ENTERPRISE PRODUCTS PARTNERS L.P.

Previous wording

The global and U.S. economy has generally recovered from the negative economic impacts of the COVID-19 pandemic, which disrupted global supply chains, reduced consumer activity, disrupted travel and created significant volatility and disruption of financial and commodity markets. While the World Health Organization declared an end to the global public health emergency for COVID-19 in May 2023, a future global public health crisis could lead to similar disruptions and related economic repercussions. Any resumed period of economic slowdown or recession, or the return to a period of depressed demand or prices for hydrocarbons that we handle, could have significant adverse consequences on our financial condition and the financial condition of our customers, suppliers and other counterparties, and could diminish our liquidity and negatively affect the volumes of products handled by our pipelines and other facilities.

Current wording

Global public health crises, such as the COVID-19 pandemic, and measures taken by governmental authorities, businesses and consumers in response to such crises, have previously adversely impacted the global and U.S. economy by disrupting global supply chains, reducing consumer activity, limiting travel and creating significant volatility and disruption of financial and commodity markets. A future global public health crisis could lead to similar disruptions and related economic repercussions. Any resumed period of economic slowdown or recession, or the return to a period of depressed demand or prices for hydrocarbons that we handle, could have significant adverse consequences on our financial condition and the financial condition of our customers, suppliers and other counterparties, and could diminish our liquidity and negatively affect the volumes of products handled by our pipelines and other facilities.

Previous wording

Crude oil and natural gas prices have been volatile in recent years. For example, crude oil prices (based on WTI as measured by the NYMEX) ranged from a high of $123.70 per barrel to a low of $65.75 per barrel in the three-year period ended December 31, 2024. For the period January 1, 2025 through January 31, 2025, WTI prices ranged from a high of $80.04 per barrel to a low of $72.53 per barrel. Natural gas prices (based on Henry Hub as measured by the NYMEX) ranged from a high of $9.68 per MMBtu to a low of $1.58 per MMBtu over the three-year period ended December 31, 2024. Henry Hub natural gas prices ranged from a high of $4.26 per MMBtu to a low of $3.04 per MMBtu from January 1, 2025 through January 31, 2025.

Current wording

Crude oil and natural gas prices have been volatile in recent years. For example, crude oil prices (based on WTI as measured by the NYMEX) ranged from a high of $93.68 per barrel to a low of $55.27 per barrel in the three-year period ended December 31, 2025. For the period January 1, 2026 through January 31, 2026, WTI prices ranged from a high of $65.42 per barrel to a low of $55.99 per barrel. Natural gas prices (based on Henry Hub as measured by the NYMEX) ranged from a high of $5.29 per MMBtu to a low of $1.58 per MMBtu over the three-year period ended December 31, 2025. Henry Hub natural gas prices ranged from a high of $7.46 per MMBtu to a low of $3.10 per MMBtu from January 1, 2026 through January 31, 2026.

Previous wording

As of December 31, 2024, we had $29.9 billion in principal amount of consolidated senior long-term debt outstanding and $2.3 billion in principal amount of junior subordinated debt outstanding. The amount of our future debt could have significant effects on our operations, including, among other things:

Current wording

As of December 31, 2025, we had$32.4 billion in principal amount of consolidated senior long-term debt outstanding and$2.3 billion in principal amount of junior subordinated debt outstanding. The amount of our future debt could have significant effects on our operations, including, among other things:

Previous wording

We will require substantial new capital to finance the future development and acquisition of assets and businesses. For example, our capital investments for 2024 reflected $5.5 billion of cash payments for capital projects, acquisitions and other investments. Based on information currently available, we expect our total capital investments for 2025, net of contributions from joint venture partners, to approximate $4.5 billion to $5.0 billion, which includes growth capital projects of $4.0 billion to $4.5 billion and sustaining capital expenditures of $525 million. These amounts do not include capital investments associated with our proposed deep-water offshore crude oil terminal (the Sea Port Oil Terminal or “SPOT”), which remains subject to a final investment decision. Any limitations on our access to capital may impair our ability to execute this growth strategy. If our cost of debt or equity capital becomes too expensive, our ability to develop or acquire accretive assets will be limited. We also may not be able to raise the necessary funds on satisfactory terms, if at all.

Current wording

We will require substantial new capital to finance the future development and acquisition of assets and businesses. For example, our capital investments for 2025 reflected $5.6 billion of cash payments for capital projects, acquisitions and other investments. Based on information currently available, we expect our total organic capital investments for 2026, net of contributions from noncontrolling interests, to approximate $3.1 billion to $3.5 billion, which includes organic growth capital investments of $2.5 billion to $2.9 billion and sustaining capital expenditures of $580 million. Any limitations on our access to capital may impair our ability to execute this growth strategy. If our cost of debt or equity capital becomes too expensive, our ability to develop or acquire accretive assets will be limited. We also may not be able to raise the necessary funds on satisfactory terms, if at all.

Previous wording

We rely on our IT and OT systems to conduct our business, as well as systems of third-party vendors. These systems include information used to operate our assets, as well as cloud-based services. These systems are subject to possible security breaches and cyber-attacks.

Current wording

We rely on our IT and OT systems, as well as systems of third-party vendors, to conduct our business. These systems include information used to operate our assets, as well as cloud-based services. These systems are subject to possible security breaches and cyber-attacks.

Previous wording

At December 31, 2024, we had $31.6 billion in principal amount of consolidated fixed-rate debt outstanding, including current maturities thereof. Additionally, at December 31, 2024, we had $582 million of variable-rate debt.

Current wording

At December 31, 2025, we had$34.1 billion in principal amount of consolidated fixed-rate debt outstanding, including current maturities thereof. Additionally, at December 31, 2025, we had$582 million of variable-rate debt.

Previous wording

After increasing benchmark interest rates seven times in 2022 and four times in 2023, the Board of Governors of the Federal Reserve System lowered benchmark interest rates three times during 2024, and such rates may fall further in 2025. However, should interest rates increase significantly, the amount of cash required to service our debt (including any future refinancing of our fixed-rate debt instruments) would increase. Additionally, from time to time, we may enter into interest rate swap arrangements, which could increase our exposure to variable interest rates. As a result, significant increases in interest rates could have a material adverse effect on our financial position, results of operations and cash flows.

Current wording

After increasing benchmark interest rates in 2022 and 2023, the Board of Governors of the Federal Reserve System lowered benchmark interest rates during 2024 and 2025, and such rates may fall further in 2026. However, should interest rates increase significantly, the amount of cash required to service our debt (including any future refinancing of our fixed-rate debt instruments) would increase. Additionally, from time to time, we may enter into interest rate swap arrangements, which could increase our exposure to variable interest rates. As a result, significant increases in interest rates could have a material adverse effect on our financial position, results of operations and cash flows.

Previous wording

In total, our pipeline integrity costs for the years ended December 31, 2024, 2023 and 2022 were $126 million, $104 million and $105 million, respectively. Of these annual totals, we charged $70 million, $55 million and $61 million to operating costs and expenses during the years ended December 31, 2024, 2023 and 2022, respectively. The remaining annual pipeline integrity costs were capitalized and treated as sustaining capital projects. We expect the cost of our pipeline integrity program, regardless of whether such costs are capitalized or expensed, to approximate $114 million for 2025.

Current wording

In total, our pipeline integrity costs for the years ended December 31, 2025, 2024 and 2023 were $144 million, $126 million and $104 million, respectively. Of these annual totals, we charged $66 million, $70 million and $55 million to operating costs and expenses during the years ended December 31, 2025, 2024 and 2023, respectively. The remaining annual pipeline integrity costs were capitalized and treated as sustaining capital projects. We expect the cost of our pipeline integrity program, regardless of whether such costs are capitalized or expensed, to approximate $150 million for 2026.

Previous wording

Climate Change. Responding to reports regarding global warming and climate change matters, the U.S. Congress from time to time has considered and adopted legislation intended to reduce emissions of greenhouse gases or require fees related to greenhouse gas emissions or carbon taxes. In addition, certain states, including states in which our facilities or operations are located, have, individually or in regional cooperation, taken or proposed measures to reduce emissions of greenhouse gases. The Infrastructure Investment and Jobs Act passed in November 2021 provides for, among other things, $7.5 billion to build out a national network of electric vehicle (“EV”) chargers in the U.S., as part of a plan to accelerate the adoption of EVs, as well as funding for electric school buses and low- and no-emission buses for public transit. The Inflation Reduction Act of 2022 passed in August 2022 includes multiple additional incentives to promote clean energy, EVs, and battery and energy storage as well as imposes a first-time fee on the emission of methane from sources required to report their greenhouse gas emissions under the EPA’s Greenhouse Gas Reporting Program Part 98 (Subpart W) regulations starting in 2024. Various other policies and approaches, including establishing a cap on emissions, requiring efficiency measures, or providing incentives for pollution reduction, use of renewable energy sources, or use of replacement fuels with lower carbon content are under discussion and have resulted, and may continue to result, in additional actions involving greenhouse gases.

Current wording

Climate Change. Responding to reports regarding global warming and climate change matters, the U.S. Congress from time to time has considered and adopted legislation intended to reduce emissions of greenhouse gases or require fees related to greenhouse gas emissions or carbon taxes. In addition, certain states, including states in which our facilities or operations are located, have, individually or in regional cooperation, taken or proposed measures to reduce emissions of greenhouse gases. Various policies and approaches, including establishing a cap on emissions, requiring efficiency measures, or providing incentives for emissions reduction, use of renewable energy sources, or use of replacement fuels with lower carbon content, have been considered and could result in additional actions involving greenhouse gases.

Previous wording

In addition to direct regulation of emissions as described above, there has been an expansion of requirements and incentives relating to reporting greenhouse gas emissions and other climate change-related matters. Examples include the SEC’s pending 2024 climate disclosure rules (which are currently stayed), expanded greenhouse gas and climate change-related reporting requirements enacted by the California legislature in 2023 and amended in 2024, and periodic requests from commercial counterparties. We currently file greenhouse gas emission reports for certain facilities and equipment subject to EPA reporting regulations. However, we do not publicly report our total direct or indirect greenhouse gas emissions, and it may not be feasible to quantify all types of emissions without relying on estimates. If we are required to determine comprehensively and report publicly our full direct and indirect greenhouse gas emissions, or certain other climate change-related matters, then it could entail significant costs and administrative burdens and be a source of potential liability and negative publicity. Alternatively, if we do not make such public disclosures, we may be prevented from operating or supplying products into certain markets or dealing with certain counterparties.

Current wording

In addition to direct regulation of emissions as described above, there has been an expansion of requirements and incentives relating to reporting greenhouse gas emissions and other climate change-related matters. We currently file greenhouse gas emission reports for certain facilities and equipment subject to EPA reporting regulations. However, we do not publicly report our total direct or indirect greenhouse gas emissions, and it may not be feasible to quantify all types of emissions without relying on estimates. If we are required to determine comprehensively and report publicly our full direct and indirect greenhouse gas emissions, or certain other climate change-related matters, then such determinations and disclosures could entail significant costs and administrative burdens and be a source of potential liability and negative publicity. Alternatively, if we do not make such determinations or public disclosures, we may be prevented from operating or supplying products into certain markets or dealing with certain counterparties.

Previous wording

On December 17, 2020, the FERC issued a final rule setting the index for the five-year period beginning July 1, 2021, and ending on June 30, 2026, at PPI plus 0.78%. On January 20, 2022, the FERC granted rehearing of certain aspects of the final rule and revised the index level to PPI minus 0.21%, effective March 1, 2022 through June 30, 2026. The FERC ordered pipelines with filed rates that exceed their index ceiling levels based on PPI minus 0.21% to file rate reductions effective March 1, 2022. Enterprise, together with a number of other midstream companies, contested this index change in the U.S. Court of Appeals for the District of Columbia Circuit. On July 26, 2024, the U.S. Court of Appeals for the District of Columbia Circuit ruled that the FERC failed to comply with the Administrative Procedures Act when it modified the Index Level in 2022. As a result, the court vacated the rehearing order and ordered FERC to reinstate the December 2020 order that set the Index Level at PPI plus 0.78%, which the FERC complied with in September 2024. Pending appellate and regulatory review could result in a further change to the index. As an alternative to this indexing methodology, we may also choose to support changes in our rates based on a cost-of-service methodology, or by obtaining advance approval from FERC to charge “market-based rates,” or by charging “settlement rates” agreed to by all affected shippers. The requirements imposed by these methodologies may limit our ability to set rates based on our actual costs or may delay our ability to charge rates reflecting increased costs. Adverse decisions by the FERC related to our rates could adversely affect our financial position, results of operations and cash flows.

Current wording

As an alternative to this indexing methodology, we may also choose to support changes in our rates based on a cost-of-service methodology, or by obtaining advance approval from FERC to charge “market-based rates,” or by charging “settlement rates” agreed to by all affected shippers. The requirements imposed by these methodologies may limit our ability to set rates based on our actual costs or may delay our ability to charge rates reflecting increased costs. Adverse decisions by the FERC related to our rates could adversely affect our financial position, results of operations and cash flows.

Previous wording

Furthermore, if unitholders are dissatisfied with the performance of our general partner, they currently have no practical ability to remove our general partner or its officers or directors. Our general partner may not be removed except upon the vote of the holders of at least 60% of our outstanding units voting together as a single class. Since affiliates of our general partner currently own approximately 32% of our outstanding common units, the removal of Enterprise GP as our general partner is highly unlikely without the consent of both our general partner and its affiliates. As a result of this provision, the trading price of our common units may be lower than other forms of equity ownership because of the absence of a takeover premium in the trading price.

Current wording

Furthermore, if unitholders are dissatisfied with the performance of our general partner, they currently have no practical ability to remove our general partner or its officers or directors. Our general partner may not be removed except upon the vote of the holders of at least 60% of our outstanding units voting together as a single class. Since affiliates of our general partner currently own approximately 32.5% of our outstanding common units, the removal of Enterprise GP as our general partner is highly unlikely without the consent of both our general partner and its affiliates. As a result of this provision, the trading price of our common units may be lower than other forms of equity ownership because of the absence of a takeover premium in the trading price.

Previous wording

From 2013 through 2017, several publicly traded partnerships merged into their corporate general partner sponsors. Beginning in 2018 and continuing into 2024, the combination of a number of additional factors, including the passage of the Tax Cuts and Jobs Act (the “Tax Act”) of 2017 (which lowered the federal corporate tax rate from 35% to 21% and generally provides for the expensing of certain capital investments and acquisitions), the FERC issuing its Revised Policy Statement on the Treatment of Income Taxes in March 2018, and, generally, continued lower demand and related liquidity for midstream energy companies (including those structured as publicly traded partnerships), led to additional publicly traded partnerships to either (i) merge into their corporate general partner sponsors, (ii) merge into their general partner structured as a partnership and then elect for the combined entity to be taxed as a corporation, or (iii) voluntarily elect to be taxed as a corporation. These conversions have materially reduced the number of publicly traded partnerships and the total market capitalization and the depth of capital available for the publicly traded partnership sector.

Current wording

Over the last decade, legislative and regulatory changes and lower demand and related liquidity for midstream energy companies (including those structured as publicly traded partnerships), led to a number of publicly traded partnerships converting to corporations through mergers or voluntarily electing to be taxed as corporations, all of which have materially reduced the number of publicly traded partnerships and the total market capitalization and the depth of capital available for the publicly traded partnership sector.