ENTERPRISE PRODUCTS PARTNERS L.P.
UNAUDITED CONDENSED CONSOLIDATED
BALANCE SHEETS
(Dollars in millions)
|
|
March 31,
2017
|
|
|
December 31,
2016
|
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
62.4
|
|
|
$
|
63.1
|
|
Restricted cash
|
|
|
44.7
|
|
|
|
354.5
|
|
Accounts receivable – trade, net of allowance for doubtful accounts
of $12.3 at March 31, 2017 and $11.3 at December 31, 2016
|
|
|
3,152.8
|
|
|
|
3,329.5
|
|
Accounts receivable – related parties
|
|
|
1.6
|
|
|
|
1.1
|
|
Inventories
|
|
|
1,922.0
|
|
|
|
1,770.5
|
|
Derivative assets (see Note 12)
|
|
|
40.4
|
|
|
|
541.4
|
|
Prepaid and other current assets
|
|
|
417.6
|
|
|
|
468.1
|
|
Total current assets
|
|
|
5,641.5
|
|
|
|
6,528.2
|
|
Property, plant and equipment, net
|
|
|
33,556.1
|
|
|
|
33,292.5
|
|
Investments in unconsolidated affiliates
|
|
|
2,671.4
|
|
|
|
2,677.3
|
|
Intangible assets, net of accumulated amortization of $1,444.1 at
March 31, 2017 and $1,403.1 at December 31, 2016
(see Note 6)
|
|
|
3,823.1
|
|
|
|
3,864.1
|
|
Goodwill
(see Note 6)
|
|
|
5,745.2
|
|
|
|
5,745.2
|
|
Other assets
|
|
|
92.2
|
|
|
|
86.7
|
|
Total assets
|
|
$
|
51,529.5
|
|
|
$
|
52,194.0
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Current maturities of debt (see Note 7)
|
|
$
|
2,300.0
|
|
|
$
|
2,576.8
|
|
Accounts payable – trade
|
|
|
526.1
|
|
|
|
397.7
|
|
Accounts payable – related parties
|
|
|
50.1
|
|
|
|
105.1
|
|
Accrued product payables
|
|
|
3,618.2
|
|
|
|
3,613.7
|
|
Accrued interest
|
|
|
202.8
|
|
|
|
340.8
|
|
Derivative liabilities (see Note 12)
|
|
|
43.8
|
|
|
|
737.7
|
|
Other current liabilities
|
|
|
307.0
|
|
|
|
478.7
|
|
Total current liabilities
|
|
|
7,048.0
|
|
|
|
8,250.5
|
|
Long-term debt
(see Note 7)
|
|
|
21,123.0
|
|
|
|
21,120.9
|
|
Deferred tax liabilities
|
|
|
52.6
|
|
|
|
52.7
|
|
Other long-term liabilities
|
|
|
505.9
|
|
|
|
503.9
|
|
Commitments and contingencies
(see
Note 14)
|
|
|
|
|
|
|
|
|
Equity:
(see Note 8)
|
|
|
|
|
|
|
|
|
Partners' equity:
|
|
|
|
|
|
|
|
|
Limited partners:
|
|
|
|
|
|
|
|
|
Common units (2,136,371,658 units outstanding at March 31, 2017
and 2,117,588,414 units outstanding at December 31, 2016)
|
|
|
22,695.5
|
|
|
|
22,327.0
|
|
Accumulated other comprehensive loss
|
|
|
(116.2
|
)
|
|
|
(280.0
|
)
|
Total partners' equity
|
|
|
22,579.3
|
|
|
|
22,047.0
|
|
Noncontrolling interests
|
|
|
220.7
|
|
|
|
219.0
|
|
Total equity
|
|
|
22,800.0
|
|
|
|
22,266.0
|
|
Total liabilities and equity
|
|
$
|
51,529.5
|
|
|
$
|
52,194.0
|
|
See Notes to Unaudited Condensed Consolidated Financial Statements.
ENTERPRISE PRODUCTS PARTNERS L.P.
UNAUDITED CONDENSED STATEMENTS OF
CONSOLIDATED OPERATIONS
(Dollars in millions, except per unit amounts)
|
|
For the Three Months
Ended March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Revenues:
|
|
|
|
|
|
|
Third parties
|
|
$
|
7,309.6
|
|
|
$
|
4,989.7
|
|
Related parties
|
|
|
10.8
|
|
|
|
15.6
|
|
Total revenues (see Note 9)
|
|
|
7,320.4
|
|
|
|
5,005.3
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
Third parties
|
|
|
6,081.6
|
|
|
|
3,866.3
|
|
Related parties
|
|
|
251.6
|
|
|
|
280.6
|
|
Total operating costs and expenses
|
|
|
6,333.2
|
|
|
|
4,146.9
|
|
General and administrative costs:
|
|
|
|
|
|
|
|
|
Third parties
|
|
|
20.7
|
|
|
|
14.3
|
|
Related parties
|
|
|
29.7
|
|
|
|
29.6
|
|
Total general and administrative costs
|
|
|
50.4
|
|
|
|
43.9
|
|
Total costs and expenses (see Note 9)
|
|
|
6,383.6
|
|
|
|
4,190.8
|
|
Equity in income of unconsolidated affiliates
|
|
|
94.8
|
|
|
|
101.1
|
|
Operating income
|
|
|
1,031.6
|
|
|
|
915.6
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(249.3
|
)
|
|
|
(240.6
|
)
|
Other, net
|
|
|
(5.3
|
)
|
|
|
3.6
|
|
Total other expense, net
|
|
|
(254.6
|
)
|
|
|
(237.0
|
)
|
Income before income taxes
|
|
|
777.0
|
|
|
|
678.6
|
|
Provision for income taxes
|
|
|
(6.0
|
)
|
|
|
(8.4
|
)
|
Net income
|
|
|
771.0
|
|
|
|
670.2
|
|
Net income attributable to noncontrolling interests (see Note 8)
|
|
|
(10.3
|
)
|
|
|
(9.0
|
)
|
Net income attributable to limited partners
|
|
$
|
760.7
|
|
|
$
|
661.2
|
|
|
|
|
|
|
|
|
|
|
Earnings per unit:
(see Note 10)
|
|
|
|
|
|
|
|
|
Basic earnings per unit
|
|
$
|
0.36
|
|
|
$
|
0.32
|
|
Diluted earnings per unit
|
|
$
|
0.36
|
|
|
$
|
0.32
|
|
See Notes to Unaudited Condensed Consolidated Financial Statements.
ENTERPRISE PRODUCTS PARTNERS L.P.
UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED
(Dollars in millions)
|
|
For the Three Months
Ended March 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
771.0
|
|
|
$
|
670.2
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
Cash flow hedges:
|
|
|
|
|
|
|
|
|
Commodity derivative instruments:
|
|
|
|
|
|
|
|
|
Changes in fair value of cash flow hedges
|
|
|
144.8
|
|
|
|
(1.2
|
)
|
Reclassificati
on of losses (gains) to ne
t income
|
|
|
7.1
|
|
|
|
(57.2
|
)
|
Interest rate derivative instruments:
|
|
|
|
|
|
|
|
|
Changes in fair value of cash flow hedges
|
|
|
2.4
|
|
|
|
--
|
|
Reclassification of
losses to
net income
|
|
|
9.6
|
|
|
|
9.2
|
|
Total cash flow hedges
|
|
|
163.9
|
|
|
|
(49.2
|
)
|
Other
|
|
|
(0.1
|
)
|
|
|
(0.1
|
)
|
Total other comprehens
ive income (loss)
|
|
|
163.8
|
|
|
|
(49.3
|
)
|
Comprehensive income
|
|
|
934.8
|
|
|
|
620.9
|
|
Comprehensive income attributable to noncontrolling interests
|
|
|
(10.3
|
)
|
|
|
(9.0
|
)
|
Comprehensive income attributable to limited partners
|
|
$
|
924.5
|
|
|
$
|
611.9
|
|
See Notes to Unaudited Condensed Consolidated Financial Statements.
ENTERPRISE PRODUCTS PARTNERS L.P.
UNAUDITED CONDENSED STATEMENTS OF
CONSOLIDATED CASH FLOWS
(Dollars in millions)
|
|
For the Three Months
Ended March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Operating activities:
|
|
|
|
|
|
|
Net income
|
|
$
|
771.0
|
|
|
$
|
670.2
|
|
Reconciliation of net income to net cash flows provided by operating activities:
|
|
|
|
|
|
|
|
|
Depreciation, amortization and accretion
|
|
|
402.3
|
|
|
|
382.1
|
|
Asset impairment and related charges (see Note 12)
|
|
|
11.2
|
|
|
|
1.7
|
|
Equity in income of unconsolidated affiliates
|
|
|
(94.8
|
)
|
|
|
(101.1
|
)
|
Distributions received on earnings from unconsolidated affiliates
|
|
|
90.5
|
|
|
|
106.7
|
|
Net losses (gains) attributable to asset sales
|
|
|
(0.3
|
)
|
|
|
4.9
|
|
Deferred income tax expense
|
|
|
0.1
|
|
|
|
4.1
|
|
Change in fair market value of derivative instruments
|
|
|
(20.3
|
)
|
|
|
20.1
|
|
Change in fair market value of Liquidity Option Agreement
|
|
|
5.5
|
|
|
|
(2.2
|
)
|
Net effect of changes in operating accounts (see Note 15)
|
|
|
(288.8
|
)
|
|
|
(186.4
|
)
|
Other operating activities
|
|
|
(0.8
|
)
|
|
|
(0.4
|
)
|
Net cash flows provided by operating activities
|
|
|
875.6
|
|
|
|
899.7
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(446.0
|
)
|
|
|
(1,007.2
|
)
|
Contributions in aid of construction costs
|
|
|
15.6
|
|
|
|
12.2
|
|
Decrease (increase) in restricted cash (see Note 2)
|
|
|
309.8
|
|
|
|
(121.0
|
)
|
Cash used for pending business combination (see Note 4)
|
|
|
(16.0
|
)
|
|
|
--
|
|
Investments in unconsolidated affiliates
|
|
|
(13.7
|
)
|
|
|
(70.4
|
)
|
Distributions received for return of capital from unconsolidated affiliates
|
|
|
12.0
|
|
|
|
9.1
|
|
Proceeds from asset sales
|
|
|
2.0
|
|
|
|
13.4
|
|
Other investing activities
|
|
|
2.1
|
|
|
|
--
|
|
Cash used in investing activities
|
|
|
(134.2
|
)
|
|
|
(1,163.9
|
)
|
Financing activities:
|
|
|
|
|
|
|
|
|
Borrowings under debt agreements
|
|
|
17,575.1
|
|
|
|
20,000.6
|
|
Repayments of debt
|
|
|
(17,856.5
|
)
|
|
|
(19,797.4
|
)
|
Cash distributions paid to limited partners (see Note 8)
|
|
|
(869.0
|
)
|
|
|
(788.3
|
)
|
Cash payments made in connection with distribution equivalent rights
|
|
|
(3.2
|
)
|
|
|
(2.0
|
)
|
Cash distributions paid to noncontrolling interests
|
|
|
(10.1
|
)
|
|
|
(8.7
|
)
|
Cash contributions from noncontrolling interests
|
|
|
0.2
|
|
|
|
11.1
|
|
Net cash proceeds from the issuance of common units
|
|
|
448.8
|
|
|
|
1,011.5
|
|
Other financing activities
|
|
|
(27.4
|
)
|
|
|
(21.0
|
)
|
Cas
h provided by (used in) financing ac
tivities
|
|
|
(742.1
|
)
|
|
|
405.8
|
|
Net change in cash and cash equivalents
|
|
|
(0.7
|
)
|
|
|
141.6
|
|
Cash and cash equivalents, January 1
|
|
|
63.1
|
|
|
|
19.0
|
|
Cash and cash equivalents, March 31
|
|
$
|
62.4
|
|
|
$
|
160.6
|
|
See Notes to Unaudited Condensed Consolidated Financial Statements.
ENTERPRISE PRODUCTS PARTNERS L.P.
UNAUDITED CONDENSED STATEMENTS OF
CONSOLIDATED EQUITY
(See Note 8 for Unit History, Accumulated Other Comprehensive
Income (Loss) and Noncontrolling Interests)
(Dollars in millions)
|
|
Partners' Equity
|
|
|
|
|
|
|
|
|
|
Limited
Partners
|
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
|
Noncontrolling
Interests
|
|
|
Total
|
|
Balance, January 1, 2017
|
|
$
|
22,327.0
|
|
|
$
|
(280.0
|
)
|
|
$
|
219.0
|
|
|
$
|
22,266.0
|
|
Net income
|
|
|
760.7
|
|
|
|
--
|
|
|
|
10.3
|
|
|
|
771.0
|
|
Cash distributions paid to limited partners
|
|
|
(869.0
|
)
|
|
|
--
|
|
|
|
--
|
|
|
|
(869.0
|
)
|
Cash payments made in connection with distribution equivalent rights
|
|
|
(3.2
|
)
|
|
|
--
|
|
|
|
--
|
|
|
|
(3.2
|
)
|
Cash distributions paid to noncontrolling interests
|
|
|
--
|
|
|
|
--
|
|
|
|
(10.1
|
)
|
|
|
(10.1
|
)
|
Cash contributions from noncontrolling interests
|
|
|
--
|
|
|
|
--
|
|
|
|
0.2
|
|
|
|
0.2
|
|
Net cash proceeds from the issuance of common units
|
|
|
448.8
|
|
|
|
--
|
|
|
|
--
|
|
|
|
448.8
|
|
Common units issued in connection with employee compensation
|
|
|
33.7
|
|
|
|
--
|
|
|
|
--
|
|
|
|
33.7
|
|
Amortization of fair value of equity-based awards
|
|
|
24.8
|
|
|
|
--
|
|
|
|
--
|
|
|
|
24.8
|
|
Cash flow hedges
|
|
|
--
|
|
|
|
163.9
|
|
|
|
--
|
|
|
|
163.9
|
|
Other
|
|
|
(27.3
|
)
|
|
|
(0.1
|
)
|
|
|
1.3
|
|
|
|
(26.1
|
)
|
Balance, March 31, 2017
|
|
$
|
22,695.5
|
|
|
$
|
(116.2
|
)
|
|
$
|
220.7
|
|
|
$
|
22,800.0
|
|
|
|
Partners' Equity
|
|
|
|
|
|
|
|
|
|
Limited
Partners
|
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
|
Noncontrolling
Interests
|
|
|
Total
|
|
Balance, January 1, 2016
|
|
$
|
20,514.3
|
|
|
$
|
(219.2
|
)
|
|
$
|
206.0
|
|
|
$
|
20,501.1
|
|
Net income
|
|
|
661.2
|
|
|
|
--
|
|
|
|
9.0
|
|
|
|
670.2
|
|
Cash distributions paid to limited partners
|
|
|
(788.3
|
)
|
|
|
--
|
|
|
|
--
|
|
|
|
(788.3
|
)
|
Cash payments made in connection with distribution equivalent rights
|
|
|
(2.0
|
)
|
|
|
--
|
|
|
|
--
|
|
|
|
(2.0
|
)
|
Cash distributions paid to noncontrolling interests
|
|
|
--
|
|
|
|
--
|
|
|
|
(8.7
|
)
|
|
|
(8.7
|
)
|
Cash contributions from noncontrolling interests
|
|
|
--
|
|
|
|
--
|
|
|
|
11.1
|
|
|
|
11.1
|
|
Net cash proceeds from the issuance of common units
|
|
|
1,011.5
|
|
|
|
--
|
|
|
|
--
|
|
|
|
1,011.5
|
|
Amortization of fair value of equity-based awards
|
|
|
22.3
|
|
|
|
--
|
|
|
|
--
|
|
|
|
22.3
|
|
Cash flow hedges
|
|
|
--
|
|
|
|
(49.2
|
)
|
|
|
--
|
|
|
|
(49.2
|
)
|
Other
|
|
|
(21.6
|
)
|
|
|
(0.1
|
)
|
|
|
--
|
|
|
|
(21.7
|
)
|
Balance, March 31, 2016
|
|
$
|
21,397.4
|
|
|
$
|
(268.5
|
)
|
|
$
|
217.4
|
|
|
$
|
21,346.3
|
|
See Notes to Unaudited Condensed Consolidated Financial Statements.
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.
KEY REFERENCES USED IN THESE
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Unless the context requires otherwise, references to "we," "us," "our," "Enterprise" or "Enterprise Products Partners" are intended to mean the business and operations of Enterprise Products Partners L.P. and its consolidated subsidiaries. References to "EPO" mean Enterprise Products Operating LLC, which is a wholly owned subsidiary of Enterprise, and its consolidated subsidiaries, through which Enterprise Products Partners L.P. conducts its business. Enterprise is managed by its 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 (the "Board") of Enterprise GP; (ii) Richard H. Bachmann, who is also a director and Vice Chairman of the Board of Enterprise GP; and (iii) Dr. Ralph S. Cunningham. Ms. Duncan Williams and Mr. Bachmann also currently serve as managers of Dan Duncan LLC along with W. Randall Fowler, who is also a director and President of Enterprise GP.
References to "EPCO" mean Enterprise Products Company, a privately held Texas corporation, and its privately held affiliates. A majority of 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) Dr. Cunningham, who serves as Vice Chairman of EPCO; and (iii) Mr. Bachmann, who serves as the President and Chief Executive Officer of EPCO. Ms. Duncan Williams and Mr. Bachmann also currently serve as directors of EPCO along with Mr. Fowler, who is also the Executive Vice President and Chief Administrative Officer of EPCO. EPCO, together with its privately held affiliates, owned approximately 32% of our limited partner interests at March 31, 2017.
References to "Oiltanking acquisition" mean the two-step acquisition of Oiltanking Partners, L.P. and its general partner that was completed in February 2015.
References to "TEPPCO" mean TEPPCO Partners, L.P. prior to its merger with one of our wholly owned subsidiaries in October 2009.
Note 1. Partnership Operations, Organization and Basis of Presentation
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." 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.
Our integrated midstream energy asset network 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 currently include: natural gas gathering, treating, processing, transportation and storage; NGL transportation, fractionation, storage, and export and import terminals (including those used to export liquefied petroleum gases, or "LPG," and ethane); crude oil gathering, transportation, storage, and export and import terminals; petrochemical and refined products transportation, storage, export and import terminals, and related services; and a marine transportation business that operates primarily on the U.S. inland and Intracoastal Waterway systems. Our assets currently include approximately 50,000 miles of pipelines; 260 million barrels ("MMBbls") of storage capacity for NGLs, crude oil, petrochemicals and refined products; and 14 billion cubic feet ("Bcf") of natural gas storage capacity.
We conduct substantially all of our business through EPO and are owned 100% by our limited partners from an economic perspective. Enterprise GP manages our partnership and owns a non-economic general partner interest in us. We, Enterprise GP, EPCO and Dan Duncan LLC are affiliates under the collective common control of the DD LLC Trustees and the EPCO Trustees. 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 13 for information regarding the ASA and other related party matters.
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. See Note 9 for information regarding our business segments.
Note 2. General Accounting and Disclosure Matters
Our results of operations for the three months ended March 31, 2017 are not necessarily indicative of results expected for the full year of 2017. 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, 2016 (the "2016 Form 10-K") filed with the SEC on February 24, 2017.
Contingencies
Certain conditions may exist as of the date our consolidated financial statements are issued, which may result in a loss to us but which will only be resolved when one or more future events occur or fail to occur. Management has regular quarterly litigation reviews, including updates from legal counsel, to assess the need for accounting recognition or disclosure of these contingencies, and such assessment inherently involves an exercise in judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, our management and legal counsel evaluate the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.
We accrue an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. We do not record a contingent liability when the likelihood of loss is probable but the amount cannot be reasonably estimated or when the likelihood of loss is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is reasonably possible and the impact would be material to our consolidated financial statements, we disclose the nature of the contingency and, where feasible, an estimate of the possible loss or range of loss.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. See Note 14 for additional information regarding our contingencies.
Derivative Instruments
We use derivative instruments such as futures, swaps, forward contracts and other arrangements to manage price risks associated with inventories, firm commitments, interest rates and certain anticipated future commodity transactions. To qualify for hedge accounting, the hedged item must expose us to risk and the related derivative instrument must reduce the exposure to that risk and meet specific hedge documentation requirements related to designation dates, expectations for hedge effectiveness and the probability that hedged future transactions will occur as forecasted. We formally designate derivative instruments as hedges and document and assess their effectiveness at inception of the hedge and on a monthly basis thereafter. Forecasted transactions are evaluated for the probability of occurrence and are periodically back-tested once the forecasted period has passed to determine whether similarly forecasted transactions are probable of occurring in the future.
For certain physical forward commodity derivative contracts, we apply the normal purchase/normal sale exception, whereby changes in the mark-to-market values of such contracts are not recognized in income. As a result, the revenues and expenses associated with such physical transactions are recognized during the period when volumes are physically delivered or received. Physical forward commodity contracts subject to this exception are evaluated for the probability of future delivery and are periodically back-tested once the forecasted period has passed to determine whether similar forward contracts are probable of physical delivery in the future. See Note 12 for additional information regarding our derivative instruments.
Estimates
Preparing our consolidated financial statements in conformity with U.S. GAAP requires us to make estimates that affect amounts presented in the financial statements. Our most significant estimates relate to (i) the useful lives and depreciation/amortization methods used for fixed and identifiable intangible assets; (ii) measurement of fair value and projections used in impairment testing of fixed and intangible assets (including goodwill); (iii) contingencies; and (iv) revenue and expense accruals.
Actual results could differ materially from our estimates. On an ongoing basis, we review our estimates based on currently available information. Any changes in the facts and circumstances underlying our estimates may require us to update such estimates, which could have a material impact on our consolidated financial statements.
Fair Value Measurements
Our fair value estimates are based on either (i) actual market data or (ii) assumptions that other market participants would use in pricing an asset or liability, including estimates of risk, in the principal market of the asset or liability at a specified measurement date. Recognized valuation techniques employ inputs such as contractual prices, quoted market prices or rates, operating costs, discount factors and business growth rates. These inputs may be either readily observable, corroborated by market data or generally unobservable. In developing our estimates of fair value, we endeavor to utilize the best information available and apply market-based data to the highest extent possible. Accordingly, we utilize valuation techniques (such as the market approach) that maximize the use of observable inputs and minimize the use of unobservable inputs.
A three-tier hierarchy has been established that classifies fair value amounts recognized in the financial statements based on the observability of inputs used to estimate such fair values. The hierarchy considers fair value amounts based on observable inputs (Levels 1 and 2) to be more reliable and predictable than those based primarily on unobservable inputs (Level 3). At each balance sheet reporting date, we categorize our financial assets and liabilities using this hierarchy.
Recent Accounting Developments
Revenue Recognition
.
In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Codification 606,
Revenues from Contracts with Customers
("ASC 606"). The new accounting standard, along with its related amendments, replaces the current rules-based U.S. GAAP governing revenue recognition with a principles-based approach. We plan to adopt the new standard on January 1, 2018 using the modified retrospective approach, which requires us to apply the new revenue standard to (i) all new revenue contracts entered into after January 1, 2018 and (ii) all existing revenue contracts as of January 1, 2018 through a cumulative adjustment to equity. In accordance with this approach, our consolidated revenues for periods prior to January 1, 2018 will not be revised.
The core principle in the new guidance is that a company should recognize revenue in a manner that fairly depicts the transfer of goods or services to customers in amounts that reflect the consideration the company expects to receive for those goods or services. In order to apply this core principle, companies will apply the following five steps in determining the amount of revenues to recognize: (i) identify the contract; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the performance obligation is satisfied. Each of these steps involves management's judgment and an analysis of the contract's material terms and conditions.
Our implementation activities related to ASC 606 are ongoing. For the vast majority of our businesses, we do not anticipate that there will be material differences in the amount or timing of revenues recognized following the new standard's adoption date. However, we continue to evaluate the guidance under ASC 606 applicable to natural gas processing agreements where non-cash consideration is received for services rendered (e.g., equity NGL volumes received under percent of liquids, keepwhole and similar arrangements).
Although total consolidated revenues may not be materially impacted by the new guidance, we do anticipate significant changes to our disclosures based on the additional requirements prescribed by ASC 606. These new disclosures include information regarding the significant judgments used in evaluating when and how revenue is (or will be) recognized and data related to contract assets and liabilities. Additionally, we are currently evaluating our business processes, systems and controls to ensure the accuracy and timeliness of the recognition and disclosure requirements under the new revenue guidance.
Leases
. In February 2016, the FASB issued ASC 842,
Leases
("ASC 842"), which requires substantially all leases (with the exception of leases with a term of one year or less) to be recorded on the balance sheet using a method referred to as the right-of-use ("ROU") asset approach. We plan to adopt the new standard on January 1, 2019 using the modified retrospective method described within ASC 842.
The new standard introduces two lease accounting models, which result in a lease being classified as either a "finance" or "operating" lease on the basis of whether the lessee effectively obtains control of the underlying asset during the lease term. A lease would be classified as a finance lease if it meets one of five classification criteria, four of which are generally consistent with current lease accounting guidance. By default, a lease that does not meet the criteria to be classified as a finance lease will be deemed an operating lease. Regardless of classification, the initial measurement of both lease types will result in the balance sheet recognition of a ROU asset representing a company's right to use the underlying asset for a specified period of time and a corresponding lease liability. The lease liability will be recognized at the present value of the future lease payments, and the ROU asset will equal the lease liability adjusted for any prepaid rent, lease incentives provided by the lessor, and any indirect costs.
The subsequent measurement of each type of lease varies. Leases classified as a finance lease will be accounted for using the effective interest method. Under this approach, a lessee will amortize the ROU asset (generally on a straight-line basis in a manner similar to depreciation) and the discount on the lease liability (as a component of interest expense). Leases classified as an operating lease will result in the recognition of a single lease expense amount that is recorded on a straight-line basis (or another systematic basis, if more appropriate).
We have started the process of reviewing our lease agreements in light of the new guidance. Although we are in the early stages of our ASC 842 implementation project, we anticipate that this new lease guidance will cause significant changes to the way leases are recorded, presented and disclosed in our consolidated financial statements.
Restricted Cash
Restricted cash 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 and refined products. Additional cash may be restricted to maintain our commodity derivative instruments portfolio as prices fluctuate or margin requirements change.
At March 31, 2017 and December 31, 2016, our restricted cash amounts were $44.7 million and $354.5 million, respectively. The balance of restricted cash decreased since December 31, 2016 primarily due to the settlement of derivative instruments related to contango positions during the first quarter of 2017. See Note 12 for information regarding our derivative instruments and hedging activities.
Our inventory amounts by product type were as follows at the dates indicated:
|
|
March 31,
2017
|
|
|
December 31,
2016
|
|
NGLs
|
|
$
|
1,107.5
|
|
|
$
|
1,156.1
|
|
Petrochemicals and refined products
|
|
|
474.2
|
|
|
|
220.7
|
|
Crude oil
|
|
|
319.5
|
|
|
|
360.0
|
|
Natural gas
|
|
|
20.8
|
|
|
|
33.7
|
|
Total
|
|
$
|
1,922.0
|
|
|
$
|
1,770.5
|
|
Inventories of petrochemicals and refined products increased since December 31, 2016 primarily due to our marketing group acquiring additional volumes during the first quarter of 2017 to take advantage of contango opportunities using our storage assets. These contango positions are expected to settle during the second quarter of 2017. Inventories of our other products decreased since December 31, 2016 primarily due to the settlement of contango positions in these products during the first quarter of 2017.
Due to fluctuating commodity prices, we recognize lower of cost or market 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 March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Cost of sales (1)
|
|
$
|
5,335.7
|
|
|
$
|
3,208.3
|
|
Lower of cost or net realizable value adjustments within cost of sales
|
|
|
3.4
|
|
|
|
5.3
|
|
|
|
(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 accumulated depreciation balances were as follows at the dates indicated:
|
|
Estimated
Useful Life
in Years
|
|
|
March 31,
2017
|
|
|
December 31,
2016
|
|
Plants, pipelines and facilities (1)
|
|
3-45 (5)
|
|
|
$
|
35,382.6
|
|
|
$
|
35,124.6
|
|
Underground and other storage facilities (2)
|
|
5-40 (6)
|
|
|
|
3,352.8
|
|
|
|
3,326.9
|
|
Transportation equipment (3)
|
|
3-10
|
|
|
|
169.2
|
|
|
|
165.8
|
|
Marine vessels (4)
|
|
15-30
|
|
|
|
801.2
|
|
|
|
800.7
|
|
Land
|
|
|
|
|
|
|
265.1
|
|
|
|
264.6
|
|
Construction in progress
|
|
|
|
|
|
|
3,565.8
|
|
|
|
3,320.7
|
|
Total
|
|
|
|
|
|
|
43,536.7
|
|
|
|
43,003.3
|
|
Less accumulated depreciation
|
|
|
|
|
|
|
9,980.6
|
|
|
|
9,710.8
|
|
Property, plant and equipment, net
|
|
|
|
|
|
$
|
33,556.1
|
|
|
$
|
33,292.5
|
|
|
|
(1)
Plants, pipelines and facilities include processing 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: processing 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.
|
|
The following table summarizes our depreciation expense and capitalized interest amounts for the periods indicated:
|
|
For the Three Months
Ended March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Depreciation expense (1)
|
|
$
|
317.5
|
|
|
$
|
295.9
|
|
Capitalized interest (2)
|
|
|
39.6
|
|
|
|
42.5
|
|
|
|
(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.
|
|
Asset Retirement Obligations
We record asset retirement obligations ("AROs") in connection with legal requirements to perform specified retirement activities under contractual arrangements and/or governmental regulations. Our contractual AROs primarily result from right-of-way agreements associated with our pipeline operations and real estate leases associated with our plant sites. In addition, we record AROs in connection with governmental regulations associated with the abandonment or retirement of above-ground brine storage pits and certain marine vessels. We also record AROs in connection with regulatory requirements associated with the renovation or demolition of certain assets containing hazardous substances such as asbestos. We typically fund our AROs using cash flow from operations.
Property, plant and equipment at March 31, 2017 and December 31, 2016 includes $44.2 million and $44.9 million, respectively, of asset retirement costs capitalized as an increase in the associated long-lived asset.
The following table presents information regarding our AROs since January 1, 2017:
ARO liability balance, January 1, 2017
|
|
$
|
85.4
|
|
Liabilities settled
|
|
|
(1.0
|
)
|
Accretion expense
|
|
|
1.3
|
|
ARO liability balance, March 31, 2017
|
|
$
|
85.7
|
|
Azure Acquisition
In March 2017, we announced the execution of a definitive agreement to acquire the midstream business and assets of Azure Midstream Partners, L.P. and its operating subsidiaries ("Azure"). The purchase agreement was the result of Azure's bankruptcy auction proceedings, which we won with a bid price of $189 million. The sale was approved by the U.S. Bankruptcy Court for the Southern District of Texas on March 15, 2017.
Azure's assets, which are located in East Texas and North Louisiana, include over 960 miles of natural gas gathering pipelines, three natural gas processing facilities with an aggregate processing capacity of approximately 210 million cubic feet per day, and two NGL pipelines with throughput capacities of 10 thousand barrels per day each. The Azure assets serve production from the Haynesville Shale and Bossier, Cotton Valley and Travis Peak formations.
The transaction closed in April 2017 after receiving final regulatory approvals and the satisfaction of other closing conditions. Under terms of the definitive agreement, we paid a deposit of $16.0 million in March 2017, which was applied to the purchase price of $189 million at closing. The deposit is presented on our Unaudited Condensed Statement of Consolidated Cash Flows under the Investing Activities section as "Cash used for pending business combination." The remainder of the accounting for the Azure acquisition, including development of the purchase price allocation, will take place during the second quarter of 2017 when the necessary information is obtained.
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.
|
|
Ownership
Interest at
March 31,
2017
|
|
|
March 31,
2017
|
|
|
December 31,
2016
|
|
NGL Pipelines & Services:
|
|
|
|
|
|
|
|
|
|
Venice Energy Service Company, L.L.C.
|
|
13.1%
|
|
|
$
|
24.7
|
|
|
$
|
24.8
|
|
K/D/S Promix, L.L.C.
|
|
50%
|
|
|
|
34.1
|
|
|
|
33.7
|
|
Baton Rouge Fractionators LLC
|
|
32.2%
|
|
|
|
17.5
|
|
|
|
17.3
|
|
Skelly-Belvieu Pipeline Company, L.L.C.
|
|
50%
|
|
|
|
38.7
|
|
|
|
38.9
|
|
Texas Express Pipeline LLC
|
|
35%
|
|
|
|
330.3
|
|
|
|
331.9
|
|
Texas Express Gathering LLC
|
|
45%
|
|
|
|
36.0
|
|
|
|
35.8
|
|
Front Range Pipeline LLC
|
|
33.3%
|
|
|
|
167.4
|
|
|
|
165.4
|
|
Delaware Basin Gas Processing LLC
|
|
50%
|
|
|
|
109.4
|
|
|
|
102.6
|
|
Crude Oil Pipelines & Services:
|
|
|
|
|
|
|
|
|
|
|
|
|
Seaway Crude Pipeline Company LLC
|
|
50%
|
|
|
|
1,386.5
|
|
|
|
1,393.8
|
|
Eagle Ford Pipeline LLC
|
|
50%
|
|
|
|
383.7
|
|
|
|
377.9
|
|
Eagle Ford Terminals Corpus Christi LLC
|
|
50%
|
|
|
|
57.8
|
|
|
|
52.9
|
|
Natural Gas Pipelines & Services:
|
|
|
|
|
|
|
|
|
|
|
|
|
White River Hub, LLC
|
|
50%
|
|
|
|
21.5
|
|
|
|
21.7
|
|
Petrochemical & Refined Products Services:
|
|
|
|
|
|
|
|
|
|
|
|
|
Centennial Pipeline LLC
|
|
50%
|
|
|
|
58.8
|
|
|
|
62.3
|
|
Other
|
|
Various
|
|
|
|
5.0
|
|
|
|
18.3
|
|
Total
|
|
|
|
|
|
$
|
2,671.4
|
|
|
$
|
2,677.3
|
|
The following table presents our equity in inc
ome (loss) of u
nconsolidated affiliates by business segment for the periods indicated:
|
|
For the Three Months
Ended March 31,
|
|
|
|
2017
|
|
|
2016
|
|
NGL Pipelines & Services
|
|
$
|
15.5
|
|
|
$
|
15.1
|
|
Crude Oil Pipelines & Services
|
|
|
81.2
|
|
|
|
90.1
|
|
Natural Gas Pipelines & Services
|
|
|
1.0
|
|
|
|
1.0
|
|
Petrochemical & Refined Products Services
|
|
|
(2.9
|
)
|
|
|
(5.1
|
)
|
Total
|
|
$
|
94.8
|
|
|
$
|
101.1
|
|
The following table presents our unamortized excess cost amounts by business segment at the dates indicated:
|
|
March 31,
2017
|
|
|
December 31,
2016
|
|
NGL Pipelines & Services
|
|
$
|
23.8
|
|
|
$
|
24.1
|
|
Crude Oil Pipelines & Services
|
|
|
18.8
|
|
|
|
19.0
|
|
Petrochemical & Refined Products Services
|
|
|
1.9
|
|
|
|
2.1
|
|
Total
|
|
$
|
44.5
|
|
|
$
|
45.2
|
|
In total, amortization of excess cost amounts was $0.5 million for each of the three months ended March 31, 2017 and 2016.
Summarized Combined Financial Information of Unconsolidated Affiliates
Combined results of operations data for the periods indicated for our unconsolidated affiliates are summarized in the following table (all data presented on a 100% basis):
|
|
For the Three Months
Ended March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Income Statement Data:
|
|
|
|
|
|
|
Revenues
|
|
$
|
343.2
|
|
|
$
|
345.5
|
|
Operating income
|
|
|
203.7
|
|
|
|
213.7
|
|
Net income
|
|
|
202.9
|
|
|
|
215.2
|
|
Note 6. Intangible Assets and Goodwill
Identifiable Intangible Assets
The following table summarizes our intangible assets by business segment at the dates indicated:
|
|
March 31, 2017
|
|
|
December 31, 2016
|
|
|
|
Gross
Value
|
|
|
Accumulated
Amortization
|
|
|
Carrying
Value
|
|
|
Gross
Value
|
|
|
Accumulated
Amortization
|
|
|
Carrying
Value
|
|
NGL Pipelines & Services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer relationship intangibles
|
|
$
|
447.4
|
|
|
$
|
(176.4
|
)
|
|
$
|
271.0
|
|
|
$
|
447.4
|
|
|
$
|
(172.7
|
)
|
|
$
|
274.7
|
|
Contract-based intangibles
|
|
|
279.9
|
|
|
|
(208.0
|
)
|
|
|
71.9
|
|
|
|
279.9
|
|
|
|
(204.4
|
)
|
|
|
75.5
|
|
Segment total
|
|
|
727.3
|
|
|
|
(384.4
|
)
|
|
|
342.9
|
|
|
|
727.3
|
|
|
|
(377.1
|
)
|
|
|
350.2
|
|
Crude Oil Pipelines & Services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer relationship intangibles
|
|
|
2,204.4
|
|
|
|
(95.2
|
)
|
|
|
2,109.2
|
|
|
|
2,204.4
|
|
|
|
(84.5
|
)
|
|
|
2,119.9
|
|
Contract-based intangibles
|
|
|
281.0
|
|
|
|
(134.3
|
)
|
|
|
146.7
|
|
|
|
281.0
|
|
|
|
(121.9
|
)
|
|
|
159.1
|
|
Segment total
|
|
|
2,485.4
|
|
|
|
(229.5
|
)
|
|
|
2,255.9
|
|
|
|
2,485.4
|
|
|
|
(206.4
|
)
|
|
|
2,279.0
|
|
Natural Gas Pipelines & Services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer relationship intangibles
|
|
|
1,350.3
|
|
|
|
(396.0
|
)
|
|
|
954.3
|
|
|
|
1,350.3
|
|
|
|
(390.0
|
)
|
|
|
960.3
|
|
Contract-based intangibles
|
|
|
464.7
|
|
|
|
(372.7
|
)
|
|
|
92.0
|
|
|
|
464.7
|
|
|
|
(370.5
|
)
|
|
|
94.2
|
|
Segment total
|
|
|
1,815.0
|
|
|
|
(768.7
|
)
|
|
|
1,046.3
|
|
|
|
1,815.0
|
|
|
|
(760.5
|
)
|
|
|
1,054.5
|
|
Petrochemical & Refined Products Services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer relationship intangibles
|
|
|
185.5
|
|
|
|
(45.5
|
)
|
|
|
140.0
|
|
|
|
185.5
|
|
|
|
(43.9
|
)
|
|
|
141.6
|
|
Contract-based intangibles
|
|
|
54.0
|
|
|
|
(16.0
|
)
|
|
|
38.0
|
|
|
|
54.0
|
|
|
|
(15.2
|
)
|
|
|
38.8
|
|
Segment total
|
|
|
239.5
|
|
|
|
(61.5
|
)
|
|
|
178.0
|
|
|
|
239.5
|
|
|
|
(59.1
|
)
|
|
|
180.4
|
|
Total intangible assets
|
|
$
|
5,267.2
|
|
|
$
|
(1,444.1
|
)
|
|
$
|
3,823.1
|
|
|
$
|
5,267.2
|
|
|
$
|
(1,403.1
|
)
|
|
$
|
3,864.1
|
|
The following table presents the amortization expense of our intangible assets by business segment for the periods indicated:
|
|
For the Three Months
Ended March 31,
|
|
|
|
2017
|
|
|
2016
|
|
NGL Pipelines & Services
|
|
$
|
7.3
|
|
|
$
|
7.8
|
|
Crude Oil Pipelines & Services
|
|
|
23.1
|
|
|
|
27.7
|
|
Natural Gas Pipelines & Services
|
|
|
8.2
|
|
|
|
8.6
|
|
Petrochemical & Refined Products Services
|
|
|
2.4
|
|
|
|
2.2
|
|
Total
|
|
$
|
41.0
|
|
|
$
|
46.3
|
|
The following table presents our forecast of amortization expense associated with existing intangible assets for the periods indicated:
Remainder
of 2017
|
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
2021
|
|
$
|
121.1
|
|
|
$
|
163.8
|
|
|
$
|
157.7
|
|
|
$
|
152.8
|
|
|
$
|
163.2
|
|
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. The following table presents the carrying amount of goodwill at the dates indicated:
|
|
NGL
Pipelines
& Services
|
|
|
Crude Oil
Pipelines
& Services
|
|
|
Natural Gas
Pipelines
& Services
|
|
|
Petrochemical
& Refined
Products
Services
|
|
|
Consolidated
Total
|
|
Balance at December 31, 2016
|
|
$
|
2,651.7
|
|
|
$
|
1,841.0
|
|
|
$
|
296.3
|
|
|
$
|
956.2
|
|
|
$
|
5,745.2
|
|
Balance at March 31, 2017
|
|
$
|
2,651.7
|
|
|
$
|
1,841.0
|
|
|
$
|
296.3
|
|
|
$
|
956.2
|
|
|
$
|
5,745.2
|
|
The following table presents our consolidated debt obligations (arranged by company and maturity date) at the dates indicated:
|
|
March 31,
2017
|
|
|
December 31,
2016
|
|
EPO senior debt obligations:
|
|
|
|
|
|
|
Commercial Paper Notes, variable-rates
|
|
$
|
1,500.4
|
|
|
$
|
1,777.2
|
|
Senior Notes L, 6.30% fixed-rate, due September 2017
|
|
|
800.0
|
|
|
|
800.0
|
|
364-Day Credit Agreement, variable-rate, due September 2017
|
|
|
--
|
|
|
|
--
|
|
Senior Notes V, 6.65% fixed-rate, due April 2018
|
|
|
349.7
|
|
|
|
349.7
|
|
Senior Notes OO, 1.65% fixed-rate, due May 2018
|
|
|
750.0
|
|
|
|
750.0
|
|
Senior Notes N, 6.50% fixed-rate, due January 2019
|
|
|
700.0
|
|
|
|
700.0
|
|
Senior Notes LL, 2.55% fixed-rate, due October 2019
|
|
|
800.0
|
|
|
|
800.0
|
|
Senior Notes Q, 5.25% fixed-rate, due January 2020
|
|
|
500.0
|
|
|
|
500.0
|
|
Senior Notes Y, 5.20% fixed-rate, due September 2020
|
|
|
1,000.0
|
|
|
|
1,000.0
|
|
Multi-Year Revolving Credit Facility, variable-rate, due September 2020
|
|
|
--
|
|
|
|
--
|
|
Senior Notes RR, 2.85% fixed-rate, due April 2021
|
|
|
575.0
|
|
|
|
575.0
|
|
Senior Notes CC, 4.05% fixed-rate, due February 2022
|
|
|
650.0
|
|
|
|
650.0
|
|
Senior Notes HH, 3.35% fixed-rate, due March 2023
|
|
|
1,250.0
|
|
|
|
1,250.0
|
|
Senior Notes JJ, 3.90% fixed-rate, due February 2024
|
|
|
850.0
|
|
|
|
850.0
|
|
Senior Notes MM, 3.75% fixed-rate, due February 2025
|
|
|
1,150.0
|
|
|
|
1,150.0
|
|
Senior Notes PP, 3.70% fixed-rate, due February 2026
|
|
|
875.0
|
|
|
|
875.0
|
|
Senior Notes SS, 3.95% fixed-rate, due February 2027
|
|
|
575.0
|
|
|
|
575.0
|
|
Senior Notes D, 6.875% fixed-rate, due March 2033
|
|
|
500.0
|
|
|
|
500.0
|
|
Senior Notes H, 6.65% fixed-rate, due October 2034
|
|
|
350.0
|
|
|
|
350.0
|
|
Senior Notes J, 5.75% fixed-rate, due March 2035
|
|
|
250.0
|
|
|
|
250.0
|
|
Senior Notes W, 7.55% fixed-rate, due April 2038
|
|
|
399.6
|
|
|
|
399.6
|
|
Senior Notes R, 6.125% fixed-rate, due October 2039
|
|
|
600.0
|
|
|
|
600.0
|
|
Senior Notes Z, 6.45% fixed-rate, due September 2040
|
|
|
600.0
|
|
|
|
600.0
|
|
Senior Notes BB, 5.95% fixed-rate, due February 2041
|
|
|
750.0
|
|
|
|
750.0
|
|
Senior Notes DD, 5.70% fixed-rate, due February 2042
|
|
|
600.0
|
|
|
|
600.0
|
|
Senior Notes EE, 4.85% fixed-rate, due August 2042
|
|
|
750.0
|
|
|
|
750.0
|
|
Senior Notes GG, 4.45% fixed-rate, due February 2043
|
|
|
1,100.0
|
|
|
|
1,100.0
|
|
Senior Notes II, 4.85% fixed-rate, due March 2044
|
|
|
1,400.0
|
|
|
|
1,400.0
|
|
Senior Notes KK, 5.10% fixed-rate, due February 2045
|
|
|
1,150.0
|
|
|
|
1,150.0
|
|
Senior Notes QQ, 4.90% fixed-rate, due May 2046
|
|
|
975.0
|
|
|
|
975.0
|
|
Senior Notes NN, 4.95% fixed-rate, due October 2054
|
|
|
400.0
|
|
|
|
400.0
|
|
TEPPCO senior debt obligations:
|
|
|
|
|
|
|
|
|
TEPPCO Senior Notes, 6.65% fixed-rate, due April 2018
|
|
|
0.3
|
|
|
|
0.3
|
|
TEPPCO Senior Notes, 7.55% fixed-rate, due April 2038
|
|
|
0.4
|
|
|
|
0.4
|
|
Total principal amount of senior debt obligations
|
|
|
22,150.4
|
|
|
|
22,427.2
|
|
EPO Junior Subordinated Notes A, variable-rate, due August 2066
(1)
|
|
|
521.1
|
|
|
|
521.1
|
|
EPO Junior Subordinated Notes C, fixed/variable-rate, due June 2067
(2)
|
|
|
256.4
|
|
|
|
256.4
|
|
EPO Junior Subordinated Notes B, fixed/variable-rate, due January 2068
(3)
|
|
|
682.7
|
|
|
|
682.7
|
|
TEPPCO Junior Subordinated Notes, fixed/variable-rate, due June 2067
|
|
|
14.2
|
|
|
|
14.2
|
|
Total principal amount of senior and junior debt obligations
|
|
|
23,624.8
|
|
|
|
23,901.6
|
|
Other, non-principal amounts
|
|
|
(201.8
|
)
|
|
|
(203.9
|
)
|
Less current maturities of debt
|
|
|
(2,300.0
|
)
|
|
|
(2,576.8
|
)
|
Total long-term debt
|
|
$
|
21,123.0
|
|
|
$
|
21,120.9
|
|
|
|
(1)
Variable rate is reset quarterly and based on 3-month LIBOR plus 3.708%.
(2)
Fixed rate of 7.000% through September 1, 2017 (i.e., first call date without a make-whole redemption premium); thereafter, a variable rate reset quarterly and based on 3-month LIBOR plus 2.778%.
(3)
Fixed rate of 7.034% through January 15, 2018 (i.e., first call date without a make-whole redemption premium); thereafter, the rate will be the greater of 7.034% or a variable rate reset quarterly and based on 3-month LIBOR plus 2.680%.
|
|
The following table presents the range of interest rates and weighted-average interest rates paid on our consolidated variable-rate debt during the three months ended March 31, 2017:
|
Range of Interest
Rates Paid
|
Weighted-Average
Interest Rate Paid
|
Commercial Paper Notes
|
0.90% to 1.33%
|
1.10%
|
EPO Junior Subordinated Notes A
|
4.59% to 4.74%
|
4.69%
|
The following table presents contractually scheduled maturities of our consolidated debt obligations outstanding at March 31, 2017 for the next five years, and in total thereafter:
|
|
|
|
|
Scheduled Maturities of Debt
|
|
|
|
Total
|
|
|
Remainder
of 2017
|
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
2021
|
|
|
Thereafter
|
|
Commercial Paper Notes
|
|
$
|
1,500.4
|
|
|
$
|
1,500.4
|
|
|
$
|
--
|
|
|
$
|
--
|
|
|
$
|
--
|
|
|
$
|
--
|
|
|
$
|
--
|
|
Senior Notes
|
|
|
20,650.0
|
|
|
|
800.0
|
|
|
|
1,100.0
|
|
|
|
1,500.0
|
|
|
|
1,500.0
|
|
|
|
575.0
|
|
|
|
15,175.0
|
|
Junior Subordinated Notes
|
|
|
1,474.4
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
1,474.4
|
|
Total
|
|
$
|
23,624.8
|
|
|
$
|
2,300.4
|
|
|
$
|
1,100.0
|
|
|
$
|
1,500.0
|
|
|
$
|
1,500.0
|
|
|
$
|
575.0
|
|
|
$
|
16,649.4
|
|
Parent-Subsidiary Guarantor Relationships
Enterprise Products Partners L.P. 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, Enterprise Products Partners L.P. would be responsible for full and unconditional repayment of that obligation.
Letters of Credit
At March 31, 2017, EPO had $66.4 million of letters of credit outstanding primarily related to our commodity hedging activities.
Lender Financial Covenants
We were in compliance with the financial covenants of our consolidated debt agreements at March 31, 2017.
Note 8. Equity and Distributions
Partners' Equity
Partners' equity reflects the various classes of limited partner interests (i.e., common units, including restricted common units) outstanding. The following table summarizes changes in the number of our outstanding units from January 1, 2017 to March 31, 2017:
|
|
Common
Units
(Unrestricted)
|
|
|
Restricted
Common
Units
|
|
|
Total
Common
Units
|
|
Number of units outstanding at January 1, 2017
|
|
|
2,116,906,120
|
|
|
|
682,294
|
|
|
|
2,117,588,414
|
|
Common units issued in connection with ATM program
|
|
|
12,865,371
|
|
|
|
--
|
|
|
|
12,865,371
|
|
Common units issued in connection with DRIP and EUPP
|
|
|
3,440,559
|
|
|
|
--
|
|
|
|
3,440,559
|
|
Common units issued in connection with the vesting of phantom unit awards
|
|
|
2,234,067
|
|
|
|
--
|
|
|
|
2,234,067
|
|
Common units issued in connection with the vesting of restricted common unit awards
|
|
|
665,920
|
|
|
|
(665,920
|
)
|
|
|
--
|
|
Forfeiture of restricted common unit awards
|
|
|
--
|
|
|
|
(1,250
|
)
|
|
|
(1,250
|
)
|
Cancellation of treasury units acquired in connection with the
vesting of equity-based awards
|
|
|
(946,291
|
)
|
|
|
--
|
|
|
|
(946,291
|
)
|
Common units issued in connection with employee compensation
|
|
|
1,176,103
|
|
|
|
--
|
|
|
|
1,176,103
|
|
Other
|
|
|
14,685
|
|
|
|
--
|
|
|
|
14,685
|
|
Number of units outstanding at March 31, 2017
|
|
|
2,136,356,534
|
|
|
|
15,124
|
|
|
|
2,136,371,658
|
|
The net cash proceeds we received from the issuance of common units during the three months ended March 31, 2017 were used to temporarily reduce amounts outstanding under EPO's commercial paper program and revolving credit facilities and for general company purposes.
We expect to issue additional equity and debt securities to assist us in meeting our future liquidity requirements, including those related to capital spending.
Universal shelf registration statement
. We have a universal shelf registration statement (the "2016 Shelf") on file with the SEC. The 2016 Shelf allows Enterprise Products Partners L.P. and EPO (each on a standalone basis) to issue an unlimited amount of equity and debt securities, respectively.
At-the-Market ("ATM") program
. We have a registration statement on file with the SEC covering the issuance of up to $1.89 billion of our common units in amounts, at prices and on terms to be determined by market conditions and other factors at the time of such offerings in connection with our ATM program. Pursuant to this program, we may sell common units under an equity distribution agreement between Enterprise Products Partners L.P. and certain broker-dealers from time-to-time by means of ordinary brokers' transactions through the NYSE at market prices, in block transactions or as otherwise agreed to with the broker-dealer parties to the agreement.
During the three months ended March 31, 2017, we sold 12,865,371 common units under the ATM program for aggregate gross proceeds of $359.7 million. After taking into account applicable costs, our transactions under the ATM program resulted in aggregate net cash proceeds of $356.0 million during the three months ended March 31, 2017. During the three months ended March 31, 2016, we issued 35,396,147 common units under this program for aggregate gross cash proceeds of $856.5 million, resulting in total net cash proceeds of $849.0 million. This includes 3,830,256 common units sold in January 2016 to a privately held affiliate of EPCO, which generated gross proceeds of $100 million. After taking into account the aggregate sales price of common units sold under the ATM program through March 31, 2017, we have the capacity to issue additional common units under the ATM program up to an aggregate sales price of $1.08 billion.
Distribution reinvestment plan
. We also have registration statements on file with the SEC collectively authorizing the issuance of up to 240,000,000 of our common units in connection with a distribution reinvestment plan ("DRIP"). The DRIP provides unitholders of record and beneficial owners of our common units a voluntary means by which they can increase the number of our common units they own by reinvesting the quarterly cash distributions they receive from us into the purchase of additional new common units.
We issued a total of 3,325,798 common units under our DRIP during the three months ended March 31, 2017, which generated net cash proceeds of $89.6 million. During the three months ended March 31, 2016, we issued 7,162,744 common units under our DRIP, which generated net cash proceeds of $159.8 million. Privately held affiliates of EPCO reinvested $100 million through the DRIP during the three months ended March 31, 2016 (this amount being a component of the net cash proceeds presented).
After taking into account the number of common units issued under the DRIP through March 31, 2017, we have the capacity to issue an additional 95,932,697 common units under this plan.
Employee unit purchase plan
. In addition to the DRIP, we have registration statements on file with the SEC authorizing the issuance of up to 8,000,000 of our common units in connection with our employee unit purchase plan ("EUPP"). We issued 114,761 common units under our EUPP during the three months ended March 31, 2017, which generated net cash proceeds of $3.2 million. During the three months ended March 31, 2016, we issued 119,262 common units under our EUPP, which generated net cash proceeds of $2.7 million. After taking into account the number of common units issued under the EUPP through March 31, 2017, we may issue an additional 6,150,714 common units under this plan.
Common units issued in connection with employee compensation
. In February 2017, the dollar value of the discretionary employee bonus payments with respect to the year ended December 31, 2016 (less any retirement plan deductions and withholding taxes) was remitted through the issuance of an equivalent value of newly issued Enterprise common units. The compensation expense associated with this issuance of common units was recognized during the year ended December 31, 2016.
Noncontrolling Interests
Noncontrolling interests represent third party equity ownership interests in our consolidated subsidiaries (e.g., joint venture partners in entities in which we have a controlling ownership interest).
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:
|
|
Gains (Losses) on
Cash Flow Hedges
|
|
|
|
|
|
|
|
|
|
Commodity
Derivative
Instruments
|
|
|
Interest Rate
Derivative
Instruments
|
|
|
Other
|
|
|
Total
|
|
Balance, January 1, 2017
|
|
$
|
(83.8
|
)
|
|
$
|
(199.8
|
)
|
|
$
|
3.6
|
|
|
$
|
(280.0
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
|
144.8
|
|
|
|
2.4
|
|
|
|
(0.1
|
)
|
|
|
147.1
|
|
Amounts reclassified from accumulated other comprehe
nsive loss (income)
|
|
|
7.1
|
|
|
|
9.6
|
|
|
|
--
|
|
|
|
16.7
|
|
Total other comprehensive income (loss)
|
|
|
151.9
|
|
|
|
12.0
|
|
|
|
(0.1
|
)
|
|
|
163.8
|
|
Balance, March 31, 2017
|
|
$
|
68.1
|
|
|
$
|
(187.8
|
)
|
|
$
|
3.5
|
|
|
$
|
(116.2
|
)
|
|
|
Gains (Losses) on
Cash Flow Hedges
|
|
|
|
|
|
|
|
|
|
Commodity
Derivative
Instruments
|
|
|
Interest Rate
Derivative
Instruments
|
|
|
Other
|
|
|
Total
|
|
Balance, January 1, 2016
|
|
$
|
56.6
|
|
|
$
|
(279.5
|
)
|
|
$
|
3.7
|
|
|
$
|
(219.2
|
)
|
Other comprehensive loss before reclassifications
|
|
|
(1.2
|
)
|
|
|
--
|
|
|
|
(0.1
|
)
|
|
|
(1.3
|
)
|
Amounts reclassified from accumulated other comprehensive loss (income)
|
|
|
(57.2
|
)
|
|
|
9.2
|
|
|
|
--
|
|
|
|
(48.0
|
)
|
Total other comprehensive income (loss)
|
|
|
(58.4
|
)
|
|
|
9.2
|
|
|
|
(0.1
|
)
|
|
|
(49.3
|
)
|
Balance, March 31, 2016
|
|
$
|
(1.8
|
)
|
|
$
|
(270.3
|
)
|
|
$
|
3.6
|
|
|
$
|
(268.5
|
)
|
The following table presents reclassifications out of accumulated other comprehensive income (loss) into net income during the periods indicated:
|
|
|
For the Three Months
Ended March 31,
|
|
|
Location
|
|
2017
|
|
|
2016
|
|
Losses (gains) on cash flow hedges:
|
|
|
|
|
|
|
|
Interest rate derivatives
|
Interest expense
|
|
$
|
9.6
|
|
|
$
|
9.2
|
|
Commodity derivatives
|
Revenue
|
|
|
7.5
|
|
|
|
(58.8
|
)
|
Commodity derivatives
|
Operating costs and expenses
|
|
|
(0.4
|
)
|
|
|
1.6
|
|
Total
|
|
|
$
|
16.7
|
|
|
$
|
(48.0
|
)
|
For information regarding our interest rate and commodity derivative instruments, see Note 12.
Cash Distributions
The following table presents Enterprise's declared quarterly cash distribution rates per common unit with respect to the quarter indicated:
|
|
Distribution Per
Common Unit
|
|
Record
Date
|
Payment
Date
|
2016
|
|
|
|
|
|
1st Quarter
|
|
$
|
0.3950
|
|
4/29/2016
|
5/6/2016
|
2017
|
|
|
|
|
|
|
1st Quarter
|
|
$
|
0.4150
|
|
4/28/2017
|
5/8/2017
|
Note 9. Business Segments
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 chief operating decision makers in deciding how to allocate resources and in assessing operating and financial performance.
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.
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 March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Income before income taxes
|
|
$
|
777.0
|
|
|
$
|
678.6
|
|
Add total other expense, net
|
|
|
254.6
|
|
|
|
237.0
|
|
Operating income
|
|
|
1,031.6
|
|
|
|
915.6
|
|
Adjustments to reconcile operating income to total gross operating margin:
|
|
|
|
|
|
|
|
|
Add depreciation, amortization and accretion expense in operating costs and expenses
|
|
|
376.2
|
|
|
|
358.2
|
|
Add asset impairment and related charges in operating costs and expenses
|
|
|
11.2
|
|
|
|
1.7
|
|
Add net losses and subtract net gains attributable to asset sales in operating costs and expenses
|
|
|
(0.3
|
)
|
|
|
4.9
|
|
Add general and administrative costs
|
|
|
50.4
|
|
|
|
43.9
|
|
Adjustments for make-up rights on certain new pipeline projects:
|
|
|
|
|
|
|
|
|
Add non-refundable payments received from shippers attributable to make-up rights (1)
|
|
|
13.3
|
|
|
|
7.1
|
|
Subtract the subsequent recognition of revenues attributable to make-up rights (2)
|
|
|
(9.1
|
)
|
|
|
(12.9
|
)
|
Total segment gross operating margin
|
|
$
|
1,473.3
|
|
|
$
|
1,318.5
|
|
|
|
|
|
|
|
|
|
|
(1)
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.
(2)
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 March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Gross operating margin by segment:
|
|
|
|
|
|
|
NGL Pipelines & Services
|
|
$
|
856.0
|
|
|
$
|
783.7
|
|
Crude Oil Pipelines & Services
|
|
|
264.6
|
|
|
|
202.3
|
|
Natural Gas Pipelines & Services
|
|
|
170.9
|
|
|
|
177.7
|
|
Petrochemical & Refined Products Services
|
|
|
181.8
|
|
|
|
154.8
|
|
Total segment gross operating margin
|
|
$
|
1,473.3
|
|
|
$
|
1,318.5
|
|
Summarized Segment Financial Information
Information by business segment, together with reconciliations to amounts presented on 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 March 31, 2017
|
|
$
|
3,343.0
|
|
|
$
|
1,802.6
|
|
|
$
|
757.8
|
|
|
$
|
1,406.2
|
|
|
$
|
--
|
|
|
$
|
7,309.6
|
|
Three months ended March 31, 2016
|
|
|
2,402.0
|
|
|
|
1,277.5
|
|
|
|
547.3
|
|
|
|
762.9
|
|
|
|
--
|
|
|
|
4,989.7
|
|
Revenues from related parties:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2017
|
|
|
2.8
|
|
|
|
4.6
|
|
|
|
3.4
|
|
|
|
--
|
|
|
|
--
|
|
|
|
10.8
|
|
Three months ended March 31, 2016
|
|
|
1.8
|
|
|
|
11.1
|
|
|
|
2.7
|
|
|
|
--
|
|
|
|
--
|
|
|
|
15.6
|
|
Intersegment and intrasegment revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2017
|
|
|
8,874.8
|
|
|
|
3,474.0
|
|
|
|
194.5
|
|
|
|
414.7
|
|
|
|
(12,958.0
|
)
|
|
|
--
|
|
Three months ended March 31, 2016
|
|
|
3,174.8
|
|
|
|
1,499.4
|
|
|
|
124.7
|
|
|
|
242.7
|
|
|
|
(5,041.6
|
)
|
|
|
--
|
|
Total revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2017
|
|
|
12,220.6
|
|
|
|
5,281.2
|
|
|
|
955.7
|
|
|
|
1,820.9
|
|
|
|
(12,958.0
|
)
|
|
|
7,320.4
|
|
Three months ended March 31, 2016
|
|
|
5,578.6
|
|
|
|
2,788.0
|
|
|
|
674.7
|
|
|
|
1,005.6
|
|
|
|
(5,041.6
|
)
|
|
|
5,005.3
|
|
Equity in income (loss) of unconsolidated affiliates:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2017
|
|
|
15.5
|
|
|
|
81.2
|
|
|
|
1.0
|
|
|
|
(2.9
|
)
|
|
|
--
|
|
|
|
94.8
|
|
Three months ended March 31, 2016
|
|
|
15.1
|
|
|
|
90.1
|
|
|
|
1.0
|
|
|
|
(5.1
|
)
|
|
|
--
|
|
|
|
101.1
|
|
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 March 31, 2017
|
|
$
|
14,003.1
|
|
|
$
|
4,346.9
|
|
|
$
|
8,355.6
|
|
|
$
|
3,284.7
|
|
|
$
|
3,565.8
|
|
|
$
|
33,556.1
|
|
At December 31, 2016
|
|
|
14,091.5
|
|
|
|
4,216.1
|
|
|
|
8,403.0
|
|
|
|
3,261.2
|
|
|
|
3,320.7
|
|
|
|
33,292.5
|
|
Investments in unconsolidated affiliates:
(see Note 5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2017
|
|
|
758.1
|
|
|
|
1,828.0
|
|
|
|
21.5
|
|
|
|
63.8
|
|
|
|
--
|
|
|
|
2,671.4
|
|
At December 31, 2016
|
|
|
750.4
|
|
|
|
1,824.6
|
|
|
|
21.7
|
|
|
|
80.6
|
|
|
|
--
|
|
|
|
2,677.3
|
|
Intangible assets, net:
(see Note 6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2017
|
|
|
342.9
|
|
|
|
2,255.9
|
|
|
|
1,046.3
|
|
|
|
178.0
|
|
|
|
--
|
|
|
|
3,823.1
|
|
At December 31, 2016
|
|
|
350.2
|
|
|
|
2,279.0
|
|
|
|
1,054.5
|
|
|
|
180.4
|
|
|
|
--
|
|
|
|
3,864.1
|
|
Goodwill:
(see Note 6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2017
|
|
|
2,651.7
|
|
|
|
1,841.0
|
|
|
|
296.3
|
|
|
|
956.2
|
|
|
|
--
|
|
|
|
5,745.2
|
|
At December 31, 2016
|
|
|
2,651.7
|
|
|
|
1,841.0
|
|
|
|
296.3
|
|
|
|
956.2
|
|
|
|
--
|
|
|
|
5,745.2
|
|
Segment assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2017
|
|
|
17,755.8
|
|
|
|
10,271.8
|
|
|
|
9,719.7
|
|
|
|
4,482.7
|
|
|
|
3,565.8
|
|
|
|
45,795.8
|
|
At December 31, 2016
|
|
|
17,843.8
|
|
|
|
10,160.7
|
|
|
|
9,775.5
|
|
|
|
4,478.4
|
|
|
|
3,320.7
|
|
|
|
45,579.1
|
|
Segment assets consist of property, plant and equipment, investments in unconsolidated affiliates, intangible assets and goodwill. The carrying values of such amounts are assigned to each segment based on each asset's or investment's principal operations and contribution to the gross operating margin of that particular segment. Since construction-in-progress amounts (a component of property, plant and equipment) generally do not contribute to segment gross operating margin, such amounts are excluded from segment asset totals until the underlying assets are placed in service. Intangible assets and goodwill are assigned to each segment based on the classification of the assets to which they relate. The remainder of our consolidated total assets, which consist primarily of working capital assets, are excluded from segment assets since these amounts are not attributable to one specific segment (e.g. cash).
Other 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 March 31,
|
|
|
|
2017
|
|
|
2016
|
|
NGL Pipelines & Services:
|
|
|
|
|
|
|
Sales of NGLs and related products
|
|
$
|
2,887.2
|
|
|
$
|
1,943.5
|
|
Midstream services
|
|
|
458.6
|
|
|
|
460.3
|
|
Total
|
|
|
3,345.8
|
|
|
|
2,403.8
|
|
Crude Oil Pipelines & Services:
|
|
|
|
|
|
|
|
|
Sales of crude oil
|
|
|
1,618.6
|
|
|
|
1,121.1
|
|
Midstream services
|
|
|
188.6
|
|
|
|
167.5
|
|
Total
|
|
|
1,807.2
|
|
|
|
1,288.6
|
|
Natural Gas Pipelines & Services:
|
|
|
|
|
|
|
|
|
Sales of natural gas
|
|
|
544.0
|
|
|
|
315.0
|
|
Midstream services
|
|
|
217.2
|
|
|
|
235.0
|
|
Total
|
|
|
761.2
|
|
|
|
550.0
|
|
Petrochemical & Refined Products Services:
|
|
|
|
|
|
|
|
|
Sales of petrochemicals and refined products
|
|
|
1,211.1
|
|
|
|
553.2
|
|
Midstream services
|
|
|
195.1
|
|
|
|
209.7
|
|
Total
|
|
|
1,406.2
|
|
|
|
762.9
|
|
Total consolidated revenues
|
|
$
|
7,320.4
|
|
|
$
|
5,005.3
|
|
|
|
|
|
|
|
|
|
|
Consolidated costs and expenses
|
|
|
|
|
|
|
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
$
|
5,335.7
|
|
|
$
|
3,208.3
|
|
Other operating costs and expenses (1)
|
|
|
610.4
|
|
|
|
573.8
|
|
Depreciation, amortization and accretion
|
|
|
376.2
|
|
|
|
358.2
|
|
Impairment and related charges
|
|
|
11.2
|
|
|
|
1.7
|
|
Net losses (gains) attributable to asset sales
|
|
|
(0.3
|
)
|
|
|
4.9
|
|
General and administrative costs
|
|
|
50.4
|
|
|
|
43.9
|
|
Total consolidated costs and expenses
|
|
$
|
6,383.6
|
|
|
$
|
4,190.8
|
|
|
|
(1)
Represents the cost of operating our plants, pipelines and other fixed assets excluding: depreciation, amortization and accretion charges; asset impairment and related charges; and net losses (or gains) attributable to asset sales.
|
|
Fluctuations in our product sales revenues and related cost of sales amounts are explained in part by changes in energy commodity prices. In general, lower energy commodity prices result in a decrease in our revenues attributable to product sales; however, these lower commodity prices also decrease the associated cost of sales as purchase costs decline. The same correlation would be true in the case of higher energy commodity sales prices and purchase costs.
Note 10. Earnings Per Unit
The following table presents our calculation of basic and diluted earnings per unit for the periods indicated:
|
|
For the Three Months
Ended March 31,
|
|
|
|
2017
|
|
|
2016
|
|
BASIC EARNINGS PER UNIT
|
|
|
|
|
|
|
Net income attributable to limited partners
|
|
$
|
760.7
|
|
|
$
|
661.2
|
|
Undistributed earnings allocated and cash payments on phantom unit awards (1)
|
|
|
(4.0
|
)
|
|
|
(3.2
|
)
|
Net income available to common unitholders
|
|
$
|
756.7
|
|
|
$
|
658.0
|
|
|
|
|
|
|
|
|
|
|
Basic weighted-average number of common units outstanding
|
|
|
2,126.2
|
|
|
|
2,033.6
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per unit
|
|
$
|
0.36
|
|
|
$
|
0.32
|
|
|
|
|
|
|
|
|
|
|
DILUTED EARNINGS PER UNIT
|
|
|
|
|
|
|
|
|
Net income attributable to limited partners
|
|
$
|
760.7
|
|
|
$
|
661.2
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted-average number of units outstanding:
|
|
|
|
|
|
|
|
|
Distribution-bearing common units
|
|
|
2,126.2
|
|
|
|
2,033.6
|
|
Phantom units (1)
|
|
|
8.7
|
|
|
|
6.9
|
|
Total
|
|
|
2,134.9
|
|
|
|
2,040.5
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per unit
|
|
$
|
0.36
|
|
|
$
|
0.32
|
|
|
|
(1)
Each phantom unit award includes a distribution equivalent right ("DER"), which entitles the recipient to receive cash payments equal to the product of the number of phantom unit awards and the cash distribution per unit paid to our common unitholders. Cash payments made in connection with DERs are nonforfeitable. As a result, the phantom units are considered participating securities for purposes of computing basic earnings per unit.
|
|
Note 11. 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 March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Equity-classified awards:
|
|
|
|
|
|
|
Phantom unit awards
|
|
$
|
22.8
|
|
|
$
|
19.4
|
|
Restricted common unit awards
|
|
|
0.5
|
|
|
|
2.2
|
|
Profits interest awards
|
|
|
1.5
|
|
|
|
0.7
|
|
Liability-classified awards
|
|
|
0.2
|
|
|
|
0.1
|
|
Total
|
|
$
|
25.0
|
|
|
$
|
22.4
|
|
The fair value of equity-classified awards is amortized into earnings over the requisite service or vesting period. Equity-classified awards are expected to result in the issuance of common units upon vesting. Compensation expense for liability-classified awards is recognized over the requisite service or vesting period based on the fair value of the award remeasured at each reporting date. Liability-classified awards are settled in cash upon vesting.
At March 31, 2017, all of the outstanding phantom unit awards were granted under EPCO's 2008 Enterprise Products Long-Term Incentive Plan (Third Amendment and Restatement) ("2008 Plan"). The maximum number of common units authorized for issuance under the 2008 Plan was 40,000,000 at March 31, 2017. This amount will automatically increase under the terms of the 2008 Plan by 5,000,000 common units on January 1, 2018 and will continue to automatically increase annually on January 1 thereafter during the term of the 2008 Plan; provided, however, that in no event shall the maximum aggregate number exceed 70,000,000 common units. After giving effect to awards granted under the 2008 Plan through March 31, 2017, a total of 18,863,972 additional common units were available for issuance under this plan.
EPCO serves as the general partner of four limited partnerships that were formed in 2016 (generally referred to as "Employee Partnerships") to serve as incentive arrangements for key employees of EPCO by providing them a "profits interest" in an Employee Partnership. The names of the Employee Partnerships are EPD PubCo Unit I L.P. ("PubCo I"), EPD PubCo Unit II L.P. ("PubCo II"), EPD PubCo Unit III L.P. ("PubCo III") and EPD PrivCo Unit I L.P. ("PrivCo I").
At March 31, 2017, a small number of restricted common unit awards remained outstanding under the Enterprise Products 1998 Long-Term Incentive Plan ("1998 Plan"). The 1998 Plan is effectively closed and no new awards have been granted under this plan since 2014.
Phantom Unit Awards
Phantom unit awards allow recipients to acquire our common units (at no cost to the recipient apart from fulfilling service and other conditions) once a defined vesting period expires, subject to customary forfeiture provisions. Phantom unit awards generally vest at a rate of 25% per year beginning one year after the grant date and are non-vested until the required service periods expire.
At March 31, 2017, substantially all of our phantom unit awards are expected to result in the issuance of common units upon vesting; therefore, the applicable awards are accounted for as equity-classified awards. The grant date fair value of a phantom unit award is based on the market price per unit of our common units on the date of grant. Compensation expense is recognized based on the grant date fair value, net of an allowance for estimated forfeitures, over the requisite service or vesting period.
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 January 1, 2017
|
|
|
7,767,501
|
|
|
$
|
27.20
|
|
Granted (2)
|
|
|
4,203,510
|
|
|
$
|
28.87
|
|
Vested
|
|
|
(2,238,568
|
)
|
|
$
|
28.33
|
|
Forfeited
|
|
|
(41,684
|
)
|
|
$
|
28.19
|
|
Phantom unit awards at March 31, 2017
|
|
|
9,690,759
|
|
|
$
|
27.66
|
|
|
|
(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 2017 was $121.4 million based on a grant date market price of our common units of $28.87 per unit. An estimated annual forfeiture rate of 3.8% was applied to these awards.
|
|
The 2008 Plan provides for the issuance of DERs in connection with phantom unit awards. A DER 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 to our 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 March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Cash payments made in connection with DERs
|
|
$
|
3.2
|
|
|
$
|
2.0
|
|
Total intrinsic value of phantom unit awards that vested during period
|
|
|
63.2
|
|
|
|
36.3
|
|
For the EPCO group of companies, the unrecognized compensation cost associated with phantom unit awards was $166.1 million at March 31, 2017, of which our share of the cost is currently estimated to be $145.8 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 2.3 years.
Profits Interest Awards
In 2016, EPCO Holdings Inc. ("EPCO Holdings"), a privately held affiliate of EPCO, contributed a portion of the Enterprise common units it owned to each of the Employee Partnerships. In exchange for these contributions, EPCO Holdings was admitted as the Class A limited partner of each Employee Partnership. Also on the applicable contribution date, certain key EPCO employees were issued Class B limited partner interests (i.e., profits interest awards) and admitted as Class B limited partners of each Employee Partnership, all without any capital contribution by such employees. EPCO serves as the general partner of each Employee Partnership.
The following table summarizes key elements of each Employee Partnership:
Employee
Partnership
|
Enterprise
Common Units
owned by
Employee
Partnership
|
Class A
Capital
Base
(1)
|
|
Class A
Preference Return
(2)
|
|
Expected
Liquidation
Date
|
Estimated
Grant Date
Fair Value of
Profits Interest
Awards
(3)
|
Unrecognized
Compensation
Cost
(4)
|
|
|
|
|
|
|
|
|
|
PubCo I
|
2,723,052 units
|
$63.7 million
|
|
$
|
0.39
|
|
Feb. 2020
|
$13.2 million
|
$9.6 million
|
PubCo II
|
2,834,198 units
|
$66.3 million
|
|
$
|
0.39
|
|
Feb. 2021
|
$14.7 million
|
$11.5 million
|
PubCo III
|
105,000 units
|
$2.5 million
|
|
$
|
0.39
|
|
Apr. 2020
|
$0.6 million
|
$0.4 million
|
PrivCo I
|
1,111,438 units
|
$26.0 million
|
|
$
|
0.39
|
|
Feb. 2021
|
$5.8 million
|
$1.0 million
|
|
(1)
Represents fair market value of the Enterprise common units contributed to each Employee Partnership at the applicable contribution date.
(2)
Each quarter, the Class A limited partner in each Employee Partnership is paid a cash distribution equal to the product of (i) the number of common units owned by the Employee Partnership and (ii) the Class A Preference Return of $0.39 per unit (subject to equitable adjustment in order to reflect any equity split, equity distribution or dividend, reverse split, combination, reclassification, recapitalization or other similar event affecting such common units). To the extent that the Employee Partnership has cash remaining after making this quarterly payment to the Class A limited partner, the residual cash is distributed to the Class B limited partners on a quarterly basis.
(3)
Represents the total grant date fair value of the profits interest awards irrespective of how such costs will be allocated between us and EPCO and its privately held affiliates.
(4)
Represents our expected share of the unrecognized compensation cost at March 31, 2017. We expect to recognize our share of the unrecognized compensation cost for PubCo I, PubCo II, PubCo III and PrivCo I over a weighted-average period of 2.9 years, 3.9 years, 3.0 years and 3.9 years, respectively.
|
The grant date fair value of each Employee Partnership is based on (i) the estimated value (as determined using a Black-Scholes option pricing model) of such Employee Partnership's assets that would be distributed to the Class B limited partners thereof upon liquidation and (ii) the value, based on a discounted cash flow analysis, of the residual quarterly cash amounts that such Class B limited partners are expected to receive over the life of the Employee Partnership.
The following table summarizes the assumptions we used in applying a Black-Scholes option pricing model to derive that portion of the estimated grant date fair value of the profits interest awards for each Employee Partnership:
|
Expected
|
Risk-Free
|
Expected
|
Expected Unit
|
Employee
|
Life
|
Interest
|
Distribution
|
Price
|
Partnership
|
of Award
|
Rate
|
Yield
|
Volatility
|
PubCo I
|
4.0 years
|
0.9% to 1.1%
|
6.2% to 6.8%
|
29% to 40%
|
PubCo II
|
5.0 years
|
1.1% to 1.6%
|
6.1% to 6.8%
|
27% to 40%
|
PubCo III
|
4.0 years
|
1.0% to 1.4%
|
6.1% to 6.2%
|
31% to 40%
|
PrivCo I
|
5.0 years
|
1.2% to 1.6%
|
6.1% to 6.7%
|
28% to 40%
|
Compensation expense attributable to the profits interest awards is based on the estimated grant date fair value of each award. A portion of the fair value of these equity-based awards is allocated to us under the ASA as a non-cash expense. We are not responsible for reimbursing EPCO for any expenses of the Employee Partnerships, including the value of any contributions of units made by EPCO Holdings.
Restricted Common Unit Awards
Restricted common unit awards allow recipients to acquire our common units (at no cost to the recipient apart from fulfilling service and other conditions) once a defined vesting period expires, subject to customary forfeiture provisions. Restricted common unit awards generally vest at a rate of 25% per year beginning one year after the grant date and are non-vested until the required service periods expire. Restricted common units are included in the number of common units outstanding as presented on our Unaudited Condensed Consolidated Balance Sheets.
The fair value of a restricted common unit award is based on the market price per unit of our common units on the date of grant. Compensation expense is recognized based on the grant date fair value, net of an allowance for estimated forfeitures, over the requisite service or vesting period.
The following table presents restricted common unit award activity for the period indicated:
|
|
Number of
Units
|
|
|
Weighted-
Average Grant
Date Fair Value
per Unit
(1)
|
|
Restricted common units at January 1, 2017
|
|
|
682,294
|
|
|
$
|
28.61
|
|
Vested
|
|
|
(665,920
|
)
|
|
$
|
28.56
|
|
Forfeited
|
|
|
(1,250
|
)
|
|
$
|
31.07
|
|
Restricted common units at March 31, 2017
|
|
|
15,124
|
|
|
$
|
30.74
|
|
|
|
(1)
Determined by dividing the aggregate grant date fair value of awards (before an allowance for forfeitures) by the number of awards issued.
|
|
Each recipient of a restricted common unit award is entitled to nonforfeitable cash distributions equal to the product of the number of restricted common units outstanding for the participant and the cash distribution per unit paid to our common unitholders. These distributions are included in "Cash distributions paid to limited partners" as presented on our Unaudited Condensed Statements of Consolidated Cash Flows.
The following table presents supplemental information regarding restricted common unit awards for the periods indicated:
|
For the Three Months
Ended March 31,
|
|
|
2017
|
|
2016
|
|
Cash distributions paid to restricted common unitholders
|
|
$
|
0.3
|
|
|
$
|
0.8
|
|
Total intrinsic value of restricted common unit awards that vested during period
|
|
|
18.5
|
|
|
|
26.8
|
|
We expect to recognize our share of the unrecognized compensation cost for these awards by the end of 2017.
Note 12. Derivative Instruments, 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.
Interest Rate Hedging Activities
We may utilize interest rate swaps, forward starting swaps 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.
The following table summarizes our portfolio of interest rate swaps at March 31, 2017:
Hedged Transaction
|
Number and Type
of Derivatives
Outstanding
|
|
Notional
Amount
|
|
Period of
Hedge
|
Rate
Swap
|
Accounting
Treatment
|
Senior Notes OO
|
10 fixed-to-floating swaps
|
|
$
|
750.0
|
|
5/2015 to 5/2018
|
1.65% to 1.51%
|
Fair value hedge
|
The following table summarizes our portfolio of forward starting swaps at March 31, 2017:
Hedged Transaction
|
Number and Type
of Derivatives
Outstanding
|
|
Notional
Amount
|
|
Expected
Settlement
Date
|
Average Rate
Locked
|
Accounting
Treatment
|
Future long-term debt offering
|
4 forward starting swaps
|
|
$
|
275.0
|
|
5/2018
|
2.02%
|
Cash flow hedge
|
Commodity Hedging Activities
The prices of natural gas, NGLs, crude oil, petrochemicals and refined products are subject to fluctuations in response to changes in supply and demand, market conditions and a variety of additional factors that are beyond our control. In order to manage such price risks, we enter into commodity derivative instruments such as physical forward contracts, futures contracts, fixed-for-float swaps and basis swaps.
At March 31, 2017, our predominant commodity hedging strategies consisted of (i) hedging anticipated future purchases and sales of commodity products associated with transportation, storage and blending activities, (ii) hedging natural gas processing margins and (iii) hedging the fair value of commodity products held in inventory.
|
The objective of our anticipated future commodity purchases and sales hedging program is to hedge the margins of certain transportation, storage, blending and operational activities by locking in purchase and sale prices through the use of derivative instruments and related contracts.
|
|
The objective of our natural gas processing hedging program is to hedge an amount of earnings associated with these activities. We achieve this objective by executing fixed-price sales for a portion of our expected equity NGL production using derivative instruments and related contracts. For certain natural gas processing contracts, the hedging of expected equity NGL production also involves the purchase of natural gas for 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 following table summarizes our portfolio of commodity derivative instruments outstanding at March 31, 2017 (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 (Bcf)
|
14.9
|
n/a
|
Cash flow hedge
|
Forecasted sales of NGLs (MMBbls)
|
3.5
|
n/a
|
Cash flow hedge
|
Octane enhancement:
|
|
|
|
Forecasted purchases of NGLs (MMBbls)
|
0.5
|
n/a
|
Cash flow hedge
|
Forecasted sales of octane enhancement products (MMBbls)
|
0.8
|
n/a
|
Cash flow hedge
|
Natural gas marketing:
|
|
|
|
Forecasted purchases of natural gas for fuel (Bcf)
|
4.5
|
n/a
|
Cash flow hedge
|
Natural gas storage inventory management activities (Bcf)
|
4.5
|
n/a
|
Fair value hedge
|
NGL marketing:
|
|
|
|
Forecasted purchases of NGLs and related hydrocarbon products (MMBbls)
|
82.3
|
n/a
|
Cash flow hedge
|
Forecasted sales of NGLs and related hydrocarbon products (MMBbls)
|
93.4
|
n/a
|
Cash flow hedge
|
Refined products marketing:
|
|
|
|
Forecasted purchases of refined products (MMBbls)
|
0.2
|
n/a
|
Cash flow hedge
|
Forecasted sales of refined products (MMBbls)
|
0.4
|
n/a
|
Cash flow hedge
|
Refined products inventory management activities (MMBbls)
|
5.4
|
n/a
|
Fair value hedge
|
Crude oil marketing:
|
|
|
|
Forecasted purchases of crude oil (MMBbls)
|
12.5
|
n/a
|
Cash flow hedge
|
Forecasted sales of crude oil (MMBbls)
|
21.2
|
n/a
|
Cash flow hedge
|
Derivatives not designated as hedging instruments:
|
|
|
|
Natural gas risk management activities (Bcf) (3,4)
|
188.6
|
21.7
|
Mark-to-market
|
NGL risk management activities (MMBbls) (4)
|
16.1
|
n/a
|
Mark-to-market
|
Refined products risk management activities (MMBbls) (4)
|
0.2
|
n/a
|
Mark-to-market
|
Crude oil risk management activities (MMBbls) (4)
|
25.2
|
10.4
|
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 2017, September 2017 and March 2020, respectively.
(3)
Current and long-term volumes include 55.3 Bcf and 10.5 Bcf, respectively, of physical derivative instruments that are predominantly priced at a marked-based index plus a premium or minus a discount related to location differences.
(4)
Reflects the use of derivative instruments to manage risks associated with transportation, processing and storage assets.
|
On January 3, 2017, the Chicago Mercantile Exchange ("CME") modified its exchange rules to recharacterize daily variation margin amounts as "final settlement" values. The modified rule ("CME Rule 814") impacts derivative financial instruments traded on exchanges administered by the CME, including the New York Mercantile Exchange. As a result of this rule change, we began reporting the affected derivative instruments on a net basis on our balance sheet during the first quarter of 2017. The netting process results in the elimination of derivative assets, derivative liabilities and associated restricted cash and related amounts with each other as if the underlying derivative instruments had settled on the balance sheet date. Historically through December 31, 2016, we reported such derivatives on a gross basis (i.e., not netted).
Derivative transactions cleared on exchanges other than the CME (e.g., the Intercontinental Exchange or ICE) continue to be reported on a gross basis.
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
|
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
|
March 31, 2017
|
|
December 31, 2016
|
|
|
|
|
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 rate derivatives
|
|
Current assets
|
|
$
|
0.7
|
|
Current assets
|
|
$
|
0.3
|
|
Current
liabilities
|
|
$
|
1.7
|
|
Current
liabilities
|
|
$
|
0.2
|
|
Interest rate derivatives
|
|
Other assets
|
|
|
38.6
|
|
Other assets
|
|
|
36.2
|
|
Other liabilities
|
|
|
0.3
|
|
Other liabilities
|
|
|
0.9
|
|
Total interest rate derivatives
|
|
|
|
|
39.3
|
|
|
|
|
36.5
|
|
|
|
|
2.0
|
|
|
|
|
1.1
|
|
Commodity derivatives
|
|
Current assets
|
|
|
34.1
|
|
Current assets
|
|
|
499.2
|
|
Current
liabilities
|
|
|
30.0
|
|
Current
liabilities
|
|
|
662.0
|
|
Commodity derivatives
|
|
Other assets
|
|
|
--
|
|
Other assets
|
|
|
--
|
|
Other liabilities
|
|
|
--
|
|
Other liabilities
|
|
|
--
|
|
Total commodity derivatives
|
|
|
|
|
34.1
|
|
|
|
|
499.2
|
|
|
|
|
30.0
|
|
|
|
|
662.0
|
|
Total derivatives designated as hedging instruments
|
|
|
|
$
|
73.4
|
|
|
|
$
|
535.7
|
|
|
|
$
|
32.0
|
|
|
|
$
|
663.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives not designated as hedging instruments
|
|
Commodity derivatives
|
|
Current assets
|
|
$
|
5.6
|
|
Current assets
|
|
$
|
41.9
|
|
Current
liabilities
|
|
$
|
12.1
|
|
Current
liabilities
|
|
$
|
75.6
|
|
Commodity derivatives
|
|
Other assets
|
|
|
1.5
|
|
Other assets
|
|
|
0.3
|
|
Other liabilities
|
|
|
2.4
|
|
Other liabilities
|
|
|
1.8
|
|
Total commodity derivatives
|
|
|
|
$
|
7.1
|
|
|
|
$
|
42.2
|
|
|
|
$
|
14.5
|
|
|
|
$
|
77.4
|
|
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 March 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate derivatives
|
|
$
|
39.3
|
|
|
$
|
--
|
|
|
$
|
39.3
|
|
|
$
|
(0.6
|
)
|
|
$
|
--
|
|
|
$
|
--
|
|
|
$
|
38.7
|
|
Commodity derivatives
|
|
|
41.2
|
|
|
|
--
|
|
|
|
41.2
|
|
|
|
(38.0
|
)
|
|
|
--
|
|
|
|
--
|
|
|
|
3.2
|
|
As of December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate derivatives
|
|
$
|
36.5
|
|
|
$
|
--
|
|
|
$
|
36.5
|
|
|
$
|
(0.2
|
)
|
|
$
|
--
|
|
|
$
|
--
|
|
|
$
|
36.3
|
|
Commodity derivatives
|
|
|
541.4
|
|
|
|
--
|
|
|
|
541.4
|
|
|
|
(526.8
|
)
|
|
|
--
|
|
|
|
--
|
|
|
|
14.6
|
|
|
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 March 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate derivatives
|
|
$
|
2.0
|
|
|
$
|
--
|
|
|
$
|
2.0
|
|
|
$
|
(0.6
|
)
|
|
$
|
--
|
|
|
$
|
--
|
|
|
$
|
1.4
|
|
Commodity derivatives
|
|
|
44.5
|
|
|
|
--
|
|
|
|
44.5
|
|
|
|
(38.0
|
)
|
|
|
(3.2
|
)
|
|
|
--
|
|
|
|
3.3
|
|
As of December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate derivatives
|
|
$
|
1.1
|
|
|
$
|
--
|
|
|
$
|
1.1
|
|
|
$
|
(0.2
|
)
|
|
$
|
--
|
|
|
$
|
--
|
|
|
$
|
0.9
|
|
Commodity derivatives
|
|
|
739.4
|
|
|
|
--
|
|
|
|
739.4
|
|
|
|
(526.8
|
)
|
|
|
--
|
|
|
|
(212.4
|
)
|
|
|
0.2
|
|
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 March 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
Interest rate derivatives
|
Interest expense
|
|
$
|
(0.9
|
)
|
|
$
|
6.1
|
|
Commodity derivatives
|
Revenue
|
|
|
18.8
|
|
|
|
(19.0
|
)
|
Total
|
|
|
$
|
17.9
|
|
|
$
|
(12.9
|
)
|
Derivatives in Fair Value
Hedging Relationships
|
Location
|
|
Gain (Loss) Recognized in
Income on Hedged Item
|
|
|
|
|
For the Three Months
Ended March 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
Interest rate derivatives
|
Interest expense
|
|
$
|
0.9
|
|
|
$
|
(6.2
|
)
|
Commodity derivatives
|
Revenue
|
|
|
(12.4
|
)
|
|
|
28.0
|
|
Total
|
|
|
$
|
(11.5
|
)
|
|
$
|
21.8
|
|
For the three months ended March 31, 2017, the net gain of $6.4 million recognized in income from our commodity derivatives designated as fair value hedges includes $0.6 million of net losses attributable to hedge ineffectiveness. The remaining $7.0 million of net gain recognized during the three months ended March 31, 2017 was primarily related to prompt-to-forward month price differentials that were excluded from the assessment of hedge effectiveness. Net gains or losses due to ineffectiveness and from those amounts excluded from the assessment of hedge effectiveness were immaterial for all other periods presented.
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 (Effective Portion)
|
|
|
|
For the Three Months
Ended March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Interest rate derivatives
|
|
$
|
2.4
|
|
|
$
|
--
|
|
Commodity derivatives – Revenue (1)
|
|
|
147.6
|
|
|
|
3.3
|
|
Commodity derivatives – Operating costs and expenses (1)
|
|
|
(2.8
|
)
|
|
|
(4.5
|
)
|
Total
|
|
$
|
147.2
|
|
|
$
|
(1.2
|
)
|
|
|
(1) The fair value of these derivative instruments will be reclassified to their respective locations on the Unaudited Condensed Statement of Consolidated Operations upon settlement of the underlying derivative transactions, as appropriate.
|
|
Derivatives in Cash Flow
Hedging Relationships
|
Location
|
|
Gain (Loss) Reclassified from
Accumulated Other
Comprehensive Income (Loss)
to Income (Effective Portion)
|
|
|
|
|
For the Three Months
Ended March 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
Interest rate derivatives
|
Interest expense
|
|
$
|
(9.6
|
)
|
|
$
|
(9.2
|
)
|
Commodity derivatives
|
Revenue
|
|
|
(7.5
|
)
|
|
|
58.8
|
|
Commodity derivatives
|
Operating costs and expenses
|
|
|
0.4
|
|
|
|
(1.6
|
)
|
Total
|
|
|
$
|
(16.7
|
)
|
|
$
|
48.0
|
|
Derivatives in Cash Flow
Hedging Relationships
|
Location
|
|
Gain (Loss) Recognized in
Income on Derivative
(Ineffective Portion)
|
|
|
|
|
For the Three Months
Ended March 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
Commodity derivatives
|
Operating costs and expenses
|
|
$
|
(1.0
|
)
|
|
$
|
--
|
|
Over the next twelve months, we expect to reclassify $41.4 million of losses attributable to interest rate derivative instruments from accumulated other comprehensive loss to earnings as an increase in interest expense. Likewise, we expect to reclassify $68.0 million of gains attributable to commodity derivative instruments from accumulated other comprehensive income to earnings, $67.5 million as an increase in revenue and $0.5 million as a decrease 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 March 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
Commodity derivatives
|
Revenue
|
|
$
|
15.7
|
|
|
$
|
(1.3
|
)
|
Commodity derivatives
|
Operating costs and expenses
|
|
|
4.5
|
|
|
|
0.1
|
|
Total
|
|
|
$
|
20.2
|
|
|
$
|
(1.2
|
)
|
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 at March 31, 2017 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 new 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.
|
|
March 31, 2017
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
|
|
$
|
--
|
|
|
$
|
39.3
|
|
|
$
|
--
|
|
|
$
|
39.3
|
|
Commodity derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value before application of CME Rule 814
|
|
|
57.6
|
|
|
|
174.3
|
|
|
|
1.5
|
|
|
|
233.4
|
|
Impact of CME Rule 814 change
|
|
|
(57.6
|
)
|
|
|
(134.6
|
)
|
|
|
--
|
|
|
|
(192.2
|
)
|
Total commodity derivatives
|
|
|
--
|
|
|
|
39.7
|
|
|
|
1.5
|
|
|
|
41.2
|
|
Total financial assets
|
|
$
|
--
|
|
|
$
|
79.0
|
|
|
$
|
1.5
|
|
|
$
|
80.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidity Option Agreement
|
|
$
|
--
|
|
|
$
|
--
|
|
|
$
|
275.1
|
|
|
$
|
275.1
|
|
Interest rate derivatives
|
|
|
--
|
|
|
|
2.0
|
|
|
|
--
|
|
|
|
2.0
|
|
Commodity derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value before application of CME Rule 814
|
|
|
35.4
|
|
|
|
172.9
|
|
|
|
0.8
|
|
|
|
209.1
|
|
Impact of CME Rule 814 change
|
|
|
(35.4
|
)
|
|
|
(129.2
|
)
|
|
|
--
|
|
|
|
(164.6
|
)
|
Total commodity derivatives
|
|
|
--
|
|
|
|
43.7
|
|
|
|
0.8
|
|
|
|
44.5
|
|
Total financial liabilities
|
|
$
|
--
|
|
|
$
|
45.7
|
|
|
$
|
275.9
|
|
|
$
|
321.6
|
|
|
|
December 31, 2016
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
|
|
$
|
--
|
|
|
$
|
36.5
|
|
|
$
|
--
|
|
|
$
|
36.5
|
|
Commodity derivatives
|
|
|
84.5
|
|
|
|
455.2
|
|
|
|
1.7
|
|
|
|
541.4
|
|
Total financial assets
|
|
$
|
84.5
|
|
|
$
|
491.7
|
|
|
$
|
1.7
|
|
|
$
|
577.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidity Option Agreement
|
|
$
|
--
|
|
|
$
|
--
|
|
|
$
|
269.6
|
|
|
$
|
269.6
|
|
Interest rate derivatives
|
|
|
--
|
|
|
|
1.1
|
|
|
|
--
|
|
|
|
1.1
|
|
Commodity derivatives
|
|
|
136.8
|
|
|
|
602.3
|
|
|
|
0.3
|
|
|
|
739.4
|
|
Total financial liabilities
|
|
$
|
136.8
|
|
|
$
|
603.4
|
|
|
$
|
269.9
|
|
|
$
|
1,010.1
|
|
The following table sets forth a reconciliation of changes in the fair values of our recurring Level 3 financial assets and liabilities on a combined basis for the periods indicated:
|
|
|
For the Three Months
Ended March 31,
|
|
|
Location
|
|
2017
|
|
|
2016
|
|
Financial liability balance, net, January 1
|
|
|
$
|
(268.2
|
)
|
|
$
|
(246.7
|
)
|
Total gains (losses) included in:
|
|
|
|
|
|
|
|
|
|
Net income (1)
|
Revenue
|
|
|
0.7
|
|
|
|
0.7
|
|
Net income
|
Other expense, net
|
|
|
(5.5
|
)
|
|
|
2.2
|
|
Other comprehensive income (loss)
|
Commodity derivative instruments – changes in fair value of cash flow hedges
|
|
|
--
|
|
|
|
1.5
|
|
Settlements
|
Revenue
|
|
|
(1.4
|
)
|
|
|
(0.1
|
)
|
Transfers out of Level 3
|
|
|
|
--
|
|
|
|
0.1
|
|
Financial liability balance, net, March 31
|
|
|
$
|
(274.4
|
)
|
|
$
|
(242.3
|
)
|
|
|
(1)
There were unrealized losses of $0.6 million and unrealized gains of $0.6 million included in these amounts for the three months ended March 31, 2017 and 2016, respectively.
|
|
The following
table provides quantitative information regarding our recurring Level 3 fair value measurements for commodity derivatives at March 31, 2017:
|
|
Fair Value
|
|
|
|
|
|
|
Financial
Assets
|
|
|
Financial
Liabilities
|
|
Valuation
Techniques
|
Unobservable
Input
|
Range
|
Commodity derivatives – Crude oil
|
|
$
|
1.5
|
|
|
$
|
0.8
|
|
Discounted cash flow
|
Forward commodity prices
|
$48.68-$51.93/barrel
|
With respect to commodity derivatives, we believe forward commodity prices are the most significant unobservable inputs in determining our Level 3 recurring fair value measurements at March 31, 2017. In general, changes in the price of the underlying commodity increases or decreases the fair value of a commodity derivative depending on whether the derivative was purchased or sold. We generally expect changes in the fair value of our derivative instruments to be offset by corresponding changes in the fair value of our hedged exposures.
Nonrecurring Fair Value Measurements
The following table summarizes our non-cash asset impairment charges for long-lived assets by segment during each of the periods indicated:
|
|
For the Three Months
Ended March 31,
|
|
|
|
2017
|
|
|
2016
|
|
NGL Pipelines & Services
|
|
$
|
0.2
|
|
|
$
|
0.3
|
|
Crude Oil Pipelines & Services
|
|
|
--
|
|
|
|
0.2
|
|
Natural Gas Pipelines & Services
|
|
|
0.2
|
|
|
|
--
|
|
Petrochemical & Refined Products Services
|
|
|
--
|
|
|
|
0.1
|
|
Total
|
|
$
|
0.4
|
|
|
$
|
0.6
|
|
Impairment charges are primarily a component of "Operating costs and expenses" on our Unaudited Condensed Statements of Consolidated Operations.
The following table presents categories of long-lived assets that were subject to non-recurring fair value measurements during the three months ended March 31, 2017:
|
|
|
|
Fair Value Measurements
at the End of the Reporting Period Using
|
|
|
|
|
|
Carrying
Value at
March 31,
2017
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
Non-Cash
Impairment
Loss
|
|
Long-lived assets disposed of other than by sale
|
|
$
|
--
|
|
|
$
|
--
|
|
|
$
|
--
|
|
|
$
|
--
|
|
|
$
|
0.4
|
|
Total asset impairment and related charges during the three months ended March 31, 2017 were $11.2 million, which consisted of $0.4 million of impairment charges attributable to long-lived assets and $10.8 million of impairment charges attributable to the write-down of spare parts classified as current assets.
The following table presents categories of long-lived assets that were subject to non-recurring fair value measurements during the three months ended March 31, 2016:
|
|
|
Fair Value Measurements
at the End of the Reporting Period Using
|
|
|
|
|
Carrying
Value at
March 31,
2016
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
Non-Cash
Impairment
Loss
|
|
Long-lived assets disposed of other than by sale
|
|
$
|
--
|
|
|
$
|
--
|
|
|
$
|
--
|
|
|
$
|
--
|
|
|
$
|
0.6
|
|
Total asset impairment and related charges during the three months ended March 31, 2016 were $1.7 million, which consisted of $0.6 million of impairment charges attributable to long-lived assets and $1.1 million of impairment charges attributable to the write-down of spare parts classified as current assets.
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 $21.98 billion and $21.95 billion at March 31, 2017 and December 31, 2016, respectively. The aggregate carrying value of these debt obligations was $20.85 billion at March 31, 2017 and December 31, 2016. These values are based on quoted market prices for such debt or debt of similar terms and maturities (Level 2), our credit standing and the credit standing of our counterparties. Changes in market rates of interest affect the fair value of our fixed-rate debt. The amounts reported for fixed-rate debt obligations exclude those amounts hedged using fixed-to-floating interest rate swaps. See "
Interest Rate Hedging Activities
" within this Note 12 for additional information.
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 13. Related Party Transactions
The following table summarizes our related party transactions for the periods indicated:
|
|
For the Three Months
Ended March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Revenues – related parties:
|
|
|
|
|
|
|
Unconsolidated affiliates
|
|
$
|
10.8
|
|
|
$
|
15.6
|
|
Costs and expenses – related parties:
|
|
|
|
|
|
|
|
|
EPCO and its privately held affiliates
|
|
$
|
243.1
|
|
|
$
|
237.3
|
|
Unconsolidated affiliates
|
|
|
38.2
|
|
|
|
72.9
|
|
Total
|
|
$
|
281.3
|
|
|
$
|
310.2
|
|
The following table summarizes our related party accounts receivable and accounts payable balances at the dates indicated:
|
|
March 31,
2017
|
|
|
December 31,
2016
|
|
Accounts receivable - related parties:
|
|
|
|
|
|
|
Unconsolidated affiliates
|
|
$
|
1.6
|
|
|
$
|
1.1
|
|
|
|
|
|
|
|
|
|
|
Accounts payable - related parties:
|
|
|
|
|
|
|
|
|
EPCO and its privately held affiliates
|
|
$
|
39.2
|
|
|
$
|
88.9
|
|
Unconsolidated affiliates
|
|
|
10.9
|
|
|
|
16.2
|
|
Total
|
|
$
|
50.1
|
|
|
$
|
105.1
|
|
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 March 31, 2017, 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 Units
|
Percentage of
Total Units
Outstanding
|
685,481,428
|
32%
|
Of the total number of units held by EPCO and its privately held affiliates, 118,000,000 have been pledged as security under the credit facilities of a privately held affiliate at March 31, 2017. 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 our common units.
We 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 depend on the cash distributions they receive from us and other investments to fund their other activities and to meet their debt obligations. During the three months ended March 31, 2017 and 2016, we paid EPCO and its privately held affiliates cash distributions totaling $275.2 million and $260.1 million, respectively.
We have no employees. All of our operating functions and general and administrative support services are provided by employees of EPCO pursuant to the ASA or by other service providers. 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 March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Operating costs and expenses
|
|
$
|
211.6
|
|
|
$
|
205.4
|
|
General and administrative expenses
|
|
|
26.8
|
|
|
|
27.3
|
|
Total costs and expenses
|
|
$
|
238.4
|
|
|
$
|
232.7
|
|
Note 14. Commitments and Contingencies
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.
Management has regular quarterly litigation reviews, including updates from legal counsel, to assess the possible need for accounting recognition and disclosure of these contingencies. We accrue an undiscounted liability for those contingencies where the loss is probable and the amount can be reasonably estimated. If a range of probable loss amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum amount in the range is accrued.
We do not record a contingent liability when the likelihood of loss is probable but the amount cannot be reasonably estimated or when the likelihood of loss is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is reasonably possible and the impact would be material to our consolidated financial statements, we disclose the nature of the contingency and, where feasible, an estimate of the possible loss or range of loss. Based on a consideration of all relevant known facts and circumstances, we do not believe that the ultimate outcome of any currently pending litigation directed against us will have a material impact on our consolidated financial statements either individually at the claim level or in the aggregate.
At March 31, 2017 and December 31, 2016, our accruals for litigation contingencies were $0.3 million and were recorded in our Unaudited Condensed Consolidated Balance Sheets as a component of "Other current liabilities." Our evaluation of litigation contingencies is based on the facts and circumstances of each case and predicting the outcome of these matters involves uncertainties. In the event the assumptions we use to evaluate these matters change in future periods or new information becomes available, we may be required to record additional accruals. In an effort to mitigate expenses associated with litigation, we may settle legal proceedings out of court.
ETP Matter
. In connection with a proposed pipeline project, we and Energy Transfer Partners, L.P. ("ETP") signed a non-binding letter of intent in April 2011 that disclaimed any partnership or joint venture related to such project absent executed definitive documents and board approvals of the respective companies. Definitive agreements were never executed and board approval was never obtained for the potential pipeline project. In August 2011, the proposed pipeline project was cancelled due to a lack of customer support.
In September 2011, ETP filed suit against us and a third party in connection with the cancelled project alleging, among other things, that we and ETP had formed a "partnership." The case was tried in the District Court of Dallas County, Texas, 298th Judicial District. While we firmly believe, and argued during our defense, that no agreement was ever executed forming a legal joint venture or partnership between the parties, the jury found that the actions of the two companies, nevertheless, constituted a legal partnership. As a result, the jury found that ETP was wrongfully excluded from a subsequent pipeline project involving a third party, and awarded ETP $319.4 million in actual damages on March 4, 2014. On July 29, 2014, the court entered judgment against us in an aggregate amount of $535.8 million, which includes (i) $319.4 million as the amount of actual damages awarded by the jury, (ii) an additional $150.0 million in disgorgement for the alleged benefit we received due to a breach of fiduciary duties by us against ETP and (iii) prejudgment interest in the amount of $66.4 million. The court also awarded post-judgment interest on such aggregate amount, to accrue at a rate of 5%, compounded annually.
We do not believe that the verdict or the judgment entered against us is supported by the evidence or the law. We filed our Brief of the Appellant in the Court of Appeals for the Fifth District of Dallas, Texas on March 30, 2015 and ETP filed its Brief of Appellees on June 29, 2015. We filed our Reply Brief of Appellant on September 18, 2015. Oral argument was conducted on April 20, 2016, and the case has now been submitted to the Court of Appeals for its consideration. We intend to vigorously oppose the judgment through the appeals process. As of March 31, 2017, we have not recorded a provision for this matter as management believes payment of damages in this case is not probable.
PDH Litigation
. In July 2013, we executed a contract with Foster Wheeler USA Corporation ("Foster Wheeler") pursuant to which Foster Wheeler was to serve as the general contractor responsible for the engineering, procurement, construction and installation of our propane dehydrogenation ("PDH") facility. In November 2014, Foster Wheeler was acquired by an affiliate of AMEC plc to form Amec Foster Wheeler plc, and Foster Wheeler is now known as Amec Foster Wheeler USA Corporation ("AFW"). In December 2015, Enterprise and AFW entered into a transition services agreement under which AFW was partially terminated from the PDH project. In December 2015, Enterprise engaged a second contractor, Optimized Process Designs LLC, to complete the construction and installation of the PDH facility.
On September 2, 2016, we terminated AFW for cause and filed a lawsuit in the 151st Judicial Civil District Court of Harris County, Texas against AFW and its parent company, Amec Foster Wheeler plc, asserting claims for breach of contract, breach of warranty, fraudulent inducement, string-along fraud, gross negligence, professional negligence, negligent misrepresentation and attorneys' fees. We intend to diligently prosecute these claims and seek all direct, consequential, and exemplary damages to which we may be entitled.
Contractual Obligations
Scheduled Maturities of Debt
. We have long-term and short-term payment obligations under debt agreements. See Note 7 for additional information regarding our scheduled future maturities of debt principal.
Operating Lease Obligations
. Consolidated lease and rental expense was $26.2 million and $28.5 million during the three months ended March 31, 2017 and 2016, respectively. Our operating lease commitments at March 31, 2017 did not differ materially from those reported in our 2016 Form 10-K.
Purchase Obligations
. Our consolidated purchase obligations at March 31, 2017 did not differ materially from those reported in our 2016 Form 10-K.
Liquidity Option Agreement
We entered into a put option agreement (the "Liquidity Option Agreement" or "Liquidity Option") with Oiltanking Holding Americas, Inc. ("OTA") and Marquard & Bahls ("M&B") in connection with the Oiltanking acquisition. Under the Liquidity Option Agreement, we granted M&B the option to sell to us 100% of the issued and outstanding capital stock of OTA at any time within a 90-day period commencing on February 1, 2020. If the Liquidity Option is exercised, we would indirectly acquire any Enterprise common units owned by OTA and assume all future income tax obligations of OTA associated with (i) owning common units encumbered by the entity-level taxes of a U.S. corporation and (ii) OTA's deferred tax liabilities. To the extent that the sum of OTA's deferred tax liabilities exceeds the then current book value of the Liquidity Option liability, we will recognize expense for the difference.
The carrying value of the Liquidity Option Agreement, which is a component of "Other long-term liabilities" on our Unaudited Condensed Consolidated Balance Sheet, was $275.1 million and $269.6 million at March 31, 2017 and December 31, 2016, respectively. The fair value of the Liquidity Option, at any measurement date, represents the present value of estimated federal and state income tax payments that we believe a market participant would incur on the future taxable income of OTA. We expect that OTA's taxable income would, in turn, be based on an allocation of our partnership's taxable income to the common units held by OTA and reflect any tax planning we believe could be employed. Our valuation estimate for the Liquidity Option at March 31, 2017 is based on several inputs that are not observable in the market (i.e., Level 3 inputs) such as the following:
|
OTA remains in existence (i.e., is not dissolved and its assets sold) between one and 30 years following exercise of the Liquidity Option, depending on the liquidity preference of its owner. An equal probability that OTA will be dissolved was assigned to each year in the 30-year forecast period;
|
|
OTA assumes approximately $2.2 billion of associated long-term debt (30-year maturity) immediately after the Liquidity Option is exercised. For purposes of the valuation at March 31, 2017, we used a market rate commensurate with level of debt and tenure of approximately 4.85%. If the assumption of debt is excluded from the valuation model at March 31, 2017 (and all other inputs remained the same), the estimated fair value of the Liquidity Option would have increased by $229.1 million and resulted in the recognition of an equal amount of expense at the time of change;
|
|
Forecasted annual growth rates of Enterprise's taxable earnings before interest, taxes, depreciation and amortization ranging from 0.1% to 13.6%;
|
|
OTA's ownership interest in Enterprise common units is assumed to be diluted over time in connection with Enterprise's issuance of equity for general company reasons. For purposes of the valuation at March 31, 2017, we used ownership interests ranging from 1.9% to 2.5%;
|
|
OTA pays an aggregate federal and state income tax rate of 38% on its taxable income; and
|
|
A discount rate of 7.7% based on our weighted-average cost of capital at March 31, 2017.
|
Furthermore, our valuation estimate incorporates probability-weighted scenarios reflecting the likelihood that M&B may elect to divest a portion of the Enterprise common units held by OTA prior to exercise of the option. At March 31, 2017, based on these scenarios, we expect that OTA would own approximately 85% of the 54,807,352 Enterprise common units it received in Step 1 when the option period begins in February 2020. If our valuation estimate had assumed that OTA owned all of the Enterprise common units it received in Step 1 at the time of exercise (and all other inputs remained the same), the estimated fair value of the Liquidity Option liability at March 31, 2017 would have increased by $47.1 million.
Changes in the fair value of the Liquidity Option are recognized in earnings as a component of other income (expense) on our Unaudited Condensed Statements of Consolidated Operations. Results for the three months ended March 31, 2017 and 2016 include $5.5 million of expense and $2.2 million of benefit, respectively, of aggregate non-cash adjustments attributable to accretion and changes in management estimates regarding inputs to the valuation model.
Note 15. Supplemental Cash Flow Information
The following table presents the net effect of changes in our operating accounts for the periods indicated:
|
|
For the Three Months
Ended March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Decrease (increase) in:
|
|
|
|
|
|
|
Accounts receivable – trade
|
|
$
|
110.1
|
|
|
$
|
124.6
|
|
Accounts receivable – related parties
|
|
|
(0.6
|
)
|
|
|
0.4
|
|
Inventories
|
|
|
(71.9
|
)
|
|
|
(194.3
|
)
|
Prepaid and other current assets
|
|
|
249.0
|
|
|
|
5.3
|
|
Other assets
|
|
|
(2.2
|
)
|
|
|
1.3
|
|
Increase (decrease) in:
|
|
|
|
|
|
|
|
|
Accounts payable – trade
|
|
|
6.5
|
|
|
|
(64.8
|
)
|
Accounts payable – related parties
|
|
|
(21.1
|
)
|
|
|
(46.7
|
)
|
Accrued product payables
|
|
|
(16.8
|
)
|
|
|
228.7
|
|
Accrued interest
|
|
|
(137.9
|
)
|
|
|
(158.2
|
)
|
Other current liabilities
|
|
|
(400.2
|
)
|
|
|
(84.4
|
)
|
Other liabilities
|
|
|
(3.7
|
)
|
|
|
1.7
|
|
Net effect of changes in operating accounts
|
|
$
|
(288.8
|
)
|
|
$
|
(186.4
|
)
|
We incurred liabilities for construction in progress that had not been paid at March 31, 2017 and December 31, 2016 of $240.9 million and $124.3 million, respectively. Such amounts are not included under the caption "Capital expenditures" on the Unaudited Condensed Statements of Consolidated Cash Flows.
On certain of our capital projects, third parties are obligated to reimburse us for all or a portion of project expenditures. The majority of such arrangements are associated with projects related to pipeline construction activities and production well tie-ins. These cash receipts are presented as "Contributions in aid of construction costs" within the investing activities section of our Unaudited Condensed Statements of Consolidated Cash Flows.
Note 16. Condensed Consolidating Financial Information
EPO conducts all of our business. Currently, we have no independent operations and no material assets outside those of EPO.
EPO has issued publicly traded debt securities. As the parent company of EPO, Enterprise Products Partners L.P. guarantees substantially all of the debt obligations of EPO. If EPO were to default on any of its guaranteed debt, Enterprise Products Partners L.P. would be responsible for full and unconditional repayment of that obligation. See Note 7 for additional information regarding our consolidated debt obligations.
EPO's consolidated subsidiaries have no significant restrictions on their ability to pay distributions or make loans to Enterprise Products Partners L.P.
Enterprise Products Partners L.P.
Unaudited Condensed Consolidating Balance Sheet
March 31, 2017
|
|
EPO and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsidiary
Issuer
(EPO)
|
|
|
Other
Subsidiaries
(Non-
guarantor)
|
|
|
EPO and
Subsidiaries
Eliminations
and
Adjustments
|
|
|
Consolidated
EPO and
Subsidiaries
|
|
|
Enterprise
Products
Partners
L.P.
(Guarantor)
|
|
|
Eliminations
and
Adjustments
|
|
|
Consolidated
Total
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents and restricted cash
|
|
$
|
45.0
|
|
|
$
|
67.9
|
|
|
$
|
(5.8
|
)
|
|
$
|
107.1
|
|
|
$
|
--
|
|
|
$
|
--
|
|
|
$
|
107.1
|
|
Accounts receivable – trade, net
|
|
|
1,231.3
|
|
|
|
1,922.2
|
|
|
|
(0.7
|
)
|
|
|
3,152.8
|
|
|
|
--
|
|
|
|
--
|
|
|
|
3,152.8
|
|
Accounts receivable – related parties
|
|
|
101.5
|
|
|
|
818.8
|
|
|
|
(918.7
|
)
|
|
|
1.6
|
|
|
|
6.6
|
|
|
|
(6.6
|
)
|
|
|
1.6
|
|
Inventories
|
|
|
1,548.3
|
|
|
|
374.1
|
|
|
|
(0.4
|
)
|
|
|
1,922.0
|
|
|
|
--
|
|
|
|
--
|
|
|
|
1,922.0
|
|
Derivative assets
|
|
|
37.1
|
|
|
|
3.3
|
|
|
|
--
|
|
|
|
40.4
|
|
|
|
--
|
|
|
|
--
|
|
|
|
40.4
|
|
Prepaid and other current assets
|
|
|
212.5
|
|
|
|
220.0
|
|
|
|
(14.9
|
)
|
|
|
417.6
|
|
|
|
--
|
|
|
|
--
|
|
|
|
417.6
|
|
Total current assets
|
|
|
3,175.7
|
|
|
|
3,406.3
|
|
|
|
(940.5
|
)
|
|
|
5,641.5
|
|
|
|
6.6
|
|
|
|
(6.6
|
)
|
|
|
5,641.5
|
|
Property, plant and equipment, net
|
|
|
4,972.2
|
|
|
|
28,582.3
|
|
|
|
1.6
|
|
|
|
33,556.1
|
|
|
|
--
|
|
|
|
--
|
|
|
|
33,556.1
|
|
Investments in unconsolidated affiliates
|
|
|
40,079.6
|
|
|
|
4,186.7
|
|
|
|
(41,594.9
|
)
|
|
|
2,671.4
|
|
|
|
22,847.6
|
|
|
|
(22,847.6
|
)
|
|
|
2,671.4
|
|
Intangible assets, net
|
|
|
696.0
|
|
|
|
3,141.3
|
|
|
|
(14.2
|
)
|
|
|
3,823.1
|
|
|
|
--
|
|
|
|
--
|
|
|
|
3,823.1
|
|
Goodwill
|
|
|
459.5
|
|
|
|
5,285.7
|
|
|
|
--
|
|
|
|
5,745.2
|
|
|
|
--
|
|
|
|
--
|
|
|
|
5,745.2
|
|
Other assets
|
|
|
228.1
|
|
|
|
42.8
|
|
|
|
(179.2
|
)
|
|
|
91.7
|
|
|
|
0.5
|
|
|
|
--
|
|
|
|
92.2
|
|
Total assets
|
|
$
|
49,611.1
|
|
|
$
|
44,645.1
|
|
|
$
|
(42,727.2
|
)
|
|
$
|
51,529.0
|
|
|
$
|
22,854.7
|
|
|
$
|
(22,854.2
|
)
|
|
$
|
51,529.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current maturities of debt
|
|
$
|
2,299.9
|
|
|
$
|
0.1
|
|
|
$
|
--
|
|
|
$
|
2,300.0
|
|
|
$
|
--
|
|
|
$
|
--
|
|
|
$
|
2,300.0
|
|
Accounts payable – trade
|
|
|
221.5
|
|
|
|
310.2
|
|
|
|
(5.8
|
)
|
|
|
525.9
|
|
|
|
0.2
|
|
|
|
--
|
|
|
|
526.1
|
|
Accounts payable – related parties
|
|
|
894.4
|
|
|
|
98.3
|
|
|
|
(936.1
|
)
|
|
|
56.6
|
|
|
|
0.1
|
|
|
|
(6.6
|
)
|
|
|
50.1
|
|
Accrued product payables
|
|
|
1,980.4
|
|
|
|
1,638.9
|
|
|
|
(1.1
|
)
|
|
|
3,618.2
|
|
|
|
--
|
|
|
|
--
|
|
|
|
3,618.2
|
|
Accrued interest
|
|
|
202.5
|
|
|
|
0.3
|
|
|
|
--
|
|
|
|
202.8
|
|
|
|
--
|
|
|
|
--
|
|
|
|
202.8
|
|
Derivative liabilities
|
|
|
34.5
|
|
|
|
9.3
|
|
|
|
--
|
|
|
|
43.8
|
|
|
|
--
|
|
|
|
--
|
|
|
|
43.8
|
|
Other current liabilities
|
|
|
53.4
|
|
|
|
264.1
|
|
|
|
(11.0
|
)
|
|
|
306.5
|
|
|
|
--
|
|
|
|
0.5
|
|
|
|
307.0
|
|
Total current liabilities
|
|
|
5,686.6
|
|
|
|
2,321.2
|
|
|
|
(954.0
|
)
|
|
|
7,053.8
|
|
|
|
0.3
|
|
|
|
(6.1
|
)
|
|
|
7,048.0
|
|
Long-term debt
|
|
|
21,107.9
|
|
|
|
15.1
|
|
|
|
--
|
|
|
|
21,123.0
|
|
|
|
--
|
|
|
|
--
|
|
|
|
21,123.0
|
|
Deferred tax liabilities
|
|
|
4.4
|
|
|
|
45.0
|
|
|
|
(0.5
|
)
|
|
|
48.9
|
|
|
|
--
|
|
|
|
3.7
|
|
|
|
52.6
|
|
Other long-term liabilities
|
|
|
11.6
|
|
|
|
400.6
|
|
|
|
(181.4
|
)
|
|
|
230.8
|
|
|
|
275.1
|
|
|
|
--
|
|
|
|
505.9
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Partners' and other owners' equity
|
|
|
22,800.6
|
|
|
|
41,785.8
|
|
|
|
(41,764.2
|
)
|
|
|
22,822.2
|
|
|
|
22,579.3
|
|
|
|
(22,822.2
|
)
|
|
|
22,579.3
|
|
Noncontrolling interests
|
|
|
--
|
|
|
|
77.4
|
|
|
|
172.9
|
|
|
|
250.3
|
|
|
|
--
|
|
|
|
(29.6
|
)
|
|
|
220.7
|
|
Total equity
|
|
|
22,800.6
|
|
|
|
41,863.2
|
|
|
|
(41,591.3
|
)
|
|
|
23,072.5
|
|
|
|
22,579.3
|
|
|
|
(22,851.8
|
)
|
|
|
22,800.0
|
|
Total liabilities and equity
|
|
$
|
49,611.1
|
|
|
$
|
44,645.1
|
|
|
$
|
(42,727.2
|
)
|
|
$
|
51,529.0
|
|
|
$
|
22,854.7
|
|
|
$
|
(22,854.2
|
)
|
|
$
|
51,529.5
|
|
Enterprise Products Partners L.P.
Unaudited Condensed Consolidating Balance Sheet
December 31, 2016
|
|
EPO and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsidiary
Issuer
(EPO)
|
|
|
Other
Subsidiaries
(Non-
guarantor)
|
|
|
EPO and
Subsidiaries
Eliminations
and
Adjustments
|
|
|
Consolidated
EPO and
Subsidiaries
|
|
|
Enterprise
Products
Partners
L.P.
(Guarantor)
|
|
|
Eliminations
and
Adjustments
|
|
|
Consolidated
Total
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents and restricted cash
|
|
$
|
366.2
|
|
|
$
|
58.9
|
|
|
$
|
(7.5
|
)
|
|
$
|
417.6
|
|
|
$
|
--
|
|
|
$
|
--
|
|
|
$
|
417.6
|
|
Accounts receivable – trade, net
|
|
|
1,499.4
|
|
|
|
1,830.3
|
|
|
|
(0.2
|
)
|
|
|
3,329.5
|
|
|
|
--
|
|
|
|
--
|
|
|
|
3,329.5
|
|
Accounts receivable – related parties
|
|
|
131.5
|
|
|
|
961.4
|
|
|
|
(1,090.7
|
)
|
|
|
2.2
|
|
|
|
--
|
|
|
|
(1.1
|
)
|
|
|
1.1
|
|
Inventories
|
|
|
1,357.5
|
|
|
|
413.5
|
|
|
|
(0.5
|
)
|
|
|
1,770.5
|
|
|
|
--
|
|
|
|
--
|
|
|
|
1,770.5
|
|
Derivative assets
|
|
|
464.8
|
|
|
|
76.6
|
|
|
|
--
|
|
|
|
541.4
|
|
|
|
--
|
|
|
|
--
|
|
|
|
541.4
|
|
Prepaid and other current assets
|
|
|
290.7
|
|
|
|
191.1
|
|
|
|
(13.7
|
)
|
|
|
468.1
|
|
|
|
--
|
|
|
|
--
|
|
|
|
468.1
|
|
Total current assets
|
|
|
4,110.1
|
|
|
|
3,531.8
|
|
|
|
(1,112.6
|
)
|
|
|
6,529.3
|
|
|
|
--
|
|
|
|
(1.1
|
)
|
|
|
6,528.2
|
|
Property, plant and equipment, net
|
|
|
4,796.5
|
|
|
|
28,495.7
|
|
|
|
0.3
|
|
|
|
33,292.5
|
|
|
|
--
|
|
|
|
--
|
|
|
|
33,292.5
|
|
Investments in unconsolidated affiliates
|
|
|
39,995.5
|
|
|
|
4,227.9
|
|
|
|
(41,546.1
|
)
|
|
|
2,677.3
|
|
|
|
22,317.1
|
|
|
|
(22,317.1
|
)
|
|
|
2,677.3
|
|
Intangible assets, net
|
|
|
700.2
|
|
|
|
3,178.2
|
|
|
|
(14.3
|
)
|
|
|
3,864.1
|
|
|
|
--
|
|
|
|
--
|
|
|
|
3,864.1
|
|
Goodwill
|
|
|
459.5
|
|
|
|
5,285.7
|
|
|
|
--
|
|
|
|
5,745.2
|
|
|
|
--
|
|
|
|
--
|
|
|
|
5,745.2
|
|
Other assets
|
|
|
222.6
|
|
|
|
41.0
|
|
|
|
(177.5
|
)
|
|
|
86.1
|
|
|
|
0.6
|
|
|
|
--
|
|
|
|
86.7
|
|
Total assets
|
|
$
|
50,284.4
|
|
|
$
|
44,760.3
|
|
|
$
|
(42,850.2
|
)
|
|
$
|
52,194.5
|
|
|
$
|
22,317.7
|
|
|
$
|
(22,318.2
|
)
|
|
$
|
52,194.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current maturities of debt
|
|
$
|
2,576.7
|
|
|
$
|
0.1
|
|
|
$
|
--
|
|
|
$
|
2,576.8
|
|
|
$
|
--
|
|
|
$
|
--
|
|
|
$
|
2,576.8
|
|
Accounts payable – trade
|
|
|
133.1
|
|
|
|
272.1
|
|
|
|
(7.5
|
)
|
|
|
397.7
|
|
|
|
--
|
|
|
|
--
|
|
|
|
397.7
|
|
Accounts payable – related parties
|
|
|
1,071.5
|
|
|
|
139.6
|
|
|
|
(1,106.0
|
)
|
|
|
105.1
|
|
|
|
1.1
|
|
|
|
(1.1
|
)
|
|
|
105.1
|
|
Accrued product payables
|
|
|
1,944.5
|
|
|
|
1,670.3
|
|
|
|
(1.1
|
)
|
|
|
3,613.7
|
|
|
|
--
|
|
|
|
--
|
|
|
|
3,613.7
|
|
Accrued interest
|
|
|
340.7
|
|
|
|
0.1
|
|
|
|
--
|
|
|
|
340.8
|
|
|
|
--
|
|
|
|
--
|
|
|
|
340.8
|
|
Derivative liabilities
|
|
|
590.3
|
|
|
|
147.4
|
|
|
|
--
|
|
|
|
737.7
|
|
|
|
--
|
|
|
|
--
|
|
|
|
737.7
|
|
Other current liabilities
|
|
|
173.5
|
|
|
|
316.5
|
|
|
|
(12.0
|
)
|
|
|
478.0
|
|
|
|
--
|
|
|
|
0.7
|
|
|
|
478.7
|
|
Total current liabilities
|
|
|
6,830.3
|
|
|
|
2,546.1
|
|
|
|
(1,126.6
|
)
|
|
|
8,249.8
|
|
|
|
1.1
|
|
|
|
(0.4
|
)
|
|
|
8,250.5
|
|
Long-term debt
|
|
|
21,105.7
|
|
|
|
15.2
|
|
|
|
--
|
|
|
|
21,120.9
|
|
|
|
--
|
|
|
|
--
|
|
|
|
21,120.9
|
|
Deferred tax liabilities
|
|
|
5.0
|
|
|
|
45.1
|
|
|
|
(1.1
|
)
|
|
|
49.0
|
|
|
|
--
|
|
|
|
3.7
|
|
|
|
52.7
|
|
Other long-term liabilities
|
|
|
13.5
|
|
|
|
400.6
|
|
|
|
(179.8
|
)
|
|
|
234.3
|
|
|
|
269.6
|
|
|
|
--
|
|
|
|
503.9
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Partners' and other owners' equity
|
|
|
22,329.9
|
|
|
|
41,675.3
|
|
|
|
(41,713.4
|
)
|
|
|
22,291.8
|
|
|
|
22,047.0
|
|
|
|
(22,291.8
|
)
|
|
|
22,047.0
|
|
Noncontrolling interests
|
|
|
--
|
|
|
|
78.0
|
|
|
|
170.7
|
|
|
|
248.7
|
|
|
|
--
|
|
|
|
(29.7
|
)
|
|
|
219.0
|
|
Total equity
|
|
|
22,329.9
|
|
|
|
41,753.3
|
|
|
|
(41,542.7
|
)
|
|
|
22,540.5
|
|
|
|
22,047.0
|
|
|
|
(22,321.5
|
)
|
|
|
22,266.0
|
|
Total liabilities and equity
|
|
$
|
50,284.4
|
|
|
$
|
44,760.3
|
|
|
$
|
(42,850.2
|
)
|
|
$
|
52,194.5
|
|
|
$
|
22,317.7
|
|
|
$
|
(22,318.2
|
)
|
|
$
|
52,194.0
|
|
Enterprise Products Partners L.P.
Unaudited Condensed Consolidating Statement of Operations
For the Three Months Ended March 31, 2017
|
|
EPO and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsidiary
Issuer
(EPO)
|
|
|
Other
Subsidiaries
(Non-
guarantor)
|
|
|
EPO and
Subsidiaries
Eliminations
and
Adjustments
|
|
|
Consolidated
EPO and
Subsidiaries
|
|
|
Enterprise
Products
Partners
L.P.
(Guarantor)
|
|
|
Eliminations
and
Adjustments
|
|
|
Consolidated
Total
|
|
Revenues
|
|
$
|
12,532.8
|
|
|
$
|
4,308.2
|
|
|
$
|
(9,520.6
|
)
|
|
$
|
7,320.4
|
|
|
$
|
--
|
|
|
$
|
--
|
|
|
$
|
7,320.4
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses
|
|
|
12,239.0
|
|
|
|
3,615.0
|
|
|
|
(9,520.8
|
)
|
|
|
6,333.2
|
|
|
|
--
|
|
|
|
--
|
|
|
|
6,333.2
|
|
General and administrative costs
|
|
|
7.4
|
|
|
|
42.7
|
|
|
|
(0.2
|
)
|
|
|
49.9
|
|
|
|
0.5
|
|
|
|
--
|
|
|
|
50.4
|
|
Total costs and expenses
|
|
|
12,246.4
|
|
|
|
3,657.7
|
|
|
|
(9,521.0
|
)
|
|
|
6,383.1
|
|
|
|
0.5
|
|
|
|
--
|
|
|
|
6,383.6
|
|
Equity in income of unconsolidated affiliates
|
|
|
728.8
|
|
|
|
133.4
|
|
|
|
(767.4
|
)
|
|
|
94.8
|
|
|
|
766.7
|
|
|
|
(766.7
|
)
|
|
|
94.8
|
|
Operating income
|
|
|
1,015.2
|
|
|
|
783.9
|
|
|
|
(767.0
|
)
|
|
|
1,032.1
|
|
|
|
766.2
|
|
|
|
(766.7
|
)
|
|
|
1,031.6
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(248.8
|
)
|
|
|
(2.7
|
)
|
|
|
2.2
|
|
|
|
(249.3
|
)
|
|
|
--
|
|
|
|
--
|
|
|
|
(249.3
|
)
|
Other, net
|
|
|
2.2
|
|
|
|
0.2
|
|
|
|
(2.2
|
)
|
|
|
0.2
|
|
|
|
(5.5
|
)
|
|
|
--
|
|
|
|
(5.3
|
)
|
Total other expense, net
|
|
|
(246.6
|
)
|
|
|
(2.5
|
)
|
|
|
--
|
|
|
|
(249.1
|
)
|
|
|
(5.5
|
)
|
|
|
--
|
|
|
|
(254.6
|
)
|
Income before income taxes
|
|
|
768.6
|
|
|
|
781.4
|
|
|
|
(767.0
|
)
|
|
|
783.0
|
|
|
|
760.7
|
|
|
|
(766.7
|
)
|
|
|
777.0
|
|
Provision for income taxes
|
|
|
(2.9
|
)
|
|
|
(2.6
|
)
|
|
|
--
|
|
|
|
(5.5
|
)
|
|
|
--
|
|
|
|
(0.5
|
)
|
|
|
(6.0
|
)
|
Net income
|
|
|
765.7
|
|
|
|
778.8
|
|
|
|
(767.0
|
)
|
|
|
777.5
|
|
|
|
760.7
|
|
|
|
(767.2
|
)
|
|
|
771.0
|
|
Ne
t income at
tributable to noncontrolling interests
|
|
|
--
|
|
|
|
(1.7
|
)
|
|
|
(9.9
|
)
|
|
|
(11.6
|
)
|
|
|
--
|
|
|
|
1.3
|
|
|
|
(10.3
|
)
|
Net income attributable to entity
|
|
$
|
765.7
|
|
|
$
|
777.1
|
|
|
$
|
(776.9
|
)
|
|
$
|
765.9
|
|
|
$
|
760.7
|
|
|
$
|
(765.9
|
)
|
|
$
|
760.7
|
|
Enterprise Products Partners L.P.
Unaudited Condensed Consolidating Statement of Operations
For the Three Months Ended March 31, 2016
|
|
EPO and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsidiary
Issuer
(EPO)
|
|
|
Other
Subsidiaries
(Non-
guarantor)
|
|
|
EPO and
Subsidiaries
Eliminations
and
Adjustments
|
|
|
Consolidated
EPO and
Subsidiaries
|
|
|
Enterprise
Products
Partners
L.P.
(Guarantor)
|
|
|
Eliminations
and
Adjustments
|
|
|
Consolidated
Total
|
|
Revenues
|
|
$
|
5,361.9
|
|
|
$
|
3,282.7
|
|
|
$
|
(3,639.3
|
)
|
|
$
|
5,005.3
|
|
|
$
|
--
|
|
|
$
|
--
|
|
|
$
|
5,005.3
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses
|
|
|
5,091.2
|
|
|
|
2,695.1
|
|
|
|
(3,639.4
|
)
|
|
|
4,146.9
|
|
|
|
--
|
|
|
|
--
|
|
|
|
4,146.9
|
|
General and administrative costs
|
|
|
6.0
|
|
|
|
36.8
|
|
|
|
--
|
|
|
|
42.8
|
|
|
|
1.1
|
|
|
|
--
|
|
|
|
43.9
|
|
Total costs and expenses
|
|
|
5,097.2
|
|
|
|
2,731.9
|
|
|
|
(3,639.4
|
)
|
|
|
4,189.7
|
|
|
|
1.1
|
|
|
|
--
|
|
|
|
4,190.8
|
|
Equity in income of unconsolidated affiliates
|
|
|
632.7
|
|
|
|
133.6
|
|
|
|
(665.2
|
)
|
|
|
101.1
|
|
|
|
660.1
|
|
|
|
(660.1
|
)
|
|
|
101.1
|
|
Operating income
|
|
|
897.4
|
|
|
|
684.4
|
|
|
|
(665.1
|
)
|
|
|
916.7
|
|
|
|
659.0
|
|
|
|
(660.1
|
)
|
|
|
915.6
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(237.1
|
)
|
|
|
(5.2
|
)
|
|
|
1.7
|
|
|
|
(240.6
|
)
|
|
|
--
|
|
|
|
--
|
|
|
|
(240.6
|
)
|
Other, net
|
|
|
1.8
|
|
|
|
1.3
|
|
|
|
(1.7
|
)
|
|
|
1.4
|
|
|
|
2.2
|
|
|
|
--
|
|
|
|
3.6
|
|
Total other income (expense), net
|
|
|
(235.3
|
)
|
|
|
(3.9
|
)
|
|
|
--
|
|
|
|
(239.2
|
)
|
|
|
2.2
|
|
|
|
--
|
|
|
|
(237.0
|
)
|
Income before income taxes
|
|
|
662.1
|
|
|
|
680.5
|
|
|
|
(665.1
|
)
|
|
|
677.5
|
|
|
|
661.2
|
|
|
|
(660.1
|
)
|
|
|
678.6
|
|
Provision for income taxes
|
|
|
(2.9
|
)
|
|
|
(5.1
|
)
|
|
|
--
|
|
|
|
(8.0
|
)
|
|
|
--
|
|
|
|
(0.4
|
)
|
|
|
(8.4
|
)
|
Net income
|
|
|
659.2
|
|
|
|
675.4
|
|
|
|
(665.1
|
)
|
|
|
669.5
|
|
|
|
661.2
|
|
|
|
(660.5
|
)
|
|
|
670.2
|
|
Net income attributable to noncontrolling interests
|
|
|
--
|
|
|
|
(1.3
|
)
|
|
|
(8.9
|
)
|
|
|
(10.2
|
)
|
|
|
--
|
|
|
|
1.2
|
|
|
|
(9.0
|
)
|
Net income attributable to entity
|
|
$
|
659.2
|
|
|
$
|
674.1
|
|
|
$
|
(674.0
|
)
|
|
$
|
659.3
|
|
|
$
|
661.2
|
|
|
$
|
(659.3
|
)
|
|
$
|
661.2
|
|
Enterprise Products Partners L.P.
Unaudited Condensed Consolidating Statement of Comprehensive Income
For the Three Months Ended March 31, 2017
|
|
EPO and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsidiary
Issuer
(EPO)
|
|
|
Other
Subsidiaries
(Non-
guarantor)
|
|
|
EPO and
Subsidiaries
Eliminations
and
Adjustments
|
|
|
Consolidated
EPO and
Subsidiaries
|
|
|
Enterprise
Products
Partners
L.P.
(Guarantor)
|
|
|
Eliminations
and
Adjustments
|
|
|
Consolidated
Total
|
|
Comprehensive income
|
|
$
|
870.1
|
|
|
$
|
838.3
|
|
|
$
|
(767.0
|
)
|
|
$
|
941.4
|
|
|
$
|
924.5
|
|
|
$
|
(931.1
|
)
|
|
$
|
934.8
|
|
Comprehensive income
attrib
utable to noncontrolling interests
|
|
|
--
|
|
|
|
(1.7
|
)
|
|
|
(9.9
|
)
|
|
|
(11.6
|
)
|
|
|
--
|
|
|
|
1.3
|
|
|
|
(10.3
|
)
|
Comprehensive income attributable to entity
|
|
$
|
870.1
|
|
|
$
|
836.6
|
|
|
$
|
(776.9
|
)
|
|
$
|
929.8
|
|
|
$
|
924.5
|
|
|
$
|
(929.8
|
)
|
|
$
|
924.5
|
|
Enterprise Products Partners L.P.
Unaudited Condensed Consolidating Statement of Comprehensive Income
For the Three Months Ended March 31, 2016
|
|
EPO and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsidiary
Issuer
(EPO)
|
|
|
Other
Subsidiaries
(Non-
guarantor)
|
|
|
EPO and
Subsidiaries
Eliminations
and
Adjustments
|
|
|
Consolidated
EPO and
Subsidiaries
|
|
|
Enterprise
Products
Partners
L.P.
(Guarantor)
|
|
|
Eliminations
and
Adjustments
|
|
|
Consolidated
Total
|
|
Comprehensive income
|
|
$
|
655.2
|
|
|
$
|
630.1
|
|
|
$
|
(665.0
|
)
|
|
$
|
620.3
|
|
|
$
|
611.9
|
|
|
$
|
(611.3
|
)
|
|
$
|
620.9
|
|
Comprehensive income
attrib
utable to noncontrolling interests
|
|
|
--
|
|
|
|
(1.3
|
)
|
|
|
(8.9
|
)
|
|
|
(10.2
|
)
|
|
|
--
|
|
|
|
1.2
|
|
|
|
(9.0
|
)
|
Comprehensive income attributable to entity
|
|
$
|
655.2
|
|
|
$
|
628.8
|
|
|
$
|
(673.9
|
)
|
|
$
|
610.1
|
|
|
$
|
611.9
|
|
|
$
|
(610.1
|
)
|
|
$
|
611.9
|
|
Enterprise Products Partners L.P.
Unaudited Condensed Consolidating Statement of Cash Flows
For the Three Months Ended March 31, 2017
|
|
EPO and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsidiary
Issuer
(EPO)
|
|
|
Other
Subsidiaries
(Non-
guarantor)
|
|
|
EPO and
Subsidiaries
Eliminations
and
Adjustments
|
|
|
Consolidated
EPO and
Subsidiaries
|
|
|
Enterprise
Products
Partners
L.P.
(Guarantor)
|
|
|
Eliminations
and
Adjustments
|
|
|
Consolidated
Total
|
|
Operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
765.7
|
|
|
$
|
778.8
|
|
|
$
|
(767.0
|
)
|
|
$
|
777.5
|
|
|
$
|
760.7
|
|
|
$
|
(767.2
|
)
|
|
$
|
771.0
|
|
Reconciliation of net income to net cash flows provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization and accretion
|
|
|
51.3
|
|
|
|
351.1
|
|
|
|
(0.1
|
)
|
|
|
402.3
|
|
|
|
--
|
|
|
|
--
|
|
|
|
402.3
|
|
Equity in income of unconsolidated affiliates
|
|
|
(728.8
|
)
|
|
|
(133.4
|
)
|
|
|
767.4
|
|
|
|
(94.8
|
)
|
|
|
(766.7
|
)
|
|
|
766.7
|
|
|
|
(94.8
|
)
|
Distributions received on earnings from unconsolidated affiliates
|
|
|
255.4
|
|
|
|
62.4
|
|
|
|
(227.3
|
)
|
|
|
90.5
|
|
|
|
870.5
|
|
|
|
(870.5
|
)
|
|
|
90.5
|
|
Net effect of changes in operating accounts and other operating activities
|
|
|
631.0
|
|
|
|
(958.0
|
)
|
|
|
1.4
|
|
|
|
(325.6
|
)
|
|
|
31.9
|
|
|
|
0.3
|
|
|
|
(293.4
|
)
|
Net cash flows provided by operating activities
|
|
|
974.6
|
|
|
|
100.9
|
|
|
|
(225.6
|
)
|
|
|
849.9
|
|
|
|
896.4
|
|
|
|
(870.7
|
)
|
|
|
875.6
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures, net of contributions in aid of construction costs
|
|
|
(125.5
|
)
|
|
|
(304.9
|
)
|
|
|
--
|
|
|
|
(430.4
|
)
|
|
|
--
|
|
|
|
--
|
|
|
|
(430.4
|
)
|
Cash used for pending business combination
|
|
|
--
|
|
|
|
(16.0
|
)
|
|
|
--
|
|
|
|
(16.0
|
)
|
|
|
--
|
|
|
|
--
|
|
|
|
(16.0
|
)
|
Proceeds from asset sales
|
|
|
1.2
|
|
|
|
0.8
|
|
|
|
--
|
|
|
|
2.0
|
|
|
|
--
|
|
|
|
--
|
|
|
|
2.0
|
|
Other investing activities
|
|
|
(155.9
|
)
|
|
|
4.5
|
|
|
|
461.6
|
|
|
|
310.2
|
|
|
|
(445.6
|
)
|
|
|
445.6
|
|
|
|
310.2
|
|
Cash used in investing activities
|
|
|
(280.2
|
)
|
|
|
(315.6
|
)
|
|
|
461.6
|
|
|
|
(134.2
|
)
|
|
|
(445.6
|
)
|
|
|
445.6
|
|
|
|
(134.2
|
)
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings under debt agreements
|
|
|
17,575.1
|
|
|
|
--
|
|
|
|
--
|
|
|
|
17,575.1
|
|
|
|
--
|
|
|
|
--
|
|
|
|
17,575.1
|
|
Repayments of debt
|
|
|
(17,856.4
|
)
|
|
|
(0.1
|
)
|
|
|
--
|
|
|
|
(17,856.5
|
)
|
|
|
--
|
|
|
|
--
|
|
|
|
(17,856.5
|
)
|
Cash distributions paid to owners
|
|
|
(870.5
|
)
|
|
|
(242.6
|
)
|
|
|
242.6
|
|
|
|
(870.5
|
)
|
|
|
(869.0
|
)
|
|
|
870.5
|
|
|
|
(869.0
|
)
|
Cash payments made in connection with DERs
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
(3.2
|
)
|
|
|
--
|
|
|
|
(3.2
|
)
|
Cash distributions paid to noncontrolling interests
|
|
|
--
|
|
|
|
(2.5
|
)
|
|
|
(7.8
|
)
|
|
|
(10.3
|
)
|
|
|
--
|
|
|
|
0.2
|
|
|
|
(10.1
|
)
|
Cash contributions from noncontrolling interests
|
|
|
--
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.2
|
|
|
|
--
|
|
|
|
--
|
|
|
|
0.2
|
|
Net cash proceeds from issuance of common units
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
448.8
|
|
|
|
--
|
|
|
|
448.8
|
|
Cash contributions from owners
|
|
|
445.6
|
|
|
|
469.2
|
|
|
|
(469.2
|
)
|
|
|
445.6
|
|
|
|
--
|
|
|
|
(445.6
|
)
|
|
|
--
|
|
Other financing activities
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
(27.4
|
)
|
|
|
--
|
|
|
|
(27.4
|
)
|
Cash provided by (used in) financing activities
|
|
|
(706.2
|
)
|
|
|
224.1
|
|
|
|
(234.3
|
)
|
|
|
(716.4
|
)
|
|
|
(450.8
|
)
|
|
|
425.1
|
|
|
|
(742.1
|
)
|
Net change in cash and cash equivalents
|
|
|
(11.8
|
)
|
|
|
9.4
|
|
|
|
1.7
|
|
|
|
(0.7
|
)
|
|
|
--
|
|
|
|
--
|
|
|
|
(0.7
|
)
|
Cash and cash equivalents, January 1
|
|
|
13.4
|
|
|
|
57.2
|
|
|
|
(7.5
|
)
|
|
|
63.1
|
|
|
|
--
|
|
|
|
--
|
|
|
|
63.1
|
|
Cash and cash equivalents, March 31
|
|
$
|
1.6
|
|
|
$
|
66.6
|
|
|
$
|
(5.8
|
)
|
|
$
|
62.4
|
|
|
$
|
--
|
|
|
$
|
--
|
|
|
$
|
62.4
|
|
Enterprise Products Partners L.P.
Unaudited Condensed Consolidating Statement of Cash Flows
For the Three Months Ended March 31, 2016
|
|
EPO and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsidiary
Issuer
(EPO)
|
|
|
Other
Subsidiaries
(Non-
guarantor)
|
|
|
EPO and
Subsidiaries
Eliminations
and
Adjustments
|
|
|
Consolidated
EPO and
Subsidiaries
|
|
|
Enterprise
Products
Partners
L.P.
(Guarantor)
|
|
|
Eliminations
and
Adjustments
|
|
|
Consolidated
Total
|
|
Operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
659.2
|
|
|
$
|
675.4
|
|
|
$
|
(665.1
|
)
|
|
$
|
669.5
|
|
|
$
|
661.2
|
|
|
$
|
(660.5
|
)
|
|
$
|
670.2
|
|
Reconciliation of net income to net cash flows provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization and accretion
|
|
|
42.5
|
|
|
|
339.7
|
|
|
|
(0.1
|
)
|
|
|
382.1
|
|
|
|
--
|
|
|
|
--
|
|
|
|
382.1
|
|
Equity in income of unconsolidated affiliates
|
|
|
(632.7
|
)
|
|
|
(133.6
|
)
|
|
|
665.2
|
|
|
|
(101.1
|
)
|
|
|
(660.1
|
)
|
|
|
660.1
|
|
|
|
(101.1
|
)
|
Distributions received on earnings from unconsolidated affiliates
|
|
|
247.2
|
|
|
|
74.2
|
|
|
|
(214.7
|
)
|
|
|
106.7
|
|
|
|
788.5
|
|
|
|
(788.5
|
)
|
|
|
106.7
|
|
Net effect of changes in operating accounts and other operating activities
|
|
|
35.5
|
|
|
|
(255.3
|
)
|
|
|
42.4
|
|
|
|
(177.4
|
)
|
|
|
18.8
|
|
|
|
0.4
|
|
|
|
(158.2
|
)
|
Net cash flows provided by operating activities
|
|
|
351.7
|
|
|
|
700.4
|
|
|
|
(172.3
|
)
|
|
|
879.8
|
|
|
|
808.4
|
|
|
|
(788.5
|
)
|
|
|
899.7
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures, net of contributions in aid of construction costs
|
|
|
(307.6
|
)
|
|
|
(687.4
|
)
|
|
|
--
|
|
|
|
(995.0
|
)
|
|
|
--
|
|
|
|
--
|
|
|
|
(995.0
|
)
|
Proceeds from asset sales
|
|
|
0.1
|
|
|
|
13.3
|
|
|
|
--
|
|
|
|
13.4
|
|
|
|
--
|
|
|
|
--
|
|
|
|
13.4
|
|
Other investing activities
|
|
|
(387.5
|
)
|
|
|
(55.7
|
)
|
|
|
260.9
|
|
|
|
(182.3
|
)
|
|
|
(1,008.6
|
)
|
|
|
1,008.6
|
|
|
|
(182.3
|
)
|
Cash used in investing activities
|
|
|
(695.0
|
)
|
|
|
(729.8
|
)
|
|
|
260.9
|
|
|
|
(1,163.9
|
)
|
|
|
(1,008.6
|
)
|
|
|
1,008.6
|
|
|
|
(1,163.9
|
)
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings under debt agreements
|
|
|
20,000.6
|
|
|
|
--
|
|
|
|
--
|
|
|
|
20,000.6
|
|
|
|
--
|
|
|
|
--
|
|
|
|
20,000.6
|
|
Repayments of debt
|
|
|
(19,797.3
|
)
|
|
|
(0.1
|
)
|
|
|
--
|
|
|
|
(19,797.4
|
)
|
|
|
--
|
|
|
|
--
|
|
|
|
(19,797.4
|
)
|
Cash distributions paid to owners
|
|
|
(788.5
|
)
|
|
|
(222.9
|
)
|
|
|
222.9
|
|
|
|
(788.5
|
)
|
|
|
(788.3
|
)
|
|
|
788.5
|
|
|
|
(788.3
|
)
|
Cash payments made in connection with DERs
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
(2.0
|
)
|
|
|
--
|
|
|
|
(2.0
|
)
|
Cash distributions paid to noncontrolling interests
|
|
|
--
|
|
|
|
(0.5
|
)
|
|
|
(8.2
|
)
|
|
|
(8.7
|
)
|
|
|
--
|
|
|
|
--
|
|
|
|
(8.7
|
)
|
Cash contributions from noncontrolling interests
|
|
|
--
|
|
|
|
11.1
|
|
|
|
--
|
|
|
|
11.1
|
|
|
|
--
|
|
|
|
--
|
|
|
|
11.1
|
|
Net cash proceeds from issuance of common units
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
1,011.5
|
|
|
|
--
|
|
|
|
1,011.5
|
|
Cash contributions from owners
|
|
|
1,008.6
|
|
|
|
260.9
|
|
|
|
(260.9
|
)
|
|
|
1,008.6
|
|
|
|
--
|
|
|
|
(1,008.6
|
)
|
|
|
--
|
|
Other financing activities
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
(21.0
|
)
|
|
|
--
|
|
|
|
(21.0
|
)
|
Cash provided by financing activities
|
|
|
423.4
|
|
|
|
48.5
|
|
|
|
(46.2
|
)
|
|
|
425.7
|
|
|
|
200.2
|
|
|
|
(220.1
|
)
|
|
|
405.8
|
|
Net change in cash and cash equivalents
|
|
|
80.1
|
|
|
|
19.1
|
|
|
|
42.4
|
|
|
|
141.6
|
|
|
|
--
|
|
|
|
--
|
|
|
|
141.6
|
|
Cash and cash equivalents, January 1
|
|
|
--
|
|
|
|
69.6
|
|
|
|
(50.6
|
)
|
|
|
19.0
|
|
|
|
--
|
|
|
|
--
|
|
|
|
19.0
|
|
Cash and cash equivalents, March 31
|
|
$
|
80.1
|
|
|
$
|
88.7
|
|
|
$
|
(8.2
|
)
|
|
$
|
160.6
|
|
|
$
|
--
|
|
|
$
|
--
|
|
|
$
|
160.6
|
|
45