Enterprise Products Partners L.P.

SEC Filings

S-1/A
ENTERPRISE PRODUCTS PARTNERS L P filed this Form S-1/A on 07/21/1998
Entire Document
 
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        NOTES TO UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS

                     FOR THE YEAR ENDED DECEMBER 31, 1997
   
(a) Reflects the reduction in selling, general and administrative and certain
    administrative charges in operating expenses to the amount of the
    administrative fee to be paid to EPCO in the first year of the EPCO
    Agreement. Pursuant to the EPCO Agreement, EPCO will be reimbursed at cost
    for all expenses that it incurs in connection with managing the business
    and affairs of the Company, except that EPCO will not be entitled to be
    reimbursed for any selling, general and administrative expenses. In lieu
    of reimbursement for such selling, general and administrative expenses,
    EPCO will be entitled to receive an annual administrative services fee
    that will initially equal $12.0 million. The General Partner, with the
    approval and consent of the Audit and Conflicts Committee, will have the
    right to agree to increases in such administrative services fee of up to
    10% each year during the 10-year term of the EPCO Agreement and may agree
    to further increases in such fee in connection with expansions of the
    Company's operations through the construction of new facilities or the
    completion of acquisitions that require additional management personnel.
    Based upon its analysis of 1997 selling, general and administrative
    expenses, EPCO's management believes that the fee to be paid under the
    EPCO Agreement includes all such expenses that the Company would have
    incurred, including additional amounts attributable to being a public
    company, had the Company operated independently from EPCO.     
 
(b) Reflects the elimination of interest expense due to the repayment of all
    debt assumed from EPCO.
 
(c) Reflects accrual of $6.0 million of interest on $89.2 million of assumed
    borrowings under the bank credit facility at 6.47% per annum plus a 0.2%
    fee for the unused portion of the $200.0 million bank credit facility.
 
(d) Reflects interest income earned on the purchase of $41.6 million of
    participation interests in bank notes of EPCO's unconsolidated affiliates,
    BEF and Mont Belvieu Associates.
 
(e) Reflects the additional minority interest associated with the pro forma
    adjustments for the 1% minority interest of the Operating Partnership held
    by the General Partner.
 
  The pro forma condensed statement of operations for the year ended December
31, 1997 does not include a pro forma adjustment for the loss expected to be
incurred on the early extinguishment of debt assumed from EPCO. Such loss, in
accordance with generally accepted accounting principles, will be reported as
an extraordinary loss when the debt is repaid. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations--General--
Prepayment Penalties on Extinguishment of Debt."
 
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