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
 
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 Year Ended December 31,
 
 
Location 
 
2017
   
2016
 
Financial asset (liability) balance, net, January 1
 
 
$
(268.2
)
 
$
(246.7
)
Total gains (losses) included in:
 
               
Net income (1)
Revenue
   
2.3
     
2.2
 
Net income
Other expense, net
   
(64.3
)
   
(24.5
)
Other comprehensive income (loss)
Commodity derivative instruments – changes in fair value of cash flow hedges
   
0.1
     
(0.5
)
Settlements (1)
Revenue
   
(2.4
)
   
(0.5
)
Transfers out of Level 3 (2)
 
   
(0.2
)
   
1.8
 
Financial liability balance, net, December 31 (2)
 
 
$
(332.7
)
 
$
(268.2
)
   
(1)   There were $0.1 million of unrealized losses and $1.7 million of unrealized gains included in these amounts for the years ended December 31, 2017 and 2016, respectively.
(2)   Transfers out of Level 3 into Level 2 were due to shorter remaining transaction maturities falling inside of the Level 2 range at December 31, 2017 and 2016.
 

The following tables provide quantitative information regarding our recurring Level 3 fair value measurements for commodity derivatives at the dates indicated:

 
 
Fair Value At
December 31, 2017
 
 
 
   
 
 
Financial
Assets
   
Financial
Liabilities
 
Valuation
Techniques
Unobservable Input
Range
Commodity derivatives – Crude oil
 
$
2.9
   
$
1.7
 
Discounted cash flow
Forward commodity prices
$60.21-$66.05/barrel
Total
 
$
2.9
   
$
1.7
 
 
 
   

 
 
Fair Value At
December 31, 2016
 
 
 
   
 
 
Financial
Assets
   
Financial
Liabilities
 
Valuation
Techniques
Unobservable Input
Range
Commodity derivatives – Crude oil
 
$
1.7
   
$
0.3
 
Discounted cash flow
Forward commodity prices
$51.73-$54.77/barrel
Total
 
$
1.7
   
$
0.3
         

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 December 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.

The recurring fair value measurement pertaining to the Liquidity Option Agreement is based on a number of Level 3 inputs. See Note 17 for a discussion of this liability.
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