ENTERPRISE PRODUCTS PARTNERS L.P. 10-Q

ITEM 1. FINANCIAL STATEMENTS. EN TERPRISE PRODUCTS PARTNERS L.P. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in millions) September 30, 2023 December 31, 2022 ASSETS Current assets: Cash and cash equivalents $ 171 $ 76 Restricted cash 143 130 Accounts receivable – trade, net of allowance for credit losses of $ 49 at September 30, 2023 and $ 54 at December 31, 2022 6,923 6,964 Accounts receivable – related parties 5 11 Inventories (see Note 3) 3,345 2,554 Derivative assets (see Note 13) 409 469 Prepaid and other current assets 436 394 Total current assets 11,432 10,598 Property, plant and equipment, net (see Note 4) 45,340 44,401 Investments in unconsolidated affiliates (see Note 5) 2,337 2,352 Intangible assets, net (see Note 6) 3,821 3,965 Goodwill (see Note 6) 5,608 5,608 Other assets 1,266 1,184 Total assets $ 69,804 $ 68,108 LIABILITIES AND EQUITY Current liabilities: Current maturities of debt (see Note 7) $ 1,470 $ 1,744 Accounts payable – trade 962 743 Accounts payable – related parties 148 232 Accrued product payables 8,460 7,988 Accrued interest 237 426 Derivative liabilities (see Note 13) 427 354 Other current liabilities 771 778 Total current liabilities 12,475 12,265 Long-term debt (see Note 7) 27,446 26,551 Deferred tax liabilities (see Note 15) 605 600 Other long-term liabilities 1,007 941 Commitments and contingent liabilities (see Note 16) Redeemable preferred limited partner interests: (see Note 8) Series A cumulative convertible preferred units (“preferred units”) ( 50,412 units outstanding at September 30, 2023 and December 31, 2022 ) 49 49 Equity: (see Note 8) Partners’ equity: Common limited partner interests ( 2,171,879,003 units issued and outstanding at September 30, 2023 , 2,170,806,347 units issued and outstanding at December 31, 2022 ) 28,244 27,555 Treasury units, at cost ( 1,297 ) ( 1,297 ) Accumulated other comprehensive income 203 365 Total partners’ equity 27,150 26,623 Noncontrolling interests in consolidated subsidiaries 1,072 1,079 Total equity 28,222 27,702 Total liabilities, preferred units, and equity $ 69,804 $ 68,108 See Notes to Unaudited Condensed Consolidated Financial Statements. 2 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS (Dollars in millions, except per unit amounts) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Revenues: Third parties $ 11,980 $ 15,448 $ 35,049 $ 44,481 Related parties 18 20 44 55 Total revenues (see Note 9) 11,998 15,468 35,093 44,536 Costs and expenses: Operating costs and expenses: Third party and other costs 10,009 13,459 29,246 38,545 Related parties 357 353 1,014 1,005 Total operating costs and expenses 10,366 13,812 30,260 39,550 General and administrative costs: Third party and other costs 18 19 59 68 Related parties 41 36 113 111 Total general and administrative costs 59 55 172 179 Total costs and expenses (see Note 10) 10,425 13,867 30,432 39,729 Equity in income of unconsolidated affiliates 122 111 347 335 Operating income 1,695 1,712 5,008 5,142 Other income (expense): Interest expense ( 328 ) ( 309 ) ( 944 ) ( 937 ) Interest income 5 3 22 6 Other, net – 4 14 6 Total other expense, net ( 323 ) ( 302 ) ( 908 ) ( 925 ) Income before income taxes 1,372 1,410 4,100 4,217 Provision for income taxes (see Note 15) ( 22 ) ( 18 ) ( 45 ) ( 54 ) Net income 1,350 1,392 4,055 4,163 Net income attributable to noncontrolling interests ( 31 ) ( 31 ) ( 91 ) ( 93 ) Net income attributable to preferred units ( 1 ) ( 1 ) ( 3 ) ( 3 ) Net income attributable to common unitholders $ 1,318 $ 1,360 $ 3,961 $ 4,067 Earnings per unit: (see Note 11) Basic and diluted earnings per common unit $ 0.60 $ 0.62 $ 1.81 $ 1.85 See Notes to Unaudited Condensed Consolidated Financial Statements. 3 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (Dollars in millions) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Net income $ 1,350 $ 1,392 $ 4,055 $ 4,163 Other comprehensive income (loss): Cash flow hedges: (see Note 13) Commodity hedging derivative instruments: Changes in fair value of cash flow hedges ( 96 ) 186 ( 139 ) 126 Reclassificatio n of losses ( gains) to ne t income 33 9 ( 15 ) ( 54 ) Interest rate hedging derivative instruments: Changes in fair value of cash flow hedges – – ( 5 ) – Reclassification of losses (gains) to net income ( 2 ) 1 ( 3 ) 15 Total cash flow hedges ( 65 ) 196 ( 162 ) 87 Total other comprehens ive income (loss) ( 65 ) 196 ( 162 ) 87 Comprehensive income 1,285 1,588 3,893 4,250 Comprehensive income attributable to noncontrolling interests ( 31 ) ( 31 ) ( 91 ) ( 93 ) Comprehensive income attributable to preferred units ( 1 ) ( 1 ) ( 3 ) ( 3 ) Comprehensive income attributable to common unitholders $ 1,253 $ 1,556 $ 3,799 $ 4,154 See Notes to Unaudited Condensed Consolidated Financial Statements. 4 Table of Contents ENTERPRISE PRODUCT S PARTNERS L.P. UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (Dollars in millions) For the Nine Months Ended September 30, 2023 2022 Operating activities: Net income $ 4,055 $ 4,163 Reconciliation of net income to net cash flows provided by operating activities: Depreciation and accretion 1,388 1,336 Amortization of intangible assets 148 132 Amortization of major maintenance costs for reaction-based plants 48 38 Other amortization expense 158 169 Impairment of assets other than goodwill 28 48 Equity in income of unconsolidated affiliates ( 347 ) ( 335 ) Distributions received from unconsolidated affiliates attributable to earnings 330 329 Net losses (gains) attributable to asset sales and related matters ( 4 ) 3 Deferred income tax expense 5 24 Change in fair market value of derivative instruments 48 46 Non-cash expense related to long-term operating leases (see Note 16) 51 43 Net effect of changes in operating accounts (see Note 17) ( 706 ) ( 682 ) Other operating activities 1 – Net cash flows provided by operating activities 5,203 5,314 Investing activities: Capital expenditures ( 2,254 ) ( 1,203 ) Cash used for business combinations, net of cash received (See Note 17) – ( 3,204 ) Investments in unconsolidated affiliates ( 2 ) ( 1 ) Distributions received from unconsolidated affiliates attributable to the return of capital 37 82 Proceeds from asset sales and other matters 7 20 Other investing activities ( 8 ) ( 3 ) Cash used in investing activities ( 2,220 ) ( 4,309 ) Financing activities: Borrowings under debt agreements 57,685 64,482 Repayments of debt ( 57,062 ) ( 64,828 ) Debt issuance costs ( 17 ) ( 1 ) Monetization of interest rate derivative instruments 21 – Cash distributions paid to common unitholders (see Note 8) ( 3,215 ) ( 3,061 ) Cash payments made in connection with distribution equivalent rights ( 29 ) ( 26 ) Cash distributions paid to noncontrolling interests ( 121 ) ( 115 ) Cash contributions from noncontrolling interests 25 4 Repurchase of common units under 2019 Buyback Program ( 92 ) ( 107 ) Other financing activities ( 70 ) ( 63 ) Cas h used in financing ac tivities ( 2,875 ) ( 3,715 ) Net change in cash and cash equivalents, including restricted cash 108 ( 2,710 ) Cash and cash equivalents, including restricted cash, at beginning of period 206 2,965 Cash and cash equivalents, including restricted cash, at end of period $ 314 $ 255 See Notes to Unaudited Condensed Consolidated Financial Statements. 5 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED EQUITY FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 (Dollars in millions) Partners’ Equity Common Limited Partner Interests Treasury Units Accumulated Other Comprehensive Income (Loss) Noncontrolling Interests in Consolidated Subsidiaries Total For the Three Months Ended September 30, 2023 : Balance June 30, 2023 $ 27,980 $ ( 1,297 ) $ 268 $ 1,071 $ 28,022 Net income 1,318 – – 31 1,349 Cash distributions paid to common unitholders ( 1,086 ) – – – ( 1,086 ) Cash payments made in connection with distribution equivalent rights ( 10 ) – – – ( 10 ) Cash distributions paid to noncontrolling interests – – – ( 40 ) ( 40 ) Cash contributions from noncontrolling interests – – – 10 10 Amortization of fair value of equity-based awards 43 – – – 43 Cash flow hedges – – ( 65 ) – ( 65 ) Other, net ( 1 ) – – – ( 1 ) Balance, September 30, 2023 $ 28,244 $ ( 1,297 ) $ 203 $ 1,072 $ 28,222 Partners’ Equity Common Limited Partner Interests Treasury Units Accumulated Other Comprehensive Income (Loss) Noncontrolling Interests in Consolidated Subsidiaries Total For the Nine Months Ended September 30, 2023 : Balance, December 31, 2022 $ 27,555 $ ( 1,297 ) $ 365 $ 1,079 $ 27,702 Net income 3,961 – – 91 4,052 Cash distributions paid to common unitholders ( 3,215 ) – – – ( 3,215 ) Cash payments made in connection with distribution equivalent rights ( 29 ) – – – ( 29 ) Cash distributions paid to noncontrolling interests – – – ( 121 ) ( 121 ) Cash contributions from noncontrolling interests – – – 25 25 Repurchase and cancellation of common units under 2019 Buyback Program ( 92 ) – – – ( 92 ) Amortization of fair value of equity-based awards 128 – – – 128 Cash flow hedges – – ( 162 ) – ( 162 ) Other, net ( 64 ) – – ( 2 ) ( 66 ) Balance, September 30, 2023 $ 28,244 $ ( 1,297 ) $ 203 $ 1,072 $ 28,222 See Notes to Unaudited Condensed Consolidated Financial Statements. For information regarding Unit History and Accumulated Other Comprehensive Income (Loss), see Note 8. 6 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED EQUITY FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 (Dollars in millions) Partners’ Equity Common Limited Partner Interests Treasury Units Accumulated Other Comprehensive Income (Loss) Noncontrolling Interests in Consolidated Subsidiaries Total For the Three Months Ended September 30, 2022 : Balance, June 30, 2022 $ 27,003 $ ( 1,297 ) $ 177 $ 1,094 $ 26,977 Net income 1,360 – – 31 1,391 Cash distributions paid to common unitholders ( 1,035 ) – – – ( 1,035 ) Cash payments made in connection with distribution equivalent rights ( 9 ) – – – ( 9 ) Cash distributions paid to noncontrolling interests – – – ( 33 ) ( 33 ) Repurchase and cancellation of common units under 2019 Buyback Program ( 72 ) – – – ( 72 ) Amortization of fair value of equity-based awards 39 – – – 39 Cash flow hedges – – 196 – 196 Other, net ( 14 ) – – – ( 14 ) Balance, September 30, 2022 $ 27,272 $ ( 1,297 ) $ 373 $ 1,092 $ 27,440 Partners’ Equity Common Limited Partner Interests Treasury Units Accumulated Other Comprehensive Income (Loss) Noncontrolling Interests in Consolidated Subsidiaries Total For the Nine Months Ended September 30, 2022 : Balance, December 31, 2021 $ 26,340 $ ( 1,297 ) $ 286 $ 1,110 $ 26,439 Net income 4,067 – – 93 4,160 Cash distributions paid to common unitholders ( 3,061 ) – – – ( 3,061 ) Cash payments made in connection with distribution equivalent rights ( 26 ) – – – ( 26 ) Cash distributions paid to noncontrolling interests – – – ( 115 ) ( 115 ) Cash contributions from noncontrolling interests – – – 4 4 Repurchase and cancellation of common units under 2019 Buyback Program ( 107 ) – – – ( 107 ) Amortization of fair value of equity-based awards 118 – – – 118 Cash flow hedges – – 87 – 87 Other, net ( 59 ) – – – ( 59 ) Balance, September 30, 2022 $ 27,272 $ ( 1,297 ) $ 373 $ 1,092 $ 27,440 See Notes to Unaudited Condensed Consolidated Financial Statements. For information regarding Unit History and Accumulated Other Comprehensive Income (Loss), see Note 8. 7 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS KEY REFERENCES USED IN THESE NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Unless the context requires otherwise, references to “we,” “us” or “our” within these Notes to Unaudited Condensed Consolidated Financial Statements are intended to mean the business and operations of Enterprise Products Partners L.P. and its consolidated subsidiaries. References to the “Partnership” or “Enterprise” mean Enterprise Products Partners L.P. on a standalone basis. References to “EPO” mean Enterprise Products Operating LLC, which is an indirect wholly owned subsidiary of the Partnership, and its consolidated subsidiaries, through which the Partnership conducts its business. We are managed by our general partner, Enterprise Products Holdings LLC (“Enterprise GP”), which is a wholly owned subsidiary of Dan Duncan LLC, a privately held Texas limited liability company. 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 of Enterprise GP (the “Board”); (ii) Richard H. Bachmann, who is also a director and Vice Chairman of the Board; and (iii) W. Randall Fowler, who is also a director and the Co-Chief Executive Officer and Chief Financial Officer of Enterprise GP. Ms. Duncan Williams and Messrs. Bachmann and Fowler also currently serve as managers of Dan Duncan LLC. References to “EPCO” mean Enterprise Products Company, a privately held Texas corporation, and its privately held affiliates. The outstanding voting capital stock of EPCO is owned by a voting trust, the current trustees (“EPCO Trustees”) of which are: (i) Ms. Duncan Williams, who serves as Chairman of EPCO; (ii) Mr. Bachmann, who serves as the President and Chief Executive Officer of EPCO; and (iii) Mr. Fowler, who serves as an Executive Vice President and the Chief Financial Officer of EPCO. Ms. Duncan Williams and Messrs. Bachmann and Fowler also currently serve as directors of EPCO. 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, 2023. With the exception of per unit amounts, or as noted within the context of each disclosure, the dollar amounts presented in the tabular data within these disclosures are stated in millions of dollars. 8 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 1. Partnership Organization and Operations We are a publicly traded Delaware limited partnership, the common units of which are listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “EPD.” Our preferred units are not publicly traded. We were formed in April 1998 to own and operate certain natural gas liquids (“NGLs”) related businesses of EPCO and are a leading North American provider of midstream energy services to producers and consumers of natural gas, NGLs, crude oil, petrochemicals and refined products. We are owned by our limited partners (preferred and common unitholders) from an economic perspective. Enterprise GP, which owns a non-economic general partner interest in us, manages our Partnership. We conduct substantially all of our business operations through EPO and its consolidated subsidiaries. Our fully integrated, midstream energy asset network (or “value chain”) links producers of natural gas, NGLs and crude oil from some of the largest supply basins in the United States (“U.S.”), Canada and the Gulf of Mexico with domestic consumers and international markets. Our midstream energy operations include: • natural gas gathering, treating, processing, transportation and storage; • 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; • propylene production facilities (including propane dehydrogenation (“PDH”) facilities), butane isomerization, octane enhancement, isobutane dehydrogenation (“iBDH”) and high purity isobutylene (“HPIB”) production facilities; • petrochemical and refined products transportation, storage, and marine terminals (including those used to export ethylene and polymer grade propylene (“PGP”)); and • a marine transportation business that operates on key U.S. inland and intracoastal waterway systems. Like many publicly traded partnerships, we have no employees. All of our management, administrative and operating functions are performed by employees of EPCO pursuant to an administrative services agreement (the “ASA”) or by other service providers. See Note 14 for information regarding related party matters. Our results of operations for the nine months ended September 30, 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. Although we believe the disclosures in these financial statements are adequate and make the information presented not misleading, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). These Unaudited Condensed Consolidated Financial Statements and Notes thereto should be read in conjunction with the Audited Consolidated Financial Statements and Notes thereto included in our annual report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”) filed with the SEC on February 28, 2023. 9 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 2. Summary of Significant Accounting Policies Apart from those matters described in this footnote, there have been no updates to our significant accounting policies since those reported under Note 2 of the 2022 Form 10-K. Allowance for Credit Losses We estimate our allowance for credit losses at each reporting date using a current expected credit loss model, which requires the measurement of expected credit losses for financial assets (e.g., accounts receivable) based on historical experience with customers, current economic conditions, and reasonable and supportable forecasts. We may also increase the allowance for credit losses in response to the specific identification of customers involved in bankruptcy proceedings and similar financial difficulties. The following table presents our allowance for credit losses activity since December 31, 2022: Allowance for credit losses, December 31, 2022 $ 54 Charged to costs and expenses – Charged to other accounts – Deductions ( 5 ) Allowance for credit losses, September 30, 2023 $ 49 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, 2023 December 31, 2022 Cash and cash equivalents $ 171 $ 76 Restricted cash 143 130 Total cash, cash equivalents and restricted cash shown in the Unaudited Condensed Statements of Consolidated Cash Flows $ 314 $ 206 Restricted cash primarily represents amounts held in segregated bank accounts by our clearing brokers as margin in support of our commodity derivative instruments portfolio and related physical purchases and sales of natural gas, NGLs, crude oil, refined products and power. Additional cash may be restricted to maintain our commodity derivative instruments portfolio as prices fluctuate or margin requirements change. See Note 13 for information regarding our derivative instruments and hedging activities. Note 3. Inventories Our inventory amounts by product type were as follows at the dates indicated: September 30, 2023 December 31, 2022 NGLs $ 2,550 $ 1,689 Petrochemicals and refined products 400 430 Crude oil 388 411 Natural gas 7 24 Total $ 3,345 $ 2,554 10 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Due to fluctuating commodity prices, we recognize lower of cost or net realizable value adjustments when the carrying value of our available-for-sale inventories exceeds their net realizable value. The following table presents our total cost of sales amounts and lower of cost or net realizable value adjustments for the periods indicated: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Cost of sales (1) $ 8,786 $ 12,319 $ 25,796 $ 35,325 Lower of cost or net realizable value adjustments recognized in cost of sales 8 11 17 18 (1) Cost of sales is a component of “Operating costs and expenses” as presented on our Unaudited Condensed Statements of Consolidated Operations. Fluctuations in these amounts are primarily due to changes in energy commodity prices and sales volumes associated with our marketing activities. Note 4. Property, Plant and Equipment The historical costs of our property, plant and equipment and related balances were as follows at the dates indicated: Estimated Useful Life in Years September 30, 2023 December 31, 2022 Plants, pipelines and facilities (1)(5) 3 - 45 $ 57,337 $ 54,396 Underground and other storage facilities (2)(6) 5 - 40 4,374 4,329 Transportation equipment (3) 3 - 10 235 222 Marine vessels (4) 15 - 30 934 921 Land 398 387 Construction in progress 2,006 2,867 Subtotal 65,284 63,122 Less accumulated depreciation 19,995 18,800 Subtotal property, plant and equipment, net 45,289 44,322 Capitalized major maintenance costs for reaction-based plants, net of accumulated amortization (7) 51 79 Property, plant and equipment, net $ 45,340 $ 44,401 (1) Plants, pipelines and facilities include distillation-based and reaction-based plants; NGL, natural gas, crude oil and petrochemical and refined products pipelines; terminal loading and unloading facilities; buildings; office furniture and equipment; laboratory and shop equipment and related assets. (2) Underground and other storage facilities include underground product storage caverns; above ground storage tanks; water wells and related assets. (3) Transportation equipment includes tractor-trailer tank trucks and other vehicles and similar assets used in our operations. (4) Marine vessels include tow boats, barges and related equipment used in our marine transportation business. (5) In general, the estimated useful lives of major assets within this category are: distillation-based and reaction-based plants, 20 - 35 years; pipelines and related equipment, 5 - 45 years; terminal facilities, 10 - 35 years; buildings, 20 - 40 years; office furniture and equipment, 3 - 20 years; and laboratory and shop equipment, 5 - 35 years. (6) In general, the estimated useful lives of assets within this category are: underground storage facilities, 5 - 35 years; storage tanks, 10 - 40 years; and water wells, 5 - 35 years. (7) For reaction-based plants, we use the deferral method when accounting for major maintenance activities. Under the deferral method, major maintenance costs are capitalized and amortized over the period until the next major overhaul project. On a weighted-average basis, the expected remaining amortization period for these costs is 0.9 years. Property, plant and equipment at September 30, 2023 and December 31, 2022 includes $ 107 million and $ 117 million, respectively, of asset retirement costs capitalized as an increase in the associated long-lived asset. 11 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The following table presents information regarding our asset retirement obligations, or AROs, since December 31, 2022: ARO liability balance, December 31, 2022 $ 234 Liabilities incurred (1) 2 Revisions in estimated cash flows (2) ( 11 ) Liabilities settled (3) ( 11 ) Accretion expense (4) 9 ARO liability balance, September 30, 2023 $ 223 (1) Represents the initial recognition of estimated ARO liabilities during period. (2) Represents subsequent adjustments to estimated ARO liabilities during period. (3) Represents cash payments to settle ARO liabilities during period. (4) 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 $ 223 million total ARO liability recorded at September 30, 2023 , $ 7 million was reflected as a current liability and $ 216 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, 2023 2022 2023 2022 Depreciation expense (1) $ 476 $ 446 $ 1,379 $ 1,329 Capitalized interest (2) 17 22 86 60 (1) Depreciation expense is a component of “Costs and expenses” as presented on our Unaudited Condensed Statements of Consolidated Operations. (2) We capitalize interest costs incurred on funds used to construct property, plant and equipment while the asset is in its construction phase. The capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset’s estimated useful life as a component of depreciation expense. When capitalized interest is recorded, it reduces interest expense from what it would be otherwise. Note 5. Investments in Unconsolidated Affiliates The following table presents our investments in unconsolidated affiliates by business segment at the dates indicated. We account for these investments using the equity method. September 30, 2023 December 31, 2022 NGL Pipelines & Services $ 618 $ 640 Crude Oil Pipelines & Services 1,684 1,677 Natural Gas Pipelines & Services 32 32 Petrochemical & Refined Products Services 3 3 Total $ 2,337 $ 2,352 The following table presents our equity in income of unconsolidated affiliates by business segment for the periods indicated: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 NGL Pipelines & Services $ 32 $ 39 $ 101 $ 109 Crude Oil Pipelines & Services 89 70 241 221 Natural Gas Pipelines & Services 1 2 4 4 Petrochemical & Refined Products Services – – 1 1 Total $ 122 $ 111 $ 347 $ 335 12 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 6. Intangible Assets and Goodwill Identifiable Intangible Assets The following table summarizes our intangible assets by business segment at the dates indicated: September 30, 2023 December 31, 2022 Gross Value Accumulated Amortization Carrying Value Gross Value Accumulated Amortization Carrying Value NGL Pipelines & Services: Customer relationship intangibles $ 449 $ ( 260 ) $ 189 $ 449 $ ( 249 ) $ 200 Contract-based intangibles 752 ( 102 ) 650 749 ( 84 ) 665 Segment total 1,201 ( 362 ) 839 1,198 ( 333 ) 865 Crude Oil Pipelines & Services: Customer relationship intangibles 2,195 ( 504 ) 1,691 2,195 ( 431 ) 1,764 Contract-based intangibles 283 ( 274 ) 9 283 ( 271 ) 12 Segment total 2,478 ( 778 ) 1,700 2,478 ( 702 ) 1,776 Natural Gas Pipelines & Services: Customer relationship intangibles 1,350 ( 615 ) 735 1,350 ( 588 ) 762 Contract-based intangibles 640 ( 205 ) 435 639 ( 195 ) 444 Segment total 1,990 ( 820 ) 1,170 1,989 ( 783 ) 1,206 Petrochemical & Refined Products Services: Customer relationship intangibles 181 ( 85 ) 96 181 ( 80 ) 101 Contract-based intangibles 45 ( 29 ) 16 45 ( 28 ) 17 Segment total 226 ( 114 ) 112 226 ( 108 ) 118 Total intangible assets $ 5,895 $ ( 2,074 ) $ 3,821 $ 5,891 $ ( 1,926 ) $ 3,965 The following table presents the amortization expense of our intangible assets by business segment for the periods indicated: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 NGL Pipelines & Services $ 10 $ 10 $ 29 $ 27 Crude Oil Pipelines & Services 28 21 76 62 Natural Gas Pipelines & Services 12 13 37 38 Petrochemical & Refined Products Services 2 2 6 5 Total $ 52 $ 46 $ 148 $ 132 The following table presents our forecast of amortization expense associated with existing intangible assets for the periods indicated: Remainder of 2023 2024 2025 2026 2027 $ 55 $ 222 $ 231 $ 237 $ 236 Goodwill Goodwill represents the excess of the purchase price of an acquired business over the amounts assigned to assets acquired and liabilities assumed in the transaction. There has been no change in our goodwill amounts since those reported in our 2022 Form 10-K. 13 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 7. Debt Obligations The following table presents our consolidated debt obligations (arranged by company and maturity date) at the dates indicated: September 30, 2023 December 31, 2022 EPO senior debt obligations: Commercial Paper Notes, variable-rates $ 620 $ 495 Senior Notes HH, 3.35 % fixed-rate, due March 2023 – 1,250 Senior Notes JJ, 3.90 % fixed-rate, due February 2024 850 850 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 1,150 1,150 Senior Notes FFF, 5.05 % fixed-rate, due January 2026 750 – Senior Notes PP, 3.70 % fixed-rate, due February 2026 875 875 Senior Notes SS, 3.95 % fixed-rate, due February 2027 575 575 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 1,000 1,000 Senior Notes YY, 3.125 % fixed-rate, due July 2029 1,250 1,250 Senior Notes AAA, 2.80 % fixed-rate, due January 2030 1,250 1,250 Senior Notes GGG, 5.35 % fixed-rate, due January 2033 1,000 – Senior Notes D, 6.875 % fixed-rate, due March 2033 500 500 Senior Notes H, 6.65 % fixed-rate, due October 2034 350 350 Senior Notes J, 5.75 % fixed-rate, due March 2035 250 250 Senior Notes W, 7.55 % fixed-rate, due April 2038 400 400 Senior Notes R, 6.125 % fixed-rate, due October 2039 600 600 Senior Notes Z, 6.45 % fixed-rate, due September 2040 600 600 Senior Notes BB, 5.95 % fixed-rate, due February 2041 750 750 Senior Notes DD, 5.70 % fixed-rate, due February 2042 600 600 Senior Notes EE, 4.85 % fixed-rate, due August 2042 750 750 Senior Notes GG, 4.45 % fixed-rate, due February 2043 1,100 1,100 Senior Notes II, 4.85 % fixed-rate, due March 2044 1,400 1,400 Senior Notes KK, 5.10 % fixed-rate, due February 2045 1,150 1,150 Senior Notes QQ, 4.90 % fixed-rate, due May 2046 975 975 Senior Notes UU, 4.25 % fixed-rate, due February 2048 1,250 1,250 Senior Notes XX, 4.80 % fixed-rate, due February 2049 1,250 1,250 Senior Notes ZZ, 4.20 % fixed-rate, due January 2050 1,250 1,250 Senior Notes BBB, 3.70 % fixed-rate, due January 2051 1,000 1,000 Senior Notes DDD, 3.20 % fixed-rate, due February 2052 1,000 1,000 Senior Notes EEE, 3.30 % fixed-rate, due February 2053 1,000 1,000 Senior Notes NN, 4.95 % fixed-rate, due October 2054 400 400 Senior Notes CCC, 3.95 % fixed-rate, due January 2060 1,000 1,000 Total principal amount of senior debt obligations 26,895 26,270 EPO Junior Subordinated Notes C, variable-rate, due June 2067 (3)(7) 232 232 EPO Junior Subordinated Notes D, variable-rate, due August 2077 (4)(7) 350 350 EPO Junior Subordinated Notes E, fixed/variable-rate, due August 2077 (5)(7) 1,000 1,000 EPO Junior Subordinated Notes F, fixed/variable-rate, due February 2078 (6)(7) 700 700 TEPPCO Junior Subordinated Notes, variable-rate, due June 2067 (3)(7) 14 14 Total principal amount of senior and junior debt obligations 29,191 28,566 Other, non-principal amounts ( 275 ) ( 271 ) Less current maturities of debt ( 1,470 ) ( 1,744 ) Total long-term debt $ 27,446 $ 26,551 (1) Under the terms of the 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). (2) Under the terms of the 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). (3) Variable rate is reset quarterly and based on 3-month Chicago Mercantile Exchange (“CME”) Term Secured Overnight Financing Rate (“SOFR”) plus (a) a 0.26161% tenor spread adjustment and (b) 2.778 %. (4) Variable rate is reset quarterly and based on 3-month CME Term SOFR plus (a) a 0.26161% tenor spread adjustment and (b) 2.986 %. (5) Fixed rate of 5.250 % through August 15, 2027; thereafter, a variable rate reset quarterly and based on 3-month CME Term SOFR plus (a) a 0.26161% tenor spread adjustment and (b) 3.033 %. (6) Fixed rate of 5.375 % through February 14, 2028; thereafter, a variable rate reset quarterly and based on 3-month CME Term SOFR plus (a) a 0.26161% tenor spread adjustment and (b) 2.57 %. (7) Effective July 1, 2023, all series of our junior subordinated notes subject to a variable interest rate replaced the 3-month London Interbank Offered Rate (“LIBOR”) with 3-month CME Term SOFR plus a 0.26161% tenor spread adjustment. See discussion below in “Variable Interest Rates” regarding the LIBOR replacement and LIBOR replacement rate. 14 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS References to “TEPPCO” mean TEPPCO Partners, L.P. prior to its merger with one of our wholly owned subsidiaries in October 2009. 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, 2023: Range of Interest Rates Paid Weighted-Average Interest Rate Paid Commercial Paper Notes 4.59 % to 5.56 % 5.34 % EPO Junior Subordinated Notes C and TEPPCO Junior Subordinated Notes 7.54 % to 8.45 % 7.95 % EPO Junior Subordinated Notes D 7.63 % to 8.62 % 8.10 % 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) 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. In July 2017, the Financial Conduct Authority in the U.K. announced a desire to phase out LIBOR as a benchmark by the end of June 2023. 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 were subject to a variable rate (as defined by the applicable agreement) based on three-month LIBOR (in each case, a “LIBOR Rate”) through June 30, 2023, replaced the applicable LIBOR Rate with a variable rate based on the three-month CME Term SOFR 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 CME Term SOFR 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, 2023 for the next five years, and in total thereafter: Scheduled Maturities of Debt Total Remainder of 2023 2024 2025 2026 2027 Thereafter Commercial Paper Notes $ 620 $ 620 $ – $ – $ – $ – $ – Senior Notes 26,275 – 850 1,150 1,625 575 22,075 Junior Subordinated Notes 2,296 – – – – – 2,296 Total $ 29,191 $ 620 $ 850 $ 1,150 $ 1,625 $ 575 $ 24,371 15 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 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 September 30, 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. 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 March 2025. 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 September 30, 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. 16 Table of Contents 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, 2023, EPO had $ 152 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, 2023. Parent-Subsidiary Guarantor Relationships The Partnership acts as guarantor of the consolidated debt obligations of EPO, with the exception of the remaining debt obligations of TEPPCO. If EPO were to default on any of its guaranteed debt, the Partnership would be responsible for full and unconditional repayment of such obligations. Note 8. Capital Accounts Common Limited Partner Interests The following table summarizes changes in the number of our common units outstanding since December 31, 2022: Common units outstanding at December 31, 2022 2,170,806,347 Common unit repurchases under 2019 Buyback Program ( 682,589 ) Common units issued in connection with the vesting of phantom unit awards, net 4,364,301 Other 20,892 Common units outstanding at March 31, 2023 2,174,508,951 Common unit repurchases under 2019 Buyback Program ( 2,910,121 ) Common units issued in connection with the vesting of phantom unit awards, net 153,502 Common units outstanding at June 30, 2023 2,171,752,332 Common units issued in connection with the vesting of phantom unit awards, net 126,671 Common units outstanding at September 30, 2023 2,171,879,003 Registration Statements We have a universal shelf registration statement on file with the SEC which allows the Partnership and EPO (each on a standalone basis) to issue an unlimited amount of equity and debt securities, respectively. In addition, the Partnership has a registration statement on file with the SEC covering the issuance of up to $ 2.5 billion of its common units in amounts, at prices and on terms based on market conditions and other factors at the time of such offerings (referred to as the Partnership’s at-the-market (“ATM”) program). The Partnership did not issue any common units under its ATM program during the nine months ended September 30, 2023 . The Partnership’s capacity to issue additional common units under the ATM program remains at $ 2.5 billion as of September 30, 2023. 17 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS We may issue additional equity and debt securities to assist us in meeting our future liquidity requirements, including those related to capital investments. Common Unit Repurchases Under 2019 Buyback Program 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 2019 Buyback Program authorizes the Partnership to repurchase its common units from time to time, including through open market purchases and negotiated transactions. No time limit has been set for completion of the program, and it may be suspended or discontinued at any time. The Partnership elected not to repurchase common units during the three months ended September 30, 2023. During the nine months ended September 30, 2023, the Partnership repurchased 3,592,710 common units under the 2019 Buyback Program through open market purchases . The total cost of these repurchases, including commissions and fees, was $ 92 million. 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. Common units repurchased under the 2019 Buyback Program are immediately cancelled upon acquisition. At September 30, 2023, the remaining available capacity under the 2019 Buyback Program was $ 1.2 billion. Common Units Issued in Connection With the Vesting of Phantom Unit Awards After taking into account tax withholding requirements, the Partnership issued 4,644,474 new common units to employees in connection with the vesting of phantom unit awards during the nine months ended September 30, 2023. See Note 12 for information regarding our phantom unit awards. Common Units Delivered Under DRIP and EUPP The Partnership has registration statements on file with the SEC in connection with its distribution reinvestment plan (“DRIP”) and employee unit purchase plan (“EUPP”). In July 2019, the Partnership announced that, beginning with the quarterly distribution payment paid in August 2019, it would use common units purchased on the open market, rather than issuing new common units, to satisfy its delivery obligations under the DRIP and EUPP. 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, 2023 , agents of the Partnership purchased 4,986,549 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. 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, 2023. Preferred Units There were 50,412 of our Series A Cumulative Convertible Preferred Units (“preferred units”) outstanding at September 30, 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, 2023, the Partnership made quarterly cash distributions to its preferred unitholders of $ 3 million. 18 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Accumulated Other Comprehensive Income (Loss) The following tables present the components of accumulated other comprehensive income (loss) as reported on our Unaudited Condensed Consolidated Balance Sheets at the dates indicated: Cash Flow Hedges Commodity Derivative Instruments Interest Rate Derivative Instruments Other Total Accumulated Other Comprehensive Income (Loss), December 31, 2022 $ 171 $ 192 $ 2 $ 365 Other comprehensive income (loss) for period, before reclassifications ( 139 ) ( 5 ) – ( 144 ) Reclassification of losses (gains) to net income during period ( 15 ) ( 3 ) – ( 18 ) Total other comprehensive income (loss) for period ( 154 ) ( 8 ) – ( 162 ) Accumulated Other Comprehensive Income (Loss), September 30, 2023 $ 17 $ 184 $ 2 $ 203 Cash Flow Hedges Commodity Derivative Instruments Interest Rate Derivative Instruments Other Total Accumulated Other Comprehensive Income (Loss), December 31, 2021 $ 137 $ 147 $ 2 $ 286 Other comprehensive income (loss) for period, before reclassifications 126 – – 126 Reclassification of losses (gains) to net income during period ( 54 ) 15 – ( 39 ) Total other comprehensive income (loss) for period 72 15 – 87 Accumulated Other Comprehensive Income (Loss), September 30, 2022 $ 209 $ 162 $ 2 $ 373 The following table presents reclassifications of (income) loss out of accumulated other comprehensive income into net income during the periods indicated: For the Three Months Ended September 30, For the Nine Months Ended September 30, Losses (gains) on cash flow hedges: Location 2023 2022 2023 2022 Interest rate derivatives Interest expense $ ( 2 ) $ 1 $ ( 3 ) $ 15 Commodity derivatives Revenue 58 35 7 ( 12 ) Commodity derivatives Operating costs and expenses ( 25 ) ( 26 ) ( 22 ) ( 42 ) Total $ 31 $ 10 $ ( 18 ) $ ( 39 ) For information regarding our interest rate and commodity derivative instruments, see Note 13. Cash Distributions On October 5, 2023, we announced that the Board declared a quarterly cash distribution of $ 0.50 per common unit, or $ 2.00 per common unit on an annualized basis, to be paid to the Partnership’s common unitholders with respect to the third quarter of 2023. The quarterly distribution is payable on November 14, 2023 to unitholders of record as of the close of business on October 31, 2023. The total amount to be paid is $ 1.1 billion, which includes $ 10 million for distribution equivalent rights (“DERs”) on phantom unit awards. The payment of quarterly cash distributions is subject to management’s evaluation of our financial condition, results of operations and cash flows in connection with such payments and Board approval. Management will evaluate any future increases in cash distributions on a quarterly basis. 19 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 9. Revenues We classify our revenues into sales of products and midstream services. Product sales relate primarily to our various marketing activities whereas midstream services represent our other integrated businesses (i.e., gathering, processing, transportation, fractionation, storage and terminaling). The following table presents our revenues by business segment, and further by revenue type, for the periods indicated: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 NGL Pipelines & Services: Sales of NGLs and related products $ 3,021 $ 5,519 $ 10,325 $ 16,139 Segment midstream services: Natural gas processing and fractionation 344 340 944 1,143 Transportation 286 250 798 708 Storage and terminals 106 128 308 381 Total segment midstream services 736 718 2,050 2,232 Total NGL Pipelines & Services 3,757 6,237 12,375 18,371 Crude Oil Pipelines & Services: Sales of crude oil 5,068 4,455 12,999 13,202 Segment midstream services: Transportation 194 162 549 650 Storage and terminals 103 107 302 329 Total segment midstream services 297 269 851 979 Total Crude Oil Pipelines & Services 5,365 4,724 13,850 14,181 Natural Gas Pipelines & Services: Sales of natural gas 537 1,556 1,828 3,795 Segment midstream services: Transportation 347 330 1,046 901 Total segment midstream services 347 330 1,046 901 Total Natural Gas Pipelines & Services 884 1,886 2,874 4,696 Petrochemical & Refined Products Services: Sales of petrochemicals and refined products 1,647 2,346 5,052 6,470 Segment midstream services: Fractionation and isomerization 94 56 208 172 Transportation, including marine logistics 171 149 486 426 Storage and terminals 80 70 248 220 Total segment midstream services 345 275 942 818 Total Petrochemical & Refined Products Services 1,992 2,621 5,994 7,288 Total consolidated revenues $ 11,998 $ 15,468 $ 35,093 $ 44,536 Substantially all of our revenues are derived from contracts with customers as defined within Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers . 20 Table of Contents 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, 2023: Contract Asset Location Balance Unbilled revenue (current amount) Prepaid and other current assets $ 12 Total $ 12 Contract Liability Location Balance Deferred revenue (current amount) Other current liabilities $ 159 Deferred revenue (noncurrent) Other long-term liabilities 315 Total $ 474 The following table presents significant changes in our unbilled revenue and deferred revenue balances for the nine months ended September 30, 2023: Unbilled Revenue Deferred Revenue Balance at December 31, 2022 $ 6 $ 501 Amount included in opening balance transferred to other accounts during period (1) ( 6 ) ( 234 ) Amount recorded during period (2) 59 676 Amounts recorded during period transferred to other accounts (1) ( 47 ) ( 457 ) Other changes – ( 12 ) Balance at September 30, 2023 $ 12 $ 474 (1) Unbilled revenues are transferred to accounts receivable once we have an unconditional right to consideration from the customer. Deferred revenues are recognized as revenue upon satisfaction of our performance obligation to the customer. (2) Unbilled revenue represents revenue that has been recognized upon satisfaction of a performance obligation, but cannot be contractually invoiced (or billed) to the customer at the balance sheet date until a future period. Deferred revenue is recorded when payment is received from a customer prior to our satisfaction of the associated performance obligation. Remaining Performance Obligations 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, 2023. Period Fixed Consideration Three Months Ended December 31, 2023 $ 1,036 One Year Ended December 31, 2024 3,815 One Year Ended December 31, 2025 3,388 One Year Ended December 31, 2026 3,130 One Year Ended December 31, 2027 2,884 Thereafter – 11,465 Total $ 25,718 21 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 10. Business Segments and Related Information Our operations are reported under four business segments: (i) NGL Pipelines & Services, (ii) Crude Oil Pipelines & Services, (iii) Natural Gas Pipelines & Services and (iv) Petrochemical & Refined Products Services. Our business segments are generally organized and managed according to the types of services rendered (or technologies employed) and products produced and/or sold. Financial information regarding these segments is evaluated regularly by our co-chief operating decision makers in deciding how to allocate resources and in assessing our operating and financial performance. The co-principal executive officers of our general partner have been identified as our co-chief operating decision makers. While these two officers evaluate results in a number of different ways, the business segment structure is the primary basis for which the allocation of resources and financial results are assessed. The following information summarizes the assets and operations of each business segment: • Our NGL Pipelines & Services business segment includes our natural gas processing and related NGL marketing activities, NGL pipelines, NGL fractionation facilities, NGL and related product storage facilities, and NGL marine terminals . • Our Crude Oil Pipelines & Services business segment includes our crude oil pipelines, crude oil storage and marine terminals, and related crude oil marketing activities. • Our Natural Gas Pipelines & Services business segment includes our natural gas pipeline systems that provide for the gathering, treating and transportation of natural gas. This segment also includes our natural gas marketing activities. • Our Petrochemical & Refined Products Services business segment includes our (i) propylene production facilities, which include propylene fractionation units and PDH facilities, and related pipelines and marketing activities, (ii) butane isomerization complex and related deisobutanizer operations, (iii) octane enhancement, iBDH and HPIB production facilities, (iv) refined products pipelines, terminals and related marketing activities, (v) ethylene export terminal and related operations; and (vi) marine transportation business . Segment Gross Operating Margin We evaluate segment performance based on our financial measure of gross operating margin. Gross operating margin is an important performance measure of the core profitability of our operations and forms the basis of our internal financial reporting. We believe that investors benefit from having access to the same financial measures that our management uses in evaluating segment results. Gross operating margin is exclusive of other income and expense transactions, income taxes, the cumulative effect of changes in accounting principles and extraordinary charges. Gross operating margin is presented on a 100% basis before any allocation of earnings to noncontrolling interests. Our calculation of gross operating margin may or may not be comparable to similarly titled measures used by other companies. 22 Table of Contents 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. The GAAP financial measure most directly comparable to total segment gross operating margin is operating income. For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Operating income $ 1,695 $ 1,712 $ 5,008 $ 5,142 Adjustments to reconcile operating income to total segment gross operating margin (addition or subtraction indicated by sign): Depreciation, amortization and accretion expense in operating costs and expenses (1) 566 524 1,644 1,569 Asset impairment charges in operating costs and expenses 11 29 27 48 Net losses (gains) attributable to asset sales and related matters in operating costs and expenses – 1 ( 4 ) 3 General and administrative costs 59 55 172 179 Non-refundable payments received from shippers attributable to make-up rights (2) 12 39 36 112 Subsequent recognition of revenues attributable to make-up rights (3) ( 23 ) ( 18 ) ( 68 ) ( 63 ) Total segment gross operating margin $ 2,320 $ 2,342 $ 6,815 $ 6,990 (1) Excludes amortization of major maintenance costs for reaction-based plants, which are a component of gross operating margin. (2) Since make-up rights entail a future performance obligation by the pipeline to the shipper, these receipts are recorded as deferred revenue for GAAP purposes; however, these receipts are included in gross operating margin in the period of receipt since they are nonrefundable to the shipper. (3) As deferred revenues attributable to make-up rights are subsequently recognized as revenue under GAAP, gross operating margin must be adjusted to remove such amounts to prevent duplication since the associated non-refundable payments were previously included in gross operating margin. Gross operating margin by segment is calculated by subtracting segment operating costs and expenses from segment revenues, with both segment totals reflecting the adjustments noted in the preceding table, as applicable, and before the elimination of intercompany transactions. The following table presents gross operating margin by segment for the periods indicated: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Gross operating margin by segment: NGL Pipelines & Services $ 1,196 $ 1,296 $ 3,518 $ 3,848 Crude Oil Pipelines & Services 432 415 1,251 1,237 Natural Gas Pipelines & Services 239 278 791 727 Petrochemical & Refined Products Services 453 353 1,255 1,178 Total segment gross operating margin $ 2,320 $ 2,342 $ 6,815 $ 6,990 23 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Summarized Segment Financial Information Information by business segment, together with reconciliations to amounts presented on, or included in, our Unaudited Condensed Statements of Consolidated Operations, is presented in the following table: Reportable Business Segments NGL Pipelines & Services Crude Oil Pipelines & Services Natural Gas Pipelines & Services Petrochemical & Refined Products Services Adjustments and Eliminations Consolidated Total Revenues from third parties: Three months ended September 30, 2023 $ 3,754 $ 5,354 $ 880 $ 1,992 $ – $ 11,980 Three months ended September 30, 2022 6,232 4,720 1,875 2,621 – 15,448 Nine months ended September 30, 2023 12,367 13,825 2,863 5,994 – 35,049 Nine months ended September 30, 2022 18,358 14,163 4,672 7,288 – 44,481 Revenues from related parties: Three months ended September 30, 2023 3 11 4 – – 18 Three months ended September 30, 2022 5 4 11 – – 20 Nine months ended September 30, 2023 8 25 11 – – 44 Nine months ended September 30, 2022 13 18 24 – – 55 Intersegment and intrasegment revenues: Three months ended September 30, 2023 12,367 16,343 133 4,307 ( 33,150 ) – Three months ended September 30, 2022 14,666 13,456 262 5,934 ( 34,318 ) – Nine months ended September 30, 2023 34,347 41,139 386 13,108 ( 88,980 ) – Nine months ended September 30, 2022 52,079 35,327 683 14,446 ( 102,535 ) – Total revenues: Three months ended September 30, 2023 16,124 21,708 1,017 6,299 ( 33,150 ) 11,998 Three months ended September 30, 2022 20,903 18,180 2,148 8,555 ( 34,318 ) 15,468 Nine months ended September 30, 2023 46,722 54,989 3,260 19,102 ( 88,980 ) 35,093 Nine months ended September 30, 2022 70,450 49,508 5,379 21,734 ( 102,535 ) 44,536 Equity in income of unconsolidated affiliates: Three months ended September 30, 2023 32 89 1 – – 122 Three months ended September 30, 2022 39 70 2 – – 111 Nine months ended September 30, 2023 101 241 4 1 – 347 Nine months ended September 30, 2022 109 221 4 1 – 335 Segment revenues include intersegment and intrasegment transactions, which are generally based on transactions made at market-based rates. Our consolidated revenues reflect the elimination of intercompany transactions. Substantially all of our consolidated revenues are earned in the U.S. and derived from a wide customer base. Information by business segment, together with reconciliations to our Unaudited Condensed Consolidated Balance Sheet totals, is presented in the following table: Reportable Business Segments NGL Pipelines & Services Crude Oil Pipelines & Services Natural Gas Pipelines & Services Petrochemical & Refined Products Services Adjustments and Eliminations Consolidated Total Property, plant and equipment, net: (see Note 4) At September 30, 2023 $ 17,468 $ 6,671 $ 9,821 $ 9,374 $ 2,006 $ 45,340 At December 31, 2022 17,283 6,760 9,721 7,770 2,867 44,401 Investments in unconsolidated affiliates: (see Note 5) At September 30, 2023 618 1,684 32 3 – 2,337 At December 31, 2022 640 1,677 32 3 – 2,352 Intangible assets, net: (see Note 6) At September 30, 2023 839 1,700 1,170 112 – 3,821 At December 31, 2022 865 1,776 1,206 118 – 3,965 Goodwill: (see Note 6) At September 30, 2023 2,811 1,841 – 956 – 5,608 At December 31, 2022 2,811 1,841 – 956 – 5,608 Segment assets: At September 30, 2023 21,736 11,896 11,023 10,445 2,006 57,106 At December 31, 2022 21,599 12,054 10,959 8,847 2,867 56,326 24 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Supplemental Revenue and Expense Information The following table presents additional information regarding our consolidated revenues and costs and expenses for the periods indicated: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Consolidated revenues: NGL Pipelines & Services $ 3,757 $ 6,237 $ 12,375 $ 18,371 Crude Oil Pipelines & Services 5,365 4,724 13,850 14,181 Natural Gas Pipelines & Services 884 1,886 2,874 4,696 Petrochemical & Refined Products Services 1,992 2,621 5,994 7,288 Total consolidated revenues $ 11,998 $ 15,468 $ 35,093 $ 44,536 Consolidated costs and expenses Operating costs and expenses: Cost of sales $ 8,786 $ 12,319 $ 25,796 $ 35,325 Other operating costs and expenses (1) 986 926 2,749 2,567 Depreciation, amortization and accretion 583 537 1,692 1,607 Asset impairment charges 11 29 27 48 Ne t losses (gains) attributable to asset sales and related matters – 1 ( 4 ) 3 General and administrative costs 59 55 172 179 Total consolidated costs and expenses $ 10,425 $ 13,867 $ 30,432 $ 39,729 (1) 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. Fluctuations in our product sales revenues and cost of sales amounts are explained in large part by changes in energy commodity prices. In general, higher energy commodity prices result in an increase in our revenues attributable to product sales; however, these higher commodity prices would also be expected to increase the associated cost of sales as purchase costs are higher. The same type of relationship would be true in the case of lower energy commodity sales prices and purchase costs. 25 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 11. Earnings Per Unit The following table presents our calculation of basic and diluted earnings per common unit for the periods indicated: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 BASIC EARNINGS PER COMMON UNIT Net income attributable to common unitholders $ 1,318 $ 1,360 $ 3,961 $ 4,067 Earnings allocated to phantom unit awards (1) ( 12 ) ( 11 ) ( 36 ) ( 34 ) Net income allocated to common unitholders $ 1,306 $ 1,349 $ 3,925 $ 4,033 Basic weighted-average number of common units outstanding 2,172 2,179 2,173 2,179 Basic earnings per common unit $ 0.60 $ 0.62 $ 1.81 $ 1.85 DILUTED EARNINGS PER COMMON UNIT Net income attributable to common unitholders $ 1,318 $ 1,360 $ 3,961 $ 4,067 Net income attributable to preferred units 1 1 3 3 Net income attributable to limited partners $ 1,319 $ 1,361 $ 3,964 $ 4,070 Diluted weighted-average number of units outstanding: Distribution-bearing common units 2,172 2,179 2,173 2,179 Phantom units (2) 20 18 20 19 Preferred units (2) 2 2 2 2 Total 2,194 2,199 2,195 2,200 Diluted earnings per common unit $ 0.60 $ 0.62 $ 1.81 $ 1.85 (1) Phantom units are considered participating securities for purposes of computing basic earnings per unit. See Note 12 for information regarding the phantom units. (2) 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. See Note 12 for information regarding phantom unit awards. See Note 8 for information regarding preferred units. Note 12. Equity-Based Awards An allocated portion of the fair value of EPCO’s equity-based awards is charged to us under the ASA. The following table summarizes compensation expense we recognized in connection with equity-based awards for the periods indicated: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Equity-classified awards: Phantom unit awards $ 42 $ 39 $ 126 $ 117 Profits interest awards 1 1 3 3 Total $ 43 $ 40 $ 129 $ 120 The fair value of equity-classified awards is amortized to earnings over the requisite service or vesting period. Equity-classified awards are expected to result in the issuance of the Partnership’s common units upon vesting. 26 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Phantom Unit Awards Subject to customary forfeiture provisions, phantom unit awards allow recipients to acquire the Partnership’s common units once a defined vesting period expires (at no cost to the recipient apart from fulfilling required service and other conditions). The following table presents phantom unit award activity for the period indicated: Number of Units Weighted- Average Grant Date Fair Value per Unit (1) Phantom unit awards at December 31, 2022 17,982,945 $ 23.94 Granted (2) 8,904,445 $ 25.80 Vested ( 6,761,823 ) $ 24.81 Forfeited ( 459,279 ) $ 24.52 Phantom unit awards at September 30, 2023 19,666,288 $ 24.47 (1) Determined by dividing the aggregate grant date fair value of awards (before an allowance for forfeitures) by the number of awards issued. (2) The aggregate grant date fair value of phantom unit awards issued during 2023 was $ 230 million based on a grant date market price of the Partnership’s common units ranging from $ 25.80 to $ 26.70 per unit. An estimated annual forfeiture rate of 2.0 % was applied to these awards. Each phantom unit award includes a DER, which entitles the participant to nonforfeitable cash payments equal to the product of the number of phantom unit awards outstanding for the participant and the cash distribution per common unit paid by the Partnership to its common unitholders. Cash payments made in connection with DERs are charged to partners’ equity when the phantom unit award is expected to result in the issuance of common units; otherwise, such amounts are expensed. The following table presents supplemental information regarding phantom unit awards for the periods indicated: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Cash payments made in connection with DERs $ 10 $ 9 $ 29 $ 26 Total intrinsic value of phantom unit awards that vested during period 5 6 181 155 For the EPCO group of companies, the unrecognized compensation cost associated with phantom unit awards was $ 225 million at September 30, 2023, of which our share of such cost is currently estimated to be $ 184 million. Due to the graded vesting provisions of these awards, we expect to recognize our share of the unrecognized compensation cost for these awards over a weighted-average period of 2.1 years. 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 profits interest awards (or Class B limited partner interests) in one or more of the Employee Partnerships. At September 30, 2023 , our share of the total unrecognized compensation cost related to the Employee Partnerships was $ 1 million , which we expect to recognize over a weighted-average period of less than one   year. On November 6, 2023, the partners of both Employee Partnerships amended their respective Employee Partnership’s limited partnership agreement to provide that the Class B limited partner interests therein will vest on the earliest of (i) December 3, 2027, (ii) the first date on or after November 6, 2023 for which the closing sale price of the Partnership’s common units on the NYSE is equal to or greater than $ 29.02 per unit (subject to certain adjustments), (iii) a change of control, or (iv) dissolution of such Employee Partnership. Note 13. Hedging Activities and Fair Value Measurements In the normal course of our business operations, we are exposed to certain risks, including changes in interest rates and commodity prices. In order to manage risks associated with assets, liabilities and certain anticipated future transactions, we use derivative instruments such as futures, forward contracts, swaps, options and other instruments with similar characteristics. Substantially all of our derivatives are used for non-trading activities. 27 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Interest Rate Hedging Activities We may utilize interest rate swaps, forward-starting swaps, options to enter into forward-starting swaps (“swaptions”), and similar derivative instruments to manage our exposure to changes in interest rates charged on borrowings under certain consolidated debt agreements. This strategy may be used in controlling our overall cost of capital associated with such borrowings. 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, 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, 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 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 plant thermal reduction, 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. 28 Table of Contents 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, 2023 (volume measures as noted): Volume (1) Accounting Derivative Purpose Current (2) Long-Term (2) Treatment Derivatives designated as hedging instruments: Natural gas processing: Forecasted natural gas purchases for plant thermal reduction (billion cubic feet (“Bcf”)) 0.3 n/a Cash flow hedge Forecasted sales of natural gas (Bcf) 4.6 n/a Cash flow hedge Forecasted sales of NGLs (MMBbls) 0.2 n/a Cash flow hedge Octane enhancement: Forecasted sales of octane enhancement products (MMBbls) 4.7 1.2 Cash flow hedge Natural gas marketing: Forecasted purchases of natural gas (Bcf) 2.0 n/a Cash flow hedge Forecasted sales of natural gas (Bcf) 1.7 n/a Cash flow hedge Natural gas storage inventory management activities (Bcf) 0.8 n/a Fair value hedge NGL marketing: Forecasted purchases of NGLs and related hydrocarbon products (MMBbls) 82.2 7.6 Cash flow hedge Forecasted sales of NGLs and related hydrocarbon products (MMBbls) 82.2 10.6 Cash flow hedge Refined products marketing: Forecasted purchases of refined products (MMBbls) 0.3 n/a Cash flow hedge Forecasted sales of refined products (MMBbls) 0.3 n/a Cash flow hedge Crude oil marketing: Forecasted purchases of crude oil (MMBbls) 10.9 n/a Cash flow hedge Forecasted sales of crude oil (MMBbls) 13.0 1.1 Cash flow hedge Petrochemical marketing: Forecasted purchases of petrochemical products (MMBbls) 4.4 n/a Cash flow hedge Forecasted sales of petrochemical products (MMBbls) 0.5 n/a Cash flow hedge Commercial energy: Forecasted purchases of power related to asset operations (terawatt hours (“TWh”)) 1.4 1.9 Cash flow hedge Derivatives not designated as hedging instruments: Natural gas risk management activities (Bcf) (3) 21.0 1.6 Mark-to-market NGL risk management activities (MMBbls) (3) 22.0 5.4 Mark-to-market Refined products risk management activities (MMBbls) (3) 3.1 n/a Mark-to-market Crude oil risk management activities (MMBbls) (3) 91.1 46.8 Mark-to-market (1) 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. (2) 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 2024 and December 2025, respectively. (3) 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 $ 2 million and $ 12 million at September 30, 2023 and December 31, 2022, respectively. 29 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Tabular Presentation of Fair Value Amounts, and Gains and Losses on Derivative Instruments and Related Hedged Items The following table provides a balance sheet overview of our derivative assets and liabilities at the dates indicated: Asset Derivatives Liability Derivatives September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments Interest derivatives Current assets $ – Current assets $ 26 Current liabilities $ – Current liabilities $ – Commodity derivatives Current assets $ 136 Current assets $ 422 Current liabilities $ 148 Current liabilities $ 316 Commodity derivatives Other assets 42 Other assets 43 Other liabilities 52 Other liabilities 58 Total commodity derivatives 178 465 200 374 Total derivatives designated as hedging instruments $ 178 $ 491 $ 200 $ 374 Derivatives not designated as hedging instruments Commodity derivatives Current assets $ 273 Current assets $ 21 Current liabilities $ 279 Current liabilities $ 38 Commodity derivatives Other assets 82 Other assets – Other liabilities 80 Other liabilities – Total commodity derivatives 355 21 359 38 Total derivatives not designated as hedging instruments $ 355 $ 21 $ 359 $ 38 Certain of our commodity derivative instruments are subject to master netting arrangements or similar agreements. The following tables present our derivative instruments subject to such arrangements at the dates indicated: Offsetting of Financial Assets and Derivative Assets Gross Amounts of Recognized Assets Gross Amounts Offset in the Balance Sheet Amounts of Assets Presented in the Balance Sheet Gross Amounts Not Offset in the Balance Sheet Amounts That Would Have Been Presented On Net Basis Financial Instruments Cash Collateral Received Cash Collateral Paid (i) (ii) (iii) = (i) – (ii) (iv) (v) = (iii) + (iv) As of September 30, 2023: Commodity derivatives $ 533 $ – $ 533 $ ( 532 ) $ – $ – $ 1 As of December 31, 2022: Interest rate derivatives $ 26 $ – $ 26 $ – $ – $ – $ 26 Commodity derivatives 486 – 486 ( 411 ) – ( 74 ) 1 Offsetting of Financial Liabilities and Derivative Liabilities Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Balance Sheet Amounts of Liabilities Presented in the Balance Sheet Gross Amounts Not Offset in the Balance Sheet Amounts That Would Have Been Presented On Net Basis Financial Instruments Cash Collateral Received Cash Collateral Paid (i) (ii) (iii) = (i) – (ii) (iv) (v) = (iii) + (iv) As of September 30, 2023: Commodity derivatives $ 559 $ – $ 559 $ ( 532 ) $ – $ ( 27 ) $ – As of December 31, 2022: Commodity derivatives $ 412 $ – $ 412 $ ( 411 ) $ – $ – $ 1 30 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Derivative assets and liabilities recorded on our Unaudited Condensed Consolidated Balance Sheets are presented on a gross-basis and determined at the individual transaction level. The tabular presentation above provides a means for comparing the gross amount of derivative assets and liabilities, excluding associated accounts payable and receivable, to the net amount that would likely be receivable or payable under a default scenario based on the existence of rights of offset in the respective derivative agreements. Any cash collateral paid or received is reflected in these tables, but only to the extent that it represents variation margins. Any amounts associated with derivative prepayments or initial margins that are not influenced by the derivative asset or liability amounts or those that are determined solely on their volumetric notional amounts are excluded from these tables. The following tables present the effect of our derivative instruments designated as fair value hedges on our Unaudited Condensed Statements of Consolidated Operations for the periods indicated: Derivatives in Fair Value Hedging Relationships Location Gain (Loss) Recognized in Income on Derivative For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Commodity derivatives Revenue $ 1 $ 8 $ 5 $ ( 116 ) Total $ 1 $ 8 $ 5 $ ( 116 ) Derivatives in Fair Value Hedging Relationships Location Gain (Loss) Recognized in Income on Hedged Item For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Commodity derivatives Revenue $ ( 7 ) $ 41 $ ( 5 ) $ 66 Total $ ( 7 ) $ 41 $ ( 5 ) $ 66 The gain (loss) corresponding to the hedge ineffectiveness on the fair value hedges was negligible for all periods presented. The remaining gain (loss) for each period presented is primarily attributable to prompt-to-forward month price differentials that were excluded from the assessment of hedge effectiveness. The following tables present the effect of our derivative instruments designated as cash flow hedges on our Unaudited Condensed Statements of Consolidated Operations and Unaudited Condensed Statements of Consolidated Comprehensive Income for the periods indicated: Derivatives in Cash Flow Hedging Relationships Change in Value Recognized in Other Comprehensive Income (Loss) on Derivative For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Interest rate derivatives $ – $ – $ ( 5 ) $ – Commodity derivatives – Revenue (1) ( 129 ) 176 ( 160 ) 78 Commodity derivatives – Operating costs and expenses (1) 33 10 21 48 Total $ ( 96 ) $ 186 $ ( 144 ) $ 126 (1) 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. Derivatives in Cash Flow Hedging Relationships Location Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) to Income For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Interest rate derivatives Interest expense $ 2 $ ( 1 ) $ 3 $ ( 15 ) Commodity derivatives Revenue ( 58 ) ( 35 ) ( 7 ) 12 Commodity derivatives Operating costs and expenses 25 26 22 42 Total $ ( 31 ) $ ( 10 ) $ 18 $ 39 31 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 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 $ 18 million of net gains attributable to commodity derivative instruments from accumulated other comprehensive income to earnings, with $ 35 million as an increase in revenue and $ 17 million as an increase in operating costs and expenses. The following table presents the effect of our derivative instruments not designated as hedging instruments on our Unaudited Condensed Statements of Consolidated Operations for the periods indicated: Derivatives Not Designated as Hedging Instruments Location Gain (Loss) Recognized in Income on Derivative For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Commodity derivatives Revenue $ ( 27 ) $ 32 $ 190 $ 77 Commodity derivatives Operating costs and expenses – 7 – 14 Total $ ( 27 ) $ 39 $ 190 $ 91 The $ 190 million net gain recognized for the nine months ended September 30, 2023 (as noted in the preceding table) from derivatives not designated as hedging instruments consists of $ 240 million of net realized gains and $ 50 million of net unrealized mark-to-market losses attributable to commodity derivatives. Fair Value Measurements The following tables set forth, by level within the Level 1, 2 and 3 fair value hierarchy, the carrying values of our financial assets and liabilities at the dates indicated. These assets and liabilities are measured on a recurring basis and are classified based on the lowest level of input used to estimate their fair value. Our assessment of the relative significance of such inputs requires judgment. The values for commodity derivatives are presented before and after the application of CME Rule 814, which deems that financial instruments cleared by the CME are settled daily in connection with variation margin payments. As a result of this exchange rule, CME-related derivatives are considered to have no fair value at the balance sheet date for financial reporting purposes; however, the derivatives remain outstanding and subject to future commodity price fluctuations until they are settled in accordance with their contractual terms. Derivative transactions cleared on exchanges other than the CME (e.g., the Intercontinental Exchange or ICE) continue to be reported on a gross basis. 32 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS At September 30, 2023 Fair Value Measurements Using Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Financial assets: Commodity derivatives: Value before application of CME Rule 814 $ 391 $ 403 $ – $ 794 Impact of CME Rule 814 ( 46 ) ( 215 ) – ( 261 ) Total commodity derivatives 345 188 – 533 Total $ 345 $ 188 $ – $ 533 Financial liabilities: Commodity derivatives: Value before application of CME Rule 814 $ 447 $ 455 $ – $ 902 Impact of CME Rule 814 ( 115 ) ( 228 ) – ( 343 ) Total commodity derivatives 332 227 – 559 Total $ 332 $ 227 $ – $ 559 At December 31, 2022 Fair Value Measurements Using Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Financial assets: Interest rate derivatives: $ – $ 26 $ – $ 26 Commodity derivatives: Value before application of CME Rule 814 166 1,170 – 1,336 Impact of CME Rule 814 ( 161 ) ( 689 ) – ( 850 ) Total commodity derivatives 5 481 – 486 Total $ 5 $ 507 $ – $ 512 Financial liabilities: Commodity derivatives: Value before application of CME Rule 814 $ 95 $ 1,118 $ – $ 1,213 Impact of CME Rule 814 ( 90 ) ( 711 ) – ( 801 ) Total commodity derivatives 5 407 – 412 Total $ 5 $ 407 $ – $ 412 In the aggregate, the fair value of our commodity hedging portfolios at September 30, 2023 was a net derivative liability of $ 108   million prior to the impact of CME Rule 814. Financial assets and liabilities recorded on the balance sheet at September 30, 2023 using significant unobservable inputs (Level 3) are not material to the Unaudited Condensed Consolidated Financial Statements. 33 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Other Fair Value Information 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 $ 24.5 billion and $ 24.2 billion at September 30, 2023 and December 31, 2022, respectively. The aggregate carrying value of these debt obligations was $ 28.0 billion and $ 27.5 billion at September 30, 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. Changes in market rates of interest affect the fair value of our fixed-rate debt. The carrying values of our variable-rate long-term debt obligations approximate their fair values since the associated interest rates are market-based. We do not have any long-term investments in debt or equity securities recorded at fair value. Note 14. Related Party Transactions The following table summarizes our related party transactions for the periods indicated: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Revenues – related parties: Unconsolidated affiliates $ 18 $ 20 $ 44 $ 55 Costs and expenses – related parties: EPCO and its privately held affiliates $ 347 $ 334 $ 992 $ 940 Unconsolidated affiliates 51 55 135 176 Total $ 398 $ 389 $ 1,127 $ 1,116 The following table summarizes our related party accounts receivable and accounts payable balances at the dates indicated: September 30, 2023 December 31, 2022 Accounts receivable - related parties: EPCO and its privately held affiliates $ – $ 1 Unconsolidated affiliates 5 10 Total $ 5 $ 11 Accounts payable - related parties: EPCO and its privately held affiliates $ 134 $ 221 Unconsolidated affiliates 14 11 Total $ 148 $ 232 We believe that the terms and provisions of our related party agreements are fair to us; however, such agreements and transactions may not be as favorable to us as we could have obtained from unaffiliated third parties. Relationship with EPCO and Affiliates 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, 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 Percentage of Common Units Outstanding 702,197,607 common units 32.3 % 34 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 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 September 30, 2023. These credit facilities contain customary and other events of default, including defaults by us and other affiliates of EPCO. An event of default, followed by a foreclosure on the pledged collateral, could ultimately result in a change in ownership of these units and affect the market price of the Partnership’s common units. The Partnership and Enterprise GP are both separate legal entities apart from each other and apart from EPCO and its other affiliates, with assets and liabilities that are also separate from those of EPCO and its other affiliates. 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, 2023 and 2022, we paid EPCO and its privately held affiliates cash distributions totaling $ 1.0 billion and $ 955 million, respectively. We have no employees. All of our administrative and operating functions are provided either by employees of EPCO (pursuant to the ASA) or by other service providers. We and our general partner are parties to the ASA. The following table presents our related party costs and expenses attributable to the ASA with EPCO for the periods indicated: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Operating costs and expenses $ 305 $ 295 $ 873 $ 821 General and administrative expenses 36 34 102 106 Total costs and expenses $ 341 $ 329 $ 975 $ 927 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, 2023 and 2022 , 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, 2023 and 2022, we recognized $ 10 million of related party operating lease expense in connection with these office space leases. Note 15. Income Taxes 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 three and nine months ended September 30, 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, 2023 2022 2023 2022 Current portion of income tax provision: Federal $ ( 1 ) $ ( 1 ) $ ( 11 ) $ ( 1 ) State ( 8 ) ( 9 ) ( 29 ) ( 26 ) Foreign – – – ( 3 ) Total current portion ( 9 ) ( 10 ) ( 40 ) ( 30 ) Deferred portion of income tax provision: Federal ( 4 ) ( 6 ) – ( 19 ) State ( 9 ) ( 2 ) ( 5 ) ( 5 ) Total deferred portion ( 13 ) ( 8 ) ( 5 ) ( 24 ) Total provision for income taxes $ ( 22 ) $ ( 18 ) $ ( 45 ) $ ( 54 ) 35 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS A reconciliation of the provision for income taxes with amounts determined by applying the statutory U.S. federal income tax rate to income before income taxes is as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Pre-Tax Net Book Income (“NBI”) $ 1,372 $ 1,410 $ 4,100 $ 4,217 Texas Margin Tax (1) ( 17 ) ( 10 ) ( 33 ) ( 29 ) State income tax provision, net of federal benefit – – ( 1 ) ( 1 ) Federal income tax provision computed by applying the federal statutory rate to NBI of corporate entities ( 5 ) ( 4 ) ( 11 ) ( 11 ) Other – ( 4 ) – ( 13 ) Provision for income taxes $ ( 22 ) $ ( 18 ) $ ( 45 ) $ ( 54 ) Effective income tax rate ( 1.6 )% ( 1.3 )% ( 1.1 )% ( 1.3 )% (1) Although the Texas Margin Tax is not considered a state income tax, it has the characteristics of an income tax since it is determined by applying a tax rate to a base that considers our Texas-sourced revenues and expenses. The following table presents the significant components of deferred tax assets and deferred tax liabilities at the dates indicated: September 30, December 31, 2023 2022 Deferred tax liabilities: Attributable to investment in OTA $ 432 $ 406 Attributable to property, plant and equipment 137 133 Attributable to investments in other entities 5 5 Other 59 60 Total deferred tax liabilities 633 604 Deferred tax assets: Net operating loss carryovers (1) 46 22 Temporary differences related to Texas Margin Tax 4 4 Total deferred tax assets 50 26 Valuation allowance 22 22 Total deferred tax assets, net of valuation allowance 28 4 Total net deferred tax liabilities $ 605 $ 600 (1) The loss amount presented as of September 30, 2023 has an indefinite carryover period. All losses are subject to limitations on their utilization. 36 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 16. Commitments and Contingent Liabilities Litigation As part of our normal business activities, we may be named as defendants in legal proceedings, including those arising from regulatory and environmental matters. Although we are insured against various risks to the extent we believe it is prudent, there is no assurance that the nature and amount of such insurance will be adequate, in every case, to fully indemnify us against losses arising from future legal proceedings. We will vigorously defend the Partnership in litigation matters. There were no accruals for litigation contingencies at September 30, 2023 and December 31, 2022, respectively. Contractual Obligations Scheduled Maturities of Debt We have long-term and short-term payment obligations under debt agreements. In total, the principal amount of our consolidated debt obligations were $ 29.2 billion and $ 28.6 billion at September 30, 2023 and December 31, 2022, respectively. See Note 7 for additional information regarding our scheduled future maturities of debt principal. 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, 2023: Asset Category ROU Asset Carrying Value (1) Lease Liability Carrying Value (2) Weighted- Average Remaining Term Weighted- Average Discount Rate (3) Storage and pipeline facilities $ 206 $ 206 9 years 4.1 % Transportation equipment 15 17 4 years 4.2 % Office and warehouse space 154 188 13 years 3.0 % Total $ 375 $ 411 (1) Right of use (“ROU”) asset amounts are a component of “ Other assets ” on our Unaudited Condensed Consolidated Balance Sheet. (2) At September 30, 2023, lease liabilities of $ 73 million and $ 338 million were included within “ Other current liabilities ” and “ Other long-term liabilities ,” respectively. (3) The discount rate for each category of assets represents the weighted average of either (i) the implicit rate applicable to the underlying leases (where determinable) or (ii) our incremental borrowing rate adjusted for collateralization (if the implicit rate is not determinable). In general, the discount rates are based on either information available at the lease commencement date or January 1, 2019 for leases existing at the adoption date for ASC 842, Leases . The following table disaggregates our total operating lease expense for the periods indicated : For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Long-term operating leases: Fixed lease expense: Non-cash lease expense (amortization of ROU assets) $ 18 $ 16 $ 51 $ 43 Related accretion expense on lease liability balances 4 3 11 9 Total fixed lease expense 22 19 62 52 Variable lease expense 3 3 9 4 Subtotal operating lease expense 25 22 71 56 Short-term operating leases 30 25 82 65 Total operating lease expense $ 55 $ 47 $ 153 $ 121 37 Table of Contents ENTERPRISE PRODUCTS PARTNERS L.P. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Cash payments attributable to operating lease liabilities were $ 21 million and $ 19 million for the three months ended September 30, 2023 and 2022, respectively. For the nine months ended September 30, 2023 and 2022, cash paid for operating lease liabilities was $ 62 million and $ 47 million, respectively. Operating lease income for each of the three months ended September 30, 2023 and 2022 was $ 4 million. For the nine months ended September 30, 2023 and 2022 , operating lease income was $ 12 million and $ 10 million, respectively. Purchase Obligations Our consolidated purchase obligations at September 30, 2023 did not differ materially from those reported in our 2022 Form 10-K. Note 17. 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, 2023 2022 Decrease (increase) in: Accounts receivable – trade $ 36 $ 365 Accounts receivable – related parties 4 ( 9 ) Inventories ( 766 ) ( 475 ) Prepaid and other current assets ( 665 ) 272 Other assets 31 54 Increase (decrease) in: Accounts payable – trade 67 ( 134 ) Accounts payable – related parties ( 84 ) ( 12 ) Accrued product payables 457 ( 216 ) Accrued interest ( 189 ) ( 233 ) Other current liabilities 467 ( 220 ) Other long-term liabilities ( 64 ) ( 74 ) Net effect of changes in operating accounts $ ( 706 ) $ ( 682 ) Cash payments for interest, net of $ 86 and $ 60 capitalized during the nine months ended September 30, 2023 and 2022 , respectively $ 1,123 $ 1,141 Cash payments for federal and state income taxes $ 22 $ – We incurred liabilities for construction in progress that had not been paid at September 30, 2023 and December 31, 2022 of $ 371 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. 38 Table of Contents