Enterprise Products Partners L.P.

SEC Filings

10-K
ENTERPRISE PRODUCTS PARTNERS L P filed this Form 10-K on 02/28/2018
Entire Document
 


Interest rate swaps exchange the stated interest rate paid on a notional amount of existing debt for the fixed or floating interest rate stipulated in the derivative instrument.  The following table summarizes our portfolio of interest rate swaps at December 31, 2017 (dollars in millions):

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 1.87%
Fair value hedge

The following table shows the effect of hypothetical price movements (a sensitivity analysis) on the estimated fair value of our interest rate swap portfolio at the dates indicated (dollars in millions):

 
  
Interest Rate Swap
Portfolio Fair Value at
 
Scenario
Resulting
Classification
December 31,
2016
 
December 31,
2017
 
January 31,
2018
 
Fair value assuming no change in underlying interest rates
Asset (Liability)
 
$
(0.8
)
 
$
(1.5
)
 
$
(1.5
)
Fair value assuming 10% increase in underlying interest rates
Asset (Liability)
   
(2.0
)
   
(1.8
)
   
(1.8
)
Fair value assuming 10% decrease in underlying interest rates
Asset (Liability)
   
0.4
     
(1.2
)
   
(1.2
)

The following table summarizes our portfolio of 30-year forward starting swaps outstanding at December 31, 2017.  Forward starting swaps hedge the expected underlying benchmark interest rates related to future issuances of debt.

Hedged Transaction
Number and Type
of Derivatives
Outstanding
 
Notional
Amount
 
Expected
Settlement
Date
Average Rate
Locked
Accounting
Treatment
Future long-term debt offering
3 forward starting swaps
 
$
275.0
 
2/2019
2.57%
Cash flow hedge

As a result of market conditions in January 2018, we elected to terminate $100 million notional amount of the forward starting swaps that were outstanding at December 31, 2017, which resulted in cash gains totaling $1.5 million for the first quarter of 2018.

The following table shows the effect of hypothetical price movements (a sensitivity analysis) on the estimated fair value of our forward starting swap portfolio at the dates indicated (dollars in millions):

 
  
Forward Starting Swap
Portfolio Fair Value at
 
Scenario
Resulting
Classification
December 31,
2016
 
December 31,
2017
 
January 31,
2018
 
Fair value assuming no change in underlying interest rates
Asset (Liability)
 
$
36.2
   
$
(0.1
)
 
$
9.6
 
Fair value assuming 10% increase in underlying interest rates
Asset (Liability)
   
49.3
     
13.8
     
18.8
 
Fair value assuming 10% decrease in underlying interest rates
Asset (Liability)
   
22.1
     
(15.1
)
   
(0.2
)

Product Purchase Commitments

We have long and short-term purchase commitments for natural gas, NGLs, crude oil, petrochemicals and refined products.  The purchase prices that we are obligated to pay under these contracts are based on market prices at the time we take delivery of the volumes.  For additional information regarding these commitments, see Note 17 of the Notes to Consolidated Financial Statements included under Part II, Item 8 of this annual report.


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