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ENTERPRISE PRODUCTS PARTNERS LP

For the period ended Mar 31, 2024. Filed May 9, 2024.

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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.

Mar 31, 2024 · Filed May 9, 2024

EPD$37.13+1.2%Stored close · as of Nov 10, 2026

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10. Business Segments and Related Information

Note 10. Business Segments and Related Information

Our operations are reported under four business segments: (i) NGL Pipelines & Services, (ii) Crude Oil Pipelines & Services, (iii) Natural Gas Pipelines & Services and (iv) Petrochemical & Refined Products Services. Our business segments are generally organized and managed according to the types of services rendered (or technologies employed) and products produced and/or sold.

Financial information regarding these segments is evaluated regularly by our co-chief operating decision makers in deciding how to allocate resources and in assessing our operating and financial performance. The co-principal executive officers of our general partner have been identified as our co-chief operating decision makers. While these two officers evaluate results in a number of different ways, the business segment structure is the primary basis for which the allocation of resources and financial results are assessed.

The following information summarizes the assets and operations of each business segment:

•Our NGL Pipelines & Services business segment includes our natural gas processing and related NGL marketing activities, NGL pipelines, NGL fractionation facilities, NGL and related product storage facilities, and NGL marine terminals.
•Our Crude Oil Pipelines & Services business segment includes our crude oil pipelines, crude oil storage and marine terminals, and related crude oil marketing activities.
•Our Natural Gas Pipelines & Services business segment includes our natural gas pipeline systems that provide for the gathering, treating and transportation of natural gas. This segment also includes our natural gas marketing activities.
•Our Petrochemical & Refined Products Services business segment includes our (i) propylene production facilities, which include propylene fractionation units and PDH facilities, and related pipelines and marketing activities, (ii) butane isomerization complex and related deisobutanizer operations, (iii) octane enhancement, iBDH and HPIB production facilities, (iv) refined products pipelines, terminals and related marketing activities, (v) ethylene export terminal and related operations; and (vi) marine transportation business.

Our plants, pipelines and other fixed assets are located in the U.S.

Segment Gross Operating Margin

We evaluate segment performance based on our financial measure of gross operating margin. Gross operating margin is an important performance measure of the core profitability of our operations and forms the basis of our internal financial reporting. We believe that investors benefit from having access to the same financial measures that our management uses in evaluating segment results. Gross operating margin is exclusive of other income and expense transactions, income taxes, the cumulative effect of changes in accounting principles and extraordinary charges. Gross operating margin is presented on a 100% basis before any allocation of earnings to noncontrolling interests. Our calculation of gross operating margin may or may not be comparable to similarly titled measures used by other companies.

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 MonthsEnded March 31,
20242023
Operating income$1,822$1,734
Adjustments to reconcile operating income to total segment gross operating margin (addition or subtraction indicated by sign):
Depreciation, amortization and accretion expense in operating costs and expenses (1)582533
Asset impairment charges in operating costs and expenses2013
Net gains attributable to asset sales and related matters in operating costs and expenses–(2)
General and administrative costs6657
Non-refundable payments received from shippers attributable to make-up rights (2)2527
Subsequent recognition of revenues attributable to make-up rights (3)(8)(20)
Total segment gross operating margin$2,507$2,342
(1)Excludes amortization of major maintenance costs for reaction-based plants, which are a component of gross operating margin.
(2)Since make-up rights entail a future performance obligation by the pipeline to the shipper, these receipts are recorded as deferred revenue for GAAP purposes; however, these receipts are included in gross operating margin in the period of receipt since they are nonrefundable to the shipper.
(3)As deferred revenues attributable to make-up rights are subsequently recognized as revenue under GAAP, gross operating margin must be adjusted to remove such amounts to prevent duplication since the associated non-refundable payments were previously included in gross operating margin.

Gross operating margin by segment is calculated by subtracting segment operating costs and expenses from segment revenues, with both segment totals reflecting the adjustments noted in the preceding table, as applicable, and before the elimination of intercompany transactions. The following table presents gross operating margin by segment for the periods indicated:

For the Three MonthsEnded March 31,
20242023
Gross operating margin by segment:
NGL Pipelines & Services$1,340$1,212
Crude Oil Pipelines & Services411397
Natural Gas Pipelines & Services312314
Petrochemical & Refined Products Services444419
Total segment gross operating margin$2,507$2,342

Summarized Segment Financial Information

Information by business segment, together with reconciliations to amounts presented on, or included in, our Unaudited Condensed Statements of Consolidated Operations, is presented in the following table:

Reportable Business Segments
NGLPipelines& ServicesCrude OilPipelines& ServicesNatural GasPipelines& ServicesPetrochemical& RefinedProductsServicesAdjustmentsandEliminationsConsolidatedTotal
Revenues from third parties:
Three months ended March 31, 2024$5,137$5,406$851$3,351$–$14,745
Three months ended March 31, 20234,9264,1751,2112,119–12,431
Revenues from related parties:
Three months ended March 31, 2024393––15
Three months ended March 31, 2023364––13
Intersegment and intrasegment revenues:
Three months ended March 31, 202411,55513,8271776,324(31,883)–
Three months ended March 31, 202312,69612,5841364,706(30,122)–
Total revenues:
Three months ended March 31, 202416,69519,2421,0319,675(31,883)14,760
Three months ended March 31, 202317,62516,7651,3516,825(30,122)12,444
Equity in income of unconsolidated affiliates:
Three months ended March 31, 202431692––102
Three months ended March 31, 202339641––104

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
NGLPipelines& ServicesCrude OilPipelines& ServicesNatural GasPipelines& ServicesPetrochemical& RefinedProductsServicesAdjustmentsandEliminationsConsolidatedTotal
Property, plant and equipment, net:(see Note 4)
At March 31, 2024$18,051$6,412$10,039$9,701$2,228$46,431
At December 31, 202317,5416,62710,0199,3722,24545,804
Investments in unconsolidated affiliates:(see Note 5)
At March 31, 20246101,674343–2,321
At December 31, 20236121,681334–2,330
Intangible assets, net: (see Note 6)
At March 31, 20248181,6481,145109–3,720
At December 31, 20238281,6731,158111–3,770
Goodwill: (see Note 6)
At March 31, 20242,8111,841–956–5,608
At December 31, 20232,8111,841–956–5,608
Segment assets:
At March 31, 202422,29011,57511,21810,7692,22858,080
At December 31, 202321,79211,82211,21010,4432,24557,512

Supplemental Revenue and Expense Information

The following table presents additional information regarding our consolidated revenues and costs and expenses for the periods indicated:

For the Three MonthsEnded March 31,
20242023
Consolidated revenues:
NGL Pipelines & Services$5,140$4,929
Crude Oil Pipelines & Services5,4154,181
Natural Gas Pipelines & Services8541,215
Petrochemical & Refined Products Services3,3512,119
Total consolidated revenues$14,760$12,444
Consolidated costs and expenses
Operating costs and expenses:
Cost of sales$11,405$9,331
Other operating costs and expenses (1)954868
Depreciation, amortization and accretion595547
Asset impairment charges2013
Net gains attributable to asset sales and related matters–(2)
General and administrative costs6657
Total consolidated costs and expenses$13,040$10,814
(1)Represents the cost of operating our plants, pipelines and other fixed assets excluding depreciation, amortization and accretion charges; asset impairment charges; and net losses (or gains) attributable to asset sales and related matters.

Fluctuations in our product sales revenues and cost of sales amounts are explained in large part by changes in energy commodity prices. In general, higher energy commodity prices result in an increase in our revenues attributable to product sales; however, these higher commodity prices would also be expected to increase the associated cost of sales as purchase costs are higher. The same type of relationship would be true in the case of lower energy commodity sales prices and purchase costs.

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