|ENTERPRISE PRODUCTS PARTNERS L P filed this Form 10-K on 02/28/2018|
Operating income for 2017 increased $348.2 million when compared to 2016 due to the previously described year-to-year changes in revenues, operating costs and expenses, general and administrative costs and equity in income of unconsolidated affiliates.
Interest expense for 2017 increased $2.0 million when compared to 2016. The following table presents the components of our consolidated interest expense for the years indicated (dollars in millions):
Interest charged on debt principal outstanding, which is the primary driver of interest expense, increased a net $21.5 million year-to-year primarily due to increased debt principal amounts outstanding during 2017, which accounted for a $31.6 million increase, partially offset by the effect of lower overall interest rates in 2017, which accounted for a $10.1 million decrease. Our weighted-average debt principal balance for 2017 was $24.13 billion compared to $23.41 billion for 2016. In general, our debt principal balances have increased over time due to the partial debt financing of our capital spending program. For a discussion of our consolidated debt obligations and capital spending program, see “Liquidity and Capital Resources” and “Capital Spending” within this Part II, Item 7 of this annual report.
Change in fair market value of Liquidity Option Agreement
We recognized an increase of $39.8 million of aggregate non-cash expense attributable to accretion and changes in management estimates regarding inputs to the valuation model for the Liquidity Option Agreement. The unfavorable adjustment was primarily due to the effects of the recent federal tax reform measures known as the Tax Cuts and Jobs Act of 2017 (i.e., limitation of interest expense deductibility, partially offset by a lower federal tax rate). For information regarding the Liquidity Option Agreement, see Note 17 of the Notes to Consolidated Financial Statements included under Part II, Item 8 of this annual report.
Income taxes primarily reflects our state tax obligations under the Revised Texas Franchise Tax (“Texas Margin Tax”). Our provision for income taxes for 2017 increased $2.3 million when compared to 2016.
Comparison of 2016 with 2015
Total revenues for 2016 decreased $4.01 billion when compared to total revenues for 2015. Revenues from the marketing of crude oil decreased $3.93 billion year-to-year due to lower sales volumes and prices, which accounted for a $2.77 billion decrease and a $1.16 billion decrease, respectively. Revenues from the marketing of natural gas, petrochemicals, refined products and octane additives decreased a net $513.8 million year-to-year primarily due to lower sales prices, which accounted for a $760.0 million decrease, partially offset by a $246.2 million increase due to higher sales volumes. Revenues from the marketing of NGLs increased a net $335.7 million year-to-year primarily due to higher sales volumes, which accounted for a $956.2 million increase, partially offset by a $620.5 million decrease due to lower sales prices.