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 expense
Interest expense for 2016 increased $20.8 million when compared to 2015.  The following table presents the components of our consolidated interest expense for the years indicated (dollars in millions):

 
 
For the Year Ended
December 31,
 
 
 
2016
   
2015
 
Interest charged on debt principal outstanding
 
$
1,088.9
   
$
1,063.4
 
Impact of interest rate hedging program, including related amortization
   
30.5
     
15.4
 
Interest cost capitalized in connection with construction projects
   
(168.2
)
   
(149.1
)
Other
   
31.4
     
32.1
 
Total
 
$
982.6
   
$
961.8
 

Interest charged on debt principal outstanding, which is the primary driver of interest expense, increased a net $25.5 million year-to-year primarily due to increased debt principal amounts outstanding during 2016, which accounted for a $54.8 million increase, partially offset by the effect of lower overall interest rates in 2016, which accounted for a $29.3 million decrease.  Our weighted-average debt principal balance for 2016 was $23.41 billion compared to $22.24 billion for 2015.

Change in fair market value of Liquidity Option Agreement
We recognized a decrease of $0.9 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.

Income taxes
Income taxes primarily reflects our state tax obligations under the Texas Margin Tax.  Our provision for income taxes for 2016 increased $25.9 million when compared to 2015 primarily due to an increase in accruals for the Texas Margin Tax.  In June 2015, the State of Texas lowered the tax rate under the Texas Margin Tax, which resulted in an income tax benefit for us in 2015.

Business Segment Highlights

We evaluate segment performance based on our financial measure of gross operating margin.  Gross operating margin is an important performance measure of the core profitability of our operations and forms the basis of our internal financial reporting.  We believe that investors benefit from having access to the same financial measures that our management uses in evaluating segment results. 

The following table presents gross operating margin by segment and non-GAAP total gross operating margin for the periods indicated (dollars in millions):

 
 
For the Year Ended December 31,
 
 
 
2017
   
2016
   
2015
 
Gross operating margin by segment:
                 
NGL Pipelines & Services
 
$
3,258.3
   
$
2,990.6
   
$
2,771.6
 
Crude Oil Pipelines & Services
   
987.2
     
854.6
     
961.9
 
Natural Gas Pipelines & Services
   
714.5
     
734.9
     
782.6
 
Petrochemical & Refined Products Services
   
714.6
     
650.6
     
718.5
 
Offshore Pipelines & Services
   
--
     
--
     
97.5
 
Total segment gross operating margin (1)
   
5,674.6
     
5,230.7
     
5,332.1
 
Net adjustment for shipper make-up rights
   
5.8
     
17.1
     
7.1
 
Total gross operating margin (non-GAAP)
 
$
5,680.4
   
$
5,247.8
   
$
5,339.2
 
                         
(1)   Within the context of this table, total segment gross operating margin represents a subtotal and corresponds to measures similarly titled within our business segment disclosures found under Note 10 of the Notes to Consolidated Financial Statements included under Part II, Item 8 of this annual report.
 


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