What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-08-09 compared with 2023-05-10 · 303 added, 144 removed, 534 unchanged (46% of the section changed)

1 unchanged sentence

RESULTS OF OPERATIONS.

For the Three Months Ended March 31, 2023 and 2022

For the Three and Six Months Ended June 30, 2023 and 2022

The following information should be read in conjunction with our Unaudited Condensed Consolidated Financial Statements and accompanying Notes included in this quarterly report on Form 10-Q and the Audited Consolidated Financial Statements and related Notes, together with our discussion and analysis of financial position and results of operations, included in our annual report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”), as filed on February 28, 2023 with the U.S.

2 unchanged sentences

Cautionary Statement Regarding Forward-Looking Information

This quarterly report on Form 10-Q for the three months ended March 31, 2023 (our “quarterly report”) contains various forward-looking statements and information that are based on our beliefs and those of our general partner, as well as assumptions made by us and information currently available to us.

This quarterly report on Form 10-Q for the three and six months ended June 30, 2023 (our “quarterly report”) contains various forward-looking statements and information that are based on our beliefs and those of our general partner, as well as assumptions made by us and information currently available to us.

When used in this document, words such as “anticipate,” “project,” “expect,” “plan,” “seek,” “goal,” “estimate,” “forecast,” “intend,” “could,” “should,” “would,” “will,” “believe,” “may,” “scheduled,” “pending,” “potential” and similar expressions and statements regarding our plans and objectives for future operations are intended to identify forward-looking statements.

13 unchanged sentences

The membership interests of Dan Duncan LLC are owned by a voting trust, the current trustees (“DD LLC Trustees”) of which are:

(i) Randa Duncan Williams, who is also a director and Chairman of the Board of Directors (the “Board”) of Enterprise GP;

(i) Randa Duncan Williams, who is also a director and Chairman of the Board of Directors of Enterprise GP (the “Board”);

(ii) Richard H.

Bachmann, who is also a director and Vice Chairman of the Board of Enterprise GP;

Bachmann, who is also a director and Vice Chairman of the Board;

Randall Fowler, who is also a director and the Co-Chief Executive Officer and Chief Financial Officer of Enterprise GP.

10 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 March 31, 2023.

EPCO, together with its privately held affiliates, owned approximately 32.3% of the Partnership’s common units outstanding at June 30, 2023.

As generally used in the energy industry and in this quarterly report, the acronyms below have the following meanings:

10 unchanged sentences

trillion British thermal units

As used in this quarterly report, the phrase “quarter-to-quarter” means the first quarter of 2023 compared to the first quarter of 2022.

As used in this quarterly report, the phrase “quarter-to-quarter” means the second quarter of 2023 compared to the second quarter of 2022.

Likewise, the phrase “period-to-period” means the six months ended June 30, 2023 compared to the six months ended June 30, 2022.

Overview of Business

22 unchanged sentences

Recent Developments

Enterprise Begins Service At PDH 2 Plant

In July 2023 we placed into service our second propane dehydrogenation plant (“PDH 2”) in Chambers County, Texas.

Supported by long-term, fee-based contracts, PDH 2 has the capacity to consume 35 MBPD of propane to produce 1.65 billion pounds of PGP per year, which will help us supply our petrochemical customers with the feedstock to produce products that meet the needs of a growing global population.

With the completion and integration of our PDH 2 plant with our existing PDH 1 plant and other propylene production facilities, we now have the capacity to produce approximately 11 billion pounds of propylene per year.

Enterprise Begins Service At Its Twelfth NGL Fractionator in Chambers County, Texas

In July 2023, our twelfth NGL fractionator (“Frac XII”) located in Chambers County, Texas was placed into service.

The incremental 150 MBPD of nameplate capacity at Frac XII will help accommodate growing NGL production from new natural gas processing plants in the Permian Basin and help satisfy the demand for feedstocks by the petrochemical and refining industries and LPG exports to developing nations.

Supported by long-term customer agreements, the addition of Frac XII increases total NGL fractionation capacity to approximately 1.2 MMBPD at our Chambers County complex and approximately 1.7 MMBPD company-wide.

Enterprise Begins Service At Its Poseidon Natural Gas Processing Plant

In July 2023, we placed into service our Poseidon cryogenic natural gas processing plant (“Poseidon”), which is located in Glasscock County, Texas.

The new plant, which is our sixth in the Midland Basin, has a nameplate capacity of 300 MMcf/d and can extract more than 40 MBPD of NGLs.

Supported by long-term acreage dedication agreements, the new plant will support Permian Basin producers as they meet growing demand in the U.S.

and internationally.

With the addition of Poseidon, we now have the capability to process 1.3 Bcf/d of natural gas and extract more than 185 MBPD of NGLs in the Midland Basin.

Enterprise Completes Expansion of Acadian Haynesville Extension

In May 2023, we completed an expansion of our Acadian Haynesville Extension natural gas pipeline.

This expansion adds approximately 400 MMcf/d of Haynesville natural gas takeaway capacity to meet growing industrial demand in the Mississippi River Corridor and supports the Louisiana liquefied natural gas export market.

The incremental compression added as part of the expansion project increased total natural gas transportation capacity on the Acadian Haynesville Extension from approximately 2.1 Bcf/d to 2.5 Bcf/d.

This expansion is underwritten by long-term, take-or-pay contracts.

Issuance of $1.75 Billion of Senior Notes in January 2023

10 unchanged sentences

2023 by quarter:

2023 Averages

Natural gas prices are based on Henry-Hub Inside FERC commercial index prices as reported by Platts, which is a division of S&P Global, Inc.

NGL prices for ethane, propane, normal butane, isobutane and natural gasoline are based on Mont Belvieu, Texas Non-TET commercial index prices as reported by Oil Price Information Service, which is a division of Dow Jones.

Polymer grade propylene prices represent average contract pricing for such product as reported by IHS.

Refinery grade propylene (“RGP”) prices represent weighted-average spot prices for such product as reported by IHS Markit (“IHS”).

Polymer grade propylene prices represent average contract pricing for such product as reported by IHS Markit (“IHS”), which is a division of S&P Global, Inc.

Refinery grade propylene (“RGP”) prices represent weighted-average spot prices for such product as reported by IHS.

The “Indicative Gas Processing Gross Spread” represents our generic estimate of the gross economic benefit from extracting NGLs from natural gas production based on certain pricing assumptions.

2 unchanged sentences

In addition, the actual gas processing spread earned at each plant is further influenced by regional pricing and extraction dynamics.

The weighted-average indicative market price for NGLs was $0.66 per gallon in the first quarter of 2023 versus $0.95 per gallon in the first quarter of 2022.

The weighted-average indicative market price for NGLs was $0.55 per gallon in the second quarter of 2023 versus $1.06 per gallon in the second quarter of 2022.

Likewise, the weighted-average indicative market price for NGLs was $0.61 per gallon during the six months ended June 30, 2023 compared to $1.01 per gallon during the same period in 2022.

The following table presents selected average index prices for crude oil for the periods indicated:

2 unchanged sentences

2023 by quarter:

2023 Averages

WTI prices are based on commercial index prices at Cushing, Oklahoma as measured by the NYMEX.

7 unchanged sentences

Impact of Inflation

Inflation rates in the United States increased significantly in 2022 and have continued to remain elevated in 2023 compared to historical levels.

While measures taken by the U.S.

Federal Reserve Bank have helped slow the growth of inflation in 2023 and pandemic-era supply chain disruptions have largely dissipated, the high cost environment that began in 2022 has generally remained intact in 2023.

Inflation rates in the United States increased significantly in 2022 and have continued to remain elevated in 2023 compared to recent historical levels.

While pandemic-era supply chain disruptions have largely dissipated and measures taken by the U.S.

Federal Reserve Bank have helped slow the growth of inflation in 2023, the high cost environment that began in 2022 has generally remained intact in 2023.

However, to the extent that a rising cost environment impacts our results, there are typically offsetting benefits either inherent in our business or that result from other steps we take proactively to reduce the impact of inflation on our net operating results.

11 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Costs and expenses:

20 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

NGL Pipelines & Services:

11 unchanged sentences

Total consolidated revenues

Total revenues for the first quarter of 2023 decreased $ 564 million when compared to the first quarter of 2022 primarily due to a $ 540 million decrease in marketing revenues.

Revenues from the marketing of NGLs and natural gas decreased a combined net $ 810 million quarter-to-quarter primarily due to lower average sales prices, which accounted for a $ 1.1 billion decrease, partially offset by higher sales volumes, which accounted for a $ 316 million increase.

Revenues from the marketing of crude oil and petrochemicals and refined products increased a combined net $ 270 million quarter-to-quarter primarily due to higher sales volumes, which accounted for a $ 1.0 b illion increase, partially offset by lower average sales prices, which accounted for a $ 743 million decrease.

Revenues from midstream services for the first quarter of 2023 decreased a net $ 24 million when compared to the first quarter of 2022.

R evenues from our crude oil pipeline assets decreased $ 84 million quarter-to-quarter primarily due to lower deficiency revenues as a result of the expiration of minimum volume commitments under certain long-term gathering agreements on our EFS Midstream System.

Second Quarter of 2023 Compared to Second Quarter of 2022.

Total revenues for the second quarter of 2023 decreased $ 5.4 billion when compared to the second quarter of 2022 primarily due to a $ 5.3 billion decrease in marketing revenues.

Revenues from the marketing of NGLs decreased $ 2.5 billion quarter-to-quarter primarily due to lower average sales prices, which accounted for a $ 2.3 billion decrease, and lower sales volumes, which accounted for an additional $ 229 million decrease.

Revenues from the marketing of crude oil, natural gas and petrochemicals and refined products decreased a combined net $ 2.7 billion quarter-to-quarter primarily due to lower average sales prices, which accounted for a $ 3.5 b illion decrease, partially offset by higher sales volumes, which accounted for a $ 760 million increase.

Revenues from midstream services for the second quarter of 2023 decreased a net $ 150 million when compared to the second quarter of 2022.

Revenues from our natural gas processing facilities decreased $ 148 million quarter-to-quarter primarily due to lower market values for the equity NGL-equivalent production volumes we receive as non-cash consideration for processing services.

Lastly, revenues from our natural gas pipeline assets increased $ 100 million quarter-to-quarter primarily due to higher demand for transportation services and the addition of the Midland Basin Gathering System, which was acquired in February 2022 .

R evenues from our crude oil pipeline assets decreased $ 49 million quarter-to-quarter primarily due to lower deficiency revenues as a result of the expiration of minimum volume commitments under certain long-term gathering agreements on our EFS Midstream System.

Lastly, revenues from our NGL, natural gas and petrochemicals and refined products pipeline assets increased a combined $ 57 million quarter-to-quarter primarily due to higher demand for transportation services.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022 .

Total revenues for the six months ended June 30, 2023 decreased $ 6.0 billion when compared to the six months ended June 30, 2022 primarily due to a $ 5.8 billion decrease in marketing revenues.

Revenues from the marketing of NGLs decreased $ 3.3 billion period-to-period primarily due to lower average sales prices.

Revenues from the marketing of crude oil, natural gas and petrochemicals and refined products decreased a combined net $2.5 billion period-to-period primarily due to lower average sales prices, which accounted for a $4.4 billion decrease, partially offset by higher sales volumes, which accounted for a $1.9 billion increase.

Revenues from midstream services for the six months ended June 30, 2023 decreased a net $ 174 million when compared to the six months ended June 30, 2022.

Revenues from our natural gas processing facilities decreased $181 million period-to-period primarily due to lower market values for the equity NGL-equivalent production volumes we receive as non-cash consideration for processing services.

Revenues from our crude oil pipeline assets decreased $ 133 million period-to-period primarily due to lower deficiency revenues as a result of the aforementioned expiration of minimum volume commitments on our EFS Midstream System.

Lastly, revenues from our natural gas pipeline assets increased $ 127 million period-to-period primarily due to higher demand for transportation services and the addition of the Midland Basin Gathering System, which was acquired in February 2022.

Operating costs and expenses

Total operating costs and expenses for the first quarter of 2023 decreased $ 640 million when compared to the first quarter of 2022.

Total operating costs and expenses for the three and six months ended June 30, 2023 decreased $ 5.2 billion and $ 5.8 billion, respectively, when compared to the same periods in 2022.

Cost of sales

Cost of sales for the first quarter of 2023 decreased $ 767 m illion when compared to the first quarter of 2022.

The cost of sales associated with the marketing of NGLs, crude oil and natural gas decreased a combined net $ 898 million quarter-to-quarter primarily due to lower average purchase prices, which accounted for a $ 1.8 billion decrease, partially offset by higher sales volumes, which accounted for a $ 917 million increase.

The cost of sales associated with the marketing of petrochemicals and refined products increased $131 million primarily due to higher sales volumes, which accounted for an $83 million increase, and higher average purchase prices, which accounted for an additional $48 million increase.

Second Quarter of 2023 Compared to Second Quarter of 2022.

Cost of sales for the second quarter of 2023 decreased $ 5.2 b illion when compared to the second quarter of 2022.

The cost of sales associated with the marketing of NGLs decreased $ 2.9 billion quarter-to-quarter primarily due to lower average purchase prices, which accounted for a $ 2.7 billion decrease, and lower volumes, which accounted for an additional $ 235 million decrease.

The cost of sales associated with the marketing of crude oil, natural gas and petrochemicals and refined products decreased a combined net $ 2.3 billion primarily due to lower average purchase prices, which accounted for a $ 3.0 billion decrease, partially offset by higher volumes, which accounted for a $ 676 million increase.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022 .

Cost of sales for the six months ended June 30, 2023 decreased $ 6.0 billion when compared to the six months ended June 30, 2022.

The cost of sales associated with our marketing of NGLs decreased $ 3.5 billion period-to-period primarily due to lower average purchase prices.

The cost of sales associated with the marketing of crude oil, natural gas and petrochemicals and refined products decreased a combined net $2.5 billion primarily due to lower average purchase prices, which accounted for a $4.2 billion decrease, partially offset by higher volumes, which accounted for a $1.7 billion increase.

Other operating costs and expenses

Other operating costs and expenses for the first quarter of 2023 increased $ 111 million when compared to the first quarter of 2022 primarily due to higher maintenance, rental, employee compensation and other operating costs.

Other operating costs and expenses for the second quarter of 2023 increased a net $ 11 million when compared to the second quarter of 2022 primarily due to higher maintenance, rental and other operating costs, which accounted for a $71 million increase, partially offset by lower utility costs, which accounted for a $60 million decrease.

Other operating costs and expenses for the six months ended June 30, 2023 increased $ 122 million when compared to the six months ended June 30, 2022 primarily due to higher maintenance, rental and other operating costs, which accounted for a $183 million increase, partially offset by lower utility costs, which accounted for a $61 million decrease.

Depreciation, amortization and accretion expenses

Depreciation, amortization and accretion expense for the first quarter of 2023 increased a combined $ 21 million  

when compared to the first quarter of 2022 primarily due to the addition of assets attributable to the acquisition of our Midland Basin System in February 2022, which accounted for $ 12 million of the quarter-to-quarter increase.

The remainder of the quarter-to-quarter increase is due to assets placed into full or limited service since the end of the first quarter of 2022.

Depreciation, amortization and accretion expense for the three and six months ended June 30, 2023 increased a combined $ 18 million and $ 39 million, respectively, when compared to the same periods in 2022.

Depreciation expense increased $ 8 million quarter-to-quarter and $ 21 million period-to-period primarily due to the addition of assets attributable to the acquisition of our Midland Basin System in February 2022 and other assets placed into full or limited service since the end of the respective periods in 2022.

Additionally, amortization expense associated with our contract-based intangible assets accounted for an additional $5 million of the quarter-to-quarter increase and $10 million of the period-to-period increase .

General and administrative costs

General and administrative costs for the first quarter of 2023 decreased $ 5 million when compared to the first quarter of 2022 primarily due to lower employee compensation and professional services costs.

General and administrative costs for the three and six months ended June 30, 2023 decreased $ 6 million and $ 11 million, respectively, when compared to the same periods in 2022 primarily due to lower employee compensation and professional services costs.

Equity in income of unconsolidated affiliates

Equity income from our unconsolidated affiliates for the first quarter of 2023 decreased $ 13 million when compared to the first quarter of 2022 primarily due to lower earnings from investments in crude oil pipelines.

Equity income from our unconsolidated affiliates for the three and six months ended June 30, 2023 increased $ 14 million and $ 1 million, respectively, when compared to the same periods in 2022 primarily due to higher earnings from investments in crude oil pipelines.

Operating income

Operating income for the first quarter of 2023 increased $ 68 million when compared to the first quarter of 2022 due to the previously described quarter-to-quarter changes.

Operating income for the three and six months ended June 30, 2023 decreased $ 185 million and $ 117 million, respectively, when compared to the same periods in 2022 due to the previously described quarter-to-quarter and period-to-period changes.

Interest expense

1 unchanged sentence

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Interest charged on debt principal outstanding (1)

1 unchanged sentence

Interest costs capitalized in connection with construction projects (2)

The weighted-average interest rates on debt principal outstanding during the first quarters of 2023 and 2022 were 4.57% and 4.30%, respectively.

The weighted-average interest rates on debt principal outstanding during the three and six months ended June 30, 2023 were 4.58% and 4.57%, respectively.

The weighted-average interest rate on debt principal outstanding during each of the three and six months ended June 30, 2022 was 4.31%.

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

3 unchanged sentences

Interest charged on debt principal outstanding, which is a key driver of interest expense, increased a net $ 18 million quarter-to-quarter.

This increase was primarily due to the issuance of $1.75 billion fixed-rate senior notes in January 2023, which accounted for a $21 million increase, partially offset by a $12 million decrease as a result of the retirement of $1.4 billion and $1.25 billion of fixed-rate senior notes in February 2022 and March 2023, respectively, and the redemption of $350 million of junior subordinated notes in August 2022 .

This increase was primarily due to the issuance of $1.75 billion fixed-rate senior notes in January 2023, which accounted for a $23 million increase, partially offset by a $15 million decrease as a result of the retirement of $1.25 billion of fixed-rate senior notes in March 2023 and the redemption of $350 million of junior subordinated notes in August 2022 .

In addition, interest expense on our outstanding variable-rate junior subordinated notes increased $ 6 million primarily due to a quarter-to-quarter increase in the 3-month LIBOR.

Interest charged on debt principal outstanding increased a net $ 32 million period-to-period.

This increase was primarily due to the aforementioned issuance of senior notes, which accounted for a $43 million increase, partially offset by a $26 million decrease as a result of the retirement of $1.4 billion and $1.25 billion of fixed-rate senior notes in February 2022 and March 2023, respectively, and the aforementioned junior subordinated notes .

In addition, interest expense on our outstanding variable-rate junior subordinated notes increased $ 11 million primarily due to a period-to-period increase in the 3-month LIBOR.

For additional information regarding our debt obligations, see Note 7 of the Notes to Unaudited Condensed Consolidated Financial Statements included under Part I, Item 1 of this quarterly report.

For a discussion of our capital projects, see “ Capital Investments ” within this Part I, Item 2.

Our provision for income taxes for the first quarter of 2023 decreased $ 9 million  

when compared to the first quarter of 2022 primarily due to changes in income tax expense related to state tax obligations under the Revised Texas Franchise Tax (the “Texas Margin Tax”).

Our income taxes are primarily comprised of our state tax obligations under the Revised Texas Franchise Tax (“Texas Margin Tax”).

Our provision for income taxes for the three and six months ended June 30, 2023 decreased $ 4 million  

and $ 13 million, respectively, when compared to the same periods in 2022.

Business Segment Highlights

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:

16 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Operating income

16 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Segment gross operating margin:

13 unchanged sentences

Natural gas processing and related NGL marketing activities

Gross operating margin from natural gas processing and related NGL marketing activities for the first quarter of 2023 decreased $ 89 million when compared to the first quarter of 2022.

Gross operating margin from our NGL marketing activities decreased a net $77 million quarter-to-quarter primarily due to lower average sales margins, which accounted for a $72 million decrease, and lower sales volumes, which accounted for an additional $10 million decrease, partially offset by higher non-cash, mark-to-market earnings, which accounted for a $6 million increase.

Second Quarter of 2023 Compared to Second Quarter of 2022 .

Gross operating margin from natural gas processing and related NGL marketing activities for the second quarter of 2023 decreased $277 million when compared to the second quarter of 2022.

Gross operating margin from our NGL marketing activities decreased $102 million quarter-to-quarter primarily due to lower average sales margins, which accounted for a $76 million decrease, and lower sales volumes, which accounted for an additional $33 million decrease.

Gross operating margin from our Midland Basin natural gas processing facilities decreased a net $88 million quarter-to-quarter primarily due to lower average processing margins (including the impact of hedging activities), which accounted for a $108 million decrease, partially offset by a 190 MMcf/d increase in fee-based natural gas processing volumes, which accounted for a $21 million increase.

Equity NGL-equivalent production volumes at these facilities were flat quarter-to-quarter.

Gross operating margin from our Delaware Basin natural gas processing facilities decreased $29 million quarter-to-quarter primarily due to lower average processing margins (including the impact of hedging activities).

Fee-based natural gas processing volumes at these facilities increased 64 MMcf/d and equity NGL-equivalent production volumes decreased 3 MBPD quarter-to-quarter.

Gross operating margin from our South Texas natural gas processing facilities decreased $29 million quarter-to-quarter primarily due to lower average processing margins (including the impact of hedging activities).

Fee-based natural gas processing volumes increased 28 MMcf/d and equity NGL-equivalent production volumes decreased 2 MBPD quarter-to-quarter.

Gross operating margin from our South Texas natural gas processing facilities decreased $7 million quarter-to-quarter primarily due to higher maintenance and other operating costs.

Fee-based natural gas processing volumes and equity NGL-equivalent production volumes increased 78 MMcf/d and 5 MBPD, respectively, quarter-to-quarter.

Gross operating margin from our Rockies natural gas processing facilities (Meeker, Pioneer and Chaco) decreased a combined $20 million quarter-to-quarter primarily due to lower average processing margins (including the impact of hedging activities).

On a combined basis, fee-based natural gas processing volumes and equity NGL-equivalent production volumes decreased 74 MMcf/d and 10 MBPD, respectively, quarter-to-quarter.

Gross operating margin from our Louisiana and Mississippi natural gas processing facilities decreased $7 million quarter-to-quarter primarily due to lower average processing margins (including the impact of hedging activities).

Fee-based natural gas processing volumes increased 195 MMcf/d and equity NGL-equivalent production volumes decreased 7 MBPD quarter-to-quarter (net to our interest).

Gross operating margin from our Rockies natural gas processing facilities (Meeker, Pioneer and Chaco) increased a net $15 million quarter-to-quarter primarily due to higher average processing margins (including the impact of hedging activities), which accounted for a $49 million increase, and higher average processing fees, which accounted for an additional $5 million increase, partially offset by a 25 MBPD combined decrease in equity NGL-equivalent production volumes, which accounted for a $38 million decrease.

On a combined basis, fee-based natural gas processing volumes decreased 68 MMcf/d quarter-to-quarter.

Gross operating margin from our Midland Basin natural gas processing facilities, which represent the natural gas processing facilities we acquired in February 2022, increased a net $8 million quarter-to-quarter primarily due to an increase in total equity NGL-equivalent production volumes, which accounted for a $23 million increase, and an increase in total fee-based natural gas processing volumes, which accounted for an additional $22 million increase, partially offset by lower average processing margins (including the impact of hedging activities), which accounted for a $26 million decrease, and higher operating costs, which accounted for an additional $12 million decrease.

Fee-based natural gas processing volumes and equity NGL-equivalent production volumes at these facilities, which reflect the average daily operating rates from the time the asset was acquired, increased 154 MMcf/d and 4 MBPD, respectively, quarter-to-quarter.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022 .

Gross operating margin from natural gas processing and related NGL marketing activities for the six months ended June 30, 2023 decreased $366 million when compared to the six months ended June 30, 2022.

Gross operating margin from our NGL marketing activities decreased a net $179 million period-to-period primarily due to lower average sales margins, which accounted for a $152 million decrease, and lower sales volumes, which accounted for an additional $39 million decrease, partially offset by higher non-cash, mark-to-market earnings, which accounted for a $12 million increase.

Gross operating margin from our Midland Basin natural gas processing facilities decreased a net $80 million period-to-period primarily due to lower average processing margins (including the impact of hedging activities), which accounted for a $129 million decrease, and higher operating costs, which accounted for an additional $11 million decrease, partially offset by an increase in total equity NGL-equivalent production volumes, which accounted for a $19 million increase, and an increase in total fee-based natural gas processing volumes, which accounted for an additional $43 million increase.

Fee-based natural gas processing volumes at these facilities, which reflect the average daily operating rates from the time the asset was acquired, increased 162 MMcf/d and equity NGL-equivalent production volumes were flat period-to-period.

Gross operating margin from our Delaware Basin natural gas processing facilities decreased $51 million period-to-period primarily due to lower average processing margins (including the impact of hedging activities).

Fee-based natural gas processing volumes at these facilities increased 130  

MMcf/d and equity NGL-equivalent production volumes decreased 2 MBPD period-to-period .

Gross operating margin from our South Texas natural gas processing facilities decreased $36 million period-to-period primarily due to lower average processing margins (including the impact of hedging activities), which accounted for a $24 million decrease, and higher maintenance and other operating costs, which accounted for an additional $11 million decrease.

Fee-based natural gas processing volumes and equity NGL-equivalent production volumes increased 53 MMcf/d and 2 MBPD, respectively, period-to-period.

Gross operating margin from our Louisiana and Mississippi natural gas processing facilities decreased $14 million  

period-to-period primarily due to lower average processing margins (including the impact of hedging activities).

Fee-based natural gas processing volumes increased 190 MMcf/d and equity NGL-equivalent production volumes decreased 5 MBPD period-to-period (net to our interest).

On a combined basis, gross operating margin from our Rockies natural gas processing facilities (Meeker, Pioneer and Chaco) decreased a net $4 million period-to-period primarily due to a 16 MBPD decrease in equity NGL-equivalent production volumes, which accounted for a $13 million decrease, partially offset by higher average processing fees, which accounted for a $5 million increase.

Fee-based natural gas processing volumes decreased a combined 71 MMcf/d period-to-period.

NGL pipelines, storage and terminals

Gross operating margin from our NGL pipelines, storage and terminal assets during the first quarter of 2023 increased $124 million when compared to the first quarter of 2022.

Second Quarter of 2023 Compared to Second Quarter of 2022 .

Gross operating margin from our NGL pipelines, storage and terminal assets during the second quarter of 2023 increased $59 million when compared to the second quarter of 2022.

Gross operating margin from our Chambers County storage complex increased $13 million quarter-to-quarter primarily due to lower operating costs.

Gross operating margin from LPG-related activities at our Enterprise Hydrocarbons Terminal (“EHT”) increased $12 million quarter-to-quarter primarily due to higher average loading fees.

LPG export volumes at EHT decreased 4 MBPD quarter-to-quarter.

Gross operating margin at our Morgan’s Point Ethane Export Terminal increased $11 million quarter-to-quarter primarily due to a 22 MBPD increase in export volumes, which accounted for a $6 million increase, and higher average loading fees, which accounted for an additional $3 million increase.

Gross operating margin from our related Houston Ship Channel Pipeline System increased $6 million quarter-to-quarter primarily due to higher average transportation fees, which accounted for a $3 million increase, and a 59 MBPD increase in transportation volumes, which accounted for an additional $2 million increase.

Gross operating margin for our Eastern ethane pipelines, which include our ATEX and Aegis pipelines, increased a combined $4 million quarter-to-quarter  

primarily due to a combined 25 MBPD increase in transportation volumes, which accounted for a $23 million increase, and higher average transportation fees, which accounted for an additional $7 million increase.

Gross operating margin from LPG-related activities at our Enterprise Hydrocarbons Terminal (“EHT”) increased $24 million quarter-to-quarter primarily due to a 143 MBPD increase in LPG export volumes.

Gross operating margin from our related Houston Ship Channel Pipeline increased $7 million quarter-to-quarter primarily due to a 188 MBPD increase in transportation volumes.

Gross operating margin from our South Texas NGL Pipeline System increased $18 million quarter-to-quarter primarily due to higher storage and other fee revenues, which accounted for a $6 million increase, a 45 MBPD increase in transportation volumes, which accounted for a $4 million increase, and higher average transportation fees, which accounted for an additional $4 million increase.

Gross operating margin at our Morgan’s Point Ethane Export Terminal increased $13 million quarter-to-quarter primarily due to a 39 MBPD increase in export volumes.

Gross operating margin from our South Louisiana NGL Pipeline System increased $6 million quarter-to-quarter primarily due to lower operating costs, which accounted for a $4 million increase, and an 18 MBPD increase in transportation volumes, which accounted for an additional $2 million increase.

primarily due to higher average transportation fees.

Transportation volumes on these pipelines increased a combined 95 MBPD quarter-to-quarter.

A number of our pipelines, including the Mid-America Pipeline System, Seminole NGL Pipeline, Chaparral NGL Pipeline, and Shin Oak NGL Pipeline, serve Permian Basin and/or Rocky Mountain producers.

On a combined basis, gross operating margin from these pipelines increased a net $2 million quarter-to-quarter primarily due to higher other revenues, which accounted for a $7 million increase, and an 83 MBPD (net to our interest) increase in transportation volumes, which accounted for an additional $5 million increase, partially offset by higher maintenance and other operating costs, which accounted for a $10 million decrease.

On a combined basis, gross operating margin from these pipelines increased a net $2 million quarter-to-quarter primarily due to higher average transportation fees, which accounted for a $6 million increase, and higher other revenues, which accounted for an additional $5 million increase, partially offset by higher operating costs, which accounted for a $9 million decrease.

Transportation volumes on these pipelines increased a combined 72 MBPD (net to our interest) quarter-to-quarter.

Gross operating margin from our Dixie Pipeline and related terminals decreased $8 million quarter-to-quarter primarily due to higher maintenance and other operating costs.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022 .

Gross operating margin from our NGL pipelines, storage and terminal assets during the six months ended June 30, 2023 increased $183 million when compared to the six months ended June 30, 2022.

Gross operating margin from LPG-related activities at EHT increased $37 million period-to-period primarily due to a 68 MBPD increase in LPG export volumes, which accounted for a $17 million increase, and higher average loading fees, which accounted for an additional $15 million increase.

Gross operating margin at our Morgan’s Point Ethane Export Terminal increased $25 million period-to-period primarily due to a 30 MBPD increase in export volumes, which accounted for a $16 million increase, and higher average loading fees, which accounted for an additional $6 million increase.

Gross operating margin from our related Houston Ship Channel Pipeline System increased $13 million period-to-period primarily due to a 124 MBPD increase in transportation volumes, which accounted for a $10 million increase, and higher average transportation fees, which accounted for an additional $5 million increase.

On a combined basis gross operating margin for our Eastern ethane pipelines, which include our ATEX and Aegis pipelines, increased $33 million period-to-period  

primarily due to a combined 61 MBPD increase in transportation volumes.

Gross operating margin from our South Texas NGL Pipeline System increased $17 million period-to-period primarily due to higher average transportation fees, which accounted for a $6 million increase, higher pipeline capacity fee revenues, which accounted for a $5 million increase, and higher storage and other revenues, which accounted for an additional $5 million increase.

Gross operating margin from our Chambers County storage complex increased $9 million period-to-period primarily due to lower operating costs.

On a combined basis, gross operating margin for our pipelines that serve Permian Basin and/or Rocky Mountain producers increased a net $5 million period-to-period primarily due to higher other revenues, which accounted for a $12 million increase, higher average transportation fees, which accounted for a $7 million increase, and a 78 MBPD (net to our interest) increase in transportation volumes, which accounted for an additional $5 million increase, partially offset by higher maintenance and other operating costs, which accounted for a $19 million decrease.

Gross operating margin from our Dixie Pipeline and related terminals decreased $10 million period-to-period primarily due to higher maintenance and other operating costs.

NGL fractionation

Gross operating margin from NGL fractionation during the first quarter of 2023 decreased $48 million when compared to the first quarter of 2022.

Gross operating margin from our Chambers County NGL fractionation complex decreased $42 million quarter-to-quarter primarily due to lower ancillary service revenues, which accounted for a $26 million decrease, lower average fractionation fees, which accounted for a $12 million decrease, and a 5 MBPD (net to our interest) decrease in fractionation volumes, which accounted for an additional $5 million decrease.

Second Quarter of 2023 Compared to Second Quarter of 2022 .

Gross operating margin from NGL fractionation during the second quarter of 2023 increased $1 million when compared to the second quarter of 2022.

Gross operating margin from our Chambers County NGL fractionation complex increased a net $7 million quarter-to-quarter primarily due to lower utility and other operating costs, which accounted for a $35 million increase, and a 34 MBPD (net to our interest) increase in fractionation volumes, which accounted for an additional $6 million increase, partially offset by lower average fractionation fees, which accounted for an $18 million decrease, and lower ancillary service revenues, which accounted for an additional $16 million decrease.

On a combined basis, gross operating margin from our other NGL fractionators decreased $7 million quarter-to-quarter primarily due to lower average fractionation fees.

NGL fractionation volumes from our other NGL fractionators increased a combined 6 MBPD (net to our interest) quarter-to-quarter.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022 .

Gross operating margin from NGL fractionation during the six months ended June 30, 2023 decreased $47 million when compared to the six months ended June 30, 2022.

Gross operating margin from our Chambers County NGL fractionation complex decreased a net $35 million period-to-period primarily due to lower ancillary services revenues, which accounted for a $41 million decrease, and lower average fractionation fees, which accounted for an additional $ 30 million decrease, partially offset by lower utility and other operating costs, which accounted for a $33 million increase.

NGL fractionation volumes at our Chambers County NGL fractionation complex increased 15 MBPD (net to our interest) period-to-period.

On a combined basis, gross operating margin from our other NGL fractionators decreased a net $16 million period-to-period primarily due to lower average fractionation fees, which accounted for an $11 million decrease, and lower ancillary service revenues, which accounted for an additional $9 million decrease, partially offset by a combined 31 MBPD (net to our interest) increase in NGL fractionation volumes, which accounted for a $6 million increase.

Crude Oil Pipelines & Services

1 unchanged sentence

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Segment gross operating margin:

4 unchanged sentences

Crude oil marine terminal volumes (MBPD)

Gross operating margin from our Crude Oil Pipelines & Services segment for the first quarter of 2023 decreased $18 million when compared to the first quarter of 2022.

Gross operating margin from our EFS Midstream System decreased $75 million quarter-to-quarter primarily due to lower deficiency revenues as a result of the expiration of minimum volume commitments under certain long-term gathering agreements in June 2022.

Our EFS Midstream System will continue to transport volumes produced on dedicated acreage through the remaining term of these agreements, most of which have a life-of-lease duration.

Gross operating margin from our equity investment in the Seaway Pipeline decreased $17 million quarter-to-quarter primarily due to lower average transportation and other fees.

Transportation volumes on our Seaway Pipeline increased 63 MBPD quarter-to-quarter (net to our interest).

Gross operating margin from our South Texas Crude Oil Pipeline System decreased $11 million quarter-to-quarter primarily due to lower deficiency revenues as a result of the expiration of minimum volume commitments under certain long-term agreements in July 2022, which accounted for a $7 million decrease and lower average transportation fees, which accounted for an additional $6 million decrease.

Transportation volumes on our South Texas Crude Oil Pipeline System decreased 31 MBPD quarter-to-quarter.

Gross operating margin from our Midland terminal decreased $9 million quarter-to-quarter primarily due to higher operating costs.

Second Quarter of 2023 Compared to Second Quarter of 2022 .

Gross operating margin from our Crude Oil Pipelines & Services segment for the second quarter of 2023 increased $15 million when compared to the second quarter of 2022.

Gross operating margin from our Midland-to-ECHO System and related business activities increased a net $59 million quarter-to-quarter primarily due to higher average transportation fees and related margins from marketing activities, which accounted for a $45 million increase, and a 124 MBPD (net to our interest) increase in transportation volumes, which accounted for an additional $23 million increase, partially offset by higher utility, chemical and other operating costs, which accounted for a $4 million decrease.

Gross operating margin from our crude oil marketing activities (excluding those attributable to the Midland-to-ECHO System) increased $51 million quarter-to-quarter primarily due to higher non-cash, mark-to-market earnings, which accounted for a $33 million increase, and higher average sales margins, which accounted for an additional $20 million increase.

1 unchanged sentence

Transportation volumes on our West Texas Pipeline System increased 17 MBPD quarter-to-quarter.

Gross operating margin from our Midland-to-ECHO System and related business activities increased $14 million quarter-to-quarter primarily due to a 63 MBPD (net to our interest) increase in transportation volumes.

Gross operating margin from our EFS Midstream System decreased $82 million quarter-to-quarter primarily due to lower deficiency revenues as a result of the expiration of minimum volume commitments under certain long-term gathering agreements at the end of June 2022, which accounted for a $54 million decrease, and lower average transportation fees, which accounted for an additional $20 million decrease.

Our EFS Midstream System continues to transport volumes produced on dedicated acreage through the remaining term of these agreements, most of which have a life-of-lease duration.

Gross operating margin from our South Texas Crude Oil Pipeline System decreased $30 million quarter-to-quarter primarily due to lower ancillary service and other revenues, which accounted for an $11 million decrease, lower deficiency revenues as a result of the expiration of minimum volume commitments under certain long-term agreements at the end of July 2022, which accounted for an $8 million decrease, and lower average transportation fees, which accounted for an additional $7 million decrease.

Transportation volumes on our South Texas Crude Oil Pipeline System decreased 50 MBPD quarter-to-quarter.

Gross operating margin from our equity investment in the Seaway Pipeline decreased $24 million quarter-to-quarter primarily due to lower ancillary service and other fee revenues.

Transportation volumes on our Seaway Pipeline increased 52 MBPD (net to our interest) quarter-to-quarter.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022 .

Gross operating margin from our Crude Oil Pipelines & Services segment for the six months ended June 30, 2023 decreased $3 million when compared to the six months ended June 30, 2022.

Gross operating margin from our crude oil marketing activities (excluding those attributable to the Midland-to-ECHO System) increased $95 million period-to-period primarily due to higher non-cash, mark-to-market earnings, which accounted for a $74 million increase, and higher average sales margins, which accounted for an additional $27 million increase.

Gross operating margin from our West Texas Pipeline System increased $87 million period-to-period primarily due to higher ancillary service and other revenues.

Transportation volumes on our West Texas Pipeline System increased 14 MBPD period-to-period.

Gross operating margin from our Midland-to-ECHO System and related business activities increased a net $73 million period-to-period primarily due to higher average transportation fees and related margins from marketing activities, which accounted for a $49 million increase, and a 93 MBPD (net to our interest) increase in transportation volumes, which accounted for an additional $36 million increase, partially offset by higher utility, chemical and other operating costs, which accounted for a $10 million decrease.

Gross operating margin from our EFS Midstream system decreased $157 million period-to-period primarily due to lower deficiency revenues as a result of the aforementioned expiration of minimum volume commitments, which accounted for a $108 million decrease, and lower average transportation fees, which accounted for an additional $41 million decrease.

Gross operating margin from our South Texas Crude Oil Pipeline System decreased $42 million period-to-period primarily due to lower deficiency revenues as a result of the aforementioned expiration of minimum volume commitments, which accounted for a $15 million decrease, lower average transportation fees, which accounted for a $13 million decrease, and lower ancillary service and other revenues, which accounted for an additional $9 million decrease.

Transportation volumes on our South Texas Crude Oil Pipeline System decreased 41 MBPD period-to-period.

Gross operating margin from our equity investment in the Seaway Pipeline decreased $42 million period-to-period primarily due to lower ancillary service and other fee revenues.

Transportation volumes on our Seaway Pipeline increased 57 MBPD (net to our interest) period-to-period.

Gross operating margin from our Midland terminal decreased $15 million period-to-period primarily due to lower ancillary service and other revenues, which accounted for a $9 million decrease, and higher operating costs, which accounted for an additional $8 million decrease.

Natural Gas Pipelines & Services

1 unchanged sentence

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Segment gross operating margin

1 unchanged sentence

Natural gas pipeline transportation volumes (BBtus/d)

Gross operating margin from our Natural Gas Pipelines & Services segment for the first quarter of 2023 increased $94 million when compared to the first quarter of 2022.

On a combined basis, gross operating margin from our Jonah Gathering System, Piceance Basin Gathering System, and San Juan Gathering System in the Rocky Mountains increased $29 million quarter-to-quarter primarily due to higher average gathering fees on our Jonah Gathering System and San Juan Gathering System.

The gathering fees on these systems are indexed to regional gas prices, which increased during the quarter.

Gathering volumes on our Rocky Mountain gathering systems decreased a combined 140 BBtus/d quarter-to-quarter.

Second Quarter of 2023 Compared to Second Quarter of 2022 .

Gross operating margin from our Natural Gas Pipelines & Services segment for the second quarter of 2023 increased $9 million when compared to the second quarter of 2022.

Gross operating margin from our natural gas marketing activities increased $11 million quarter-to-quarter primarily due to higher average sales margins attributable to location price differentials.

Gross operating margin from our Texas Intrastate System increased $18 million quarter-to-quarter primarily due to higher average transportation fees, which accounted for a $14 million increase, and a 555 BBtus/d increase in transportation volumes, which accounted for an additional $6 million increase.

Gross operating margin from our East Texas Gathering System increased $8 million quarter-to-quarter primarily due to a 459 BBtus/d increase in gathering volumes.

Gross operating margin from our Midland Basin Gathering System, which was acquired in February 2022, increased a net $5 million quarter-to-quarter primarily due to an increase in total natural gas gathering volumes, which accounted for a $26 million increase, partially offset by higher rental and other operating costs, which accounted for a $21 million decrease.

Gathering volumes on our Midland Basin Gathering System, which reflect the average daily operating rates from the time the asset was acquired, increased 252 BBtus/d quarter-to-quarter.

Gross operating margin from our Acadian Gas System and Haynesville Gathering System increased a combined $5 million quarter-to-quarter primarily due to higher transportation volumes.

On a combined basis, transportation volumes increased 293 BBtus/d quarter-to-quarter.

Gross operating margin from our Delaware Basin Gathering System increased $6 million quarter-to-quarter primarily due to higher average gathering fees.

Natural gas gathering volumes on our Delaware Basin Gathering System increased 67 BBtus/d quarter-to-quarter.

Gross operating margin from our Acadian Gas System increased $4 million quarter-to-quarter primarily due to lower maintenance and other operating costs.

Transportation volumes on our Acadian Gas System increased 91 BBtus/d quarter-to-quarter.

Gross operating margin from our Texas Intrastate System increased a net $2 million quarter-to-quarter primarily due a 793 BBtus/d increase in transportation volumes, which accounted for a $7 million increase, and higher average transportation fees, which accounted for an additional $5 million increase, partially offset by lower ancillary and other revenues, which accounted for a $10 million decrease.

On a combined basis, gross operating margin from our Jonah Gathering System, Piceance Basin Gathering System, and San Juan Gathering System in the Rocky Mountains decreased $22 million quarter-to-quarter primarily due to lower average gathering fees on our San Juan Gathering System, which accounted for a $12 million decrease, a combined 126 BBtus/d decrease in gathering volumes, which accounted for a $3 million decrease, and higher maintenance and other operating costs, which accounted for an additional $3 million decrease.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022 .

Gross operating margin from our Natural Gas Pipelines & Services segment for the six months ended June 30, 2023 increased $103 million when compared to the six months ended June 30, 2022.

Gross operating margin from our natural gas marketing activities increased $35 million period-to-period primarily due to higher average sales margins attributable to location price differentials.

Gross operating margin from our Texas Intrastate System increased a net $20 million period-to-period primarily due to higher average transportation fees, which accounted for a $19 million increase, and a 675 BBtus/d increase in transportation volumes, which accounted for an additional $14 million increase, partially offset by higher operating costs, which accounted for a $9 million decrease, and lower ancillary and other revenues, which accounted for an additional $4 million decrease.

Gross operating margin from our East Texas Gathering System increased $13 million period-to-period primarily due to a 406 BBtus/d increase in gathering volumes.

Gross operating margin from our Delaware Basin Gathering System increased $9 million period-to-period primarily due to a 165 BBtus/d increase in gathering volumes, which accounted for a $5 million increase, and higher average gathering fees, which accounted for an additional $3 million increase.

On a combined basis, gross operating margin from our Jonah Gathering System, Piceance Basin Gathering System and San Juan Gathering System in the Rocky Mountains increased a net $6 million period-to-period primarily due to higher average gathering fees on our Jonah Gathering System and San Juan Gathering System, which accounted for a $19 million increase, partially offset by higher maintenance and other operating costs, which accounted for a $7 million decrease, and a decrease in condensate sales, which accounted for an additional $4 million decrease.

Natural gas gathering volumes on our Rocky Mountain gathering systems decreased a combined 133 BBtus/d period-to-period.

Gross operating margin from our Acadian Gas System increased $4 million period-to-period primarily due to lower maintenance and other operating costs.

Transportation volumes on our Acadian Gas System increased 154 BBtus/d period-to-period.

Petrochemical & Refined Products Services

1 unchanged sentence

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Segment gross operating margin:

14 unchanged sentences

Propylene production and related activities

Gross operating margin from propylene production and related activities for the first quarter of 2023 decreased $28 million when compared to the first quarter of 2022.

Gross operating margin from our Chambers County propylene production facilities decreased a combined $38 million quarter-to-quarter primarily due to lower propylene sales volumes.

Propylene and associated by-product production volumes at these facilities decreased a combined 10 MBPD quarter-to-quarter (net to our interest) primarily due to planned major maintenance activities at our PDH 1 facility during the first quarter of 2023.

Second Quarter of 2023 Compared to Second Quarter of 2022 .

Gross operating margin from propylene production and related activities for the second quarter of 2023 decreased $29 million when compared to the second quarter of 2022.

Gross operating margin from our Chambers County propylene production facilities decreased a combined $34 million quarter-to-quarter primarily due to lower average propylene sales margins, which accounted for a $23 million decrease, and lower propylene sales volumes, which accounted for an additional $13 million decrease.

Propylene and associated by-product production volumes at these facilities decreased a combined 25 MBPD (net to our interest) quarter-to-quarter primarily due to planned major maintenance activities at three of our propylene splitters during the second quarter of 2023.

Gross operating margin from our propylene pipeline systems increased a combined $6 million quarter-to-quarter primarily due to higher average transportation fees.

On a combined basis, transportation volumes were flat (net to our interest) quarter-to-quarter.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022 .

Gross operating margin from propylene production and related activities for the six months ended June 30, 2023 decreased $57 million when compared to the six months ended June 30, 2022.

Gross operating margin from our Chambers County propylene production facilities decreased a combined $71 million period-to-period primarily due to lower propylene sales volumes, which accounted for a $48 million decrease, and lower average propylene sales margins, which accounted for an additional $29 million decrease.

Propylene and associated by-product production volumes at these facilities decreased a combined 17 MBPD (net to our interest) period-to-period primarily due to planned major maintenance activities at our PDH 1 facility during the first quarter of 2023 and planned major maintenance at three of our propylene splitters during the second quarter of 2023.

Gross operating margin from our propylene pipeline systems increased a combined $9 million period-to-period primarily due to higher average transportation fees.

On a combined basis, transportation volumes decreased 5 MBPD (net to our interest) period-to-period.

Butane isomerization and related operations

Gross operating margin from butane isomerization and related operations were flat quarter-to-quarter primarily due to lower by-product average sales prices, which accounted for a $4 million decrease, partially offset by an 8 MBPD increase in isomerization volumes, which accounted for a $3 million increase.

Second Quarter of 2023 Compared to Second Quarter of 2022 .

Gross operating margin from butane isomerization and related operations increased $8 million quarter-to-quarter primarily due to lower utility and other operating costs.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022 .

Gross operating margin from butane isomerization and related operations increased $8 million period-to-period primarily due to lower utility and other operating costs.

Octane enhancement and related plant operations

Gross operating margin from our octane enhancement and related plant operations for the first quarter of 2023 increased $25 million when compared to the first quarter of 2022 primarily due to higher average sales margins.

Second Quarter of 2023 Compared to Second Quarter of 2022 .

Gross operating margin from our octane enhancement and related plant operations for the second quarter of 2023 decreased a net $52 million when compared to the second quarter of 2022 primarily due to lower average sales margins, which accounted for a $38 million decrease, and lower sales volumes, which accounted for an additional $20 million decrease, partially offset by lower utility and other operating costs, which accounted for a $6 million increase.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022 .

Gross operating margin from our octane enhancement and related plant operations during the six months ended June 30, 2023 decreased $27 million when compared to the six months ended June 30, 2022 primarily due to lower sales volumes, which accounted for a $15 million decrease, and lower average sales margins, which accounted for an additional $14 million decrease.

Refined products pipelines and related activities

Gross operating margin from refined products pipelines and related activities for the first quarter of 2023 increased $16 million when compared to the first quarter of 2022.

Gross operating margin from our refined products marketing activities increased a net $24 million quarter-to-quarter primarily due to higher average sales margins, which accounted for a $25 million increase, and higher sales volumes, which accounted for an additional $9 million increase, partially offset by lower non-cash, mark-to-market earnings, which accounted for a $10 million decrease.

Second Quarter of 2023 Compared to Second Quarter of 2022 .

Gross operating margin from refined products pipelines and related activities for the second quarter of 2023 increased $25 million when compared to the second quarter of 2022.

Gross operating margin from our refined products marketing activities increased $26 million quarter-to-quarter primarily due to higher average sales margins.

Gross operating margin from our refined products terminal in Beaumont, Texas increased $5 million quarter-to-quarter primarily due to higher storage and other fee revenues.

Refined product marine terminal volumes at Beaumont increased 68 MBPD quarter-to-quarter.

Gross operating margin from our TE Products Pipeline System decreased $16 million quarter-to-quarter primarily due to higher maintenance, storage and other operating costs.

Gross operating margin from our TE Products Pipeline System decreased $8 million quarter-to-quarter primarily due to higher operating costs.

Overall, transportation volumes on our TE Products Pipeline System increased a net 51 MBPD quarter-to-quarter.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022 .

Gross operating margin from refined products pipelines and related activities for the six months ended June 30, 2023 increased $41 million when compared to the six months ended June 30, 2022.

Gross operating margin from our refined products marketing activities increased $50 million period-to-period primarily due to higher average sales margins.

Gross operating margin from our refined products terminal in Beaumont, Texas increased $11 million period-to-period primarily due to higher storage and other fee revenues.

Refined product marine terminal volumes at Beaumont increased 99 MBPD period-to-period.

Gross operating margin from our TE Products Pipeline System decreased $24 million period-to-period primarily due to higher operating costs.

Overall, transportation volumes on our TE Products Pipeline System increased a net 38 MBPD period-to-period.

Ethylene exports and related activities

Gross operating margin from ethylene exports and related activities during the first quarter of 2023 decreased $3 million when compared to the first quarter of 2022 primarily due to a 1 MBPD (net to our interest) decrease in ethylene export volumes.

Second Quarter of 2023 Compared to Second Quarter of 2022 .

Gross operating margin from ethylene exports and related activities during the second quarter of 2023 increased a net $4 million when compared to the second quarter of 2022.

Gross operating margin from our ethylene pipelines, storage and related marketing activities increased a combined $6 million quarter-to-quarter primarily due to higher transportation, storage and other fee revenues, which accounted for a $3 million increase, and higher average sales margins, which accounted for an additional $2 million increase.

Gross operating margin from our ethylene export terminal decreased $2 million quarter-to-quarter primarily due to lower average loading fees.

Ethylene transportation volumes and ethylene export volumes increased 17 MBPD and 1 MBPD, respectively, quarter-to-quarter (net to our interest).

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022 .

Gross operating margin from ethylene exports and related activities during the six months ended June 30, 2023 increased a net $1 million when compared to the six months ended June 30, 2022.

Gross operating margin from our ethylene pipelines, storage and related marketing activities increased a combined $6 million period-to-period primarily due to higher transportation, storage and other fee revenues, which accounted for a $4 million increase, and higher sales volumes, which accounted for an additional $2 million increase.

Gross operating margin from our ethylene export terminal decreased $5 million period-to-period primarily due to lower average loading fees.

Ethylene transportation volumes increased 15 MBPD and ethylene export volumes were flat period-to-period (net to our interest).

Marine transportation and other services

Gross operating margin from marine transportation and other services increased a net $5 million quarter-to-quarter primarily due to higher average fees and fleet utilization rates, which accounted for a $9 million increase, partially offset by higher operating costs, which accounted for a $5 million decrease.

Second Quarter of 2023 Compared to Second Quarter of 2022 .

Gross operating margin from marine transportation and other services increased $6 million quarter-to-quarter primarily due to higher average fees and fleet utilization rates.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022 .

Gross operating margin from marine transportation and other services increased a net $11 million period-to-period primarily due to higher average fees, which accounted for an $11 million increase, and higher fleet utilization rates, which accounted for an additional $6 million increase, partially offset by higher operating costs, which accounted for a $6 million decrease.

Liquidity and Capital Resources

Based on current market conditions (as of the filing date of this quarterly report), we believe that the Partnership and its consolidated businesses will have sufficient liquidity, cash flow from operations and access to capital markets to fund their capital investments and working capital needs for the reasonably foreseeable future.

At March 31, 2023, we had $4.0 billion of consolidated liquidity.

At June 30, 2023, we had $4.0 billion of consolidated liquidity.

This amount was comprised of $3.8 billion of available borrowing capacity under EPO’s revolving credit facilities, which is the net of $4.2 billion of total borrowing capacity under EPO’s revolving credit facilities and $355 million outstanding under EPO’s commercial paper program, and $183 million of unrestricted cash on hand.

1 unchanged sentence

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

Enterprise Declares Cash Distribution for First Quarter of 2023

On April 5 , 2023, we announced that the Board declared a quarterly cash distribution of $ 0.49 per common unit, or $ 1.96 per 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.

Enterprise Declares Cash Distribution for Second Quarter of 2023

On July 10, 2023, we announced that the Board declared a quarterly cash distribution of $0.50 per common unit, or $2.00 per unit on an annualized basis, to be paid to the Partnership’s common unitholders with respect to the second quarter of 2023.

The quarterly distribution is payable on August 14, 2023 to unitholders of record as of the close of business on July 31, 2023.

The total amount to be paid is $1.1 billion, which includes $10 million for distribution equivalent rights on phantom unit awards.

2 unchanged sentences

Consolidated Debt

At March 31, 2023, the average maturity of EPO’s consolidated debt obligations was approximately 19.9 years.

The following table presents the scheduled maturities of principal amounts of EPO’s consolidated debt obligations at March 31, 2023 for the years indicated (dollars in millions):

At June 30, 2023, the average maturity of EPO’s consolidated debt obligations was approximately 19.7 years.

The following table presents the scheduled maturities of principal amounts of EPO’s consolidated debt obligations at June 30, 2023 for the years indicated (dollars in millions):

Scheduled Maturities of Debt

8 unchanged sentences

EPO’s borrowing capacity was unchanged from the prior 364-day revolving credit agreement.

As of March 31, 2023, there are no principal amounts outstanding under this new revolving credit agreement.

As of June 30, 2023, there are no principal amounts outstanding under this new 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”).

2 unchanged sentences

Under the new agreement, EPO retains the right to increase its borrowing capacity by up to $500 million to $3.2 billion, provided certain conditions for the election are met.

As of March 31, 2023, there are no principal amounts outstanding under this new revolving credit agreement.

As of June 30, 2023, there are no principal amounts outstanding under this new revolving credit agreement.

For additional information regarding our consolidated debt obligations, see Note 7 of the Notes to Unaudited Condensed Consolidated Financial Statements included under Part I, Item 1 of this quarterly report.

Credit Ratings

As of May 10 , 2023, the investment-grade credit ratings of EPO’s long-term senior unsecured debt securities were A- from Standard and Poor’s, Baa1 from Moody’s and BBB+ from Fitch Ratings.

As of August 9 , 2023, the investment-grade credit ratings of EPO’s long-term senior unsecured debt securities were A- from Standard and Poor’s, Baa1 from Moody’s and BBB+ from Fitch Ratings.

In addition, the credit ratings of EPO’s short-term senior unsecured debt securities were A-2 from Standard and Poor’s, P-2 from Moody’s and F-2 from Fitch Ratings.

4 unchanged sentences

In January 2019, we announced that the Board had approved a $2.0 billion multi-year unit buyback program (the “2019 Buyback Program”), which provides the Partnership with an additional method to return capital to investors.

The Partnership repurchased 682,589 common units through open market purchases during the first quarter of 2023.

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

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

The Partnership repurchased 2,910,121 and 3,592,710 common units through open market purchases during the three and six months ended June 30, 2023, respectively.

The total cost of these repurchases, including commissions and fees, was $ 75 million and $ 92 million, respectively .

As of June 30, 2023, the remaining available capacity under the 2019 Buyback Program was $ 1.2 billion.

Cash Flow Statement Highlights

The following table summarizes our consolidated cash flows from operating, investing and financing activities for the periods indicated (dollars in millions).

For the Three Months

Ended March 31,

For the Six Months

Ended June 30,

Net cash flows provided by operating activities

9 unchanged sentences

Operating activities

Net cash flows provided by operating activities for the first quarter of 2023 decreased a net $ 562 million when compared to the first quarter of 2022 primarily due to:

a $ 630 mill ion quarter-to-quarter decrease from changes in operating accounts primarily due to the use of working capital employed in our marketing activities, which includes the impact of (i) fluctuations in commodity prices, (ii) timing of our inventory purchase and sale strategies, and (iii) changes in margin deposit requirements associated with our commodity derivative instruments;

partially offset by

a $ 73 million quarter-to-quarter increase resulting from higher partnership earnings (determined by adjusting our $ 91 million quarter-to-quarter increase in net income for changes in the non-cash items identified on our Unaudited Condensed Statements of Consolidated Cash Flows).

For information regarding significant quarter-to-quarter changes in our consolidated net income and underlying segment results, see “ Income Statement Highlights ” and “ Business Segment Highlights ” within this Part I, Item 2.

Net cash flows provided by operating activities for the six months ended June 30, 2023 decreased $ 779 million when compared to the six months ended June 30, 2022 primarily due to:

a $ 621 mill ion period-to-period decrease from changes in operating accounts primarily due to the use of working capital employed in our marketing activities, which includes the impact of (i) fluctuations in commodity prices, (ii) timing of our inventory purchase and sale strategies, and (iii) changes in margin deposit requirements associated with our commodity derivative instruments;

a $ 151 million period-to-period decrease resulting from lower partnership earnings (determined by adjusting our $ 66 million period-to-period decrease in net income for changes in the non-cash items identified on our Unaudited Condensed Statements of Consolidated Cash Flows).

For information regarding significant period-to-period changes in our consolidated net income and underlying segment results, see “ Income Statement Highlights ” and “ Business Segment Highlights ” within this Part I, Item 2.

Investing activities

Cash used in investing activities during the first quarter of 2023 decreased a net $ 2.9 billion when compared to the first quarter of  

Cash used in investing activities during the six months ended June 30, 2023 decreased a net $ 2.5 billion when compared to the six months ended June 30,  

2022 primarily due to:

1 unchanged sentence

partially offset by

a $ 304 million quarter-to-quarter increase in investments for property, plant and equipment (see “ Capital Investments ” within this Part I, Item 2 for additional information).

a $ 702 million period-to-period increase in investments for property, plant and equipment (see “ Capital Investments ” within this Part I, Item 2 for additional information).

Financing activities

Cash used in financing activities during the first quarter of 2023 decreased a net $ 249 million when compared to the first quarter of  

Cash used in financing activities during the six months ended June 30, 2023 decreased a net $ 952 million when compared to the six months ended June 30,  

2022 primarily due to:

a net cash inflow of $307 million related to debt transactions that occurred during the first quarter of 2023 compared to a net cash outflow of $20 million related to debt transactions that occurred during the first quarter of 2022.

During the first quarter of 2023, we issued $1.75 billion aggregate principal amount of senior notes, partially offset by the repayment of $1.25 billion principal amount of senior notes and net repayments of $194 million under EPO’s commercial paper program.

During the first quarter of 2022, we repaid $ 1.4 billion aggregate principal amount of senior notes, offset by net issuances of $1.4 billion under EPO’s commercial paper program;

a net cash inflow of $ 361 million related to debt transactions that occurred during the six months ended June 30, 2023 compared to a net cash outflow of $760 million related to debt transactions that occurred during the six months ended June 30, 2022.

During the six months ended June 30, 2023, we issued $1.75 billion aggregate principal amount of senior notes, partially offset by the repayment of $1.25 billion principal amount of senior notes and net repayments of $ 140 million under EPO’s commercial paper program.

During the six months ended June 30, 2022, we repaid $ 1.4 billion aggregate principal amount of senior notes, partially offset by net issuances of $640 million under EPO’s commercial paper program;

partially offset by

a $ 52 million quarter-to-quarter increase in cash distributions paid to common unitholders primarily attributable to increases in the quarterly cash distribution rate per unit.

a $ 103 million period-to-period increase in cash distributions paid to common unitholders primarily attributable to increases in the quarterly cash distribution rate per unit.

Non-GAAP Cash Flow Measures

16 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Net income attributable to common unitholders (GAAP) (1)

5 unchanged sentences

Change in fair market value of derivative instruments

Deferred income tax expense

Deferred income tax expense (benefit)

Sustaining capital expenditures (3)

17 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Net cash flows provided by operating activities (GAAP)

8 unchanged sentences

Capital Investments

We have approximately $6.1 billion of growth capital projects scheduled to be completed by the end of 2025 including the following projects (including their respective scheduled completion dates):

natural gas gathering expansion projects in the Delaware and Midland Basins (2023);

our PDH 2 facility (second quarter of 2023);

a 400 MMcf/d expansion of our Acadian Gas System (second quarter of 2023);

our Poseidon natural gas processing plant in the Midland Basin (third quarter of 2023);

a twelfth NGL fractionator (“Frac XII”) in Chambers County, Texas (third quarter of 2023);

During the second quarter of 2023, we completed the 400 MMcf/d expansion of our Acadian Gas System.

In addition, PDH 2, Frac XII and our Poseidon natural gas processing plant were placed into service in July 2023.

We have approximately $4.1 billion of growth capital projects scheduled to be completed by the first half of 2026, including the following major projects (including their respective scheduled completion dates):

natural gas gathering expansion projects in the Delaware and Midland Basins (2023 and 2024);

our Mentone II natural gas processing plant in the Delaware Basin (fourth quarter of 2023);

our Texas Western Products System, created by repurposing a portion of our Mid-America Pipeline System’s Rocky Mountain segment and adding westbound service to our Chaparral Pipeline business to transport refined products from the U.S.

Gulf Coast to markets in West Texas, New Mexico, Colorado and Utah (fourth quarter of 2023);

Gulf Coast to markets in West Texas, New Mexico, Colorado and Utah (fourth quarter of 2023 through second quarter of 2024);

our Mentone III natural gas processing plant in the Delaware Basin (first quarter of 2024);

2 unchanged sentences

the expansion of our Shin Oak NGL Pipeline (first half of 2025);

an Ethane Export Terminal located in Orange County, Texas (2025);

an expansion of our Morgan’s Point terminal to increase ethylene export capacity (2024 and 2025).

Based on information currently available, we expect our total capital investments for 2023, net of contributions from noncontrolling interests, to approximate $ 2.8 billion to $3.2 billion, which reflects growth capital investments of $ 2.4 billion to $2.8 billion and sustaining capital expenditures of $ 400 million.

an Ethane and Propane Export Terminal located in Orange County, Texas (second half of 2025 and first half of 2026);

an expansion of our Morgan’s Point terminal to increase ethylene export capacity (second half of 2024 and second half of 2025).

Based on information currently available, we expect our total capital investments for 2023, net of contributions from noncontrolling interests, to approximate $2.8  

billion to $3.2 billion, which reflects growth capital investments of $2.4  

billion to $2.8 billion and sustaining capital expenditures of $400  

These amounts do not include capital investments associated with our proposed deep-water offshore crude oil terminal (the Sea Port Oil Terminal, or “SPOT”), which remains subject to state and federal permitting, mitigation and related requirements.

7 unchanged sentences

The following table summarizes our capital investments for the periods indicated (dollars in millions):

For the Three Months

Ended March 31,

For the Six Months

Ended June 30,

Capital investments for property, plant and equipment:

8 unchanged sentences

Sustaining capital expenditures include the costs of major maintenance activities at our reaction-based plants, which are accounted for using the deferral method.

Amount for the three months ended March 31, 2022 represents net cash used for the acquisition of our Midland Basin System, which closed on February 17, 2022.

Comparison of First Quarter of 2023 with the First Quarter of 2022

In total, investments in growth capital projects increased $277 million quarter-to-quarter primarily due to the following:

higher investments in natural gas processing and gathering projects in the Permian Basin (e.g., construction of four natural gas processing plants and related gathering systems), which accounted for a $190 million increase;

higher investments in our Texas Western Products System, which accounted for a $29 million increase;

higher investments at our Chambers County complex (e.g., a quarter-to-quarter increase in spending on Frac XII, partially offset by a quarter-to-quarter decrease in spending on our PDH 2 facility), which accounted for an additional net $22 million increase.

Investments attributable to sustaining capital projects increased $27 million quarter-to-quarter primarily due to fluctuations in timing and costs of pipeline integrity and similar projects.

Amount for the six months ended June 30, 2022 represents net cash used for the acquisition of our Midland Basin System, which closed on February 17, 2022.

Comparison of Six Months Ended June 30, 2023 with Six Months Ended June 30, 2022

In total, investments in growth capital projects increased $663 million period-to-period primarily due to the following:

higher investments in natural gas processing and related pipeline projects in the Permian Basin (e.g., construction of four natural gas processing plants and related gathering systems), which accounted for a $425 million increase;

higher investments in our Texas Western Products System, which accounted for an $88 million increase;

higher investments in ethane, LPG and ethylene export expansion projects at our Gulf Coast terminals, which accounted for an $83 million increase;

higher investments in Frac XII at our Chambers County complex, which accounted for an additional $68 million increase.

Investments attributable to sustaining capital projects increased $39 million period-to-period primarily due to fluctuations in timing and costs of pipeline integrity and similar projects.

Critical Accounting Policies and Estimates

15 unchanged sentences

If EPO were to default on any of its Guaranteed Debt, the Partnership would be responsible for full and unconditional repayment of such obligations.

At March 31, 2023, the total amount of Guaranteed Debt was $29.1 billion, which was comprised of $26.3 billion of EPO’s senior notes, $2.3 billion of EPO’s junior subordinated notes, $300 million of short-term commercial paper notes and $239 million of related accrued interest.

At June 30, 2023, the total amount of Guaranteed Debt was $29.4 billion, which was comprised of $26.3 billion of EPO’s senior notes, $2.3 billion of EPO’s junior subordinated notes, $355 million of short-term commercial paper notes and $458 million of related accrued interest.

The Partnership’s guarantees of EPO’s senior note obligations, commercial paper notes and borrowings under bank credit facilities represent unsecured and unsubordinated obligations of the Partnership that rank equal in right of payment to all other existing or future unsecured and unsubordinated indebtedness of the Partnership.

6 unchanged sentences

In accordance with Rule 13.01 of Regulation S-X, the summarized financial information of the Obligor Group excludes the Obligor Group’s equity in income and investments in the consolidated subsidiaries of EPO that are not party to the guarantee obligations (the “Non-Obligor Subsidiaries”).

The total carrying value of the Obligor Group’s investments in the Non-Obligor Subsidiaries was $47.8 billion at March 31, 2023.

The Obligor Group’s equity in the earnings of the Non-Obligor Subsidiaries for the first quarter of 2023 was $1.4 billion.

The total carrying value of the Obligor Group’s investments in the Non-Obligor Subsidiaries was $47.3 billion at June 30, 2023.

The Obligor Group’s equity in the earnings of the Non-Obligor Subsidiaries for the six months ended June 30, 2023 was $2.7 billion.

Although the net assets and earnings of the Non-Obligor Subsidiaries are not directly available to the holders of the Guaranteed Debt to satisfy the repayment of such obligations, there are no significant restrictions on the ability of the Non-Obligor Subsidiaries to pay distributions or make loans to EPO or the Partnership.

8 unchanged sentences

Other noncurrent assets, excluding investments in Non-Obligor Subsidiaries

of $47.8 billion at March 31, 2023 and $47.5 billion at December 31, 2022

of $47.3 billion at June 30, 2023 and $47.5 billion at December 31, 2022

Selected liability information:

Current portion of Guaranteed Debt, including interest of $239 million at March 31, 2023 and

Current portion of Guaranteed Debt, including interest of $458 million at June 30, 2023 and

$426 million at December 31, 2022

7 unchanged sentences

The following table presents summarized income statement information for the combined Obligor Group for the periods indicated (dollars in millions):

For the Three

For the Twelve

3 unchanged sentences

Net income (loss) of Obligor Group excluding equity in earnings of Non-Obligor Subsidiaries of

$1.4 billion for the three months ended March 31, 2023 and

$2.7 billion for the six months ended June 30, 2023 and

$5.9 billion for the twelve months ended December 31, 2022

19 unchanged sentences

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, 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.

At June 30, 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.

For a summary of our portfolio of commodity derivative instruments outstanding, see Note 13 of the Notes to Unaudited Condensed Consolidated Financial Statements included under Part I, Item 1 of this quarterly report.

46 unchanged sentences

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 2. Management’s Discussion and Analysis