ENTERPRISE PRODUCTS PARTNERS L.P. 10-Q

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. General 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 and other instruments with similar characteristics. Substantially all of our derivatives are used for non-trading activities. We assess the risk associated with each of our derivative instrument portfolios using a sensitivity analysis model. This approach measures the change in fair value of the derivative instrument portfolio based on a hypothetical 10% change in the underlying interest rates or quoted market prices on a particular day. In addition to these variables, the fair value of each portfolio is influenced by changes in the notional amounts of the instruments outstanding. The sensitivity analysis approach does not reflect the impact that the same hypothetical price movement would have on the hedged exposures to which they relate. Therefore, the impact on the fair value of a derivative instrument resulting from a change in interest rates or quoted market prices (as applicable) would normally be offset by a corresponding gain or loss on the hedged debt instrument, inventory value or forecasted transaction assuming: • the derivative instrument functions effectively as a hedge of the underlying risk; • the derivative instrument is not closed out in advance of its expected term; and • the hedged forecasted transaction occurs within the expected time period. We routinely review the effectiveness of our derivative instrument portfolios in light of current market conditions. Accordingly, the nature and volume of our derivative instruments may change depending on the specific exposure being managed. Commodity Hedging Activities The price of energy commodities such as 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 June 30, 2025 , our predominant commodity hedging strategies consisted of (i) hedging anticipated future purchases and sales of commodity products associated with transportation, storage and blending activities, (ii) hedging natural gas processing margins, (iii) hedging the fair value of commodity products held in inventory and (iv) hedging anticipated future purchases of power for certain operations in Southeast Texas. For a summary of our portfolio of commodity derivative instruments outstanding, see Note 14 of the Notes to Unaudited Condensed Consolidated Financial Statements included under Part I, Item 1 of this quarterly report. Sensitivity Analysis The following tables show the effect of hypothetical price movements on the estimated fair values of our principal commodity derivative instrument portfolios at the dates indicated (dollars in millions). The fair value information presented in the sensitivity analysis tables excludes the impact of applying Chicago Mercantile Exchange (“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. 67 Table of Contents Natural gas marketing portfolio Portfolio Fair Value at Scenario Resulting Classification December 31, 2024 June 30, 2025 July 15, 2025 Fair value assuming no change in underlying commodity prices Asset (Liability) $ 5 $ 37 $ 32 Fair value assuming 10% increase in underlying commodity prices Asset (Liability) 4 31 25 Fair value assuming 10% decrease in underlying commodity prices Asset (Liability) 6 43 39 NGL, petrochemical and refined products marketing, natural gas processing and octane enhancement portfolio Portfolio Fair Value at Scenario Resulting Classification December 31, 2024 June 30, 2025 July 15, 2025 Fair value assuming no change in underlying commodity prices Asset (Liability) $ 61 $ (33) $ (13) Fair value assuming 10% increase in underlying commodity prices Asset (Liability) 24 (39) (25) Fair value assuming 10% decrease in underlying commodity prices Asset (Liability) 98 (27) (1) Crude oil marketing portfolio Portfolio Fair Value at Scenario Resulting Classification December 31, 2024 June 30, 2025 July 15, 2025 Fair value assuming no change in underlying commodity prices Asset (Liability) $ 19 $ 63 $ 36 Fair value assuming 10% increase in underlying commodity prices Asset (Liability) (79) (26) (25) Fair value assuming 10% decrease in underlying commodity prices Asset (Liability) 117 152 97 Commercial energy derivative portfolio Portfolio Fair Value at Scenario Resulting Classification December 31, 2024 June 30, 2025 July 15, 2025 Fair value assuming no change in underlying commodity prices Asset (Liability) $ (3) $ 2 $ 2 Fair value assuming 10% increase in underlying commodity prices Asset (Liability) 7 12 13 Fair value assuming 10% decrease in underlying commodity prices Asset (Liability) (13) (8) (9) Interest Rate Hedging Activities We may utilize interest rate swaps, forward-starting swaps, options to enter into forward-starting swaps (“swaptions”), treasury locks 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. As of the filing date of this quarterly report, we do not have any interest rate hedging instruments outstanding.