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
 

ENTERPRISE PRODUCTS PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 4.  Inventories

Our inventory amounts by product type were as follows at the dates indicated:

 
 
December 31,
 
 
 
2017
   
2016
 
NGLs
 
$
917.4
   
$
1,156.1
 
Petrochemicals and refined products
   
161.5
     
220.7
 
Crude oil
   
516.3
     
360.0
 
Natural gas
   
14.6
     
33.7
 
Total
 
$
1,609.8
   
$
1,770.5
 

In those instances where we take ownership of inventory volumes through percent-of-liquids contracts and similar arrangements (as opposed to outright purchases from third parties for cash), these volumes are valued at market-based prices during the month in which they are acquired.

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 Year Ended December 31,
 
 
 
2017
   
2016
   
2015
 
Cost of sales (1)
 
$
21,487.0
   
$
15,710.9
   
$
19,612.9
 
Lower of cost or net realizable value adjustments within cost of sales
   
9.1
     
11.5
     
19.8
 
                         
(1)   Cost of sales is a component of “Operating costs and expenses,” as presented on our 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.
 

Due to fluctuating commodity prices, we recognize lower of cost or net realizable value adjustments when the carrying value of our available-for-sale inventories exceeds their net realizable value.  These non-cash charges are a component of cost of sales in the period they are recognized.  To the extent our commodity hedging strategies address inventory-related price risks and are successful, these inventory valuation adjustments are mitigated or offset.  See Note 14 for a description of our commodity hedging activities.

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