Enterprise Products Partners L.P.

SEC Filings

10-Q
TEPPCO PARTNERS LP filed this Form 10-Q on 05/06/1997
Entire Document
 
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                             TEPPCO PARTNERS, L.P.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                                  (UNAUDITED)


     The agreements relating to the Notes contain certain covenant
restrictions, including limitations on cash distributions and on the amount of
future indebtedness, none of which are expected to have a material adverse
effect on the Partnership's operations.

NOTE 4. INVENTORIES

     Inventories are carried at the lower of cost (based on weighted average
cost method) or market. The major components of inventories were as follows (in
thousands):



<TABLE>
<CAPTION>
                                                       MARCH 31,    DECEMBER 31,
                                                         1997           1996
                                                     ------------   ------------
<S>                                                  <C>            <C>         
          Gasolines ..............................   $      3,570   $      3,232
          Propane ................................          5,613          6,550
          Butanes ................................          2,760          4,023
          Fuel oils ..............................             71             --
          Other products .........................          2,222          2,021
          Materials and supplies .................          3,375          3,088
                                                     ------------   ------------
                    Total ........................   $     17,611   $     18,914
                                                     ============   ============
</TABLE>


     The costs of inventories were lower than market at March 31, 1997, and
December 31, 1996.

NOTE 5. CASH DISTRIBUTIONS

     The Partnership makes quarterly cash distributions of all of its Available
Cash, generally defined as consolidated cash receipts less consolidated cash
disbursements and cash reserves established by the general partner in its sole
discretion or as required by the terms of the Notes.

     On February 7, 1997, the Partnership paid a cash distribution of $0.75 per
Unit for the fourth quarter of 1996. Additionally, on April 11, 1997, the
Partnership declared a cash distribution of $0.75 per Unit for the quarter
ended March 31, 1997. The distribution is payable on May 9, 1997, to
Unitholders of record on April 30, 1997.

     The Company receives incremental incentive distributions of 15%, 25% and
50% on quarterly distributions of Available Cash that exceed $0.55, $0.65 and
$0.90 per Unit, respectively. During the three months ended March 31, 1997 and
1996, incentive distributions paid to the Company totaled $0.7 million and $0.5
million, respectively.

NOTE 6. COMMITMENTS AND CONTINGENCIES

     The Partnership is involved in various claims and legal proceedings
incidental to its business. In the opinion of management, these claims and
legal proceedings will not have a material adverse effect on the Partnership's
consolidated financial position or results of operations.

      The operations of the Partnership are subject to federal, state and local
laws and regulations relating to protection of the environment. Although the
Partnership believes the operations of the pipeline system are in material
compliance with applicable environmental regulations, risks of significant
costs and liabilities are inherent in pipeline operations, and there can be no
assurance that significant costs and liabilities will not be incurred.
Moreover, it is possible that other developments, such as increasingly strict
environmental laws and regulations and enforcement policies thereunder, and

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