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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    or such affiliate has first presented the opportunity to engage in such
    business or activity to the Company and the General Partner (with the
    concurrence of the Audit and Conflicts Committee) has elected not to have
    the Company pursue such opportunity. There can be no assurance, however,
    that there will not be competition between the Company and affiliates of
    the General Partner in the future.
 
TAX RISKS
 
  . The availability to a Common Unitholder of the federal income tax
    benefits of an investment in the Company depends on the classification of
    the Company as a partnership for federal income tax purposes. Assuming
    the accuracy of certain factual matters as to which the General Partner
    and the Company have made representations, Vinson & Elkins L.L.P.,
    special counsel to the General Partner and the Company, is of the opinion
    that, under current law, the Company will be classified as a partnership
    for federal income tax purposes.
 
  . No ruling has been requested from the Internal Revenue Service (the
    "IRS") with respect to classification of the Company as a partnership for
    federal income tax purposes or any other matter affecting the Company.
 
  . A Unitholder will be required to pay income taxes on his allocable share
    of the Company's income, whether or not he receives cash distributions
    from the Company.
 
  . Investment in Common Units by certain tax-exempt entities, regulated
    investment companies and foreign persons raises issues unique to such
    persons. For example, much of the taxable income derived from the
    ownership of a Common Unit by most organizations exempt from federal
    income tax (including individual retirement accounts ("IRAs") and other
    retirement plans) will be unrelated business taxable income and, thus,
    will be taxable to such a Unitholder.
 
  . In the case of taxpayers subject to the passive loss rules (generally,
    individuals and closely-held corporations), losses generated by the
    Company will generally only be available to offset future income
    generated by the Company and cannot be used to offset income from other
    activities, including other passive activities or investments. Passive
    losses which are not deductible because they exceed the Unitholder's
    income generated by the Company may be deducted in full when the
    Unitholder disposes of his entire investment in the Company to an
    unrelated party in a fully taxable transaction.
 
  . The General Partner has applied for registration of the Company with the
    Secretary of the Treasury as a "tax shelter." No assurance can be given
    that the Company will not be audited by the IRS or that tax adjustments
    will not be made. Any adjustments in the Company's tax returns will lead
    to adjustments in the Unitholders' tax returns and may lead to audits of
    the Unitholders' tax returns and adjustments of items unrelated to the
    Company.
 
  . A Unitholder likely will be required to file state and local income tax
    returns and pay state and local income taxes in some or all of the
    various jurisdictions in which the Company does business or owns
    property. The Company will initially own property and conduct business in
    Alabama, Louisiana, Mississippi and Texas.
 
  See "Risk Factors," "Cash Distribution Policy," "Cash Available for
Distribution," "Conflicts of Interest and Fiduciary Responsibilities," "The
Partnership Agreement" and "Tax Considerations" for a more detailed
description of these and other risk factors and conflicts of interest that
should be considered in evaluating an investment in the Common Units.
 
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