Capital Accounts

3 Months Ended

Mar. 31, 2025

Capital Accounts [Abstract]

Capital Accounts

Note 8.  Capital Accounts

Common Limited Partner Interests

The following table summarizes changes in the number of our common units outstanding since December 31, 2024:

Common units outstanding at December 31, 2024	2,165,699,962
Common unit repurchases under 2019 Buyback Program	(1,803,215	)
Common units issued in connection with the vesting of phantom unit awards, net	4,989,490
Other	16,398
Common units outstanding at March 31, 2025	2,168,902,635

Registration Statements

We have a universal shelf registration statement on file with the SEC which allows the Partnership and EPO (each on a standalone basis) to issue an unlimited amount of equity and debt securities, respectively.

In addition, the Partnership has a registration statement on file with the SEC covering the issuance of up to $2.5 billion of its common units in amounts, at prices and on terms based on market conditions and other factors at the time of such offerings (referred to as the Partnership’s at-the-market (“ATM”) program).  The Partnership did not issue any common units under its ATM program during the three months ended March 31, 2025.  The Partnership’s capacity to issue additional common units under the ATM program remains at $2.5 billion as of March 31, 2025.

We may issue additional equity and debt securities to assist us in meeting our future liquidity requirements, including those related to capital investments.

Common Unit Repurchases Under 2019 Buyback Program

In January 2019, we announced that the Board had approved a $2.0 billion multi-year unit buyback program (the “2019 Buyback Program”), which provides the Partnership with an additional method to return capital to investors.  The 2019 Buyback Program authorizes the Partnership to repurchase its common units from time to time, including through open market purchases and negotiated transactions.  No time limit has been set for completion of the program, and it may be suspended or discontinued at any time.

During the three months ended March 31, 2025 and 2024, the Partnership repurchased 1,803,215 and 1,386,835 common units, respectively, under the 2019 Buyback Program through open market purchases.  The total cost of these repurchases, including commissions and fees, was $60 million and $40 million, respectively.  Common units repurchased under the 2019 Buyback Program are immediately cancelled upon acquisition.  At March 31, 2025, the remaining available capacity under the 2019 Buyback Program was $803 million.

Common Units Issued in Connection With the Vesting of Phantom Unit Awards

After taking into account tax withholding requirements, the Partnership issued 4,989,490 new common units to employees in connection with the vesting of phantom unit awards during the three months ended March 31, 2025.  See Note 13 for information regarding our phantom unit awards.

Common Units Delivered Under DRIP and EUPP

The Partnership has registration statements on file with the SEC in connection with its distribution reinvestment plan (“DRIP”) and employee unit purchase plan (“EUPP”).  In July 2019, the Partnership announced that, beginning with the quarterly distribution payment paid in August 2019, it would use common units purchased on the open market, rather than issuing new common units, to satisfy its delivery obligations under the DRIP and EUPP.  This election is subject to change in future quarters depending on the Partnership’s need for equity capital.

During the three months ended March 31, 2025, agents of the Partnership purchased 1,063,842 common units on the open market and delivered them to participants in the DRIP and EUPP.  Apart from $1 million attributable to the plan discount available to all participants in the EUPP, the funds used to effect these purchases were sourced from the DRIP and EUPP participants.  No other Partnership funds were used to satisfy these obligations.  We plan to use open market purchases to satisfy DRIP and EUPP reinvestments in connection with the distribution expected to be paid on May 14, 2025.

Preferred Units

The following table summarizes changes in the number of our Series A Cumulative Convertible Preferred Units (“preferred units”) outstanding since December 31, 2024.

Preferred units outstanding at December 31, 2024	50,687
Paid in-kind distribution to third party	95
Preferred units outstanding at March 31, 2025	50,782

We present the capital accounts attributable to our preferred unitholders as mezzanine equity on our consolidated balance sheets since the terms of the preferred units allow for cash redemption by such unitholders in the event of a Change of Control (as defined in our partnership agreement), without regard to the likelihood of such an event.

During the three months ended March 31, 2025, the Partnership made quarterly cash distributions to its preferred unitholders of $1 million and paid-in-kind distributions of 95 new preferred units valued at less than $1 million.

Accumulated Other Comprehensive Income (Loss)

The following tables present the components of accumulated other comprehensive income (loss) as reported on our Unaudited Condensed Consolidated Balance Sheets at the dates indicated:

	Cash Flow Hedges
	Commodity Derivative Instruments		Interest Rate Derivative Instruments			Other		Total
Accumulated Other Comprehensive Income (Loss), December 31, 2024	$	91	$	143		$	2	$	236
Other comprehensive income (loss) for period, before reclassifications		22		2			–		24
Reclassification of losses (gains) to net income during period		26		(1	)		–		25
Total other comprehensive income (loss) for period		48		1			–		49
Accumulated Other Comprehensive Income (Loss), March 31, 2025	$	139	$	144		$	2	$	285

	Cash Flow Hedges
	Commodity Derivative Instruments			Interest Rate Derivative Instruments			Other		Total
Accumulated Other Comprehensive Income (Loss), December 31, 2023	$	154		$	151		$	2	$	307
Other comprehensive income (loss) for period, before reclassifications		(162	)		2			–		(160	)
Reclassification of losses (gains) to net income during period		(2	)		(2	)		–		(4	)
Total other comprehensive income (loss) for period		(164	)		–			–		(164	)
Accumulated Other Comprehensive Income (Loss), March 31, 2024	$	(10	)	$	151		$	2	$	143

The following table presents reclassifications of (income) loss out of accumulated other comprehensive income (loss) into net income during the periods indicated:

		For the Three Months Ended March 31,
Losses (gains) on cash flow hedges:	Location	2025			2024
Interest rate derivatives	Interest expense	$	(1	)	$	(2	)
Commodity derivatives	Revenue		14			(19	)
Commodity derivatives	Operating costs and expenses		12			17
Total		$	25		$	(4	)

For information regarding our interest rate and commodity derivative instruments, see Note 14.

Cash Distributions

On April 7, 2025, we announced that the Board declared a quarterly cash distribution of $0.535 per common unit, or $2.14 per common unit on an annualized basis, to be paid to the Partnership’s common unitholders with respect to the first quarter of 2025.  The quarterly distribution is payable on May 14, 2025 to unitholders of record as of the close of business on April 30, 2025.  The total amount to be paid is $1.17 billion, which includes $11 million for distribution equivalent rights (“DERs”) on phantom unit awards.

The payment of quarterly cash distributions is subject to management’s evaluation of our financial condition, results of operations and cash flows in connection with such payments and Board approval.  Management will evaluate any future increases in cash distributions on a quarterly basis.