EPE » Topics » 5. Inventories

This excerpt taken from the EPE 8-K filed Mar 14, 2008.

Note 8. Inventories

 

 

Our inventory amounts by business segment were as follows at December 31, 2007:

 

Investment in Enterprise Products Partners:

 

Working inventory (1)

$    342,589

Forward-sales inventory (2)

11,693

Subtotal

354,282

Investment in TEPPCO:

 

Working inventory (3)

56,574

Forward-sales inventory (4)

16,547

Subtotal

73,121

Eliminations

(1,717)

Total inventory

$    425,686

 

 

(1)    Working inventory is comprised of inventories of natural gas, NGLs and certain petrochemical products that are either available-for-sale or used in the provision for services.

(2)    Forward sales inventory consists of segregated NGL and natural gas volumes dedicated to the fulfillment of forward-sales contracts.

(3)    Working inventory is comprised of inventories of crude oil, refined products, liquefied petroleum gas (“LPGs”), lubrication oils, and specialty chemicals that are either available-for-sale or used in the provision for services.

(4)    Forward sales inventory primarily consists of segregated crude oil volumes dedicated to the fulfillment of forward-sales contracts.

                

Our inventory values reflect payments for product purchases, freight charges associated with such purchase volumes, terminal and storage fees, vessel inspection costs, demurrage charges and other related costs. Inventories are valued at the lower of average cost or market.

 

In addition to cash purchases, Enterprise Products Partners takes ownership of volumes through percent-of-liquids contracts and similar arrangements. These volumes are recorded as inventory at market-related values in the month of acquisition. Enterprise Products Partners capitalizes as a component of inventory those ancillary costs (e.g. freight-in, handling and processing charges) incurred in connection with such volumes.

 

Due to fluctuating commodity prices in the NGL, natural gas and petrochemical industry, we recognize lower of cost or market (“LCM”) adjustments when the carrying value of our inventories exceed their net realizable value.

 

 

 

 

 

 

 

 

 

 

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This excerpt taken from the EPE 8-K filed Nov 19, 2007.

Note 6. Inventories

 

 

Our inventory amounts by business segment were as follows at September 30, 2007:

 

Investment in Enterprise Products Partners:

 

 

Working inventory (1)

$ 496,030

 

Forward-sales inventory (2)

13,858

 

Subtotal

509,888

 

Investment in TEPPCO:

 

 

Working inventory (3)

48,486

 

Forward-sales inventory (4)

77,950

 

Subtotal

126,436

 

Eliminations

(961)

 

Total inventory

$ 635,363

 

 

 

 

(1)    Working inventory is comprised of inventories of natural gas, NGLs and certain petrochemical products that are either available-for-sale or used in the provision for services.

(2)    Forward sales inventory consists of segregated NGL and natural gas volumes dedicated to the fulfillment of forward-sales contracts.

(3)    Working inventory is comprised of inventories of crude oil, refined products, LPGs, lubrication oils, and specialty chemicals that are either available-for-sale or used in the provision for services.

(4)    Forward sales inventory primarily consists of segregated crude oil volumes dedicated to the fulfillment of forward-sales contracts.

 

Our inventory values reflect payments for product purchases, freight charges associated with such purchase volumes, terminal and storage fees, vessel inspection costs, demurrage charges and other related costs. Inventories are valued at the lower of average cost or market.

 

In addition to cash purchases, Enterprise Products Partners takes ownership of volumes through percent-of-liquids contracts and similar arrangements. These volumes are recorded as inventory at market-related values in the month of acquisition. Enterprise Products Partners capitalizes as a component of inventory those ancillary costs (e.g. freight-in, handling and processing charges) incurred in connection with such volumes.

 

Due to fluctuating commodity prices, we recognize lower of cost or market (“LCM”) adjustments when the carrying value of inventories exceeds their net realizable value.

 

 

 

 

 

 

 

 

 

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This excerpt taken from the EPE 8-K filed Sep 20, 2007.

Note 8. Inventories

 

Our inventory amounts by business segment were as follows at December 31, 2006:

 

Investment in Enterprise Products Partners:

 

Working inventory (1)

$    387,973

Forward-sales inventory (2)

35,871

Subtotal

$    423,844

Investment in TEPPCO:

 

Working inventory (3)

$      21,203

Forward-sales inventory (4)

43,960

Subtotal

65,163

Total inventory

$    489,007

 

 

(1)    Working inventory is comprised of inventories of natural gas, NGLs and certain petrochemical products that are either available-for-sale or used in the provision for services.

(2)    Forward sales inventory consists of segregated NGL and natural gas volumes dedicated to the fulfillment of forward-sales contracts.

(3)    Working inventory is comprised of inventories of crude oil, refined products, LPGs, lubrication oils, and specialty chemicals that are either available-for-sale or used in the provision for services.

(4)    Forward sales inventory primarily consists of segregated crude oil volumes dedicated to the fulfillment of forward-sales contracts.

 

 

 

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Our inventory values reflect payments for product purchases, freight charges associated with such purchase volumes, terminal and storage fees, vessel inspection costs, demurrage charges and other related costs. Inventories are valued at the lower of average cost or market.

 

In addition to cash purchases, Enterprise Products Partners takes ownership of volumes through percent-of-liquids contracts and similar arrangements. These volumes are recorded as inventory at market-related values in the month of acquisition. Enterprise Products Partners capitalizes as a component of inventory those ancillary costs (e.g. freight-in, handling and processing charges) incurred in connection with such volumes.

 

Due to fluctuating commodity prices, we recognize lower of cost or market (“LCM”) adjustments when the carrying value of inventories exceed their net realizable value. To the extent our commodity hedging strategies address inventory-related risks and are successful, these inventory valuation adjustments are mitigated or offset. See Note 7 for a description of our commodity hedging activities.

 


This excerpt taken from the EPE 8-K filed Sep 19, 2007.

Note 6. Inventories

 

Our aggregate inventory amounts by business segment were as follows at June 30, 2007:

 

Investment in Enterprise Products Partners

$    335,622

Investment in TEPPCO

94,733

Eliminations

(2,113)

 

Total inventory

$    428,242

 

Enterprise Products Partners

 

Enterprise Products Partners’ inventory amounts were as follows at June 30, 2007:

 

Working inventory

$    325,539

Forward-sales inventory

10,083

Inventory

$    335,622

 

Regular trade (or “working”) inventory is comprised of inventories of natural gas, NGLs, and certain petrochemical products that are available-for-sale or used in the provision of services. Forward sales inventory consists of segregated NGL and natural gas volumes dedicated to the fulfillment of forward-sales contracts. Inventory values reflect payments for product purchases, freight charges associated with such purchase volumes, terminal and storage fees, vessel inspection costs, demurrage charges and other related costs. Inventories are valued at the lower of average cost or market.

 

Due to fluctuating commodity prices in the NGL, natural gas and petrochemical industry, lower of cost or market (“LCM”) adjustments are recognized when the carrying value of inventories exceed their net realizable value.

 

TEPPCO

 

Inventories are valued at the lower of cost (based on weighted average cost method) or market. The costs of inventories did not exceed market values at June 30, 2007. The major components of inventories were as follows at June 30, 2007:

 

Crude oil (1)

$    64,110

Refined products and LPGs (2)

14,403

Lubrication oils and specialty chemicals

7,836

Materials and supplies (3)

8,114

Other

270

Total

$    94,733

 

 

(1)   At June 30, 2007, the substantial majority of crude oil inventory was subject to forward sales contracts.

(2)   Refined products and LPGs inventory is managed on a combined basis.

(3)   Includes inventories held by Jonah and its consolidated subsidiaries.

 

 

 

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This excerpt taken from the EPE 8-K filed May 25, 2007.

Note 5. Inventories

 

 

Our inventory amounts were as follows at March 31, 2007:

 

Working inventory

$      451,641

Forward-sales inventory

9,274

Inventory

$      460,915

 

Our regular trade (or “working”) inventory is comprised of inventories of natural gas, NGLs, and certain petrochemical products that are available-for-sale or used by us in the provision of services. Our forward sales inventory consists of segregated NGL and natural gas volumes dedicated to the fulfillment of forward-sales contracts. Our inventory values reflect payments for product purchases, freight charges associated with such purchase volumes, terminal and storage fees, vessel inspection costs, demurrage charges and other related costs. We value our inventories at the lower of average cost or market.

 

Due to fluctuating commodity prices in the NGL, natural gas and petrochemical industry, we recognize lower of cost or market (“LCM”) adjustments when the carrying value of our inventories exceed their net realizable value.

 

 

This excerpt taken from the EPE 8-K filed Mar 22, 2007.

Note 7. Inventories

 

 

Our inventory amounts were as follows at December 31, 2006:

 

Working inventory

$      387,973

Forward-sales inventory

35,871

Inventory

$      423,844

 

Our regular trade (or “working”) inventory is comprised of inventories of natural gas, NGLs, and certain petrochemical products that are available-for-sale or used by us in the provision of services. Our forward sales inventory consists of segregated NGL and natural gas volumes dedicated to the fulfillment of forward-sales contracts. Our inventory values reflect payments for product purchases, freight charges associated with such purchase volumes, terminal and storage fees, vessel inspection costs, demurrage charges and other related costs. We value our inventories at the lower of average cost or market.

 

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In those instances where we take ownership of inventory volumes through percent-of-liquids contracts and similar arrangements (as opposed to actually purchasing volumes for cash from third parties), these volumes are valued at market-related prices during the month in which they are acquired. We capitalize as a component of inventory those ancillary costs (e.g. freight-in and other handling and processing charges) incurred in connection with volumes obtained through such contracts.

 

Due to fluctuating commodity prices in the NGL, natural gas and petrochemical industry, we recognize lower of cost or market (“LCM”) adjustments when the carrying value of our inventories exceed their net realizable value.

 


This excerpt taken from the EPE 8-K filed Nov 29, 2006.

5. Inventories

 

 

At September 30, 2006, our inventory amounts were as follows:

 

Working inventory

$      397,939

Forward-sales inventory

64,339

Inventory

$      462,278

 

Our regular trade (or “working”) inventory is comprised of inventories of natural gas, NGLs, and certain petrochemical products that are available for sale or used by us in the provision of services. Our forward sales inventory consists of segregated NGL and natural gas volumes dedicated to the fulfillment of forward-sales contracts. Both inventories are valued at the lower of average cost or market.

 

 

 

 

 

 

 

 

 

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This excerpt taken from the EPE 10-Q filed Nov 8, 2006.

5. Inventories

 

 

The following table shows our inventory amounts at the dates indicated:

 

 

 

September 30,

December 31,

 

 

2006

2005

Working inventory

$      397,939

$      279,237

Forward-sales inventory

64,339

60,369

Inventory

$      462,278

$      339,606

 

Our regular trade (or “working”) inventory is comprised of inventories of natural gas, NGLs, and certain petrochemical products that are available for sale or used by us in the provision of services. Our forward sales inventory consists of segregated NGL and natural gas volumes dedicated to the fulfillment of forward-sales contracts. Both inventories are valued at the lower of average cost or market.

 

Costs and expenses, as shown on our Unaudited Condensed Statements of Consolidated Operations and Comprehensive Income, include cost of sales related to the sale of inventories. For the three months ended September 30, 2006 and 2005, such consolidated cost of sales amounts were $3.2 billion and $2.7 billion, respectively. We recorded $9 billion and $7.1 billion of such consolidated cost of sales amounts for the nine months ended September 30, 2006 and 2005, respectively.

 

Due to fluctuating commodity prices in the NGL, natural gas and petrochemical industry, we recognize lower of cost or market adjustments when the carrying values of our inventories exceed their net realizable value. These non-cash charges are a component of cost of sales in the period they are

 

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recognized. For the three months ended September 30, 2006 and 2005, we recognized $5.7 million and $0.5 million, respectively, of lower of cost or market adjustments. We recorded $17.7 million and $17.5 million of such adjustments for the nine months ended September 30, 2006 and 2005, respectively.

 


This excerpt taken from the EPE 8-K filed Aug 14, 2006.

5. Inventories

 

 

At June 30, 2006, our inventory amounts were as follows:

 

Working inventory

$     406,169

Forward-sales inventory

45,068

Inventory

$     451,237

 

Our regular trade (or “working”) inventory is comprised of inventories of natural gas, NGLs, and petrochemical products that are available for sale or used by us in the provision of services. Our forward sales inventory consists of segregated NGL and natural gas volumes dedicated to the fulfillment of forward-sales contracts. Both inventories are valued at the lower of average cost or market.



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This excerpt taken from the EPE 8-K filed Jun 26, 2006.

5. Inventories

 

 

At March 31, 2006, our inventory amounts were as follows:

 

Working inventory

$    237,783

Forward-sales inventory

17,632

Inventory

$    255,415

 

Our regular trade (or “working”) inventory is comprised of inventories of natural gas, NGLs, and petrochemical products that are available for sale or used in the provision of services. Our forward sales inventory is comprised of segregated NGL and natural gas volumes dedicated to the fulfillment of forward-sales contracts. Both inventories are valued at the lower of average cost or market.

 



8


 
This excerpt taken from the EPE 8-K filed Mar 17, 2006.

6. Inventories

 

 

Our inventory amounts were as follows at December 31, 2005:

 

Working inventory

$     279,237

Forward-sales inventory

60,369

Inventory

$     339,606

 

 

A general description of our inventories is as follows:

 

 

Our regular trade (or “working”) inventory is primarily comprised of inventories of natural gas, NGLs and petrochemical products that are available for sale or used in the provision of services. This inventory is valued at the lower of average cost or market, with “market” being determined by industry-related posted prices such as those published by Oil Price Information Service (“OPIS”) and Chemical Market Associates, Inc. (“CMAI”).

 

 

The forward-sales inventory is comprised of segregated NGL volumes dedicated to the fulfillment of forward sales contracts and is valued at the lower of average cost or market, with “market” being defined as the weighted-average sales price for NGL volumes to be delivered in future months on the forward sales contracts.

 

Our inventory values reflect payments for product purchases, freight charges associated with such purchase volumes and other related costs including terminal and storage fees, vessel inspection and demurrage charges and processing costs.

 

In those instances where we take ownership of inventory volumes through percent-of-liquids contracts and similar arrangements (as opposed to actually purchasing volumes for cash from third parties), these volumes are valued at market-related prices during the month in which they are acquired. As with inventory volumes we purchase for cash, we capitalize as a component of inventory those ancillary costs (e.g. freight-in and other handling and processing charges) incurred in connection with volumes obtained through such contracts.

 

Due to fluctuating market conditions in the NGL, natural gas and petrochemical industry, our inventory balances are subject to lower of average cost or market (“LCM”) adjustments when the cost of our inventories exceed their net realizable value.

 

 

 

 

 

 

 

 

 

 

 






15


This excerpt taken from the EPE 10-K filed Feb 27, 2006.

9. Inventories

 

 

Our inventory amounts were as follows at the dates indicated:

 

 

 

December 31,

 

 

2005

2004

Working inventory

$     279,237

$     171,485

Forward-sales inventory

60,369

17,534

Inventory

$     339,606

$     189,019

 

 

A general description of our inventories is as follows:

 

 

Our regular trade (or “working”) inventory is primarily comprised of inventories of natural gas, NGLs and petrochemical products that are available for sale or used in the provision of services. This inventory is valued at the lower of average cost or market, with “market” being determined by industry-related posted prices such as those published by Oil Price Information Service (“OPIS”) and Chemical Market Associates, Inc. (“CMAI”).

 

 

The forward-sales inventory is comprised of segregated NGL volumes dedicated to the fulfillment of forward sales contracts and is valued at the lower of average cost or market, with “market” being defined as the weighted-average sales price for NGL volumes to be delivered in future months on the forward sales contracts.

 

Our inventory values reflect payments for product purchases, freight charges associated with such purchase volumes and other related costs including terminal and storage fees, vessel inspection and demurrage charges and processing costs.

 

In those instances where we take ownership of inventory volumes through percent-of-liquids contracts and similar arrangements (as opposed to actually purchasing volumes for cash from third parties, see Note 4), these volumes are valued at market-related prices during the month in which they are acquired. As with inventory volumes we purchase for cash, we capitalize as a component of inventory those ancillary costs (e.g. freight-in and other handling and processing charges) incurred in connection with volumes obtained through such contracts.

 

Due to fluctuating market conditions in the NGL, natural gas and petrochemical industry, we occasionally recognize lower of average cost or market (“LCM”) adjustments when the cost of our inventories exceed their net realizable value. These non-cash adjustments are charged to operating costs and expenses and generally affect our segment operating results in the following manner:

 

 

NGL inventory write-downs are recorded as a cost of our NGL marketing activities within our NGL Pipelines & Services business segment;

 

 

Natural gas inventory write downs are recorded as a cost of our natural gas pipeline operations within our Onshore Natural Gas Pipelines & Services business segment; and

 

 

Petrochemical inventory write downs are recorded as a cost of our petrochemical marketing activities or octane additive production business within our Petrochemical Services business segment, as applicable.

 

For the years ended December 31, 2005, 2004 and 2003, we recognized LCM adjustments of approximately $21.9 million, $9.4 million and $16.9 million, respectively. The majority of these write-downs were taken against NGL inventories. To the extent our commodity hedging strategies address inventory-related risks and are successful, these inventory valuation adjustments are mitigated or offset. See Note 7 for a description of our commodity hedging activities.



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