benchmark replacements for certain contracts that reference various tenors of LIBOR and do not provide an alternative rate or would result in a rate that is expressed in terms of the last known value of LIBOR (typically referred to as a “frozen LIBOR” provision).

The final rule became effective during the first quarter of 2023.

As a result of the LIBOR Act, our Junior Subordinated Notes C and D and the TEPPCO Junior Subordinated Notes, which are currently subject to a variable rate (as defined by the applicable agreement) based on three-month LIBOR (in each case, a “LIBOR Rate”), will replace the applicable LIBOR Rate with a variable rate based on the three-month CME Term SOFR (“SOFR Rate”) as administered by the CME Group Benchmark Administration, Ltd.

plus a 0.26161% tenor spread adjustment beginning on July 1, 2023.

Additionally, our Junior Subordinated Notes E and F, which would have been subject to a variable rate (as defined by the applicable agreement) based on three-month LIBOR beginning in August 2027 and February 2028, respectively, will replace the applicable LIBOR Rate with the three-month SOFR Rate plus a 0.26161% tenor spread adjustment.

The foregoing tenor spread adjustment will be in addition to the applicable spread under the terms of each series of Junior Subordinated Notes.

We do not expect the transition from LIBOR to have a material financial impact on us.

Scheduled Maturities of Debt

The following table presents the scheduled maturities of principal amounts of EPO’s consolidated debt obligations at September 30, 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 March 31, 2023 for the next five years, and in total thereafter:

Scheduled Maturities of Debt

1 unchanged sentence

Junior Subordinated Notes

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 issuances under its commercial paper program.

Partial Redemption of Junior Subordinated Notes D

In August 2022, EPO redeemed $ 350 million of the $ 700 million outstanding principal amount of its Junior Subordinated Notes D 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 was funded using cash on hand and proceeds from issuances under EPO’s commercial paper program.

September 2022 $1.5 Billion 364-Day Revolving Credit Agreement

In September 2022, EPO entered into a new 364-Day Revolving Credit Agreement (the “September 2022 $1.5 Billion 364-Day Revolving Credit Agreement”) that replaced its September 2021 364-Day Revolving Credit Agreement.

There were no principal amounts outstanding under the September 2021 364-Day Revolving Credit Agreement when it was replaced by the September 2022 $1.5 Billion 364-Day Revolving Credit Agreement.

As of September 30, 2022, there are no principal amounts outstanding under the September 2022 $1.5 Billion 364-Day Revolving Credit Agreement.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Under the terms of the September 2022 $1.5 Billion 364-Day Revolving Credit Agreement, EPO may borrow up to $ 1.5 billion (which may be increased by up to $ 200 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 2022 $1.5 Billion 364-Day Revolving Credit Agreement matures in September 2023.

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 2024.

Borrowings under the September 2022 $1.5 Billion 364-Day Revolving Credit Agreement may be used for working capital, capital expenditures, acquisitions and general company purposes.

The September 2022 $1.5 Billion 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 2022 $1.5 Billion 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 2022 $1.5 Billion 364-Day Revolving Credit Agreement are not secured by any collateral;

March 2023 $1.5 Billion 364-Day Revolving Credit Agreement

In March 2023, EPO entered into a new 364-Day Revolving Credit Agreement (the “March 2023 $1.5 Billion 364-Day Revolving Credit Agreement”) that replaced its September 2022 364-Day Revolving Credit Agreement.

There were no principal amounts outstanding under the September 2022 364-Day Revolving Credit Agreement when it was replaced by the March 2023 $1.5 Billion 364-Day Revolving Credit Agreement.

As of March 31, 2023, there were no principal amounts outstanding under the March 2023 $1.5 Billion 364-Day Revolving Credit Agreement.

Under the terms of the March 2023 $1.5 Billion 364-Day Revolving Credit Agreement, EPO may borrow up to $ 1.5 billion (which may be increased by up to $ 200 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 March 2023 $1.5 Billion 364-Day Revolving Credit Agreement matures in March 2024.

Borrowings under the March 2023 $1.5 Billion 364-Day Revolving Credit Agreement may be used for working capital, capital expenditures, acquisitions and general company purposes.

The March 2023 $1.5 Billion 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 March 2023 $1.5 Billion 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 March 2023 $1.5 Billion 364-Day Revolving Credit Agreement are not secured by any collateral;

however, they are guaranteed by the Partnership.

March 2023 $2.7 Billion Multi-Year Revolving Credit Agreement

In March 2023, EPO entered into a new revolving credit agreement that matures in March 2028 (the “March 2023 $2.7 Billion Multi-Year Revolving Credit Agreement”).

The March 2023 $2.7 Billion Multi-Year Revolving Credit Agreement replaced EPO’s prior multi-year revolving credit agreement that was scheduled to mature in September 2026.

There were no principal amounts outstanding under the prior multi-year revolving credit agreement when it was replaced by the March 2023 $2.7 Billion Multi-Year Revolving Credit Agreement.

As of March 31, 2023, there were no principal amounts outstanding under the March 2023 $2.7 Billion Multi-Year Revolving Credit Agreement.

Under the terms of the March 2023 $2.7 Billion Multi-Year Revolving Credit Agreement, EPO may borrow up to $ 2.7 billion (which may be increased by up to $ 500 million to $ 3.2 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.

The March 2023 $2.7 Billion Multi-Year Revolving Credit Agreement matures in March 2028, although the maturity date may be extended at EPO’s request (up to two requests) for a one-year extension of the maturity date by delivering a request prior to the maturity date and with the consent of required lenders as set forth under the March 2023 $2.7 Billion Multi-Year Revolving Credit Agreement.

Borrowings under the March 2023 $2.7 Billion Multi-Year Revolving Credit Agreement may be used for working capital, capital expenditures, acquisitions and general company purposes.

The March 2023 $2.7 Billion 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 March 2023 $2.7 Billion 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 March 2023 $2.7 Billion Multi-Year Revolving Credit Agreement are not secured by any collateral;

however, they are guaranteed by the Partnership.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Issuance of $1.75 Billion of Senior Notes in January 2023

In January 2023, EPO issued $ 1.75 billion aggregate principal amount of senior notes comprised of (i) $ 750 million principal amount of senior notes due January 2026 (“Senior Notes FFF”) and (ii) $ 1.0 billion principal amount of senior notes due January 2033 (“Senior Notes GGG”).

Net proceeds from this offering were used by EPO for general company purposes, including for growth capital investments, and the repayment of debt (including the repayment of all of our $ 1.25 billion principal amount of 3.35 % Senior Notes HH at their maturity in March 2023 and amounts outstanding under our commercial paper program).

Senior Notes FFF were issued at 99.893 % of their principal amount and have a fixed-rate interest rate of 5.05 % per year.

Senior Notes GGG were issued at 99.803 % of their principal amount and have a fixed-rate interest rate of 5.35 % per year.

The Partnership guaranteed these senior notes through an unconditional guarantee on an unsecured and unsubordinated basis.

Letters of Credit

At September 30, 2022, EPO had $ 100 million of letters of credit outstanding primarily related to our commodity hedging activities.

At March 31, 2023, EPO had $ 56 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, 2022.

We were in compliance with the financial covenants of our consolidated debt agreements at March 31, 2023.

Parent-Subsidiary Guarantor Relationships

6 unchanged sentences

2,170,806,347

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

Common units outstanding at March 31, 2022

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

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, 2022

Common units outstanding at March 31, 2023

2,174,508,951

1 unchanged sentence

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.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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, 2022 .

The Partnership’s capacity to issue additional common units under the ATM program remains at $ 2.5 billion as of September 30, 2022.

The Partnership did not issue any common units under its ATM program during the three months ended March 31, 2023 .

The Partnership’s capacity to issue additional common units under the ATM program remains at $ 2.5 billion as of March 31, 2023.

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

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Common Unit Repurchases Under 2019 Buyback Program

2 unchanged sentences

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

During the three and nine months ended September 30, 2022, the Partnership repurchased 2,925,842 and 4,333,963 common units, respectively, under the 2019 Buyback Program through open market purchases .

The total cost of these repurchases, including commissions and fees, was $ 72 million and $ 107 million, respectively.

During the three and nine months ended September 30, 2021 , the Partnership repurchased 3,367,377 and 4,077,193 common units, respectively, under the 2019 Buyback Program through open market purchases .

The total cost of these repurchases, including commissions and fees, was $ 75 million and $ 89 million, respectively.

During the three months ended March 31, 2023, the Partnership repurchased 682,589 common units under the 2019 Buyback Program through open market purchases .

The total cost of these repurchases, including commissions and fees, was $ 17 million.

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

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

At September 30, 2022, the remaining available capacity under the 2019 Buyback Program was $ 1.4 billion.

At March 31, 2023, the remaining available capacity under the 2019 Buyback Program was $ 1.3 billion.

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

After taking into account tax withholding requirements, the Partnership issued 4,437,786 new common units to employees in connection with the vesting of phantom unit awards during the nine months ended September 30, 2022.

After taking into account tax withholding requirements, the Partnership issued 4,364,301 new common units to employees in connection with the vesting of phantom unit awards during the three months ended March 31, 2023.

See Note 12 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, 2022 , agents of the Partnership purchased 4,735,703 common units on the open market and delivered them to participants in the DRIP and EUPP.

Apart from $ 2 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.

During the three months ended March 31, 2023 , agents of the Partnership purchased 1,653,454 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 14, 2022.

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, 2023.

Preferred Units

There were 50,412 of our Series A Cumulative Convertible Preferred Units (“preferred units”) outstanding at September 30, 2022.

There were 50,412 of our Series A Cumulative Convertible Preferred Units (“preferred units”) outstanding at March 31, 2023.

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, 2022, the Partnership made quarterly cash distributions to its preferred unitholders of $ 3 million.

During the three months ended March 31, 2023, the Partnership made quarterly cash distributions to its preferred unitholders of $ 1 million.

ENTERPRISE PRODUCTS PARTNERS L.P.

8 unchanged sentences

Total other comprehensive income (loss) for period

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

Accumulated Other Comprehensive Income (Loss), March 31, 2023

Cash Flow Hedges

4 unchanged sentences

Total other comprehensive income (loss) for period

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

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, 2022

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 4, 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 third quarter of 2022.

The quarterly distribution is payable on November 14, 2022 to unitholders of record as of the close of business on October 31, 2022.

On April 5, 2023, we announced that the Board declared a quarterly cash distribution of $ 0.490 per common unit, or $ 1.96 per common unit on an annualized basis, to be paid to the Partnership’s common unitholders with respect to the first quarter of 2023.

The quarterly distribution is payable on May 12, 2023 to unitholders of record as of the close of business on April 28, 2023.

The total amount to be paid is $ 1.08 billion, which includes $ 10 million for distribution equivalent rights (“DERs”) on phantom unit awards.

7 unchanged sentences

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

NGL Pipelines & Services:

29 unchanged sentences

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

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unbilled Revenue and Deferred Revenue

The following table provides information regarding our contract assets and contract liabilities at September 30, 2022:

The following table provides information regarding our contract assets and contract liabilities at March 31, 2023:

Contract Asset

6 unchanged sentences

Other long-term liabilities

ENTERPRISE PRODUCTS PARTNERS L.P.

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, 2022:

The following table presents significant changes in our unbilled revenue and deferred revenue balances for the three months ended March 31, 2023:

Balance at December 31, 2022

3 unchanged sentences

Other changes

Balance at September 30, 2022

Balance at March 31, 2023

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, 2022.

These amounts represent the revenues we expect to recognize in future periods from these contracts as of March 31, 2023.

Consideration

Three Months Ended December 31, 2022

Nine Months Ended December 31, 2023

One Year Ended December 31, 2024

2 unchanged sentences

One Year Ended December 31, 2027

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Business Segments and Related Information

8 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.

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.

9 unchanged sentences

Our calculation of gross operating margin may or may not be comparable to similarly titled measures used by other companies.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents our measurement of total segment gross operating margin for the periods presented.

1 unchanged sentence

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

Operating income

5 unchanged sentences

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, 2022

Three months ended September 30, 2021

Nine months ended September 30, 2022

Nine months ended September 30, 2021

Three months ended March 31, 2023

Three months ended March 31, 2022

Revenues from related parties:

Three months ended September 30, 2022

Three months ended September 30, 2021

Nine months ended September 30, 2022

Nine months ended September 30, 2021

Three months ended March 31, 2023

Three months ended March 31, 2022

Intersegment and intrasegment revenues:

Three months ended September 30, 2022

Three months ended September 30, 2021

Nine months ended September 30, 2022

Nine months ended September 30, 2021

Three months ended March 31, 2023

Three months ended March 31, 2022

Total revenues:

Three months ended September 30, 2022

Three months ended September 30, 2021

Nine months ended September 30, 2022

Nine months ended September 30, 2021

Equity in income loss of unconsolidated affiliates:

Three months ended September 30, 2022

Three months ended September 30, 2021

Nine months ended September 30, 2022

Nine months ended September 30, 2021

Three months ended March 31, 2023

Three months ended March 31, 2022

Equity in income of unconsolidated affiliates:

Three months ended March 31, 2023

Three months ended March 31, 2022

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, 2022

At March 31, 2023

At December 31, 2022

Investments in unconsolidated affiliates:

At September 30, 2022

At March 31, 2023

At December 31, 2022

Intangible assets, net:

At September 30, 2022

At March 31, 2023

At December 31, 2022

At September 30, 2022

At March 31, 2023

At December 31, 2022

Segment assets:

At September 30, 2022

At March 31, 2023

At December 31, 2022

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 (gains) 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 (gains) attributable to asset sales and related matters.

and net losses (or gains) 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 September 30,

For the Nine Months

Ended September 30,

Ended March 31,

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 the phantom units.

See Note 12 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 EPO’s 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:

Cash and cash equivalents

Property, plant and equipment

Contract-based intangible asset

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.

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 $ 175 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 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 nine months ended September 30, 2022.

Additionally, acquisition related costs were not material during the three and nine months ended September 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 nine months ended September 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.

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:

3 unchanged sentences

Equity-classified awards are expected to result in the issuance of the Partnership’s common units 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, 2022

Phantom unit awards at September 30, 2022

Phantom unit awards at March 31, 2023

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 $ 193 million at September 30, 2022, of which our share of such cost is currently estimated to be $ 158 million.

For the EPCO group of companies, the unrecognized compensation cost associated with phantom unit awards was $ 323 million at March 31, 2023, of which our share of such cost is currently estimated to be $ 271 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 2.4 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 September 30, 2022 , our share of the total unrecognized compensation cost related to the Employee Partnerships was $ 6 million , which we expect to recognize over a weighted-average period of 1.2 years.

At March 31, 2023 , our share of the total unrecognized compensation cost related to the Employee Partnerships was $ 3 million , which we expect to recognize over a weighted-average period of less than one  

Hedging Activities and Fair Value Measurements

2 unchanged sentences

Substantially all of our derivatives are used for non-trading activities.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Interest Rate Hedging Activities

1 unchanged sentence

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 September 30, 2022.

Treasury Locks

A treasury lock is an agreement that fixes the price (or yield) of a specified U.S.

treasury security for an established period of time.

We use treasury lock agreements to hedge our exposure to interest rate changes and to reduce the volatility of financing costs on an expected future debt issuance.

During the fourth quarter of 2022, we entered into a treasury lock transaction to fix the ten-year treasury rate at 3.45 % on a notional amount of $ 750 million.

In January 2023, we entered into an additional treasury lock transaction to fix the three-year treasury rate at 4.165 % on a notional amount of $ 750 million.

The purpose of these transactions was to hedge the underlying interest rate risk associated with debt issuances which occurred in January 2023 (see Note 7).

Both of our treasury lock transactions were designated as cash flow hedges of the interest payments associated with these debt issuances.

In January 2023, we terminated both treasury lock transactions simultaneously with our issuance of the three-year and ten-year notes and received total cash proceeds of $ 21 million.

As cash flow hedges, gains on these derivative instruments are reflected as a component of accumulated other comprehensive income and will be amortized to earnings as a reduction to interest expense over the full term of each issuance.

Commodity Hedging Activities

The prices of natural gas, NGLs, crude oil, petrochemicals and refined products are subject to fluctuations in response to changes in supply and demand, market conditions and a variety of additional factors that are beyond our control.

The prices of natural gas, NGLs, crude oil, petrochemicals and refined products, and power are subject to fluctuations in response to changes in supply and demand, market conditions and a variety of additional factors that are beyond our control.

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, 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 March 31, 2023 , 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, (iii) hedging the fair value of commodity products held in inventory and (iv) hedging anticipated future purchases of power for certain operations in Southeast Texas .

The objective of our anticipated future commodity purchases and sales hedging program is to hedge the margins of certain transportation, storage, blending and operational activities by locking in purchase and sale prices through the use of derivative instruments and related contracts.

The objective of our natural gas processing hedging program is to hedge an amount of earnings associated with these activities.

We achieve this objective by executing fixed-price sales for a portion of our expected equity NGL production using derivative instruments and related contracts.

For certain natural gas processing contracts, the hedging of expected equity NGL production also involves the purchase of natural gas for shrinkage, which is hedged using derivative instruments and related contracts.

The objective of our inventory hedging program is to hedge the fair value of commodity products currently held in inventory by locking in the sales price of the inventory through the use of derivative instruments and related contracts.

The objective of our commercial energy hedging program is to hedge anticipated future purchases of power for certain operations in Southeast Texas by locking in purchase prices through the use of derivative instruments and related contracts.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The following table summarizes our portfolio of commodity derivative instruments outstanding at March 31, 2023 (volume measures as noted):

Derivative Purpose

10 unchanged sentences

Natural gas marketing:

Forecasted purchases of natural gas (Bcf)

Cash flow hedge

Natural gas storage inventory management activities (Bcf)

5 unchanged sentences

Cash flow 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:

4 unchanged sentences

Petrochemical marketing:

Forecasted purchases of petrochemical products (MMBbls)

Cash flow hedge

Forecasted sales of petrochemical products (MMBbls)

13 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 2025, February 2023 and December 2024, 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 $ 20 million and $ 102 million at September 30, 2022 and December 31, 2021, respectively.

The carrying amount of our inventories subject to fair value hedges was $ 6 million and $ 12 million at March 31, 2023 and December 31, 2022, respectively.

ENTERPRISE PRODUCTS PARTNERS L.P.

5 unchanged sentences

Liability Derivatives

September 30, 2022

March 31, 2023

December 31, 2022

September 30, 2022

March 31, 2023

December 31, 2022

Derivatives designated as hedging instruments

Interest derivatives

Commodity derivatives

Current assets

Commodity derivatives

5 unchanged sentences

Commodity derivatives

Current assets

Commodity derivatives

14 unchanged sentences

(v) = (iii) + (iv)

As of September 30, 2022:

As of March 31, 2023:

Commodity derivatives

As of December 31, 2022:

Interest rate derivatives

Commodity derivatives

9 unchanged sentences

(v) = (iii) + (iv)

As of September 30, 2022:

As of March 31, 2023:

Commodity derivatives

13 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 $ 4 million of losses attributable to interest rate derivative instruments from accumulated other comprehensive loss to earnings as an increase in interest expense.

Over the next twelve months, we expect to reclassify $ 9 million of gains attributable to interest rate derivative instruments from accumulated other comprehensive income to earnings as a decrease in interest expense.

Likewise, we expect to reclassify $ 71 million of net gains attributable to commodity derivative instruments from accumulated other comprehensive income to earnings, with $ 123 million as an increase in revenue and $ 52 million as an increase in operating costs and expenses.

5 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 $ 91 million net gain recognized for the nine months ended September 30, 2022 (as noted in the preceding table) from derivatives not designated as hedging instruments consists of $ 107 million of net realized gains and $ 16 million of net unrealized mark-to-market losses attributable to commodity derivatives.

The $ 200 million net gain recognized for the three months ended March 31, 2023 (as noted in the preceding table) from derivatives not designated as hedging instruments consists of $ 202 million of net realized gains and $ 2 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, 2022

At March 31, 2023

Fair Value Measurements Using

18 unchanged sentences

Financial assets:

Interest rate derivatives:

Commodity derivatives:

7 unchanged sentences

Total commodity derivatives

In the aggregate, the fair value of our commodity hedging portfolios at September 30, 2022 was a net derivative asset of $ 154 million prior to the impact of CME Rule 814.

Financial assets and liabilities recorded on the balance sheet at September 30, 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 March 31, 2023 was a net derivative liability of $ 148  

million prior to the impact of CME Rule 814.

Financial assets and liabilities recorded on the balance sheet at March 31, 2023 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 $ 23.5 billion and $ 33.5 billion at September 30, 2022 and December 31, 2021, respectively.

The aggregate carrying value of these debt obligations was $ 27.5 billion and $ 29.6 billion at September 30, 2022 and December 31, 2021, respectively.

The estimated total fair value of our fixed-rate debt obligations was $ 26.0 billion and $ 24.2 billion at March 31, 2023 and December 31, 2022, respectively.

The aggregate carrying value of these debt obligations was $ 28.0 billion and $ 27.5 billion at March 31, 2023 and December 31, 2022, 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, 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 March 31, 2023, 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, 2022.

Of the total number of Partnership common units held by EPCO and its privately held affiliates, 62,976,464 have been pledged as security under the separate credit facilities of EPCO and its privately held affiliates at March 31, 2023.

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 use cash on hand and cash distributions they receive from us and other investments to fund their other activities and to meet their respective debt obligations, if any.

During the nine months ended September 30, 2022 and 2021, we paid EPCO and its privately held affiliates cash distributions totaling $ 955 million and $ 918 million, respectively.

During the three months ended March 31, 2023 and 2022, we paid EPCO and its privately held affiliates cash distributions totaling $ 333 million and $ 316 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 each of the three months ended September 30, 2022 and 2021 , we recognized $ 3 million of related party operating lease expense in connection with these office space leases.

For each of the nine months ended September 30, 2022 and 2021, we recognized $ 10 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 expense attributable to

OTA Holdings, Inc.

Revised Texas Franchise Tax (“Texas Margin Tax”)

Provision for income taxes

For each of the three months ended March 31, 2023 and 2022 , we recognized $ 3 million of related party operating lease expense in connection with these office space leases.

Income taxes are accounted for under the asset-and-liability method.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

We recognize the effect of income tax positions only if those positions are more likely than not of being sustained.

Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized.

Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

We did not rely on any uncertain tax positions in recording our income tax-related amounts during the first quarters of 2023 and 2022.

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):

8 unchanged sentences

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

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

Valuation allowance (2)

Federal income tax provision computed by applying the federal

statutory rate to NBI of corporate entities

Provision for income taxes

1 unchanged sentence

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.

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

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

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

The loss amount presented as of March 31, 2023 has an indefinite carryover period.

All losses are subject to limitations on their utilization.

5 unchanged sentences

We will vigorously defend the Partnership in litigation matters.

There were no accruals for litigation contingencies at September 30, 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.

PDH 1 Litigation

In July 2013, we executed a contract with Foster Wheeler USA Corporation (“Foster Wheeler”) pursuant to which Foster Wheeler was to serve as the general contractor responsible for the engineering, procurement, construction and installation of our first propane dehydrogenation facility (“PDH 1”).

In November 2014, Foster Wheeler was acquired by an affiliate of AMEC plc to form Amec Foster Wheeler plc, and Foster Wheeler is now known as Amec Foster Wheeler USA Corporation (“AFW”).

In December 2015, Enterprise and AFW entered into a transition services agreement under which AFW was partially terminated from the PDH 1 project.

In December 2015, Enterprise engaged a second contractor, Optimized Process Designs LLC, to complete the construction and installation of PDH 1.

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, 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.

There were no accruals for litigation contingencies at March 31, 2023 and December 31, 2022, respectively.

Contractual Obligations

1 unchanged sentence

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

In total, the principal amount of our consolidated debt obligations were $ 29.5 billion and $ 29.8 billion at September 30, 2022 and December 31, 2021, respectively.

In total, the principal amount of our consolidated debt obligations were $ 28.9 billion and $ 28.6 billion at March 31, 2023 and December 31, 2022, respectively.

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 2022 Form 10-K.

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

The following table presents information regarding operating leases where we are the lessee at March 31, 2023:

Asset Category

2 unchanged sentences

Office and warehouse space

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

At September 30, 2022, lease liabilities of $ 60 million and $ 344 million were included within “Other current liabilities” and “Other long-term liabilities,” respectively.

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

At March 31, 2023, lease liabilities of $ 62 million and $ 338 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).

2 unchanged sentences

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 $ 19 million and $ 11 million for the three months ended September 30, 2022 and 2021, respectively.

For the nine months ended September 30, 2022 and 2021, cash paid for operating lease liabilities was $ 47 million and $ 29 million, respectively.

Operating lease income for the three months ended September 30, 2022 and 2021 was $ 4 million and $ 3 million, respectively.

For the nine months ended September 30, 2022 and 2021 , operating lease income was $ 10 million and $ 9 million, respectively.

Purchase Obligations

Our consolidated purchase obligations at September 30, 2022 did not differ materially from those reported in our 2021 Form 10-K.

ENTERPRISE PRODUCTS PARTNERS L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Cash payments attributable to operating lease liabilities were $ 20 million and $ 12 million for the three months ended March 31, 2023 and 2022, respectively.

Operating lease income for the three months ended March 31, 2023 and 2022 was $ 4 million and $ 3 million, respectively.

Purchase Obligations

Our consolidated purchase obligations at March 31, 2023 did not differ materially from those reported in our 2022 Form 10-K.

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:

11 unchanged sentences

Cash payments for interest, net of $ 32 and $ 17 capitalized during the

nine months ended September 30, 2022 and 2021 , respectively

Cash payments for federal and state income taxes

We incurred liabilities for construction in progress that had not been paid at September 30, 2022 and December 31, 2021 of $ 236 million and $ 183 million, respectively.

three months ended March 31, 2023 and 2022 , respectively

Cash payments (refunds) for federal and state income taxes

We incurred liabilities for construction in progress that had not been paid at March 31, 2023 and December 31, 2022 of $ 247 million and $ 238 million, respectively.

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

Acquisition of Navitas Midstream

In February 2022, we acquired all of the member interests in Navitas Midstream Partners, LLC (“Navitas Midstream”) for $ 3.2 billion in net cash consideration.

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