Enterprise Products Partners L.P.

SEC Filings

ENTERPRISE PRODUCTS PARTNERS L P filed this Form 10-K on 02/28/2018
Entire Document

Since the effective date of the EFS Midstream acquisition was July 1, 2015, our Statements of Consolidated Operations do not reflect any earnings from this business prior to this date.  Our consolidated revenues and net income for the last six months ended December 31, 2015 include $117.8 million and $59.9 million, respectively, from EFS Midstream.  The following table presents selected unaudited pro forma earnings information for the year ended December 31, 2015 as if the acquisition had been completed on January 1, 2015.  This pro forma information was prepared using historical financial data for EFS Midstream and reflects certain estimates and assumptions made by our management.  Our unaudited pro forma financial information is not necessarily indicative of what our consolidated financial results would have been for the year ended December 31, 2015 had we acquired EFS Midstream on January 1, 2015.

Pro forma earnings data:
Costs and expenses
Operating income
Net income
Net income attributable to noncontrolling interests
Net income attributable to limited partners
Basic earnings per unit:
As reported basic earnings per unit
Pro forma basic earnings per unit
Diluted earnings per unit:
As reported diluted earnings per unit
Pro forma diluted earnings per unit

Acquisition of Oiltanking
On October 1, 2014, we acquired Oiltanking GP and the related IDRs, 15,899,802 common units and 38,899,802 subordinated units of Oiltanking from OTA.  We paid total consideration of approximately $4.4 billion to OTA comprised of $2.21 billion in cash and 54,807,352 Enterprise common units for these ownership interests and rights. We also paid $228.3 million to assume the outstanding loans, including related accrued interest, owed by Oiltanking or its subsidiaries to OTA.  Collectively, these transactions are referred to as “Step 1” of the Oiltanking acquisition. We funded the cash consideration for the Step 1 transactions using borrowings under our 364-Day Credit Agreement, proceeds from the sale of short-term notes under our commercial paper program and cash on hand.

Oiltanking owned marine terminals located on the Houston Ship Channel and at the Port of Beaumont featuring a number of ship and barge docks and extensive crude oil and petroleum products storage capacity. We had a strategic relationship and enjoyed mutual growth with Oiltanking and its predecessors since 1983.  The combination of our legacy midstream assets and Oiltanking’s access to waterborne markets and crude oil and petroleum products storage assets extended and broadened our midstream energy services business.

Step 2 of the Oiltanking acquisition. As a second step (“Step 2”) of the Oiltanking acquisition (separately negotiated by the conflicts committee of Oiltanking GP on behalf of Oiltanking), we entered into an Agreement and Plan of Merger (the “merger agreement”) with Oiltanking in November 2014 that provided for the following:

the merger of a wholly owned subsidiary of ours with and into Oiltanking, with Oiltanking surviving the merger as our wholly owned subsidiary; and

all outstanding common units of Oiltanking at the effective time of the merger held by Oiltanking’s public unitholders (which consisted of Oiltanking unitholders other than us and our subsidiaries) to be cancelled and converted into our common units based on an exchange ratio of 1.30 of our common units for each Oiltanking common unit.

In accordance with the merger agreement and Oiltanking’s partnership agreement, the merger was submitted to a vote of Oiltanking’s common unitholders, with the required majority of unitholders (including our ownership interests) voting to approve the merger on February 13, 2015.  Upon approval of the merger, a total of 36,827,517 of our common units were issued to Oiltanking’s former public unitholders.  With the completion of Step 2, total consideration paid by Enterprise for Oiltanking was approximately $6.02 billion.