UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
__________________________________
FORM
10-K
þ ANNUAL REPORT PURSUANT TO
SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended December 31, 2008
OR
¨ TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from _____ to _____
Commission
File Number 1-10403
TEPPCO
Partners, L.P.
(Exact
name of Registrant as specified in its charter)
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Delaware
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76-0291058
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|
(State
or Other Jurisdiction of
Incorporation
or Organization)
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(I.R.S.
Employer Identification Number)
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1100
Louisiana Street, Suite 1600
Houston,
Texas 77002
(Address
of principal executive offices, including zip code)
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(713)
381-3636
(Registrant’s
telephone number, including area code)
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Securities
registered pursuant to Section 12(b) of the Act:
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Title of each class
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Name of each exchange on which
registered
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Limited
Partner Units representing Limited
Partner
Interests
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New
York Stock Exchange
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Securities
registered pursuant to Section 12(g) of the Act: None.
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Indicate
by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes þ No o
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Indicate
by check mark if the registrant is not required to file reports pursuant
to Section 13 or Section 15(d) of the Act. Yes o No þ
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Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes þ No o
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Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the
best of registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. o
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Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
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Large
accelerated filer þ
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Accelerated
Filer o
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Non-accelerated
Filer o (Do not check if
a smaller reporting company)
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Smaller
reporting company o
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Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes o No þ
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At
June 30, 2008, the aggregate market value of the registrant’s Limited
Partner Units held by non-affiliates was $2.6 billion, which was computed
using the average of the high and low sales prices of the Limited Partner
Units on June 30, 2008.
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Limited
Partner Units outstanding as of January 31, 2009:
104,696,761.
Documents
Incorporated by Reference: None.
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1
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2
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3
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AND
2.
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31
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51
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51
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53
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53
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55
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||
56
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93
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95
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||
95
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95
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98
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98
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103
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119
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122
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130
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131
|
/d | = per day | |
BBtus | = billion British Thermal units | |
Bcf | = billion cubic feet | |
MMBtus | = million British Thermal units | |
MMcf | = million cubic feet | |
Mcf | = thousand cubic feet | |
MMBbls | = million barrels |
§
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pipeline
transportation, marketing and storage of refined products, LPGs and
petrochemicals (“Downstream
Segment”);
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§
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gathering,
pipeline transportation, marketing and storage of crude oil, distribution
of lubrication oils and specialty chemicals and fuel transportation
services (“Upstream Segment”);
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§
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gathering
of natural gas, fractionation of NGLs and pipeline transportation of NGLs
(“Midstream Segment”); and
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§
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marine
transportation of refined products, crude oil, condensate, asphalt, heavy
fuel oil and other heated oil products via tow boats and tank barges
(“Marine Services Segment”).
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§
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Optimize
our existing asset base and realize cost efficiencies through operational
and logistical improvements;
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§
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Continue
to invest in fee-based, demand-driven, long-lived internal growth
opportunities that increase pipeline system and terminal throughput or
expand and upgrade existing assets or
operations;
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§
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Target
accretive and complementary acquisitions and expansion opportunities that
provide attractive, long-term, balanced growth in each business
segment;
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§
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Manage
our business with the financial discipline necessary to maintain our
investment grade credit ratings;
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§
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Share
capital costs and risks through joint ventures or other similar
arrangements; and
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§
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Operate
in a safe and environmentally responsible manner consistent with
applicable regulations.
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§
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Completion
in the third quarter of an extension of the refined products pipeline
system in Memphis, Tennessee, to provide for the delivery of jet fuel to
the Memphis airport.
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§
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Completion
in the third quarter of a new refined products terminal located in
Boligee, Alabama, along the Tennessee-Tombigbee waterway
system. The 500,000 barrel storage terminal has capabilities of
receiving U.S. Gulf Coast refined products and distributing them via barge
or truck.
|
§
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Completion
in the third quarter of a 250,000 barrel crude oil storage tank in
Cushing, Oklahoma.
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§
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Continued
construction of the multi-year Motiva Enterprises, LLC (“Motiva”) project
(see “– Downstream Segment – Transportation and Storage of Refined
Products, LPGs and Petrochemicals”
below).
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§
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Construction
of a new natural gasoline storage tank at our Beaumont terminal with vapor
recovery and associated facilities to enable year-round natural gasoline
deliveries via new connections to Exxon Mobil Corporation’s Beaumont
refinery and chemical plants. Completion is expected in the
first quarter of 2009.
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§
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Reactivation
of two 400,000 barrel storage tanks related to the 2005 Genco acquisition
for distillate storage.
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§
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Construction
of an added extension of our pipeline system in Memphis, Tennessee, to
supply a third party refined products distribution
terminal. Completion is expected in the second quarter of
2009.
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§
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TE
Products, our principal operating company for the Downstream
Segment;
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§
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TEPPCO
Terminals Company, L.P. (“TEPPCO Terminals”), which owns a refined
products terminal and two-bay truck loading rack both connected to the
mainline system;
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§
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TEPPCO
Terminaling and Marketing Company, LLC (“TTMC”), which provides refined
products terminaling and marketing services and owns two refined products
terminals, one in Aberdeen, Mississippi and another in Boligee,
Alabama;
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§
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a
subsidiary which owns the northern portion of the Dean Pipeline (“Dean
North”); and
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§
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our
50% equity investment in
Centennial.
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Our
Ownership
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Refined
products and LPGs pipelines and terminals
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100%
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Mont
Belvieu, Texas, to Port Arthur, Texas, petrochemical
pipelines
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100%
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Northern
portion of Dean Pipeline
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100%
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Centennial
(1)
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50%
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(1)
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Accounted
for as an equity investment.
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For
Year Ended December 31,
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2008
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2007
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2006
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Refined Products Deliveries: (1) | ||||
Gasoline
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88.9
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96.3
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94.9
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Jet
Fuels
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23.2
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25.7
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25.5
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Distillates
(2)
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47.5
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53.0
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44.9
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Subtotal
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159.6
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175.0
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165.3
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LPGs
Deliveries:
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|||
Propane
(3)
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30.0
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31.8
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36.5
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Butanes (includes isobutane)
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8.9
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10.1
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8.5
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Subtotal
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38.9
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41.9
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45.0
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Petrochemical
Deliveries (4)
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40.6
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43.9
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32.5
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Total Product Deliveries
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239.1
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260.8
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242.8
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Centennial
Product Deliveries
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41.0
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55.6
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44.8
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(1)
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Includes
volumes on terminals not connected to the mainline
system.
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(2)
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Primarily
diesel fuel, heating oil and other middle
distillates.
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(3)
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Includes
short-haul propane barrels of 2.2 million and 10.0 million for the years
ended December 31, 2007 and 2006, respectively, related to a pipeline that
was sold on March 1, 2007 to Louis Dreyfus Energy Services L.P. (“Louis
Dreyfus”). The tariff on these pipeline movements was
32.8 cents per barrel.
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(4)
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Includes
Dean North RGP volumes and petrochemical volumes on pipelines between Mont
Belvieu and Port Arthur, Texas.
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For
Year Ended December 31,
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2008
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2007
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2006
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Refined
Products Deliveries:
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|||
Central (1)
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83.8
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84.3
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74.6
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Midwest (2)
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56.2
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66.6
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66.6
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Ohio and
Kentucky
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19.6
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24.1
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24.1
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Subtotal
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159.6
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175.0
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165.3
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LPGs
Deliveries:
|
|
|
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Central, Midwest and Kentucky
(1)(2)
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20.6
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22.1
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28.5
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Ohio and Northeast
(3)
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18.3
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19.8
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16.5
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Subtotal
|
38.9
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41.9
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45.0
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Petrochemical
Deliveries (4)
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40.6
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43.9
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32.5
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Total Product
Deliveries
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239.1
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260.8
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242.8
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Centennial
Product Deliveries
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41.0
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55.6
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44.8
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(1)
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Arkansas,
Louisiana, Missouri, Alabama and
Texas.
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(2)
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Illinois
and Indiana.
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(3)
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New
York and Pennsylvania.
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(4)
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Includes
Dean North RGP volumes and petrochemical volumes on pipelines between Mont
Belvieu and Port Arthur, Texas.
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§
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TCTM,
our holding company for the Upstream
Segment;
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§
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TEPPCO
Crude Pipeline, LLC (“TCPL”), TEPPCO Crude Oil, LLC (“TCO”) and
Lubrication Services, LLC (“LSI”), wholly owned subsidiaries of
TCTM;
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§
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our
50% equity investment in Seaway;
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§
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our
33.3% equity investment in Texas Offshore Port System;
and
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§
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our
13% undivided joint interest in Basin
Pipeline.
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For
Year Ended December 31,
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2008
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2007
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2006
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Barrels
Delivered:
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|||
Crude
oil
transportation
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114.3
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96.5
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91.5
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Crude
oil
marketing
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254.7
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232.0
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222.1
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Crude
oil
terminaling
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166.8
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135.0
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126.0
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Lubrication
Services:
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|
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Lubricants
and chemicals (total gallons)
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21.9
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15.3
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14.4
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Fuel
transported (total gallons)
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43.4
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--
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--
|
|
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Seaway
Barrels Delivered:
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|
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Long-haul
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76.2
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49.4
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88.4
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Short-haul
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205.1
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229.5
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223.4
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Crude
Oil Pipeline
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Our
Ownership
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Operator
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Description
(1)
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Red
River System
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100%
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TCPL
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1,690
miles of small diameter pipeline; 1,491,000 barrels of storage – North
Texas to South Oklahoma
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South
Texas System
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100%
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TCPL
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1,150
miles of small diameter pipeline; 1,106,000 barrels of storage – South
Central Texas to Houston, Texas area
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West
Texas System
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100%
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TCPL
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360
miles of small diameter pipeline; 415,000 barrels of storage – connecting
West Texas and Southeast New Mexico to TCPL’s Midland, Texas
terminal
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Other
crude oil assets
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100%
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TCPL
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265
miles of small diameter pipeline; 295,000 barrels of storage – primarily
in Texas and Oklahoma
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Cushing
Terminal
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100%
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TCPL
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19
tanks with 3,100,000 barrels of storage in Cushing,
Oklahoma
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Midland
Station
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100%
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TCPL
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12
tanks with 980,000 barrels of storage in Midland, Texas
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Seaway
(2)
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50%
general partnership interest
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TCPL
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500-mile,
30-inch diameter pipeline – Texas Gulf Coast to Cushing, Oklahoma –
2,600,000 barrels of breakout tankage; 30-mile Texas City system
– 1,800,000 barrels of storage tankage and 2,436,000
barrels of breakout tankage (3)
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Basin
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13%
joint ownership
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Plains
All American Pipeline, L.P.
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416-mile
pipeline, 20 to 24 inches in diameter – Permian Basin (New Mexico and
Texas) to Cushing,
Oklahoma
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(1)
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Small
diameter of pipeline ranges from two inches to twelve
inches.
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(2)
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TCPL’s
participation in revenues and expenses of Seaway vary as described below
in “Seaway Crude
Pipeline Equity Investment.”
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(3)
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Breakout
tankage is used to facilitate transportation and is not leased to
customers. Storage tankage is non-FERC jurisdictional and is
leased to customers.
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§
|
TEPPCO
Midstream, our holding company for the Midstream
Segment;
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§
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our
80.64% equity investment in Jonah Gas Gathering Company, which gathers
natural gas;
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§
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Val
Verde Gas Gathering Company, L.P. (“Val Verde”), which gathers and treats
coal bed methane natural gas;
|
§
|
Chaparral
Pipeline Company, LLC and Quanah Pipeline Company, LLC (collectively
referred to as “Chaparral” or “Chaparral NGL system”), Panola Pipeline
Company, LLC (“Panola Pipeline”), Dean Pipeline Company, LLC (“Dean
Pipeline”) and Wilcox Pipeline Company, LLC (“Wilcox Pipeline”), which
transport NGLs; and
|
§
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TEPPCO
Colorado, LLC (“TEPPCO Colorado”), which fractionates
NGLs.
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For
Year Ended December 31,
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|||
2008
|
2007
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2006
|
|
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|||
Gathering
– Natural Gas – Jonah (Bcf) (1)
|
709.9
|
587.4
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473.9
|
Gathering
– Natural Gas – Val Verde (Bcf)
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166.9
|
175.7
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181.9
|
Transportation
– NGLs (MMBbls)
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73.6
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77.0
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69.7
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Fractionation
– NGLs (MMBbls)
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4.2
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4.2
|
4.4
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(1)
|
Effective
August 1, 2006, with the formation of a joint venture with Enterprise
Products Partners, Jonah was deconsolidated and operating results after
August 1, 2006, are included in equity earnings. The table
includes Jonah’s gathering volumes for the full years ended December 31,
2008, 2007 and 2006.
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NGL
Pipeline
|
Physical
Capacity
(barrels/day)
|
Description
|
|
Chaparral
(1) (2)
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118,000
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845
miles of pipeline – West Texas and New Mexico to Mont Belvieu,
Texas
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|
Quanah
(1)
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30,000
|
180
miles of pipeline – Sutton County, Texas to the Chaparral Pipeline near
Midland, Texas
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|
Panola
(3)
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65,000
|
189
miles of pipeline – Carthage, Texas to Mont Belvieu, Texas
|
|
San
Jacinto (3)
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12,000
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34
miles of pipeline – Carthage, Texas to Longview, Texas
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|
The
southern portion of the Dean Pipeline (3)
|
8,500
|
155
miles of pipeline – South Texas to Point Comfort, Texas
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(1)
|
The
Chaparral NGL system, including the Quanah Pipeline, extends from West
Texas and New Mexico to Mont Belvieu. Shippers on Chaparral,
which include Enterprise Products Partners (see “Customers” below), pay
posted tariffs, which tariffs are adjusted each July based upon a FERC
approved indexing methodology. The specified capacity of the
Chaparral Pipeline represents aggregate volume transported
system-wide.
|
(2)
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See
discussion in “Chaparral Open Season”
below.
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(3)
|
The
Panola Pipeline, San Jacinto Pipeline and the southern portion of the Dean
Pipeline transport NGLs for major integrated oil and gas companies,
including Enterprise Products Partners (see “Customers” below) at posted
tariffs and under negotiated lease and exchange agreements. The
Panola Pipeline and San Jacinto Pipeline originate at an East Texas Plant
Complex in Panola County, Texas. The southern portion of the Dean Pipeline
originates in South Texas and delivers NGLs into a customer’s pipeline at
Point Comfort, Texas.
|
§
|
transports
refined products, crude oil, condensate, asphalt, heavy fuel oil and other
heated oil products via tow boats and tank
barges;
|
§
|
provides
offshore flow-back operations relating to well-testing and pipeline
remediation activities. We service refineries and storage
terminals along the Mississippi, Illinois and Ohio rivers, the
Intracoastal Waterway between Texas and Florida and the
Tennessee-Tombigbee Waterway system;
and
|
§
|
gathers
crude oil from production facilities and platforms along the U.S. Gulf
Coast and in the Gulf of Mexico.
|
Class
of Equipment
|
Number
in Class
|
Capacity
(bbl)/
Horsepower
(hp)
|
Inland:
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||
Barges
(includes seven single hull barges)
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16
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<
25,000 bbl
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Barges
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89
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>
25,000 bbl
|
Tow
boats
|
22
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<
2,000 hp
|
Tow
boats
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23
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>
2,000 hp
|
Offshore:
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||
Barges
(includes three single hull barges)
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8
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>
20,000 bbl
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Tow
boats
|
3
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<
2,000 hp
|
Tow
boats
|
3
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>
2,000 hp
|
Fleet
available days (1)
|
51,932
|
Fleet
operating days (2)
|
48,308
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Fleet
utilization (3)
|
93%
|
(1)
|
Equal
to the number of calendar days from our acquisition of Cenac on February
1, 2008 and Horizon on February 29, 2008 through December 31, 2008
multiplied by the total number of vessels less the aggregate number of
days that our vessels are not operating due to scheduled maintenance and
repairs or unscheduled instances where vessels may have to be drydocked in
the event of accidents and other unforeseen
damage.
|
(2)
|
Equal
to the number of our fleet available days from our acquisition of Cenac on
February 1, 2008 and Horizon on February 29, 2008 through December 31,
2008 less the aggregate number of days that our vessels are
off-hire.
|
(3)
|
Equal
to the number of fleet operating days divided by the number of fleet
available days during the period.
|
Revenue
Generating
|
Sustaining
Existing Operations
|
System
Upgrades
|
Capitalized
Interest
|
Total
|
||||||||||||||||
Downstream
Segment
|
$ | 162.6 | $ | 29.0 | $ | 6.5 | $ | 11.7 | $ | 209.8 | ||||||||||
Midstream
Segment
|
1.2 | 3.5 | 0.5 | 0.1 | 5.3 | |||||||||||||||
Upstream
Segment
|
11.5 | 17.2 | 3.6 | 1.0 | 33.3 | |||||||||||||||
Marine
Services Segment
|
42.4 | 0.6 | 0.2 | 0.4 | 43.6 | |||||||||||||||
Other
|
0.2 | 8.2 | 0.1 | -- | 8.5 | |||||||||||||||
Total
|
$ | 217.9 | $ | 58.5 | $ | 10.9 | $ | 13.2 | $ | 300.5 |
§
|
a
significant portion of our cash flow could be dedicated to the payment of
principal and interest on our future debt and may not be available for
other purposes, including the payment of distributions on our Units and
capital expenditures;
|
§
|
credit
rating agencies may view our debt level
negatively;
|
§
|
covenants
contained in our existing debt arrangements will require us to continue to
meet financial tests that may adversely affect our flexibility in planning
for and reacting to changes in our
business;
|
§
|
our
ability to obtain additional financing for working capital, capital
expenditures, acquisitions, and general partnership purposes may be
limited;
|
§
|
we
may be at a competitive disadvantage relative to similar companies that
have less debt; and
|
§
|
we
may be more vulnerable to adverse economic and industry conditions as a
result of our significant debt
level.
|
§
|
the
volume of products that we handle and the prices we receive for our
services;
|
§
|
the
level of our operating costs;
|
§
|
the
level of competition in our business
segments;
|
§
|
prevailing
economic conditions, including the price of and demand for oil, natural
gas and other products we transport, store and
market;
|
§
|
the
level of capital expenditures we
make;
|
§
|
the
restrictions contained in our debt agreements and debt service
requirements;
|
§
|
fluctuations
in our working capital needs;
|
§
|
the
weather in our operating areas;
|
§
|
the
cost of acquisitions, if any; and
|
§
|
the
amount, if any, of cash reserves established by our General Partner in its
discretion.
|
§
|
natural
declines from depleting wells,
|
§
|
decreased
exploration and production activities or lower successful drilling
activity in our service areas, including as a result of reduced capital
budgets of producers,
|
§
|
decreased
or volatile oil and natural prices,
|
§
|
general
economic factors, including recessions and other adverse economic
conditions,
|
§
|
adverse
weather and other natural
phenomena,
|
§
|
actions
by foreign nations,
|
§
|
government
regulations, including drilling and related permits, alternative fuel
requirements and conservation measures,
and
|
§
|
industry
changes, including the effect of consolidations and divestitures and
technological advances.
|
§
|
demand
for gasoline depends upon market price, prevailing economic conditions,
demographic changes in the markets we serve and availability of gasoline
produced in refineries located in these
markets;
|
§
|
demand
for distillates is affected by truck and railroad freight, the price of
natural gas used by utilities that use distillates as a substitute and
usage for agricultural operations;
|
§
|
demand
for jet fuel depends on prevailing economic conditions and military usage;
and
|
§
|
propane
deliveries are generally sensitive to the weather and meaningful
year-to-year variances have occurred and will likely continue to
occur.
|
§
|
we
may be unable to complete construction projects on schedule or at the
budgeted cost due to the unavailability of required construction personnel
or materials, accidents, weather conditions or an inability to obtain
necessary permits;
|
§
|
we
will not receive any material increases in revenues until the project is
completed, even though we may have expended considerable funds during the
construction phase, which may be
prolonged;
|
§
|
we
may construct facilities to capture anticipated future growth in
production in a region in which such growth does not
materialize;
|
§
|
the
completion or success of our project may depend on the completion of a
project that we do not control, such as a refinery, that may be subject to
numerous of its own potential risks, delays and complexities;
and
|
§
|
we
may be unable to obtain rights-of-way to construct additional pipelines or
the cost to do so may be
uneconomical.
|
§
|
Enterprise
GP Holdings, Enterprise Products Partners, EPCO and their affiliates may
engage in substantial competition with us on the terms set forth in the
ASA.
|
§
|
Neither
our Partnership Agreement nor any other agreement requires entities that
control our General Partner or other entities controlled by Mr. Duncan
(other than our General Partner) to pursue a business strategy that favors
us. Directors and officers of EPCO, the general partner of
Enterprise GP Holdings and the general partner of Enterprise Products
Partners and their affiliates have a fiduciary duty to make decisions in
the best interest of their members, shareholders or unitholders, as the
case may be, which may be contrary to our
interests.
|
§
|
Our
General Partner is allowed to take into account the interests of parties
other than us, such as Enterprise GP Holdings, Enterprise Products
Partners and their affiliates, in resolving conflicts of interest, which
has the effect of limiting its fiduciary duty to our
unitholders.
|
§
|
Some
of the officers of EPCO who provide services to us also may devote
significant time to the business of Enterprise Products Partners or its
other affiliates and will be compensated by EPCO for such
services.
|
§
|
Our
Partnership Agreement limits the liability and reduces the fiduciary
duties of our General Partner, while also restricting the remedies
available to our unitholders for actions that, without these limitations,
might constitute breaches of fiduciary duty. By purchasing
Units, unitholders are deemed to have consented to some actions and
conflicts of interest that might otherwise constitute a breach of
fiduciary or other duties under applicable
law.
|
§
|
Our
General Partner determines the amount and timing of asset purchases and
sales, operating expenditures, capital expenditures, borrowings,
repayments of indebtedness, issuances of additional partnership securities
and cash reserves, each of which can affect the amount of cash that is
available for distribution to our
unitholders.
|
§
|
Our
General Partner determines which costs, including allocated overhead,
incurred by it and its affiliates are reimbursable by
us.
|
§
|
Our
Partnership Agreement does not restrict our General Partner from causing
us to pay it or its affiliates for any services rendered on terms that are
fair and reasonable to us or entering into additional contractual
arrangements with any of these entities on our
behalf.
|
§
|
Our
General Partner generally seeks to limit its liability regarding our
contractual obligations.
|
§
|
Our
General Partner may exercise its rights to call and purchase all of our
Units if at any time it and its affiliates own 85% or more of the
outstanding Units.
|
§
|
Our
General Partner controls the enforcement of obligations owed to us by it
and its affiliates, including the
ASA.
|
§
|
Our
General Partner decides whether to retain separate counsel, accountants or
others to perform services for us.
|
§
|
permits
our General Partner to make a number of decisions on its behalf, as
opposed to in its capacity as our General Partner. This
entitles our General Partner to consider only the interests and factors
that it desires, and it has no duty or obligation to give any
consideration to any interest of, or
factors
|
|
affecting, us, our affiliates or any limited
partner. Examples include the exercise of its limited call
right with respect to Units, its registration rights and the determination
of whether to consent to any merger or consolidation of the Partnership or
amendment to the Partnership
Agreement;
|
§
|
provides
that, in the absence of bad faith by the ACG Committee or our General
Partner, the resolution, action or terms made, taken or provided by the
ACG Committee or our General Partner in connection with a potential
conflict of interest transaction will be conclusive and binding on all
persons (including all partners) and will not constitute a breach of the
Partnership Agreement or any standard of care or duty imposed by
law;
|
§
|
provides
that any conflict of interest and any resolution of such conflict of
interest will be conclusively deemed fair and reasonable to us if approved
by the ACG Committee or is on terms objectively demonstrable to be no less
favorable to us than those generally being provided to or available from
unrelated third party;
|
§
|
provides
that the General Partner shall not be liable to the Partnership or any
partner for its good faith reliance on the provisions of the Partnership
Agreement to the extent it has duties, including fiduciary duties, and
liabilities at law or in equity;
|
§
|
provides
that it shall be presumed that the resolution of any conflicts of interest
by our General Partner or the ACG Committee was not made in bad faith, and
in any proceeding brought by or on behalf of any limited partner or us,
the person bringing or prosecuting such proceeding will have the burden of
overcoming such presumption; and
|
§
|
provides
that our General Partner and its officers and directors will not be liable
for monetary damages to us or our limited partners for any acts or
omissions unless there has been a final and non-appealable judgment
entered by a court of competent jurisdiction determining that the General
Partner or those other persons acted in bad faith or engaged in fraud or
willful misconduct or, in the case of a criminal matter, acted with
knowledge that the conduct was
criminal.
|
§
|
we
were conducting business in a state, but had not complied with that
particular state’s partnership statute;
or
|
§
|
the
right of limited partners to remove our General Partner or to take other
action under our Partnership Agreement constituted participation in the
“control” of our business.
|
2008
|
2007
|
||||||||||||||||
Quarter
|
High
|
Low
|
|
High
|
Low
|
||||||||||||
First
|
$ |
39.86
|
|
$ |
32.91
|
$ |
44.53
|
$ |
39.88
|
||||||||
Second
|
36.88
|
|
32.50
|
46.20
|
42.15
|
||||||||||||
Third
|
34.02
|
|
24.97
|
46.01
|
37.04
|
||||||||||||
Fourth
|
30.09
|
|
16.90
|
40.81
|
37.17
|
Payment Date
|
Amount
Per
Unit
|
||||
April
28, 2007
|
May
7, 2007
|
$ |
0.685
|
||
July 31, 2007 | August 7, 2007 |
0.685
|
|||
October
31, 2007
|
November
7, 2007
|
0.695
|
|||
January
31, 2008
|
February
7, 2008
|
0.695
|
|||
April
30, 2008
|
May
7, 2008
|
0.710
|
|||
July
31, 2008
|
August
7, 2008
|
0.710
|
|||
October
31, 2008
|
November
6, 2008
|
0.725
|
|||
January
30, 2009
|
February
6, 2009
|
0.725
|
For
Year Ended December 31,
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
(in
thousands, except per Unit amounts)
|
||||||||||||||||||||
Income
Statement Data:
|
||||||||||||||||||||
Operating
revenues:
|
||||||||||||||||||||
Sales of petroleum products
|
$ | 12,840,649 | $ | 9,147,104 | $ | 9,080,516 | $ | 8,061,808 | $ | 5,426,832 | ||||||||||
Transportation – Refined products
|
164,120 | 170,231 | 152,552 | 144,552 | 148,166 | |||||||||||||||
Transportation – LPGs
|
105,419 | 101,076 | 89,315 | 96,297 | 87,050 | |||||||||||||||
Transportation
– Crude oil
|
57,305 | 45,952 | 38,822 | 37,614 | 37,177 | |||||||||||||||
Transportation –
NGLs
|
52,192 | 46,542 | 43,838 | 43,915 | 41,204 | |||||||||||||||
Transportation –
Marine
|
164,265 | -- | -- | -- | -- | |||||||||||||||
Gathering – Natural
gas
|
57,097 | 61,634 | 123,933 | 152,797 | 140,122 | |||||||||||||||
Other revenues
|
91,842 | 85,521 | 78,509 | 68,051 | 67,539 | |||||||||||||||
Total operating
revenues
|
13,532,889 | 9,658,060 | 9,607,485 | 8,605,034 | 5,948,090 | |||||||||||||||
Purchases of petroleum
products
|
12,703,534 | 9,017,109 | 8,967,062 | 7,986,438 | 5,367,027 | |||||||||||||||
Operating expenses
(1)
|
408,240 | 271,167 | 278,448 | 255,359 | 257,372 | |||||||||||||||
General and administrative
expenses
|
41,364 | 33,657 | 31,348 | 33,143 | 28,016 | |||||||||||||||
Depreciation and
amortization
|
126,329 | 105,225 | 108,252 | 110,729 | 112,284 | |||||||||||||||
(Gains) losses on sales of
assets
|
2 | (18,653 | ) | (7,404 | ) | (668 | ) | (1,053 | ) | |||||||||||
Operating
income
|
253,420 | 249,555 | 229,779 | 220,033 | 184,444 | |||||||||||||||
Interest expense –
net
|
(139,988 | ) | (101,223 | ) | (86,171 | ) | (81,861 | ) | (72,053 | ) | ||||||||||
Gain on sale of ownership
interest in MB Storage
|
-- | 59,628 | -- | -- | -- | |||||||||||||||
Equity earnings
|
82,693 | 68,755 | 36,761 | 20,094 | 22,148 | |||||||||||||||
Other income – net (including
interest income)
|
2,044 | 3,022 | 2,965 | 1,135 | 1,320 | |||||||||||||||
Income before provision for
income taxes
|
198,169 | 279,737 | 183,334 | 159,401 | 135,859 | |||||||||||||||
Provision for income
taxes
|
4,617 | 557 | 652 | -- | -- | |||||||||||||||
Income from continuing
operations
|
193,552 | 279,180 | 182,682 | 159,401 | 135,859 | |||||||||||||||
Discontinued operations
(2)
|
-- | -- | 19,369 | 3,150 | 2,689 | |||||||||||||||
Net
income
|
$ | 193,552 | $ | 279,180 | $ | 202,051 | $ | 162,551 | $ | 138,548 | ||||||||||
Basic and diluted income per
Unit: (3)
|
||||||||||||||||||||
Continuing
operations
|
$ | 1.65 | $ | 2.60 | $ | 1.77 | $ | 1.67 | $ | 1.53 | ||||||||||
Discontinued operations
(2)
|
-- | -- | 0.19 | 0.04 | 0.03 | |||||||||||||||
Net income per
Unit
|
$ | 1.65 | $ | 2.60 | $ | 1.96 | $ | 1.71 | $ | 1.56 |
December
31,
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Balance
Sheet Data:
|
||||||||||||||||||||
Property, plant and equipment –
net
|
$ | 2,439,910 | $ | 1,793,634 | $ | 1,642,095 | $ | 1,960,068 | $ | 1,703,702 | ||||||||||
Total assets
|
5,049,820 | 4,750,057 | 3,922,092 | 3,680,538 | 3,186,284 | |||||||||||||||
Total short-term
debt
|
-- | 353,976 | -- | -- | -- | |||||||||||||||
Total long-term
debt
|
2,529,519 | 1,511,083 | 1,603,287 | 1,525,021 | 1,480,226 | |||||||||||||||
Partners’
capital
|
1,591,479 | 1,264,627 | 1,320,330 | 1,201,370 | 1,011,103 |
For
Year Ended December 31,
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
(in
thousands, except per Unit amounts)
|
||||||||||||||||||||
Cash
Flow Data:
|
||||||||||||||||||||
Net cash provided by continuing
operating
activities
(2)
|
$ | 346,861 | $ | 350,572 | $ | 271,552 | $ | 250,723 | $ | 263,896 | ||||||||||
Net cash provided by operating
activities
|
346,861 | 350,572 | 273,073 | 254,505 | 267,167 | |||||||||||||||
Capital expenditures to sustain
existing
operations (4)
|
(58,487 | ) | (52,149 | ) | (39,966 | ) | (40,783 | ) | (41,733 | ) | ||||||||||
Capital
expenditures
|
(300,503 | ) | (228,272 | ) | (170,046 | ) | (220,553 | ) | (156,749 | ) | ||||||||||
Net cash used in continuing
investing activities
|
(831,020 | ) | (317,400 | ) | (273,716 | ) | (350,915 | ) | (182,759 | ) | ||||||||||
Net cash used in investing
activities
|
(831,020 | ) | (317,400 | ) | (273,716 | ) | (350,915 | ) | (190,157 | ) | ||||||||||
Net cash provided by (used in)
financing activities
|
484,164 | (33,219 | ) | 594 | 80,107 | (90,057 | ) | |||||||||||||
Distributions
paid
|
(327,997 | ) | (294,450 | ) | (278,566 | ) | (251,101 | ) | (233,057 | ) | ||||||||||
Distributions paid per Unit
(3)
|
$ | 2.84 | $ | 2.74 | $ | 2.70 | $ | 2.68 | $ | 2.64 |
(1)
|
Includes
operating fuel and power and taxes – other than income
taxes.
|
(2)
|
Reflects
the Pioneer plant as discontinued operations for the years ended December
31, 2004, 2005 and 2006. The Pioneer plant was constructed as
part of the Phase III expansion of the Jonah system and was completed
during the first quarter of 2004.
|
(3)
|
Per
Unit calculation includes the following Unit issuances: No
Units were issued in 2004. In 2005 and 2006, 6,965,000 Units
and 5,750,000 Units were issued, respectively. On December 8,
2006, we issued 14,091,275 Units to our General Partner in consideration
for a reduction in the incentive distribution rights of the General
Partner. In 2007, 106,703 Units were issued. In
2008, 14,793,329 Units were issued.
|
(4)
|
Capital
expenditures to sustain existing operations include projects required by
regulatory agencies or required life-cycle
replacements.
|
§
|
Overview
of Business.
|
§
|
Critical
Accounting Policies and Estimates – Presents accounting policies that are
among the most critical to the portrayal of our financial condition and
results of operations.
|
§
|
Results
of Operations – Discusses material period-to-period variances in the
statements of consolidated income.
|
§
|
Financial
Condition and Liquidity – Analyzes cash flows and financial
position.
|
§
|
Other
Considerations – Addresses available sources of liquidity, trends, future
plans and contingencies that are reasonably likely to materially affect
future liquidity or earnings.
|
§
|
Recent
Accounting Pronouncements.
|
§
|
Our
Downstream Segment, which is engaged in the pipeline transportation,
marketing and storage of refined products, LPGs and
petrochemicals;
|
§
|
Our
Upstream Segment, which is engaged in the gathering, transportation,
marketing and storage of crude oil, distribution of lubrication oils and
specialty chemicals and fuel transportation
services;
|
§
|
Our
Midstream Segment, which is engaged in the gathering of natural gas,
fractionation of NGLs and pipeline transportation of NGLs;
and
|
§
|
Our
Marine Services Segment, which is engaged in the marine transportation of
refined products, crude oil, condensate, asphalt, heavy fuel oil and other
heated oil products via tow boats and tank
barges.
|
§
|
changes
in laws and regulations relating to restoration and abandonment
requirements;
|
§
|
changes
in expected costs for dismantlement, restoration and abandonment as a
result of changes, or expected changes, in labor, materials and other
related costs associated with these
activities;
|
§
|
changes
in the useful life of an asset based on the actual known life of similar
assets, changes in technology, or other factors;
and
|
§
|
changes
in expected salvage proceeds as a result of a change, or expected change
in the salvage market.
|
§
|
discrete
financial forecasts for the assets contained within the reporting unit,
which rely on management’s estimates of operating margins and
transportation volumes;
|
§
|
long-term
growth rates for cash flows beyond the discrete forecast period;
and
|
§
|
appropriate
discount rates.
|
§
|
the
expected useful life of the related tangible assets (e.g., pipeline or
other asset, etc.);
|
§
|
any
legal or regulatory developments that would impact such contractual
rights; and
|
§
|
any
contractual provisions that enable us to renew or extend such
agreements.
|
For
Year Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Operating
revenues:
|
||||||||||||
Downstream
Segment
|
$ | 372,964 | $ | 362,691 | $ | 304,301 | ||||||
Upstream Segment
|
12,873,426 | 9,173,683 | 9,109,629 | |||||||||
Midstream Segment
(1)
|
122,417 | 122,235 | 201,269 | |||||||||
Marine Services
Segment
|
164,274 | -- | -- | |||||||||
Intersegment
eliminations
|
(192 | ) | (549 | ) | (7,714 | ) | ||||||
Total operating
revenues
|
13,532,889 | 9,658,060 | 9,607,485 | |||||||||
Operating
income:
|
||||||||||||
Downstream
Segment
|
91,270 | 135,055 | 91,262 | |||||||||
Upstream Segment
|
95,683 | 84,222 | 70,840 | |||||||||
Midstream Segment
(1)
|
27,559 | 25,767 | 65,499 | |||||||||
Marine Services
Segment
|
34,507 | -- | -- | |||||||||
Intersegment
eliminations
|
4,401 | 4,511 | 2,178 | |||||||||
Total operating
income
|
253,420 | 249,555 | 229,779 | |||||||||
Equity
earnings (losses):
|
||||||||||||
Downstream
Segment
|
(14,603 | ) | (12,396 | ) | (8,018 | ) | ||||||
Upstream Segment
|
11,693 | 2,602 | 11,905 | |||||||||
Midstream Segment
(1)
|
90,004 | 83,060 | 35,052 | |||||||||
Intersegment
eliminations
|
(4,401 | ) | (4,511 | ) | (2,178 | ) | ||||||
Total equity
earnings
|
82,693 | 68,755 | 36,761 | |||||||||
Earnings
before interest: (2)
|
||||||||||||
Downstream
Segment
|
77,526 | 184,251 | 84,746 | |||||||||
Upstream Segment
|
108,164 | 87,246 | 83,540 | |||||||||
Midstream Segment
(1)
|
117,947 | 109,463 | 101,219 | |||||||||
Marine Services
Segment
|
34,520 | -- | -- | |||||||||
Interest
expense
|
(159,158 | ) | (112,253 | ) | (96,852 | ) | ||||||
Interest
capitalized
|
19,170 | 11,030 | 10,681 | |||||||||
Income before provision for
income taxes
|
198,169 | 279,737 | 183,334 | |||||||||
Provision
for income taxes
|
4,617 | 557 | 652 | |||||||||
Income from continuing
operations
|
193,552 | 279,180 | 182,682 | |||||||||
Discontinued
operations
|
-- | -- | 19,369 | |||||||||
Net
income
|
$ | 193,552 | $ | 279,180 | $ | 202,051 |
(1)
|
Effective
August 1, 2006, with the formation of a joint venture with Enterprise
Products Partners, Jonah was deconsolidated and has been subsequently
accounted for as an equity investment (see Note 9 in the Notes to
Consolidated Financial Statements).
|
(2)
|
See
Note 14 in the Notes to Consolidated Financial Statements for a
reconciliation of earnings before interest to net
income.
|
For
Year Ended December 31,
|
Increase
(Decrease)
|
|||||||||||||||||||
2008
|
2007
|
2006
|
2008-2007
|
2007-2006
|
||||||||||||||||
Operating
revenues:
|
||||||||||||||||||||
Sales
of petroleum products
|
$ | 37,554 | $ | 30,326 | $ | 5,800 | $ | 7,228 | $ | 24,526 | ||||||||||
Transportation
– Refined products
|
164,120 | 170,231 | 152,552 | (6,111 | ) | 17,679 | ||||||||||||||
Transportation
– LPGs
|
105,419 | 101,076 | 89,315 | 4,343 | 11,761 | |||||||||||||||
Other
|
65,871 | 61,058 | 56,634 | 4,813 | 4,424 | |||||||||||||||
Total
operating revenues
|
372,964 | 362,691 | 304,301 | 10,273 | 58,390 | |||||||||||||||
Costs
and expenses:
|
||||||||||||||||||||
Purchases
of petroleum products
|
37,194 | 30,041 | 5,526 | 7,153 | 24,515 | |||||||||||||||
Operating
expense
|
133,090 | 103,406 | 106,455 | 29,684 | (3,049 | ) | ||||||||||||||
Operating
fuel and power
|
40,536 | 39,906 | 38,354 | 630 | 1,552 | |||||||||||||||
General
and administrative
|
16,501 | 16,929 | 17,085 | (428 | ) | (156 | ) | |||||||||||||
Depreciation
and amortization
|
43,063 | 46,141 | 41,405 | (3,078 | ) | 4,736 | ||||||||||||||
Taxes
– other than income taxes
|
11,312 | 9,866 | 8,437 | 1,446 | 1,429 | |||||||||||||||
Gains
on sales of assets
|
(2 | ) | (18,653 | ) | (4,223 | ) | 18,651 | (14,430 | ) | |||||||||||
Total
costs and expenses
|
281,694 | 227,636 | 213,039 | 54,058 | 14,597 | |||||||||||||||
Operating
income
|
91,270 | 135,055 | 91,262 | (43,785 | ) | 43,793 | ||||||||||||||
Gain
on sale of ownership interest in
MB Storage
|
-- | 59,628 | -- | (59,628 | ) | 59,628 | ||||||||||||||
Equity
losses
|
(14,603 | ) | (12,396 | ) | (8,018 | ) | (2,207 | ) | (4,378 | ) | ||||||||||
Interest
income
|
643 | 879 | 1,008 | (236 | ) | (129 | ) | |||||||||||||
Other
income
|
216 | 1,085 | 494 | (869 | ) | 591 | ||||||||||||||
Earnings
before interest
|
$ | 77,526 | $ | 184,251 | $ | 84,746 | $ | (106,725 | ) | $ | 99,505 |
For
Year Ended December 31,
|
Percentage
Increase
(Decrease)
|
|||||||||||||||||||
2008
|
2007
|
2006
|
2008-2007
|
2007-2006
|
||||||||||||||||
Volumes
Delivered:
|
||||||||||||||||||||
Refined
products
|
159,586 | 174,910 | 165,269 | (9 | %) | 6 | % | |||||||||||||
LPGs
|
38,802 | 40,875 | 44,997 | (5 | %) | (9 | %) | |||||||||||||
Total
|
198,388 | 215,785 | 210,266 | (8 | %) | 3 | % | |||||||||||||
Average
Tariff per Barrel:
|
||||||||||||||||||||
Refined
products
|
$ | 1.03 | $ | 0.97 | $ | 0.92 | 6 | % | 5 | % | ||||||||||
LPGs
|
2.72 | 2.47 | 1.98 | 10 | % | 25 | % | |||||||||||||
Average system tariff per
barrel
|
$ | 1.36 | $ | 1.25 | $ | 1.15 | 9 | % | 9 | % |
For
Year Ended
December
31,
|
Increase
|
|||||||||||
2008
|
2007
|
(Decrease)
|
||||||||||
Centennial
|
$ | (14,673 | ) | $ | (13,528 | ) | $ | (1,145 | ) | |||
MB
Storage
|
-- | 1,089 | (1,089 | ) | ||||||||
Other
|
70 | 43 | 27 | |||||||||
Total
equity
losses
|
$ | (14,603 | ) | $ | (12,396 | ) | $ | (2,207 | ) |
For
Year Ended
|
||||||||||||
December
31,
|
Increase
|
|||||||||||
2007
|
2006
|
(Decrease)
|
||||||||||
Centennial
|
$ | (13,528 | ) | $ | (17,094 | ) | $ | 3,566 | ||||
MB
Storage
|
1,089 | 9,082 | (7,993 | ) | ||||||||
Other
|
43 | (6 | ) | 49 | ||||||||
Total
equity losses
|
$ | (12,396 | ) | $ | (8,018 | ) | $ | (4,378 | ) |
For
Year Ended December 31,
|
Increase
(Decrease)
|
|||||||||||||||||||
2008
|
2007
|
2006
|
2008-2007
|
2007-2006
|
||||||||||||||||
Operating
revenues: (1)
|
||||||||||||||||||||
Sales
of petroleum products (2)
|
$ | 12,803,288 | $ | 9,117,327 | $ | 9,060,782 | $ | 3,685,961 | $ | 56,545 | ||||||||||
Transportation
– Crude oil
|
57,305 | 45,952 | 38,822 | 11,353 | 7,130 | |||||||||||||||
Other
|
12,833 | 10,404 | 10,025 | 2,429 | 379 | |||||||||||||||
Total
operating revenues
|
12,873,426 | 9,173,683 | 9,109,629 | 3,699,743 | 64,054 | |||||||||||||||
Costs
and expenses: (1)
|
||||||||||||||||||||
Purchases
of petroleum products (2)
|
12,670,933 | 8,992,048 | 8,953,407 | 3,678,885 | 38,641 | |||||||||||||||
Operating
expense
|
61,950 | 58,976 | 54,422 | 2,974 | 4,554 | |||||||||||||||
Operating
fuel and power
|
7,406 | 7,001 | 6,989 | 405 | 12 | |||||||||||||||
General
and administrative
|
9,903 | 7,619 | 5,986 | 2,284 | 1,633 | |||||||||||||||
Depreciation
and amortization
|
20,928 | 18,257 | 14,400 | 2,671 | 3,857 | |||||||||||||||
Taxes
– other than income taxes
|
6,625 | 5,560 | 5,390 | 1,065 | 170 | |||||||||||||||
Gains
on sales of assets
|
(2 | ) | -- | (1,805 | ) | (2 | ) | 1,805 | ||||||||||||
Total
costs and expenses
|
12,777,743 | 9,089,461 | 9,038,789 | 3,688,282 | 50,672 | |||||||||||||||
Operating
income
|
95,683 | 84,222 | 70,840 | 11,461 | 13,382 | |||||||||||||||
Equity
earnings
|
11,693 | 2,602 | 11,905 | 9,091 | (9,303 | ) | ||||||||||||||
Interest
income
|
51 | 161 | 407 | (110 | ) | (246 | ) | |||||||||||||
Other
income
|
737 | 261 | 388 | 476 | (127 | ) | ||||||||||||||
Earnings
before interest
|
$ | 108,164 | $ | 87,246 | $ | 83,540 | $ | 20,918 | $ | 3,706 |
(1)
|
Amounts
in this table are presented after elimination of intercompany
transactions, including sales and purchases of petroleum
products.
|
(2)
|
Petroleum
products includes crude oil, lubrication oils and specialty
chemicals.
|
For
Year Ended December 31,
|
Percentage
Increase
(Decrease)
|
|||||||||||||||||||
2008
|
2007
|
2006
|
2008-2007
|
2007-2006
|
||||||||||||||||
Margins:
(1)
|
||||||||||||||||||||
Crude
oil marketing
|
$ | 67,104 | $ | 72,655 | $ | 58,358 | (8 | %) | 24 | % | ||||||||||
Lubrication
oil sales
|
13,842 | 8,820 | 8,565 | 57 | % | 3 | % | |||||||||||||
Revenues:
(1)
|
||||||||||||||||||||
Crude
oil transportation
|
89,643 | 75,285 | 67,439 | 19 | % | 12 | % | |||||||||||||
Crude
oil terminaling (2)
|
19,071 | 14,471 | 11,835 | 32 | % | 22 | % | |||||||||||||
Total
margin/revenues
|
$ | 189,660 | $ | 171,231 | $ | 146,197 | 11 | % | 17 | % | ||||||||||
Total
barrels/gallons:
|
||||||||||||||||||||
Crude
oil marketing(barrels) (1)
|
254,680 | 232,041 | 222,069 | 10 | % | 4 | % | |||||||||||||
Lubrication
oil volume (gallons)
|
21,853 | 15,344 | 14,444 | 42 | % | 6 | % | |||||||||||||
Crude
oil transportation (barrels)
|
114,259 | 96,451 | 91,487 | 18 | % | 5 | % | |||||||||||||
Crude
oil terminaling (barrels)
|
166,751 | 135,010 | 125,974 | 24 | % | 7 | % | |||||||||||||
Margin
per barrel or gallon:
|
||||||||||||||||||||
Crude
oil marketing (per barrel) (1)
|
$ | 0.263 | $ | 0.313 | $ | 0.263 | (16 | %) | 19 | % | ||||||||||
Lubrication
oil margin (per gallon)
|
0.633 | 0.575 | 0.593 | 10 | % | (3 | %) | |||||||||||||
Average
tariff per barrel:
|
||||||||||||||||||||
Crude
oil transportation
|
$ | 0.785 | $ | 0.781 | $ | 0.737 | 1 | % | 6 | % | ||||||||||
Crude
oil terminaling
|
0.114 | 0.107 | 0.094 | 7 | % | 14 | % |
(1)
|
Amounts
in this table are presented prior to the eliminations of intercompany
sales, revenues and purchases between TCO and TCPL, both of which are our
wholly-owned subsidiaries. TCO is a significant shipper on
TCPL. Crude oil marketing volumes also include inter-region
transfers, which are transfers among TCO’s various geographically managed
regions.
|
(2)
|
Revenues
associated with crude oil terminaling are classified as crude oil
transportation in our statements of consolidated
income.
|
For
Year Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Sales
of petroleum
products
|
$ | 12,803,288 | $ | 9,117,327 | $ | 9,060,782 | ||||||
Transportation
– Crude
oil
|
57,305 | 45,952 | 38,822 | |||||||||
Less: Purchases
of petroleum
products
|
(12,670,933 | ) | (8,992,048 | ) | (8,953,407 | ) | ||||||
Total
margin/revenues
|
189,660 | 171,231 | 146,197 | |||||||||
Other
operating
revenues
|
12,833 | 10,404 | 10,025 | |||||||||
Net operating
revenues
|
202,493 | 181,635 | 156,222 | |||||||||
Operating
expense
|
61,950 | 58,976 | 54,422 | |||||||||
Operating
fuel and
power
|
7,406 | 7,001 | 6,989 | |||||||||
General
and administrative
expense
|
9,903 | 7,619 | 5,986 | |||||||||
Depreciation
and
amortization
|
20,928 | 18,257 | 14,400 | |||||||||
Taxes
– other than income
taxes
|
6,625 | 5,560 | 5,390 | |||||||||
Gains
on sales of
assets
|
(2 | ) | -- | (1,805 | ) | |||||||
Operating
income
|
$ | 95,683 | $ | 84,222 | $ | 70,840 |
For
Year Ended December 31,
|
Increase
(Decrease)
|
|||||||||||||||||||
2008
|
2007
|
2006
|
2008-2007
|
2007-2006
|
||||||||||||||||
Operating
revenues: (1)
|
||||||||||||||||||||
Sales
of petroleum products (2)
|
$ | -- | $ | -- | $ | 18,766 | $ | -- | $ | (18,766 | ) | |||||||||
Gathering
– Natural gas
|
57,097 | 61,634 | 123,933 | (4,537 | ) | (62,299 | ) | |||||||||||||
Transportation
– NGLs (3)
|
52,192 | 46,542 | 43,838 | 5,650 | 2,704 | |||||||||||||||
Other
|
13,128 | 14,059 | 14,732 | (931 | ) | (673 | ) | |||||||||||||
Total
operating revenues
|
122,417 | 122,235 | 201,269 | 182 | (79,034 | ) | ||||||||||||||
Costs
and expenses: (1)
|
||||||||||||||||||||
Purchases
of petroleum products
|
-- | -- | 17,272 | -- | (17,272 | ) | ||||||||||||||
Operating
expense
|
26,367 | 29,395 | 42,887 | (3,028 | ) | (13,492 | ) | |||||||||||||
Operating
fuel and power
|
16,410 | 14,551 | 12,107 | 1,859 | 2,444 | |||||||||||||||
General
and administrative expense
|
9,717 | 9,109 | 8,277 | 608 | 832 | |||||||||||||||
Depreciation
and amortization
|
39,323 | 40,827 | 52,447 | (1,504 | ) | (11,620 | ) | |||||||||||||
Taxes
– other than income taxes
|
3,041 | 2,586 | 4,156 | 455 | (1,570 | ) | ||||||||||||||
Gains
on sales of assets
|
-- | -- | (1,376 | ) | -- | 1,376 | ||||||||||||||
Total
costs and expenses
|
94,858 | 96,468 | 135,770 | (1,610 | ) | (39,302 | ) | |||||||||||||
Operating
income
|
27,559 | 25,767 | 65,499 | 1,792 | (39,732 | ) | ||||||||||||||
Equity
earnings (1)
|
90,004 | 83,060 | 35,052 | 6,944 | 48,008 | |||||||||||||||
Interest
income
|
384 | 636 | 662 | (252 | ) | (26 | ) | |||||||||||||
Other
income
|
-- | -- | 6 | -- | (6 | ) | ||||||||||||||
Earnings
before interest
|
$ | 117,947 | $ | 109,463 | $ | 101,219 | $ | 8,484 | $ | 8,244 |
(1)
|
Effective
August 1, 2006, with the formation of a joint venture with Enterprise
Products Partners, Jonah was deconsolidated and operating results,
including revenues and costs and expenses, after August 1, 2006 are
included in equity earnings (see Note 9 in the Notes to Consolidated
Financial Statements).
|
(2)
|
The
2006 period includes Jonah’s natural gas sales to Enterprise Products
Partners of $2.9 million through July 31,
2006.
|
(3)
|
Includes
transportation revenue from Enterprise Products Partners of $13.8 million,
$13.2 million and $10.2 million for the years ended December 31, 2008,
2007 and 2006, respectively.
|
For
Year Ended December 31,
|
Percentage
Increase
(Decrease)
|
|||||||||||||||||||
2008
|
2007
|
2006
|
2008-2007
|
2007-2006
|
||||||||||||||||
Gathering
– Natural Gas – Jonah: (1) (2)
|
||||||||||||||||||||
MMcf
|
709,915 | 587,354 | 473,909 | 21 | % | 24 | % | |||||||||||||
BBtu
|
784,179 | 647,890 | 522,667 | 21 | % | 24 | % | |||||||||||||
Average
fee per Mcf
|
$ | 0.257 | $ | 0.236 | $ | 0.224 | 9 | % | 5 | % | ||||||||||
Average
fee per MMBtu
|
$ | 0.233 | $ | 0.214 | $ | 0.204 | 9 | % | 5 | % | ||||||||||
Gathering
– Natural Gas – Val Verde: (2)
|
||||||||||||||||||||
MMcf
|
166,914 | 175,667 | 181,928 | (5 | %) | (3 | %) | |||||||||||||
BBtu
|
149,095 | 155,982 | 160,929 | (5 | %) | (3 | %) | |||||||||||||
Average
fee per Mcf
|
$ | 0.342 | $ | 0.351 | $ | 0.359 | (3 | %) | (2 | %) | ||||||||||
Average
fee per MMBtu
|
$ | 0.383 | $ | 0.395 | $ | 0.406 | (3 | %) | (3 | %) | ||||||||||
Transportation
and movements – NGLs:
|
||||||||||||||||||||
Transportation
barrels (in thousands)
|
62,647 | 64,199 | 63,396 | (2 | %) | 1 | % | |||||||||||||
Lease
barrels (in thousands) (3)
|
10,982 | 12,797 | 6,350 | (14 | %) | 102 | % | |||||||||||||
Average
rate per barrel
|
$ | 0.783 | $ | 0.688 | $ | 0.674 | 14 | % | 2 | % | ||||||||||
Natural
Gas Sales: (1)
|
||||||||||||||||||||
BBtu
|
4,908 | 14,774 | 10,206 | (67 | %) | 45 | % | |||||||||||||
Average
fee per MMBtu
|
$ | 6.374 | $ | 4.278 | $ | 4.984 | 49 | % | (14 | %) | ||||||||||
Fractionation
– NGLs:
|
||||||||||||||||||||
Barrels
(in thousands)
|
4,232 | 4,175 | 4,406 | 1 | % | (5 | %) | |||||||||||||
Average
rate per barrel
|
$ | 1.753 | $ | 1.768 | $ | 1.662 | (1 | %) | 6 | % | ||||||||||
Sales
– Condensate: (1) (4)
|
||||||||||||||||||||
Barrels
(in thousands)
|
76.9 | 89.7 | 74.2 | (14 | %) | 21 | % | |||||||||||||
Average
rate per barrel
|
$ | 74.02 | $ | 59.57 | $ | 62.26 | 24 | % | (4 | %) |
(1)
|
Effective
August 1, 2006, with the formation of a joint venture with Enterprise
Products Partners, Jonah was deconsolidated and operating results after
August 1, 2006 are included in equity earnings (see Note 9 in the Notes to
Consolidated Financial Statements). However, this table
includes Jonah’s volume and average rate information for the full years
ended December 31, 2008, 2007 and
2006.
|
(2)
|
The
majority of volumes in Val Verde’s contracts are measured in Mcf, while
the majority of volumes in Jonah’s contracts are measured in
MMBtu. Both measures are shown for each asset for comparability
purposes.
|
(3)
|
Revenues
associated with capacity leases are classified as other operating revenues
in our statements of consolidated
income.
|
(4)
|
All
of Jonah’s condensate volumes are sold to
TCO.
|
For
Year Ended
|
||||
December
31,
|
||||
|
2006 | |||
Operating
revenues:
|
||||
Sales
of petroleum products
|
$ | 3,828 | ||
Other
|
932 | |||
Total
operating revenues
|
4,760 | |||
Costs
and expenses:
|
||||
Purchases
of petroleum products
|
3,000 | |||
Operating
expense
|
182 | |||
Depreciation
and amortization
|
51 | |||
Taxes
– other than income taxes
|
30 | |||
Total
costs and expenses
|
3,263 | |||
Income from discontinued operations
|
$ | 1,497 |
For Year
Ended
|
||||||||||||
December
31,
|
Increase
|
|||||||||||
2008
|
2007
|
(Decrease)
|
||||||||||
Operating
revenues:
|
||||||||||||
Transportation
– Marine
|
$ | 164,265 | $ | -- | $ | 164,265 | ||||||
Other
|
9 | -- | 9 | |||||||||
Total
operating revenues
|
164,274 | -- | 164,274 | |||||||||
Costs
and expenses:
|
||||||||||||
Operating
expense
|
64,353 | -- | 64,353 | |||||||||
Operating
fuel and power
|
34,727 | -- | 34,727 | |||||||||
General
and administrative
|
5,243 | -- | 5,243 | |||||||||
Depreciation
and amortization
|
23,015 | -- | 23,015 | |||||||||
Taxes
– other than income taxes
|
2,423 | -- | 2,423 | |||||||||
Loss
on the sale of assets
|
6 | -- | 6 | |||||||||
Total
costs and expenses
|
129,767 | -- | 129,767 | |||||||||
Operating
income
|
34,507 | -- | 34,507 | |||||||||
Interest
income
|
13 | -- | 13 | |||||||||
Earnings
before interest
|
$ | 34,520 | $ | -- | $ | 34,520 |
Number
of inland tow boats
|
45
|
Number
of inland tank barges
|
105
|
Number
of offshore tow boats
|
6
|
Number
of offshore tank
barges
|
8
|
Fleet
available days (1)
|
51,932
|
Fleet
operating days (2)
|
48,308
|
Fleet
utilization (3)
|
93%
|
Gross
margin
|
$65,194
|
Average
daily rate
(4)
|
$1,350
|
(1)
|
Equal
to the number of calendar days from our acquisition of Cenac on February
1, 2008 and Horizon on February 29, 2008 through December 31, 2008
multiplied by the total number of vessels less the aggregate number of
days that our vessels are not operating due to scheduled maintenance and
repairs or unscheduled instances where vessels may have to be drydocked in
the event of accidents and other unforeseen
damage.
|
(2)
|
Equal
to the number of our fleet available days from our acquisition of Cenac on
February 1, 2008 and Horizon on February 29, 2008 through December 31,
2008 less the aggregate number of days that our vessels are
off-hire.
|
(3)
|
Equal
to the number of fleet operating days divided by the number of fleet
available days during the period.
|
(4)
|
Equal
to gross margin divided by the number of fleet operating days during the
period.
|
For
Year Ended December
31, 2008
|
||||
Transportation
– Marine
|
$ | 164,265 | ||
Other
operating revenues
|
9 | |||
Operating
expense
|
64,353 | |||
Operating
fuel and power
|
34,727 | |||
Gross margin
|
65,194 | |||
General
and administrative
|
5,243 | |||
Depreciation
and amortization
|
23,015 | |||
Taxes
– other than income taxes
|
2,423 | |||
Loss
on sale of assets
|
6 | |||
Operating income
|
$ | 34,507 |
For
Year Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Cash
provided by (used in):
|
||||||||||||
Continuing
operating activities
|
$ | 346,861 | $ | 350,572 | $ | 271,552 | ||||||
Operating
activities
|
346,861 | 350,572 | 273,073 | |||||||||
Investing
activities
|
(831,020 | ) | (317,400 | ) | (273,716 | ) | ||||||
Financing
activities
|
484,164 | (33,219 | ) | 594 |
§
|
Cash
flow from operating activities decreased due to the timing of cash
receipts and cash disbursements related to working capital
components.
|
§
|
Cash
distributions received from unconsolidated affiliates increased $23.2
million. Distributions from our equity investment in Jonah increased $32.1
million primarily due to increased revenues and volumes generated from
completion of the Phase V expansion. Distributions received
from our equity investment in Seaway increased $1.4 million primarily due
to increased earnings in 2008 as compared to 2007. In 2007, we
received distributions from our equity investment in MB Storage of $10.4
million. We sold our interest in MB Storage on March 1, 2007
(see Note 10 in the Notes to Consolidated Financial
Statements).
|
§
|
Cash
paid for interest, net of amounts capitalized, increased $23.9 million
year-to-year primarily due to the increase in debt outstanding, including
higher outstanding balances on our variable rate revolving credit
facility. Excluding the effects of hedging activities and
interest capitalized during the year
|
|
ended December 31, 2009, we expect interest payments on our fixed
rate senior notes and junior subordinated notes for 2009 to be
approximately $139.6 million. We expect to make our interest
payments with cash flows from operating
activities.
|
§
|
Cash
used for business combinations was $351.3 million during the year ended
December 31, 2008, of which $258.2 million was for the Cenac acquisition,
$87.5 million was for the Horizon acquisition and $5.6 million was for the
Quality Petroleum acquisition (see Note 10 in the Notes to Consolidated
Financial Statements).
|
§
|
Capital
expenditures increased $72.2 million primarily due to an increase in
organic growth projects year-to-year and higher spending to sustain
existing operations, including pipeline integrity. Cash paid
for linefill on assets owned decreased $26.6 million year-to-year
primarily due to the timing of completion of organic growth projects in
our Upstream Segment.
|
§
|
Proceeds
from the sales of assets and ownership interests during the year ended
December 31, 2007 were $165.1 million, which includes $137.3 million from
the sale of TE Products’ ownership interests in MB Storage and its general
partner and $18.5 million for the sale of other Downstream Segment assets,
all to Louis Dreyfus on March 1, 2007; $8.0 million for the sale of
Downstream Segment assets to Enterprise Products Partners in January 2007
(see Note 10 in the Notes to Consolidated Financial Statements) and $1.3
million for the sale of various Upstream Segment assets in the third
quarter of 2007.
|
§
|
Investments
in unconsolidated affiliates decreased $32.9 million, which includes an
$11.1 million decrease in contributions to Centennial and a $57.8 million
decrease in contributions to Jonah primarily related to completion of its
Phase V expansion in 2008. During the year ended December 31,
2007, TE Products contributed $11.1 million to Centennial, of which $6.1
million was for contractual obligations that were created upon formation
of Centennial and $5.0 million was for debt service
requirements. These decreases were partially offset by $36.0
million in contributions to Texas Offshore Port System for the year ended
December 31, 2008 (see Note 9 in the Notes to Consolidated Financial
Statements).
|
§
|
Cash
paid for the acquisition of assets for the year ended December 31, 2007
was $12.9 million, of which $6.2 million was for Downstream Segment assets
and $6.7 million was for Upstream Segment
assets.
|
§
|
During
the years ended December 31, 2008 and 2007, we paid $0.7 million and $3.3
million, respectively, related to the acquisition of intangible
assets.
|
§
|
During
the year ended December 31, 2008, we used $1.0 billion of proceeds from
our term credit agreement (i) to fund the cash portion of our Cenac and
Horizon acquisitions, (ii) to fund the redemption of our 7.51% TE Products
Senior Notes in January 2008 and the repayment of our 6.45% TE Products
Senior Notes, which matured in January 2008, (iii) to repay $63.2 million
of debt assumed in the Cenac acquisition, and (iv) for other general
partnership purposes. We used the proceeds from the issuance of
senior notes in March 2008 to repay the outstanding balance of
$1.0
|
|
billion
under the term credit agreement (see Note 12 in the Notes to Consolidated
Financial Statements). Debt issuance costs paid during the year
ended December 31, 2008 were $9.9
million.
|
§
|
We
received $295.8 million from the issuance in May 2007 of our 7.000% junior
subordinated notes due September 2067 (net of debt issuance costs of $3.7
million) (see Note 12 in the Notes to Consolidated Financial
Statements).
|
§
|
Net
borrowings under our revolving credit facility increased $26.7
million.
|
§
|
We
paid $52.1 million to settle treasury locks in March 2008 (see Note 6 in
the Notes to Consolidated Financial Statements) upon the issuance of
senior notes. We received $1.4 million in proceeds from the
termination of treasury locks in May 2007, and we paid $1.2 million for
the termination of an interest rate swap in September
2007.
|
§
|
Cash
distributions to our partners increased $33.5 million year-to-year due to
an increase in the number of Units outstanding and an increase in our
quarterly cash distribution rate per Unit. We paid cash
distributions of $328.0 million ($2.84 per Unit) and $294.5 million ($2.74
per Unit) during the years ended December 31, 2008 and 2007,
respectively. Additionally, we declared a cash distribution of
$0.725 per Unit for the quarter ended December 31, 2008. We
paid the distribution of $91.2 million on February 6, 2009 to unitholders
of record on January 30, 2009.
|
§
|
We
received $257.0 million in net proceeds from an underwritten equity
offering in September 2008 from the public issuance of 9.2 million Units
(see Note 13 in the Notes to Consolidated Financial Statements) and $7.0
million from the sale of 241,380 unregistered Units to TEPPCO Unit (see
Note 4 in the Notes to Consolidated Financial
Statements).
|
§
|
Net
proceeds from the issuance of Units to employees under the employee unit
purchase plan and the issuance of Units in connection with our
distribution reinvestment plan (“DRIP”) were $12.2 million for the year
ended December 31, 2008, compared to $1.7 million for the year ended
December 31, 2007 (see Note 13 in the Notes to Consolidated Financial
Statements).
|
§
|
The
improvement in cash flow is generally due to increased earnings (see
“Results of Operations” within this Item 7) and the timing of related cash
collections and disbursements between
years.
|
§
|
Cash
received for crude oil inventory was $4.8 million for the year ended
December 31, 2007, compared to cash payments of $46.3 million for the year
ended December 31, 2006. The increase in cash received was
related to changes in activities relating to crude oil
inventory. As part of our crude oil marketing activity, we
purchase crude oil and simultaneously enter into offsetting sales
contracts for physical delivery in future periods. These
transactions result in an increase in the amount of inventory carried on
our books until the crude oil is sold. The substantial
majority of inventory related to these contracts as of December 31,
2007 was been contracted for sale in 2008; however, new
contracts may be executed, which would result in higher inventory balances
being held in future balance sheet periods. At December
31, 2007, inventory balances related to these types of transactions were
lower compared to the balance at December 31,
2006.
|
§
|
Cash
distributions received from unconsolidated affiliates increased $59.4
million primarily due to an increase of $70.0 million in distributions
received from our equity investment in Jonah as a result of the
formation of the joint venture on August 1, 2006. Distributions
received from our equity
|
|
investment
in Seaway decreased $8.1 million primarily due to the reduction of our
sharing ratio to 40% in 2007 from 47% in 2006, and lower Seaway revenues,
which were negatively impacted by the unexpected temporary shutdown of
several regional refineries for maintenance and repairs. Distributions
received from our equity investment in MB Storage decreased $2.5 million
due to the sale of our investment in MB Storage on March 1,
2007.
|
§
|
Cash
paid for interest, net of amounts capitalized, increased $16.1 million
year-to-year primarily due to higher outstanding balances on our
variable-rate revolving credit facility, the issuance of junior
subordinated notes in May 2007 and the payment of a make-whole premium
related to the redemption of $35.0 million of TE Product’s Senior
Notes.
|
§
|
Investments
in unconsolidated affiliates increased $70.3 million, which includes a
$66.5 million increase in contributions for our ownership interest in the
Jonah joint venture with Enterprise Products Partners primarily for
capital expenditures on its Phase V expansion and an $8.6 million increase
in contributions to Centennial, partially offset by a $4.8 million
decrease in contributions to MB Storage, which was sold on March 1,
2007. Contributions to Centennial in 2007 included $6.1 million
for contractual obligations that were created upon formation of Centennial
and $5.0 million for debt service
requirements.
|
§
|
Capital
expenditures increased $58.2 million primarily due to an increase in
organic growth projects year-to-year and higher spending to sustain
existing operations, including pipeline integrity. Cash paid
for linefill on assets owned increased $33.0 million year-to-year
primarily due to increases in our propane inventory related to the sale of
our ownership interest in MB Storage on March 1, 2007 and the completion
of organic growth projects in our Upstream Segment. Because we
sold our interest in MB Storage and we have location exchange requirements
to provide barrels to shippers at Mont Belvieu, we increased our long-term
propane inventory.
|
§
|
Proceeds
from the sales of assets and ownership interests for the year ended
December 31, 2007 were $165.1 million, which includes $137.3 million from
the sale of TE Products’ ownership interests in MB Storage and its general
partner and $18.5 million for the sale of other Downstream Segment assets,
all to Louis Dreyfus on March 1, 2007; $8.0 million for the sale of
Downstream Segment assets to Enterprise Products Partners in January 2007;
and $1.3 million for the sale of various Upstream Segment assets in the
third quarter of 2007. Proceeds from the sales of assets for
the year ended December 31, 2006 were $51.6 million, of which $38.0
million related to cash proceeds received from the sale of the Pioneer
plant in the Midstream Segment and $11.7 million of cash proceeds received
from the sale of certain crude oil pipeline assets from the Upstream
Segment and products pipeline assets from the Downstream Segment to an
affiliate of Enterprise Products
Partners.
|
§
|
Cash
paid for the acquisition of assets for the year ended December 31, 2007
was $12.9 million, of which $6.2 million was for Downstream Segment assets
and $6.7 million was for Upstream Segment assets. For the year
ended December 31, 2006, cash paid for the acquisition of assets was $4.8
million for Downstream Segment
assets.
|
§
|
Cash
used for business combinations for the year ended December 31, 2006 was
$15.7 million for Downstream Segment
assets.
|
§
|
During
the year ended December 31, 2007, we paid $3.3 million related to the
acquisition of intangible
assets.
|
§
|
Borrowings
under our revolving credit facility offset repayments under our revolving
credit facility during the year ended December 31, 2007, while net
borrowings under our revolving credit facility during the year ended
December 31, 2006 were $84.1
million.
|
§
|
Cash
distributions to our partners increased $15.9 million year-to-year due to
an increase in the number of Units outstanding and our quarterly cash
distribution rates. We paid cash distributions of $294.5
million ($2.74 per Unit) and $278.6 million ($2.70 per Unit) during each
of the years ended December 31, 2007 and 2006,
respectively.
|
§
|
Net
proceeds from the issuance of Units decreased $193.4 million
year-to-year. We generated $195.1 million in net proceeds from
an underwritten equity offering in July 2006 from the public issuance of
5.8 million Units. In 2007, we received $1.7 million in net
proceeds related to the issuance of Units to employees under the employee
unit purchase plan and the issuance of Units in connection with our
DRIP.
|
§
|
We
received $295.8 million from the issuance in May 2007 of our 7.000% junior
subordinated notes due June 2067 (net of debt issuance costs of $3.7
million).
|
§
|
In
October 2007, TE Products redeemed $35.0 million principal amount of the
7.51% TE Products Senior Notes for $36.1 million and accrued
interest.
|
§
|
We
received $1.4 million in proceeds from the termination of treasury locks
in May 2007, and we paid $1.2 million for the termination of an interest
rate swap in September 2007.
|
Amount
of Commitment Expiration Per Period
|
||||||||||||||||||||
Total
|
Less
than 1 Year
|
1-3
Years
|
4-5
Years
|
After
5
Years
|
||||||||||||||||
Revolving
Credit Facility, due 2012
|
$ | 516,654 | $ | -- | $ | -- | $ | 516,654 | $ | -- | ||||||||||
7.625%
Senior Notes due 2012 (1)
|
500,000 | -- | -- | 500,000 | -- | |||||||||||||||
6.125%
Senior Notes due 2013 (1)
|
200,000 | -- | -- | 200,000 | -- | |||||||||||||||
5.90%
Senior Notes due 2013 (1)
|
250,000 | -- | -- | 250,000 | -- | |||||||||||||||
6.65%
Senior Notes due 2018 (1)
|
350,000 | -- | -- | -- | 350,000 | |||||||||||||||
7.55%
Senior Notes due 2038 (1)
|
400,000 | -- | -- | -- | 400,000 | |||||||||||||||
7.00%
Junior Subordinated Notes due 2067 (1)
|
300,000 | -- | -- | -- | 300,000 | |||||||||||||||
Interest
payments (2)
|
2,624,102 | 146,838 | 293,677 | 215,449 | 1,968,138 | |||||||||||||||
Debt
and interest subtotal
|
$ | 5,140,756 | $ | 146,838 | $ | 293,677 | $ | 1,682,103 | $ | 3,018,138 | ||||||||||
Operating
leases (3)
|
$ | 55,696 | $ | 12,467 | $ | 20,352 | $ | 15,201 | $ | 7,676 | ||||||||||
Purchase
obligations: (4)
|
||||||||||||||||||||
Product
purchase commitments:
|
||||||||||||||||||||
Estimated
payment obligation:
|
||||||||||||||||||||
Crude
oil
|
$ | 212,435 | $ | 212,435 | $ | -- | $ | -- | $ | -- | ||||||||||
Refined
Products
|
$ | 10,594 | $ | 10,594 | $ | -- | $ | -- | $ | -- | ||||||||||
Other
|
$ | 3,057 | $ | 1,772 | $ | 884 | $ | 401 | $ | -- | ||||||||||
Underlying
major volume commitments:
|
||||||||||||||||||||
Crude
oil (in MBbls)
|
4,409 | 4,409 | -- | -- | -- | |||||||||||||||
Refined
Products (in MBbls)
|
353 | 353 | -- | -- | -- | |||||||||||||||
Service
payment commitments (5)
|
$ | 5,024 | $ | 4,675 | $ | 349 | $ | -- | $ | -- | ||||||||||
Contributions
to Jonah (6)
|
$ | 27,000 | $ | 27,000 | $ | -- | $ | -- | $ | -- | ||||||||||
Contributions
to Texas Offshore Port System (7)
|
$ | 70,000 | $ | 70,000 | $ | -- | $ | -- | $ | -- | ||||||||||
Capital
expenditure obligations (8)
|
$ | 116,733 | $ | 116,733 | $ | -- | $ | -- | $ | -- | ||||||||||
Other
liabilities and deferred credits (9)
|
$ | 28,826 | $ | -- | $ | 11,223 | $ | 7,703 | $ | 9,900 | ||||||||||
Total
|
$ | 5,674,883 | $ | 607,276 | $ | 326,485 | $ | 1,705,408 | $ | 3,035,714 |
(1)
|
At
December 31, 2008, the 7.625% Senior Notes includes a deferred gain of
$18.1 million, net of amortization, from interest rate swap terminations
(see Note 6 in the Notes to Consolidated Financial
Statements). At December 31, 2008, our senior notes and our
junior subordinated notes include an aggregate of $5.2 million of
unamortized debt discounts. The deferred gain and the
unamortized debt discounts are excluded from this
table.
|
(2)
|
Includes
interest payments due on our senior notes and junior subordinated notes
and interest payments and commitment fees due on our Revolving Credit
Facility. The interest amounts calculated on the Revolving Credit Facility
and the junior subordinated notes are based on the assumption that the
amounts outstanding and the interest rates charged both remain at their
current levels.
|
(3)
|
We
lease property, plant and equipment under noncancelable and cancelable
operating leases. Amounts shown in the table represent minimum
cash lease payment obligations under our operating leases with terms in
excess of one year for the periods indicated. Lease expense is
charged to operating costs and expenses on a straight line basis over the
period of expected economic benefit. Contingent rental payments
are expensed as incurred. Total rental expense for the years
ended December 31, 2008, 2007 and 2006, was $20.0 million, $22.1 million
and $25.3 million, respectively.
|
(4)
|
We
have long and short-term purchase obligations for products and services
with third-party suppliers. The prices that we are obligated to
pay under these contracts approximate current market
prices. The preceding table shows our commitments and estimated
payment obligations under these contracts for the periods
indicated. Our estimated future payment obligations are based
on the contractual price under each contract for products and services at
December 31, 2008. The majority of contractual commitments we
make for the purchase of crude oil range in term from a thirty-day
evergreen to one year. A substantial portion of the contracts
for the purchase of crude oil that extend beyond thirty days include
cancellation provisions that allow us to cancel the contract with thirty
days written notice.
|
(5)
|
Includes
approximately $4.5 million related to a shipment commitment on Centennial,
approximately $0.4 million related to a commitment to pay for compression
services on Val Verde and approximately $0.1 million related to the
monthly service fee we pay Cenac to operate the marine assets in
accordance with the transitional operating
agreement.
|
(6)
|
Expected
contributions to Jonah in 2009 for our share of capital
expenditures.
|
(7)
|
Expected
contributions to Texas Offshore Port System for our share of costs related
to the TOPS and PACE projects. We are obligated under the joint
venture agreement to contribute one-third of the funds to complete the
projects, which we currently estimate will total $600.0 million for our
share.
|
(8)
|
We
have short-term payment obligations relating to capital projects we have
initiated. These commitments represent unconditional payment
obligations that we have agreed to pay vendors for services rendered or
products purchased.
|
(9)
|
Includes
approximately $9.6 million of long-term deferred revenue payments,
primarily in the Downstream and Upstream segments, which are being
recognized into income as the services are performed and approximately
$12.0 million related to our estimated long-term portions of our
liabilities under our guarantees to Centennial for its credit agreement
and for a catastrophic event. The amount of commitment by year
is our best estimate of projected payments of these long-term
liabilities.
|
For
Year Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Revenues
from EPCO and affiliates:
|
||||||||||||
Sales
of petroleum products
|
$ | 715 | $ | 320 | $ | 3,165 | ||||||
Transportation
– NGLs
|
13,785 | 13,153 | 10,225 | |||||||||
Transportation
– LPGs
|
8,735 | 5,191 | 3,648 | |||||||||
Other
operating revenues
|
13,318 | 1,761 | 1,517 | |||||||||
Revenues
from unconsolidated affiliates:
|
||||||||||||
Other
operating revenues
|
91 | 351 | 295 | |||||||||
Related
party revenues
|
$ | 36,644 | $ | 20,776 | $ | 18,850 | ||||||
Costs
and Expenses from EPCO and affiliates:
|
||||||||||||
Purchases
of petroleum products
|
$ | 132,624 | $ | 61,596 | $ | 52,982 | ||||||
Operating
expense
|
104,878 | 96,947 | 103,924 | |||||||||
General
and
administrative
|
31,601 | 25,500 | 21,709 | |||||||||
Costs
and Expenses from unconsolidated affiliates:
|
||||||||||||
Purchases
of petroleum products
|
7,143 | 5,493 | 2,987 | |||||||||
Operating
expense
|
7,926 | 8,736 | 5,094 | |||||||||
Costs
and Expenses from Cenac and affiliates:
|
||||||||||||
Operating
expense
|
45,382 | -- | -- | |||||||||
General
and administrative
|
2,912 | -- | -- | |||||||||
Related
party expenses
|
$ | 332,466 | $ | 198,272 | $ | 186,696 |
Scenario
|
Resulting
Classification
|
December
31,
2007
|
December
31,
2008
|
February
3,
2009
|
|||||||||
FV
assuming no change in underlying commodity prices
|
Asset
(Liability)
|
$ | (18,897 | ) | $ | 3 | $ | (200 | ) | ||||
FV
assuming 10% increase in underlying commodity prices
|
Asset
(Liability)
|
(33,606 | ) | 9 | (199 | ) | |||||||
FV
assuming 10% decrease in underlying commodity prices
|
Asset
(Liability)
|
(4,188 | ) | (4 | ) | (198 | ) |
(i)
|
that
our disclosure controls and procedures are designed to ensure that
information required to be disclosed by us in the reports that we file or
submit under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the SEC’s
rules and forms, and that such information is accumulated and communicated
to our management, including the CEO and CFO, as appropriate to allow
timely decisions regarding required disclosure;
and
|
(ii)
|
that
our disclosure controls and procedures are effective at a reasonable
assurance level.
|
(i)
|
pertain
to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the
Partnership;
|
(ii)
|
provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the
Partnership are being made only in accordance with authorizations of
management and directors of the Partnership;
and
|
(iii)
|
provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Partnership’s assets
that could have a material effect on the financial
statements.
|
/s/ JERRY E.
THOMPSON
|
/s/ TRACY E.
OHMART
|
Jerry
E. Thompson
|
Tracy
E. Ohmart
|
President
and Chief Executive Officer
|
Acting
Chief Financial Officer of our
|
of
our General Partner,
|
General
Partner,
|
Texas
Eastern Products Pipeline Company, LLC
|
Texas
Eastern Products Pipeline Company,
LLC
|
§
|
From
June 2000 until February 14, 2006, Mr. Snell was a director of Enterprise
Products GP, the general partner of Enterprise Products
Partners. The Board determined that this relationship is not
material because that directorship was terminated soon after he joined our
Board and, as described below, the Board determined his ownership of
Enterprise Products Partners common units to be
immaterial.
|
§
|
Until
November 2006, Mr. Snell owned 4,557 Enterprise Products Partners common
units and options to purchase 40,000 Enterprise Products Partners common
units; his wife owned 1,100 Enterprise Products Partners common units; and
Mr. Snell and his wife owned as tenants in common 7,500 common units of
Enterprise GP Holdings. Mr. Snell is the trustee of a family
trust that owns a total of 3,000 Enterprise Products Partners common
units. Mr. Snell was also the trustee of a family trust, which
was terminated during 2008, that owned a total of 200 Enterprise GP
Holdings common units. The Board determined that these
relationships are not material because, consistent with principles in NYSE
listing standards, the Board does not view ownership of units, by itself,
as a bar to an independence finding. Further, Mr. Snell and his
wife no longer own directly any Enterprise Products Partners or Enterprise
GP Holdings common units, and he disclaims beneficial ownership of the
units owned by the family trusts.
|
§
|
Since
May 2000, Mr. Snell has been a partner with the law firm of Thompson &
Knight LLP in Houston, Texas, which has from time to time provided legal
services for Enterprise Products Partners and its affiliates, including
Mr. Duncan. For the three year period ended December 31, 2005,
Mr. Duncan paid an aggregate of approximately $51,000 to Thompson &
Knight for legal services. The Board determined that this
relationship is not material because Thompson & Knight has performed
no legal services for us or any of our affiliates, including Mr. Duncan,
since Mr. Snell joined the Board and because the fees paid to his firm for
prior services were minimal.
|
§
|
Mr.
Snell and Richard Bachmann practiced law as partners for a number of years
until 1998. Mr. Bachmann was a member of the Board until December
2006 and serves as a director and executive officer of EPCO, Enterprise
Products Partners and certain affiliates of Enterprise Products
Partners. The Board determined that this relationship is not
material because their relationship as partners terminated a number of
years before Mr. Snell joined the
Board.
|
§
|
During
2008 the Board approved a consulting arrangement between Mr. Daigle’s
brother-in-law, a crude oil tank farm specialist, and the Partnership
involving consulting fees not to exceed $120 thousand related to the
cleaning of crude oil storage tanks. To date no services have
been rendered or payments made under this consulting arrangement. The
Board determined this relationship is not material because of the
qualifications of Mr. Daigle’s family member, the limited scope of the
arrangement and the capping of potential
fees.
|
Name
|
Age
|
Position with Our General
Partner
|
Michael
B. Bracy
|
67
|
Director,
Member of Audit, Conflicts and Governance Committee*
|
Murray
H. Hutchison
|
70
|
Chairman
of the Board, Member of the Audit, Conflicts and Governance
Committee
|
Richard
S. Snell
|
66
|
Director,
Member of the Audit, Conflicts and Governance Committee
|
Donald
H. Daigle
|
67
|
Director,
Member of the Audit, Conflicts and Governance Committee
|
Jerry
E. Thompson
|
59
|
President,
Chief Executive Officer and Director
|
Tracy
E. Ohmart
|
41
|
Acting
Chief Financial Officer
|
J.
Michael Cockrell+
|
62
|
Senior
Vice President, Commercial Upstream
|
John
N. Goodpasture+
|
60
|
Vice
President, Corporate Development
|
Samuel
N. Brown+
|
52
|
Vice
President, Commercial Downstream
|
Patricia
A. Totten
|
58
|
Vice
President, General Counsel and Secretary
|
Joel
H. Kieffer
|
51
|
Vice
President, Marine
Services
|
§
|
annual
base salary;
|
§
|
discretionary
annual cash awards;
|
§
|
awards
under our and EPCO’s long-term incentive
plans;
|
§
|
awards
of equity profits interests in employee partnerships described below;
and
|
§
|
other
compensation, including very limited
perquisites.
|
All
|
|||||||||||||||||||||||||
Unit
|
Option
|
Other
|
|||||||||||||||||||||||
Name
and
|
Salary
|
Bonus
|
Awards
|
Awards
|
Compensation
|
Total
|
|||||||||||||||||||
Principal
Position
|
Year
|
($)
|
($)
(3)
|
($)
(4)
|
($)
(5)
|
($)
(6)
|
($)
|
||||||||||||||||||
Jerry
E. Thompson (1)
|
2008
|
482,250 | 265,000 | 311,200 | 49,626 | 168,378 | 1,276,454 | ||||||||||||||||||
President and
Chief Executive Officer
|
2007
|
463,500 | 281,000 | 803,761 | 29,317 | 151,975 | 1,729,553 | ||||||||||||||||||
2006
|
325,673 | 770,000 | 721,000 | -- | 58,007 | 1,874,680 | |||||||||||||||||||
William
G. Manias (2)
|
2008
|
221,025 | -- | 29,352 | 24,359 | 75,392 | 350,128 | ||||||||||||||||||
Vice
President and Chief Financial
|
2007
|
206,175 | 74,000 | 68,570 | 13,498 | 30,481 | 392,724 | ||||||||||||||||||
Officer
|
2006
|
192,825 | 75,000 | 37,059 | -- | 49,497 | 354,381 | ||||||||||||||||||
J.
Michael Cockrell
|
2008
|
279,130 | 103,000 | 15,965 | 24,451 | 561,040 | 983,586 | ||||||||||||||||||
Senior Vice President,
Commercial
|
2007
|
267,750 | 105,500 | 127,784 | 14,437 | 535,029 | 1,050,500 | ||||||||||||||||||
Upstream
|
2006
|
255,628 | 98,000 | 119,706 | -- | 157,611 | 630,945 | ||||||||||||||||||
John
N. Goodpasture
|
2008
|
251,125 | 76,050 | 2,492 | 24,343 | 353,494 | 707,504 | ||||||||||||||||||
Vice President, Corporate
Development
|
2007
|
233,375 | 76,000 | 108,965 | 13,342 | 334,865 | 766,547 | ||||||||||||||||||
2006
|
231,737 | 62,000 | 106,792 | -- | 107,397 | 507,926 | |||||||||||||||||||
Samuel
N. Brown
|
2008
|
244,750 | 70,000 | 5,015 | 24,359 | 297,876 | 642,000 | ||||||||||||||||||
Vice President,
Commercial
|
2007
|
241,500 | 76,000 | 95,244 | 13,498 | 281,958 | 708,200 | ||||||||||||||||||
Downstream
|
2006
|
220,901 | 75,000 | 88,754 | -- | 129,822 | 514,477 |
(1)
|
Effective
April 5, 2006, Mr. Thompson was appointed President and CEO of our General
Partner.
|
(2)
|
Effective
January 12, 2006, Mr. Manias was appointed Vice President and CFO of our
General Partner. Effective January 15, 2009, Mr. Manias
resigned from his position as Vice President and CFO of our General
Partner. See “–Employment Arrangements and Termination or
Change in Control Payments” above.
|
(3)
|
Amounts
represent discretionary annual cash awards accrued with respect to the
years presented. Payments under the discretionary annual cash
awards program are made in the subsequent year (e.g., the cash awards for
2008 were paid in February 2009).
|
(4)
|
Amounts
represent expense recognized in accordance with SFAS 123(R) with respect
to phantom unit awards issued under the 1999 Plan and 2000 LTIP,
restricted unit awards issued under the 2006 LTIP and Employee Partnership
profits interest awards issued for the years ended December 31, 2008, 2007
and 2006, respectively. The compensation amounts for the year
ended December 31, 2008, are based on the following
assumptions: (i) the closing price of a Unit at December 31,
2008 was $19.57; (ii) with respect to restricted units, the 2008 awards
grant date closing price was $35.86 per Unit and the 2007 awards grant
date closing price was $45.35 per Unit; (iii) (a) with respect to the 1999
Plan and the 2006 LTIP, the payout percentage is 100%, and (b) with
respect to the 2000 LTIP, the performance percentage is 69.7%; (iv) the
percentage of the number of days in the period presented compared to the
total vesting period; (v) with respect to the Employee Partnership awards
from TEPPCO Unit, (a) expected life of option of 5 years, (b) risk-free
interest rate of 2.87%; (c) expected distribution yield on Units of 7.28%;
and (d) expected Unit price volatility on Units of 16.42%; and (vi) with
respect to the Employee Partnership awards from TEPPCO Unit II, (a)
expected life of option of 5 years, (b) risk-free interest rate of 2.37%;
(c) expected distribution yield on Units of 13.87%; and (d) expected Unit
price volatility on Units of 66.38%. See discussion of the
equity awards and the 2008 grants from these equity incentive plans to the
Named Executive Officers below.
|
(5)
|
Amounts
represent expense recognized in accordance with SFAS 123(R) with respect
to unit option awards and UARs issued under the 2006 LTIP for the years
ended December 31, 2008 and 2007. With respect to the unit
option awards granted in 2008, the compensation amounts are based on the
following assumptions: (i) expected life of option of 4.7 years, (ii)
risk-free interest rate of 3.3%; (iii) expected distribution yield on
Units of 7.9%; and (iv) expected Unit price volatility on Units of
18.7%. With respect to the unit option awards granted in 2007,
the compensation amounts are based on the following assumptions: (i)
expected life of option of 7 years, (ii) risk-free interest rate of 4.78%;
(iii) expected distribution yield on Units of 7.92%; and(v) expected Unit
price volatility on Units of 18.03%. The UARs are
accounted for as liability awards under SFAS 123(R) because they are
expected to be settled in cash. The compensation amounts
related to UARs for the year ended December 31, 2008, are based on the
assumptions that (i) the closing price of a Unit at December 31, 2008 was
$19.57; (ii) the payout percentage is 100%; and (iii) the percentage of
the number of days in the period presented compared to the total vesting
period. See discussion of the equity awards and the 2008 grants
from this equity incentive plan to the Named Executive Officers
below.
|
(6)
|
Amounts
primarily represent (i) matching contributions under funded, qualified,
defined contribution retirement plans; (ii) quarterly distributions paid
on incentive plan awards; (iii) retention payments made; and (iv) the
imputed value of life insurance premiums paid on behalf of the Named
Executive Officer. Components of “All Other Compensation” for
which $10,000 or more was paid to or accrued for any Named Executive
Officer in 2008 as set forth below for each Named Executive Officer are as
follows:
|
Matching
|
||||||||||||||||||||
Contributions
|
Quarterly
|
|||||||||||||||||||
Under
Funded
|
Distribution
|
|||||||||||||||||||
Qualified
|
Equivalents
|
Payouts
from
|
||||||||||||||||||
Defined
|
Paid
on
|
Employment
|
||||||||||||||||||
Contribution
|
Equity
|
Agreement
|
Total
|
|||||||||||||||||
Retirement
|
Incentive
|
2007
|
Other
|
All
Other
|
||||||||||||||||
Plan
|
Plan
Awards
|
Supplements
|
Compensation
|
Compensation
|
||||||||||||||||
Name
|
($)
|
($)
|
($)
|
($)
|
($)
|
|||||||||||||||
Jerry
E. Thompson
|
23,000 |
137,526
|
--
|
7,852
|
168,378
|
|||||||||||||||
William
G. Manias
|
23,000 |
48,941
|
--
|
3,451
|
75,392
|
|||||||||||||||
J.
Michael Cockrell
|
27,600 |
34,388
|
489,375
|
9,677
|
561,040
|
|||||||||||||||
John
N. Goodpasture
|
23,000 |
25,416
|
295,800
|
9,278
|
353,494
|
|||||||||||||||
Samuel
N. Brown
|
25,300 |
24,756
|
241,920
|
5,900
|
297,876
|
Exercise
|
|||||||||||||||||||||
Or
Base
|
Grant
|
||||||||||||||||||||
Estimated
Future Payouts Under
|
Price
of
|
Date
Fair
|
|||||||||||||||||||
Equity
Incentive Plan Awards
|
Options
|
Value
of
|
|||||||||||||||||||
Grant
|
Threshold
|
Target
|
Maximum
|
Awards
|
Option
Awards
|
||||||||||||||||
Name
|
Date
|
(# | ) | (# | ) | (# | ) |
($/Unit)
|
($)
(6)
|
||||||||||||
Jerry
E. Thompson:
|
|||||||||||||||||||||
Restricted
unit awards (1)
|
5/19/2008
|
-- | 21,600 | -- | -- | 642,898 | |||||||||||||||
Unit
option awards (2)
|
5/19/2008
|
-- | 50,000 | -- | 35.86 | 86,735 | |||||||||||||||
TEPPCO
Unit profits interest award (3)
|
9/5/2008
|
-- | -- | -- | -- | 506,398 | |||||||||||||||
TEPPCO
Unit II profits interest award (4)
|
11/13/2008
|
-- | -- | -- | -- | 1,405,748 | |||||||||||||||
William
G. Manias: (5)
|
|||||||||||||||||||||
Restricted
unit awards (1)
|
5/19/2008
|
-- | 3,400 | -- | -- | 101,197 | |||||||||||||||
Unit
option awards (2)
|
5/19/2008
|
-- | 25,000 | -- | 35.86 | 43,368 | |||||||||||||||
TEPPCO
Unit profits interest award (3)
|
9/5/2008
|
-- | -- | -- | -- | 126,555 | |||||||||||||||
J.
Michael Cockrell:
|
|||||||||||||||||||||
Restricted
unit awards (1)
|
5/19/2008
|
-- | 6,000 | -- | -- | 178,583 | |||||||||||||||
Unit
option awards (2)
|
5/19/2008
|
-- | 25,000 | -- | 35.86 | 43,368 | |||||||||||||||
TEPPCO
Unit profits interest award (3)
|
9/5/2008
|
-- | -- | -- | -- | 253,288 | |||||||||||||||
John
N. Goodpasture:
|
|||||||||||||||||||||
Restricted
unit awards (1)
|
5/19/2008
|
-- | 3,400 | -- | -- | 101,197 | |||||||||||||||
Unit
option awards (2)
|
5/19/2008
|
-- | 25,000 | -- | 35.86 | 43,368 | |||||||||||||||
TEPPCO
Unit profits interest award (3)
|
9/5/2008
|
-- | -- | -- | -- | 253,288 | |||||||||||||||
Samuel
N. Brown:
|
|||||||||||||||||||||
Restricted
unit awards (1)
|
5/19/2008
|
-- | 3,400 | -- | -- | 101,197 | |||||||||||||||
Unit
option awards (2)
|
5/19/2008
|
-- | 25,000 | -- | 35.86 | 43,368 | |||||||||||||||
TEPPCO
Unit profits interest award (3)
|
9/5/2008
|
-- | -- | -- | -- | 253,288 |
(1)
|
Award
of restricted units under the 2006 LTIP. The grant date fair
value of restricted unit awards issued during 2008 was based on a market
price of $35.86 per Unit on the grant date and an estimated forfeiture
rate of 17%.
|
(2)
|
Award
of unit options under the 2006 LTIP. The grant date fair value
of unit options awarded during 2008 was based on the following
assumptions: (i) expected life of option of 4.7 years, (ii)
risk-free interest rate of 3.3%; (iii) expected distribution yield on
Units of 7.9%; (iv) estimated forfeiture rate of 17%; and (v) expected
Unit price volatility on Units of
18.7%.
|
(3)
|
The
fair value of TEPPCO Unit profits interest awards issued in September 2008
was based on the following assumptions: (i) remaining life of
the award of five years; (ii) risk-free interest rate of 2.87%; (iii) the
expected distribution yield on Units of 7.28%; and (iv) an expected Unit
price volatility of Units of
16.42%.
|
(4)
|
The
fair value of TEPPCO Unit II profits interest awards issued in November
2008 was based on the following assumptions: (i) remaining life
of the award of five years; (ii) risk-free interest rate of 2.37%; (iii)
the expected distribution yield on Units of 13.87%; and (iv) an expected
Unit price volatility of Units of
66.38%.
|
(5)
|
Effective
January 15, 2009, Mr. Manias resigned from his position as Vice President
and CFO of our General Partner. See “–Employment Arrangements
and Termination or Change in Control Payments”
above.
|
(6)
|
We
estimate that the compensation expense we record for each Named Executive
Officer with respect to these awards will equal these amounts over
time. For the period in which these awards were outstanding
during 2008, we recognized compensation expense of $0.2 million, $50
thousand, $0.1 million and $60 thousand related to grants to Named
Executive Officers of restricted unit awards, the unit option awards
TEPPCO Unit profits interest awards and TEPPCO Unit II profits interest
awards, respectively. The remaining portion of the grant date
fair values will be recognized as expense in future
periods.
|
Estimated
|
||||||||
Percentage
|
Liquidation
|
|||||||
Ownership
|
Value
To Be
|
|||||||
of
Class B
|
Received
|
|||||||
Plan
Name
|
Interests
(1)
|
by Officer
(2)
|
||||||
TEPPCO Unit:
(3)
|
||||||||
Jerry
E. Thompson
|
28.57 | % | $ |
--
|
||||
William
G. Manias (4)
|
7.14 | % | -- |
|
||||
J.
Michael Cockrell
|
14.29 | % | -- | |||||
John
Goodpasture
|
14.29 | % | -- | |||||
Samuel
N. Brown
|
14.29 | % | -- | |||||
TEPPCO Unit II:
(5)
|
||||||||
Jerry
E. Thompson
|
100 | % | -- |
|
(1)
|
Reflects
Named Executive Officer share of profits interest at December 31,
2008.
|
|
(2)
|
Values
based on December 31, 2008 closing price of $19.57 per Unit and taking
into account the terms of liquidation outlined in each
award.
|
|
(3)
|
The
TEPPCO Unit Class B partnership interest had no liquidation value at
December 31, 2008 due to a decrease in the market value of our Units since
the formation of TEPPCO Unit.
|
|
(4)
|
Effective
January 15, 2009, Mr. Manias resigned from his position as Vice President
and CFO of our General Partner. In connection with his
resignation, Mr. Manias forfeited his profits interest
award. See “–Employment Arrangements and Termination or Change
in Control Payments” above.
|
|
(5)
|
The
TEPPCO Unit II Class B partnership interest had no liquidation value at
December 31, 2008 due to a decrease in the market value of our Units since
the formation of TEPPCO Unit II.
|
Option
Awards
|
Unit
Awards
|
|||||||||||||||||||
Number
of
|
Number
|
Market
|
||||||||||||||||||
Underlying
|
Option
|
Of
Units
|
Value
of Units
|
|||||||||||||||||
Options
|
Exercise
|
Option
|
That
Have
|
That
Have
|
||||||||||||||||
Unexercisable
|
Price
|
Expiration
|
Not
Vested
|
Not
Vested
|
||||||||||||||||
Name
|
(#)
|
($/Unit)
|
Date
|
(#)
|
($)
(5)
|
|||||||||||||||
Jerry
E. Thompson:
|
||||||||||||||||||||
2008:
|
||||||||||||||||||||
Restricted
units (1)
|
-- | -- | -- | 21,600 | 422,712 | |||||||||||||||
Unit
options (1)
|
50,000 | 35.86 |
12/31/2013
|
-- | -- | |||||||||||||||
2007:
|
||||||||||||||||||||
Restricted
units (1)
|
-- | -- | -- | 19,000 | 371,830 | |||||||||||||||
Unit
options (1)
|
45,000 | 45.35 |
12/31/2012
|
-- | -- | |||||||||||||||
UARs
(3)
|
66,152 | 45.35 |
5/22/2012
|
-- | -- | |||||||||||||||
2006:
|
||||||||||||||||||||
Phantom
units (2)
|
-- | -- | -- | 13,000 | 254,410 | |||||||||||||||
William
G. Manias (4):
|
||||||||||||||||||||
2008:
|
||||||||||||||||||||
Restricted
units
|
-- | -- | -- | 3,400 | 66,538 | |||||||||||||||
Unit
options
|
25,000 | 35.86 |
12/31/2013
|
-- | -- | |||||||||||||||
2007:
|
||||||||||||||||||||
Restricted
units
|
-- | -- | -- | 3,000 | 58,710 | |||||||||||||||
Unit
options
|
22,000 | 45.35 |
12/31/2012
|
-- | -- | |||||||||||||||
UARs
|
26,461 | 45.35 |
5/22/2012
|
-- | -- | |||||||||||||||
2006:
|
||||||||||||||||||||
Phantom
units
|
-- | -- | -- | 2,800 | 54,796 | |||||||||||||||
J.
Michael Cockrell:
|
||||||||||||||||||||
2008:
|
||||||||||||||||||||
Restricted
units (1)
|
-- | -- | -- | 6,000 | 117,420 | |||||||||||||||
Unit
options (1)
|
25,000 | 35.86 |
12/31/2013
|
-- | -- | |||||||||||||||
2007:
|
||||||||||||||||||||
Restricted
units (1)
|
-- | -- | -- | 4,200 | 82,194 | |||||||||||||||
Unit
options (1)
|
22,000 | 45.35 |
12/31/2012
|
-- | -- | |||||||||||||||
UARs
(3)
|
33,076 | 45.35 |
5/22/2012
|
-- | -- | |||||||||||||||
John
N. Goodpasture:
|
||||||||||||||||||||
2008:
|
||||||||||||||||||||
Restricted
units (1)
|
-- | -- | -- | 3,400 | 66,538 | |||||||||||||||
Unit
options (1)
|
25,000 | 35.86 |
12/31/2013
|
-- | -- | |||||||||||||||
2007:
|
||||||||||||||||||||
Restricted
units (1)
|
-- | -- | -- | 3,000 | 58,710 | |||||||||||||||
Unit
options (1)
|
22,000 | 45.35 |
12/31/2012
|
-- | -- | |||||||||||||||
UARs
(3)
|
25,358 | 45.35 |
5/22/2012
|
-- | -- |
Option
Awards
|
Unit
Awards
|
||||
Number
of
|
Number
|
Market
|
|||
Underlying
|
Option
|
Of
Units
|
Value
of Units
|
||
Options
|
Exercise
|
Option
|
That
Have
|
That
Have
|
|
Unexercisable
|
Price
|
Expiration
|
Not
Vested
|
Not
Vested
|
|
Name
|
(#)
|
($/Unit)
|
Date
|
(#)
|
($)
(5)
|
Samuel
N. Brown:
|
|
|
|
|
|
2008:
|
|
|
|
|
|
Restricted
units (1)
|
--
|
--
|
--
|
3,400
|
66,538
|
Unit
options (1)
|
25,000
|
35.86
|
12/31/2013
|
--
|
--
|
2007:
|
|
|
|||
Restricted
units (1)
|
--
|
--
|
--
|
3,000
|
58,710
|
Unit
options (1)
|
22,000
|
45.35
|
12/31/2012
|
--
|
--
|
UARs
(3)
|
26,461
|
45.35
|
5/22/2012
|
--
|
--
|
(1)
|
Awards
granted in 2008 and 2007 vest on May 19, 2012 and May 22, 2011,
respectively, subject to earlier vesting on death, disability or
retirement of the participant with the approval of the ACG Committee on or
after reaching age 60.
|
(2)
|
Phantom
units vest on April 11, 2010, subject to earlier vesting on death or
disability.
|
(3)
|
Award
vests on May 22, 2012, subject to earlier vesting on death, disability or
retirement of the participant with the approval of the ACG Committee on or
after reaching age 60.
|
(4)
|
Effective
January 15, 2009, Mr. Manias resigned from his position as Vice President
and CFO of our General Partner. In connection with his
resignation, all of the awards listed below his name were
forfeited. See “–Employment Arrangements and Termination or
Change in Control Payments” above.
|
(5)
|
Amount
reflects the market value of the number of phantom units and restricted
units at December 31, 2008 using the December 31, 2008 price of $19.57 per
Unit.
|
Unit
Awards
|
||
Number
of
|
||
Units
|
Value
|
|
Acquired
|
Realized
|
|
On
Vesting
|
On
Vesting
|
|
Name
|
(#)
|
($)
|
Jerry
E. Thompson (1)
|
--
|
446,030
|
J.
Michael Cockrell (2)
|
--
|
40,635
|
Samuel
N. Brown (2)
|
--
|
35,392
|
John
N. Goodpasture (2)
|
--
|
36,702
|
(1)
|
Amount
represents an April 2008 cash payout from the 1999 Plan as a result of the
vesting of 13,000 phantom units.
|
(2)
|
Amount
represents vested 2000 LTIP phantom unit awards accrued using a
performance percentage of 69.7% at December 31, 2008, for which cash will
be paid out to the Named Executive Officer in March
2009.
|
Death,
|
||||||||
Death
or
|
Disability
or
|
|||||||
Disability
|
Retirement
|
|||||||
Accelerated
|
Accelerated
|
|||||||
1999
Plan
|
2006
LTIP
|
|||||||
Name
|
Awards
(2)
|
Awards
(3)
|
||||||
Jerry
E. Thompson
|
254,410 | 1,048,952 | ||||||
William
G. Manias (1)
|
54,796 | 180,044 | ||||||
J.
Michael Cockrell
|
-- | 148,732 | ||||||
Samuel
N. Brown
|
-- | 125,248 | ||||||
John
N. Goodpasture
|
-- | 125,248 |
(1)
|
Effective
January 15, 2009, Mr. Manias resigned from his position as Vice President
and CFO of our General Partner. In connection with his
resignation, his outstanding equity awards were forfeited. See
“–Employment Arrangements and Termination or Change in Control Payments”
above.
|
(2)
|
Amount
represents the market value of phantom unit awards based on a Unit price
of $19.57 at December 31, 2008. Phantom units vest in full in
the event of termination due to death or
disability.
|
(3)
|
Restricted
unit, unit option and UAR awards vest in full in the event of termination
due to (i) death, (ii) disability or (iii) retirement with the approval of
the ACG Committee on or after reaching age 60. Amount
represents the market value of the restricted unit awards based on a unit
price of $19.57 at December 31, 2008. Unit options and UARs are
assigned no market value at December 31, 2008 as a result of the grant
date price exceeding the Unit price at December 31, 2008 of
$19.57.
|
Fees
Earned or
|
Unit
|
Option
|
All
Other
|
|||||||||||||||||
Paid
in Cash
|
Awards
|
Awards
|
Compensation
|
Total
|
||||||||||||||||
Director
|
($)
|
($)(3)
|
($)(4)
|
($)(5)
|
($)
|
|||||||||||||||
Michael
B. Bracy (1)
|
90,000 | 969 | 165 | 1,559 | 92,693 | |||||||||||||||
Murray
H. Hutchison (2)
|
90,000 | 969 | 165 | 1,559 | 92,693 | |||||||||||||||
Richard
S. Snell
|
75,000 | 969 | 165 | 1,559 | 77,693 | |||||||||||||||
Donald
H. Daigle
|
75,000 | -- | 1,701 | -- | 76,701 |
(1)
|
Chairman
of the ACG Committee and Vice Chairman of the
Board.
|
(2)
|
Chairman
of the Board.
|
(3)
|
Amount
presented reflects the compensation expense recognized related to phantom
units granted to Mr. Bracy, Mr. Hutchison and Mr. Snell during 2008 and
2007 under the 2006 LTIP (see “– Equity-based compensation”
below). On April 30, 2007, Mr. Bracy, Mr. Hutchison and Mr.
Snell were each awarded 549 phantom units, all of which were outstanding
at December 31, 2008. The phantom units are accounted for as
liability awards under SFAS 123(R) because they will be settled in
cash. These compensation amounts are based on the following
assumptions: (i) the closing price at December 31, 2008 was $19.57 per
Unit; (ii) the payout percentage is 100%; and (iii) the percentage of the
number of days in the period presented compared to the total vesting
period. On July 30, 2007, the award agreements for the phantom
units granted were amended to provide for settlement in
cash. At December 31, 2008, the fair value of phantom
units granted to each of Mr. Bracy, Mr. Snell and Mr. Hutchison was
$10,744.
|
(4)
|
Amount
presented reflects the compensation expense recognized related to UARs
granted to Mr. Bracy, Mr. Hutchison and Mr. Snell during 2007 and to Mr.
Daigle during 2008 under the 2006 LTIP (see “– Equity-based compensation”
below). On May 2, 2007, Mr. Bracy, Mr. Hutchison and Mr.
Snell were each awarded 22,075 UARs, all of which were outstanding at
December 31, 2008. On June 20, 2008, Mr. Daigle was awarded
29,429 UARs, all of which were outstanding at December 31,
2008. The UARs are accounted for as liability awards under SFAS
123(R) because they are expected to be settled in cash. The
compensation amounts related to UARs are based on the assumptions that (i)
the closing price at December 31, 2008 was $19.57 per Unit; and (ii) the
payout percentage is 100%. At December 31, 2008, the fair value
of UARs granted to each of Mr. Bracy, Mr. Snell and Mr. Hutchison, was
$2,306 and the fair value of UARs awarded to Mr. Daigle was
$10,320.
|
(5)
|
Amounts
primarily represent quarterly distributions payable on account of phantom
unit awards. Mr. Hutchison and Mr. Snell did not receive the
November 2008 quarterly distribution payment. The amount was
subsequently paid in January 2009.
|
Name and Address of Beneficial
Owner
|
Amount
and Nature of Beneficial Ownership
|
Percentage
Owned (2)
|
||||||
Dan
L. Duncan: (1)
|
||||||||
Units
owned by EPCO: (3) (4)
|
|
|||||||
Duncan
Family Interests, Inc.
|
8,986,711 | 8.6 | % | |||||
Units
owned by Duncan Family 2000 Trust (5)
|
53,275 | * | ||||||
Units
owned by DD Securities LLC (6)
|
704,564 | * | ||||||
Units
owned by Dan Duncan LLC: (7)
|
||||||||
Units
owned by DFI Holdings LLC: (8)
|
||||||||
Units
owned by DFI GP Holdings L.P.
|
2,500,000 | 2.4 | % | |||||
Units
owned by EPE Holdings, LLC: (9)
|
||||||||
Units
owned by Enterprise GP Holdings L.P.
|
4,400,000 | 4.2 | % | |||||
Units
owned by TEPPCO Unit and TEPPCO Unit II (10)
|
364,565 | * | ||||||
Units
owned directly
|
64,200 | * | ||||||
Total
for Dan L. Duncan
|
17,073,315 | 16.3 | % |
(1)
|
The
address for each beneficial owner listed under Dan L. Duncan is 1100
Louisiana, Suite 1000, Houston, Texas
77002.
|
(2)
|
An
asterisk in the column indicates that the beneficial owner holds less than
1% of the class.
|
(3)
|
The
8,986,711 Units beneficially owned by EPCO are pledged to the lenders
under the EPCO Holdings, Inc. credit facility as
security.
|
(4)
|
As
set forth above, Duncan Family Interests, Inc. holds directly 8,986,711
Units. EPCO Holdings, Inc. has shared voting and dispositive power over
the 8,986,711 Units beneficially owned by Duncan Family Interests,
Inc. Duncan Family Interests, Inc. is a wholly owned subsidiary
of EPCO Holdings, Inc., and EPCO Holdings, Inc. is a wholly owned
subsidiary of EPCO. Therefore, EPCO and EPCO Holdings, Inc.
each have an indirect beneficial ownership interest in the 8,986,711 Units
held by Duncan Family Interests,
Inc.
|
(5)
|
Mr.
Duncan is deemed to be the beneficial owner of the Units owned by the
Duncan Family 2000 Trust, the beneficiaries of which are the shareholders
of EPCO.
|
(6)
|
DD
Securities LLC is owned by Mr.
Duncan.
|
(7)
|
Dan
Duncan LLC is owned by Mr. Duncan. Dan Duncan LLC is the sole
member of DFI Holdings LLC, which is the 1% general partner of DFI GP
Holdings L.P. (“DFIGP”), and owns a 4% limited partner interest in
DFIGP. Therefore, Dan Duncan LLC has shared voting and
dispositive power over all of the 2,500,000 Units owned directly by
DFIGP. Additionally, Enterprise GP Holdings’ general partner is
EPE Holdings, LLC, which is a wholly owned subsidiary of Dan Duncan
LLC. As a result, Dan Duncan has shared voting and dispositive
power over all of the 4,400,000 Units owned directly by Enterprise GP
Holdings.
|
(8)
|
As
set forth above, DFIGP hold directly 2,500,000 Units. DFI
Holdings LLC holds no Units directly, but it is the 1% general partner of
DFIGP, and as such has voting and dispositive power over the 2,500,000
Units owned directly by DFIGP.
|
(9)
|
As
set forth above, Enterprise GP Holdings holds directly 4,400,000
Units. EPE Holdings, LLC holds no Units directly, but it is the
0.01% general partner of Enterprise GP Holdings, and as such has voting
and dispositive power over the 4,400,000 Units owned directly by
Enterprise GP Holdings.
|
(10)
|
As
a result of EPCO’s ownership of the general partner of each TEPPCO Unit
and TEPPCO Unit II, Mr. Duncan is deemed beneficial owner of the
securities held by these entities.
|
Name
|
Amount
and Nature of Beneficial Ownership (1)
|
Percentage
Owned
(2)
|
||||||
Michael
B. Bracy
|
4,000 | * | ||||||
Murray
H. Hutchison
|
-- | -- | ||||||
Richard
S. Snell
|
1,000 | * | ||||||
Donald
H. Daigle
|
-- | -- | ||||||
Jerry
E. Thompson
|
70,760 | * | ||||||
William G. Manias (3) | 2,000 | * | ||||||
Samuel
N. Brown
|
7,400 | * | ||||||
J.
Michael Cockrell
|
15,200 | * | ||||||
John
N. Goodpasture
|
8,400 | * | ||||||
Tracy
E. Ohmart
|
1,900 | * | ||||||
All
directors and current executive officers (consisting of 11
people)
|
137,877 | * |
(1)
|
The
persons named above have sole voting and investment power over the Units
reported.
|
(2)
|
An
asterisk in the column indicates that the beneficial owner holds less than
1% of the class.
|
(3) | Effective January 15, 2009, Mr. Manias resigned from his position as Vice President and CFO of our General Partner. In connection with his resignation, his outstanding equity awards were forfeited. See "Compensation Discussion and Analysis - Employment Arrangements and Terminations or Change in Control Payments" in Item 11 above. |
Number
of
|
||||||||||||
Units
|
||||||||||||
remaining
|
||||||||||||
available
for
|
||||||||||||
Number
of
|
future
issuance
|
|||||||||||
Units
to
|
Weighted-
|
under
equity
|
||||||||||
be
issued
|
average
|
compensation
|
||||||||||
upon
exercise
|
exercise
price
|
plans
(excluding
|
||||||||||
of
outstanding
|
of
outstanding
|
securities
|
||||||||||
Unit
|
Unit
|
reflected
in
|
||||||||||
Plan
Category
|
options
|
options
|
column
(a))
|
|||||||||
(a)
|
(b)
|
(c)
|
||||||||||
Equity
compensation plans approved by unitholders:
|
||||||||||||
2006
LTIP (1)
|
355,000 | $ | 40.00 | 4,487,084 | ||||||||
Equity
compensation plans not approved by unitholders:
|
||||||||||||
None
|
-- | -- | -- | |||||||||
Total
for equity compensation plans
|
355,000 | $ | 40.00 | 4,487,084 |
(1)
|
Of
the 355,000 unit options outstanding at December 31, 2008, 47,000 unit
options were forfeited on January 15, 2009 related to the resignation of
our Chief Financial Officer. See Item 11 for additional
information. After adjusting for this forfeiture 133,000 of the
remaining unit options are exercisable in 2011 and 175,000 are
exercisable in 2012. See Note 4 in the Notes to Consolidated
Financial Statements for additional
information.
|
General
|
||
Unitholders
|
Partner
|
|
Quarterly
Cash Distribution per Unit:
|
||
Up to Minimum Quarterly
Distribution ($0.275 per Unit)
|
98%
|
2%
|
First Target – $0.276 per Unit up
to $0.325 per Unit
|
85%
|
15%
|
Over First Target – Cash
distributions greater than $0.325 per Unit
|
75%
|
25%
|
§
|
EPCO
and its consolidated private company
subsidiaries;
|
§
|
Texas
Eastern Products Pipeline Company, LLC, our General
Partner;
|
§
|
Enterprise
GP Holdings, which owns and controls our General
Partner;
|
§
|
Enterprise
Products Partners, which is controlled by affiliates of EPCO, including
Enterprise GP Holdings;
|
§
|
Duncan
Energy Partners, which is controlled by affiliates of
EPCO;
|
§
|
Enterprise
Gas Processing, LLC, which is controlled by affiliates of EPCO and is our
joint venture partner in Jonah;
|
§
|
Enterprise
Offshore Port System, LLC, which is controlled by affiliates of EPCO and
is one of our joint venture partners in Texas Offshore Port System;
and
|
§
|
TEPPCO
Unit and TEPPCO Unit II, which are controlled by
EPCO.
|
§
|
EPCO
provides administrative, management and operating services as may be
necessary to manage and operate our business, properties and assets (all
in accordance with prudent industry practices). EPCO will
employ or otherwise retain the services of such personnel as may be
necessary to provide such services.
|
§
|
We
are required to reimburse EPCO for its services in an amount equal to the
sum of all costs and expenses (direct and indirect) incurred by EPCO which
are directly or indirectly related to our business or activities
(including EPCO expenses reasonably allocated to us). In
addition, we have agreed to pay all sales, use, excise, value added or
similar taxes, if any, that may be applicable from time to time in respect
of the services provided to us by
EPCO.
|
§
|
EPCO
allows us to participate as named insureds in its overall insurance
program with the associated costs being allocated to
us.
|
Revenues
from EPCO and affiliates:
|
||||
Sales
of petroleum products (1)
|
$ | 715 | ||
Transportation
– NGLs (2)
|
13,785 | |||
Transportation
– LPGs (3)
|
8,735 | |||
Other
operating revenues (4)
|
13,318 | |||
Costs
and Expenses from EPCO and affiliates:
|
||||
Purchases
of petroleum products (5)
|
132,624 | |||
Operating
expense (6)
|
104,878 | |||
General
and administrative (7)
|
31,601 |
(1)
|
Includes
sales from LSI to Enterprise Products Partners and certain of its
subsidiaries.
|
(2)
|
Includes
revenues from NGL transportation on the Chaparral and Panola NGL pipelines
from Enterprise Products Partners and certain of its
subsidiaries.
|
(3)
|
Includes
revenues from LPG transportation on the TE Products pipeline of $8.7
million from Enterprise Products Partners and certain of its
subsidiaries.
|
(4)
|
Includes
sales of product inventory from TE Products to Enterprise Products
Partners and other operating revenues on the TE Products pipeline and the
Val Verde system from Enterprise Products Partners and certain of its
subsidiaries.
|
(5)
|
Includes
TCO purchases of petroleum products and expenses related to LSI’s use of
an affiliate of EPCO as a
transporter.
|
(6)
|
Includes
operating payroll, payroll related expenses and other operating expenses,
including reimbursements related to employee benefits and employee benefit
plans, incurred by EPCO in managing us and our subsidiaries in accordance
with the ASA. Also includes insurance expense for the year
ended December 31, 2008 related to premiums paid by EPCO of $10.4 million
for the majority of our insurance coverage, including property, liability,
business interruption, auto and directors and officers’ liability
insurance, which was obtained through
EPCO.
|
(7)
|
Includes
administrative payroll, payroll related expenses and other administrative
expenses, including reimbursements related to employee benefits and
employee benefit plans, incurred by EPCO in managing and operating us and
our subsidiaries in accordance with the
ASA.
|
Accounts
receivable, related party (1)
|
$ | 11,011 | ||
Accounts
payable, related party (2)
|
5,388 |
(1)
|
Relates
to sales and transportation services provided to Enterprise
Products Partners and certain of its subsidiaries and EPCO and certain of
its affiliates.
|
(2)
|
Relates
to direct payroll, payroll related costs and other operational related
charges from Enterprise Products Partners and certain of its subsidiaries
and EPCO and certain of its
affiliates.
|
§
|
for
which Board approval is required by our management authorization policy,
as such policy may be amended from time to
time;
|
§
|
where
an officer or director of the General Partner or any of our subsidiaries
is a party, without regard to the size of the
transaction;
|
§
|
when
requested to do so by management or the Board;
or
|
§
|
pursuant
to our Partnership Agreement or the limited liability company agreement of
the General Partner, as such agreements may be amended from time to
time.
|
§
|
asset
purchase or sale transactions;
|
§
|
capital
expenditures; and
|
§
|
purchase
orders and operating and administrative expenses not governed by the
ASA.
|
§
|
the
relative interests of any party to such conflict, agreement, transaction
or situation and the benefits and burdens relating to such
interest;
|
§
|
the
totality of the relationships between the parties involved (including
other transactions that may be particularly favorable or advantageous to
us);
|
§
|
any
customary or accepted industry practices and any customary or historical
dealings with a particular person;
|
§
|
any
applicable generally accepted accounting or engineering practices or
principles; and
|
§
|
such
additional factors as the ACG Committee determines in its sole discretion
to be relevant, reasonable or appropriate under the
circumstances.
|
§
|
assessing
the business rationale for the
transaction;
|
§
|
reviewing
the terms and conditions of the proposed transaction, including
consideration and financing requirements, if
any;
|
§
|
assessing
the effect of the transaction on our earnings and distributable cash flow
per unit, and on our results of operations, financial condition,
properties or prospects;
|
§
|
conducting
due diligence, including by interviews and discussions with management and
other representatives and by reviewing transaction materials and findings
of management and other
representatives;
|
§
|
considering
the relative advantages and disadvantages of the transactions to the
parties;
|
§
|
engaging
third party financial advisors to provide financial advice and assistance,
including by providing fairness opinions if
requested;
|
§
|
engaging
legal advisors;
|
§
|
evaluating
and negotiating the transaction and recommending for approval or approving
the transaction, as the case may
be.
|
For
Year Ended
|
||||
December
31,
|
||||
2008
|
||||
Revenues
from unconsolidated affiliates:
|
||||
Other
operating revenues (1)
|
$ | 91 | ||
Costs
and Expenses from unconsolidated affiliates:
|
||||
Purchases
of petroleum products (2)
|
7,143 | |||
Operating
expense (3)
|
7,926 | |||
Costs
and Expenses from
Cenac:
|
||||
Operating
expense (4)
|
45,382 | |||
General
and administrative expense (5)
|
2,912 |
(1)
|
Includes
management fees and rental
revenues.
|
(2)
|
Includes
pipeline transportation expense.
|
(3)
|
Includes
rental expense and other operating
expense.
|
(4)
|
Includes
reimbursement for operating payroll, payroll related expenses, certain
repairs and maintenance expenses and insurance premiums on our
equipment.
|
(5)
|
Includes
reimbursement for administrative payroll and payroll related expenses, as
well as payment of a $42 thousand monthly service fee and a 5% overhead
fee charged on direct costs incurred by Cenac to operate the marine assets
in accordance with the transitional operating agreement with
Cenac.
|
December
31,
|
||||
2008
|
||||
Accounts
receivable, related parties (1)
|
$ | 4,747 | ||
Accounts
payable, related parties (2)
|
11,831 |
(1)
|
Receivable
from Jonah which relates to payroll related costs and other operational
expenses we charge Jonah, partially offset by our purchases from
Jonah.
|
(2)
|
Payable
relates to direct transportation and other services provided by Centennial
and Seaway, advances from Seaway for operating expenses and $3.4 million
related to operational charges from
Cenac.
|
For
Year Ended
December
31,
|
||||||||
Type
of Fee
|
2008
|
2007
|
||||||
Audit
Fees (1)
|
$ | 2,679 | $ | 1,947 | ||||
Audit
Related Fees (2)
|
-- | -- | ||||||
Tax
Fees (3)
|
476 | 264 | ||||||
All
Other Fees (4)
|
-- | -- | ||||||
Total
|
$ | 3,155 | $ | 2,211 |
(1)
|
Audit
fees represent amounts billed for each of the years presented for
professional services rendered in connection with (i) the audit of our
annual financial statements and internal controls over financial
reporting, (ii) the review of our quarterly financial statements or (iii)
those services normally provided in connection with statutory and
regulatory filings or engagements including comfort letters, consents and
other services related to SEC matters. This information is
presented as of the latest practicable date for this annual
report.
|
(2)
|
Audit-related
fees represent amounts we were billed in each of the years presented for
assurance and related services that are reasonably related to the
performance of the annual audit or quarterly reviews. This
category primarily includes services relating to internal control
assessments and accounting-related
consulting.
|
(3)
|
Tax
fees represent amounts we were billed in each of the years presented for
professional services rendered in connection with tax compliance, tax
advice and tax planning. This category primarily includes
services relating to the preparation
of unitholder annual K-1 statements and partnership tax
planning. In 2008, PricewaterhouseCoopers International Limited
was engaged to perform the majority of tax related
services.
|
(4)
|
All
other fees represent amounts we were billed in each of the years presented
for services not classified under the other categories listed in the table
above. No such services were rendered by Deloitte & Touche
during the last two
years.
|
(a)
|
The
following documents are filed as a part of this
Report:
|
(1)
|
Financial
Statements: See Index to Consolidated Financial Statements on
page F-1 of this Report for financial statements filed as part of this
Report.
|
(2)
|
Financial
Statement Schedules: Consolidated Financial Statements of
Jonah Gas Gathering Company and Subsidiary as of and for the years ended
December 31, 2008, 2007 and 2006.
|
(3)
|
Exhibits. The
agreements included as exhibits are included only to provide information
to investors regarding their terms. The agreements listed below
may contain representations, warranties and other provisions that were
made, among other things, to provide the parties thereto
with specified rights and obligations and to allocate risk among them, and
such agreements should not be relied upon as constituting or providing any
factual disclosures about us, any other persons, any state of affairs or
other matters.
|
Exhibit | ||
Number
|
Description |
3.1
|
Certificate
of Limited Partnership of TEPPCO Partners, L.P. (Filed as Exhibit 3.2 to
the Registration Statement of TEPPCO Partners, L.P. (Commission File No.
33-32203) and incorporated herein by
reference).
|
|
3.2
|
Fourth
Amended and Restated Agreement of Limited Partnership of TEPPCO Partners,
L.P., dated December 8, 2006 (Filed as Exhibit 3 to the Current Report on
Form 8-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) filed on
December 13, 2006).
|
|
3.3
|
First
Amendment to Fourth Amended and Restated Partnership Agreement of TEPPCO
Partners, L.P. dated as of December 27, 2007 (Filed as Exhibit 3.1 to
Current Report on Form 8-K of TEPPCO Partners, L.P. (Commission File No.
1-10403) filed December 28, 2007 and incorporated herein by
reference).
|
|
3.4
|
Amendment
No. 2 to the Fourth Amended and Restated Agreement of Limited Partnership
of TEPPCO Partners, L.P., dated as of November 6, 2008 (Filed as Exhibit
3.5 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403)
for the quarter ended September 30, 2008 and incorporated herein by
reference).
|
|
3.5
|
Amended
and Restated Limited Liability Company Agreement of Texas Eastern Products
Pipeline Company, LLC (Filed as Exhibit 3 to the Current Report on Form
8-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) filed on May
10, 2007 and incorporated herein by
reference).
|
|
3.6
|
First
Amendment to the Amended and Restated Limited Liability Company Agreement
of Texas Eastern Products Pipeline Company, LLC, dated as of November 6,
2008 (Filed as Exhibit 3.6 to Form 10-Q of TEPPCO Partners, L.P.
(Commission File No. 1-10403) for the quarter ended September 30, 2008 and
incorporated herein by reference).
|
|
4.1
|
Form
of Certificate representing Limited Partner Units (Filed as Exhibit 4.4 to
the Form S-3 of TEPPCO Partners, L.P. filed on September 3, 2008
(Commission File No. 1-10403) and incorporated herein by
reference).
|
|
4.2
|
Indenture
between TEPPCO Partners, L.P., as issuer, TE Products Pipeline Company,
Limited Partnership, TCTM, L.P., TEPPCO Midstream Companies, L.P. and
Jonah Gas Gathering Company, as subsidiary guarantors, and First Union
National Bank, NA, as trustee, dated as of February 20, 2002 (Filed as
Exhibit 99.2 to Form 8-K of TEPPCO Partners, L.P. (Commission File No.
1-10403) dated as of February 20, 2002 and incorporated herein by
reference).
|
4.3
|
First
Supplemental Indenture between TEPPCO Partners, L.P., as issuer, TE
Products Pipeline Company, Limited Partnership, TCTM, L.P., TEPPCO
Midstream Companies, L.P. and Jonah Gas Gathering Company, as subsidiary
guarantors, and First Union National Bank, NA, as trustee, dated as of
February 20, 2002 (Filed as Exhibit 99.3 to Form 8-K of TEPPCO Partners,
L.P. (Commission File No. 1-10403) dated as of February 20, 2002 and
incorporated herein by reference).
|
|
4.4
|
Second
Supplemental Indenture, dated as of June 27, 2002, among TEPPCO Partners,
L.P., as issuer, TE Products Pipeline Company, Limited Partnership, TCTM,
L.P., TEPPCO Midstream Companies, L.P., and Jonah Gas Gathering Company,
as Initial Subsidiary Guarantors, and Val Verde Gas Gathering Company,
L.P., as New Subsidiary Guarantor, and Wachovia Bank, National
Association, formerly known as First Union National Bank, as trustee
(Filed as Exhibit 4.6 to Form 10-Q of TEPPCO Partners, L.P. (Commission
File No. 1-10403) for the quarter ended June 30, 2002 and incorporated
herein by reference).
|
|
4.5
|
Third
Supplemental Indenture among TEPPCO Partners, L.P. as issuer, TE Products
Pipeline Company, Limited Partnership, TCTM, L.P., TEPPCO Midstream
Companies, L.P., Jonah Gas Gathering Company and Val Verde Gas Gathering
Company, L.P. as Subsidiary Guarantors, and Wachovia Bank, National
Association, as trustee, dated as of January 30, 2003 (Filed as Exhibit
4.7 to Form 10-K of TEPPCO Partners, L.P. (Commission
File No. 1-10403) for the year ended December 31, 2002 and incorporated
herein by reference).
|
|
4.6
|
Full
Release of Guarantee dated as of July 31, 2006 by Wachovia Bank, National
Association, as trustee, in favor of Jonah Gas Gathering Company (Filed as
Exhibit 4.8 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No.
1-10403) for the quarter ended September 30, 2006 and incorporated herein
by reference).
|
|
4.7
|
Indenture,
dated as of May 14, 2007, by and among TEPPCO Partners, L.P., as
issuer, TE Products Pipeline Company, Limited Partnership, TCTM, L.P.,
TEPPCO Midstream Companies, L.P. and Val Verde Gas Gathering Company,
L.P., as subsidiary guarantors, and The Bank of New York Trust Company,
N.A., as trustee (Filed as Exhibit 99.1 to the Current Report on Form 8-K
of TEPPCO Partners, L.P. (Commission File No. 1-10403) filed on May 15,
2007 and incorporated herein by
reference).
|
|
4.8
|
First
Supplemental Indenture, dated as of May 18, 2007, by and among TEPPCO
Partners, L.P., as issuer, TE Products Pipeline Company, Limited
Partnership, TCTM, L.P., TEPPCO Midstream Companies, L.P. and Val Verde
Gas Gathering Company, L.P., as subsidiary guarantors, and The Bank of New
York Trust Company, N.A., as trustee (Filed as Exhibit 4.2 to the Current
Report on Form 8-K of TEPPCO Partners, L.P. (Commission File No. 1-10403)
filed on May 18, 2007 and incorporated herein by
reference).
|
|
4.9
|
Second
Supplemental Indenture, dated as of June 30, 2007, by and among TEPPCO
Partners, L.P., as issuer, TE Products Pipeline Company, Limited
Partnership, TCTM, L.P., TEPPCO Midstream Companies, L.P. , Val Verde Gas
Gathering Company, L.P., TE Products Pipeline Company, LLC and TEPPCO
Midstream Companies, LLC, as subsidiary guarantors, and The Bank of New
York Trust Company, N.A., as trustee (Filed as Exhibit 4.2 to the Current
Report on Form 8-K of TE Products Pipeline Company, LLC (Commission File
No. 1-13603) filed on July 6, 2007 and incorporated herein by
reference).
|
|
4.10
|
Fourth
Supplemental Indenture, dated as of June 30, 2007, by and among TEPPCO
Partners, L.P., as issuer, TE Products Pipeline Company, Limited
Partnership, TCTM, L.P., TEPPCO Midstream Companies, L.P., Val Verde Gas
Gathering Company, L.P., TE Products Pipeline Company, LLC and TEPPCO
Midstream Companies, LLC, as subsidiary guarantors, and U.S. Bank National
Association, as trustee (Filed as Exhibit 4.3 to the Current Report on
Form 8-K of TE Products Pipeline Company, LLC (Commission File No.
1-13603) filed on July 6, 2007 and incorporated herein by
reference).
|
|
4.11
|
Fifth
Supplemental Indenture, dated as of March 27, 2008, by and among TEPPCO
Partners, L.P., as issuer, TE Products Pipeline Company, LLC, TCTM, L.P.,
TEPPCO Midstream Companies, LLC, and Val Verde Gathering Company, L.P., as
subsidiary guarantors, and U.S. Bank National Association, as trustee
(Filed as Exhibit 4.11 to Form 10-Q of TEPPCO Partners, L.P. (Commission
File No. 1-10403) for the quarter ended March 31, 2008 and incorporated
herein by reference).
|
|
4.12
|
Sixth
Supplemental Indenture, dated as of March 27, 2008, by and among TEPPCO
Partners, L.P., as issuer, TE Products Pipeline Company, LLC, TCTM, L.P.,
TEPPCO Midstream Companies, LLC and Val Verde Gas Gathering Company, L.P.,
as subsidiary guarantors, and U.S. Bank National Association, as trustee
(Filed as Exhibit 4.12 to Form 10-Q of TEPPCO Partners, L.P. (Commission
File No. 1-10403) for the quarter ended March 31, 2008 and incorporated
herein by reference).
|
|
4.13
|
Seventh
Supplemental Indenture, dated as of March 27, 2008, by and among TEPPCO
Partners, L.P., as issuer, TE Products Pipeline Company, LLC, TCTM, L.P.,
TEPPCO Midstream Companies, LLC and Val Verde Gas Gathering Company, L.P.,
as subsidiary guarantors, and U.S. Bank National Association, as trustee
(Filed as Exhibit 4.13 to Form
|
10-Q
of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter
ended March 31, 2008 and incorporated herein by
reference).
|
|
4.14
|
Replacement
of Capital Covenant, dated May 18, 2007, executed by TEPPCO Partners,
L.P., TE Products Pipeline Company, Limited Partnership, TCTM, L.P.,
TEPPCO Midstream Companies, L.P. and Val Verde Gas Gathering Company, L.P.
in favor of the covered
debt holders described therein (Filed as Exhibit 99.1 to the Current
Report on Form 8-K of TEPPCO Partners, L.P. (Commission File No. 1-10403)
filed on May 18, 2007 and incorporated herein by
reference).
|
|
10.1+
|
Texas
Eastern Products Pipeline Company 1994 Long Term Incentive Plan executed
on March 8, 1994 (Filed as Exhibit 10.1 to Form 10-Q of TEPPCO Partners,
L.P. (Commission File No. 1-10403) for the quarter ended March 31, 1994
and incorporated herein by
reference).
|
|
10.2+
|
Texas
Eastern Products Pipeline Company 1994 Long Term Incentive Plan, Amendment
1, effective January 16, 1995 (Filed as Exhibit 10.12 to Form 10-Q of
TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended
June 30, 1999 and incorporated herein by
reference).
|
|
10.3+
|
Form
of Supplemental Agreement to Employment Agreement between Texas Eastern
Products Pipeline Company, LLC and assumed by EPCO, Inc., and John N.
Goodpasture, Samuel N. Brown and J. Michael Cockrell dated as of January
12, 2007 (Filed as Exhibit 10.62 to Form 10-K of TEPPCO Partners, L.P.
(Commission File No. 1-10403) for the year ended December 31, 2006 and
incorporated herein by reference).
|
|
10.4
|
Services
and Transportation Agreement between TE Products Pipeline Company, Limited
Partnership and Fina Oil and Chemical Company, BASF Corporation and BASF
Fina Petrochemical Limited Partnership, dated February 9, 1999 (Filed as
Exhibit 10.22 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No.
1-10403) for the quarter ended March 31, 1999 and incorporated herein by
reference).
|
|
10.5
|
Call
Option Agreement, dated February 9, 1999 (Filed as Exhibit 10.23 to Form
10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the
quarter ended March 31, 1999 and incorporated herein by
reference).
|
|
10.6+
|
Texas
Eastern Products Pipeline Company Non-employee Directors Unit Accumulation
Plan, effective April 1, 1999 (Filed as Exhibit 10.30 to Form 10-Q of
TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended
September 30, 1999 and incorporated herein by
reference).
|
10.7+
|
Texas
Eastern Products Pipeline Company Second Amended and Restated Non-employee
Directors Unit Accumulation Plan, effective January 1, 2004 (Filed as
Exhibit 10.41 to Form 10-K of TEPPCO Partners, L.P. (Commission File No.
1-10403) for the year ended December 31, 2004 and incorporated herein by
reference).
|
10.8+
|
Texas
Eastern Products Pipeline Company Phantom Unit Retention Plan (1999 PURP),
effective August 25, 1999 (Filed as Exhibit 10.32 to Form 10-Q of TEPPCO
Partners, L.P. (Commission File No. 1-10403) for the quarter ended
September 30, 1999 and incorporated herein by
reference).
|
|
10.9+*
|
First
Amendment to the Texas Eastern Products Pipeline Company, LLC Phantom Unit
Retention Plan (1999 PURP), effective as of November 3,
2008.
|
|
10.10+*
|
First
Amendment to the Texas Eastern Products Pipeline Company, LLC Phantom Unit
Retention Plan (1999 PURP) Award Agreement, effective as of November 3,
2008.
|
|
10.11+
|
Texas
Eastern Products Pipeline Company, LLC 2000 Long Term Incentive Plan,
Amendment and Restatement, effective January 1, 2000 (Filed as Exhibit
10.28 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403)
for the year ended December 31, 2000 and incorporated herein by
reference).
|
|
10.12+
|
Texas
Eastern Products Pipeline Company, LLC 2000 Long Term Incentive Plan,
Second Amendment and Restatement, effective January 1, 2003 (Filed as
Exhibit 10.45 to Form 10-K of TEPPCO Partners, L.P. (Commission File No.
1-10403) for the year ended December 31, 2002 and incorporated herein by
reference).
|
|
10.13+*
|
Amendment
to the Texas Eastern Products Pipeline Company, LLC 2000 Long Term
Incentive Plan, dated as of December 15,
2008.
|
|
10.14+
|
Texas
Eastern Products Pipeline Company, LLC 2000 Long Term Incentive Plan
Notice of 2006 Award (Filed as Exhibit 10.1 to Form 10-Q of TEPPCO
Partners, L.P. (Commission File No. 1-10403) for the quarter ended June
30, 2006 and incorporated herein by
reference).
|
|
10.15+
|
Texas
Eastern Products Pipeline Company, LLC 2002 Phantom Unit Retention Plan,
effective June 1, 2002 (Filed as Exhibit 10.49 to Form 10-Q of TEPPCO
Partners, L.P. (Commission
File No. 1-10403) for the quarter ended June 30, 2002 and incorporated
herein by reference).
|
|
10.16+
|
Texas
Eastern Products Pipeline Company, LLC 2005 Phantom Unit Plan, dated
February 23, 2005, but effective as of January 1, 2005 (Filed as Exhibit
10.4 to Form 10-Q/A of TEPPCO Partners, L.P. (Commission File No. 1-10403)
for the quarter ended June 30, 2005 and incorporated herein by
reference).
|
|
10.17+*
|
First
Amendment to the Texas Eastern Products Pipeline Company, LLC 2005 Phantom
Unit Plan, dated as of December 15,
2008.
|
|
10.18+
|
Texas
Eastern Products Pipeline Company, LLC 2005 Phantom Unit Plan Notice of
2006 Award (Filed as Exhibit 10.2 to Form 10-Q of TEPPCO Partners, L.P.
(Commission File No. 1-10403) for the quarter ended June 30, 2006 and
incorporated herein by reference).
|
|
10.19+
|
Amended
and Restated Texas Eastern Products Pipeline Company, LLC Management
Incentive Compensation Plan, effective January 1, 2003 (Filed as Exhibit
10.46 to Form 10-K of TEPPCO Partners, L.P. (Commission File No. 1-10403)
for the year ended December 31, 2002 and incorporated herein by
reference).
|
|
10.20+
|
Amended
and Restated TEPPCO Retirement Cash Balance Plan, effective January 1,
2002 (Filed as Exhibit 10.47 to Form 10-K of TEPPCO Partners, L.P.
(Commission File No. 1-10403) for the year ended December 31, 2002 and
incorporated herein by reference).
|
|
10.21+
|
Amendments
to the TEPPCO Retirement Cash Balance Plan and the TEPPCO Supplemental
Benefit Plan dated as of May 27, 2005 (Filed as Exhibit 10.1 to Form 10-Q
of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter
ended June 30, 2005 and incorporated herein by
reference).
|
|
10.22+
|
EPCO,
Inc. 2006 TPP Long-Term Incentive Plan (Filed as Exhibit B to the
definitive proxy statement on Schedule 14A of TEPPCO Partners, L.P.
(Commission File No. 1-10403) filed on September 11, 2006 and incorporated
herein by reference).
|
|
10.23+
|
Form
of TPP Employee Unit Appreciation Right Grant of Texas Eastern Products
Pipeline Company, LLC under the EPCO, Inc. 2006 TPP Long-Term Incentive
Plan (Filed as Exhibit 10.1 to the Current Report on Form 8-K of TEPPCO
Partners, L.P. (Commission File No. 1-10403) filed on May 25, 2007 and
incorporated herein by reference).
|
|
10.24+
|
Form
of TPP Director Unit Appreciation Right Grant of Texas Eastern Products
Pipeline Company, LLC under the EPCO, Inc. 2006 TPP Long-Term Incentive
Plan (Filed as Exhibit 10.8 to Form 10-Q of TEPPCO Partners, L.P.
(Commission File No. 1-10403) for the quarter ended March 31, 2007 and
incorporated herein by reference).
|
|
10.25+
|
Form
of Phantom Unit Grant for Directors, as amended, of Texas Eastern Products
Pipeline Company, LLC under the EPCO, Inc. 2006 TPP Long-Term Incentive
Plan (Filed as Exhibit 10.3 to Form 10-Q of TEPPCO Partners, L.P.
(Commission File No. 1-10403) for the quarter ended June 30, 2007 and
incorporated herein by reference).
|
|
10.26+
|
Form
of TPP Employee Restricted Unit Grant, as amended, of Texas Eastern
Products Pipeline Company, LLC under the EPCO, Inc. 2006 TPP Long-Term
Incentive Plan (Filed as Exhibit 10.1 to Form 10-Q of TEPPCO Partners,
L.P. (Commission File No. 1-10403) for the quarter ended September 30,
2007 and incorporated herein by
reference).
|
|
10.27+
|
Form
of TPP Employee Option Grant, as amended, of Texas Eastern Products
Pipeline Company, LLC under the EPCO, Inc. 2006 TPP Long-Term Incentive
Plan (Filed as Exhibit 10.2 to Form 10-Q of TEPPCO Partners, L.P.
(Commission File No. 1-10403) for the quarter ended September 30, 2007 and
incorporated herein by reference).
|
|
10.28+
|
Form
of Distribution Equivalent Rights Grant of Texas Eastern Products Pipeline
Company, LLC, under the EPCO, Inc. 2006 TPP Long-Term Incentive Plan
(Filed as
|
|
Exhibit 10.6 to Form 10-Q of TEPPCO
Partners, L.P. (Commission File No. 1-10403) for the quarter ended
September 30, 2008 and incorporated herein by
reference).
|
|
10.29+
|
Form
of TPP Employee Unit Option Grant under the EPCO, Inc. 2006 TPP Long-Term
Incentive Plan (Filed as Exhibit 10.7 to Form 10-Q of TEPPCO Partners,
L.P. (Commission
File No. 1-10403) for the quarter ended March 31, 2008 and incorporated
herein by reference).
|
|
10.30+
|
Form
of TPP Employee Amendment to Unit Option Grant under the EPCO, Inc. 2006
TPP Long-Term Incentive Plan for options granted between April 2007 and
April 2008 (Filed as Exhibit 10.8 to Form 10-Q of TEPPCO Partners, L.P.
(Commission File No. 1-10403) for the quarter ended March 31, 2008 and
incorporated herein by reference).
|
|
10.31+*
|
Form
of TPP Employee Unit Appreciation Right Grant, as amended, of Texas
Eastern Products Pipeline Company, LLC under the EPCO, Inc. 2006 TPP
Long-Term Incentive Plan.
|
|
10.32
|
Contribution,
Assignment and Amendment Agreement among TEPPCO Partners, L.P., TE
Products Pipeline Company, Limited Partnership, TCTM, L.P., Texas Eastern
Products Pipeline Company, LLC, and TEPPCO GP, Inc., dated July 26, 2001
(Filed as Exhibit 3.6 to Form 10-Q of TEPPCO Partners, L.P. (Commission
File No. 1-10403) for the quarter ended June 30, 2001 and incorporated
herein by reference).
|
|
10.33
|
Certificate
of Formation of TEPPCO Colorado, LLC (Filed as Exhibit 3.2 to Form 10-Q of
TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter ended
March 31, 1998 and incorporated herein by
reference).
|
|
10.34
|
Unanimous
Written Consent of the Board of Directors of TEPPCO GP, Inc. dated
February 13, 2002 (Filed as Exhibit 10.41 to Form 10-K of TEPPCO Partners,
L.P. (Commission File No. 1-10403) for the year ended December 31, 2001
and incorporated herein by
reference).
|
|
10.35
|
Purchase
and Sale Agreement between Burlington Resources Gathering Inc. as Seller
and TEPPCO Partners, L.P., as Buyer, dated May 24, 2002 (Filed as Exhibit
99.1 to Form 8-K of TEPPCO Partners, L.P.
(Commission File No. 1-10403) dated as of July 2, 2002 and incorporated
herein by reference).
|
|
10.36
|
Agreement
of Limited Partnership of Val Verde Gas Gathering Company, L.P., dated May
29, 2002 (Filed as Exhibit 10.48 to Form 10-Q of TEPPCO Partners, L.P.
(Commission File No. 1-10403) for the quarter ended June 30, 2002 and
incorporated herein by reference).
|
|
10.37
|
Formation
Agreement between Panhandle Eastern Pipe Line Company and Marathon Ashland
Petroleum LLC and TE Products Pipeline Company, Limited Partnership, dated
as of August 10, 2000 (Filed as Exhibit 10.48 to Form 10-K of TEPPCO
Partners, L.P. (Commission File No. 1-10403) for the year ended December
31, 2002 and incorporated herein by
reference).
|
|
10.38
|
Amended
and Restated Limited Liability Company Agreement of Centennial Pipeline
LLC dated as of August 10, 2000 (Filed as Exhibit 10.49 to Form 10-K of
TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended
December 31, 2002 and incorporated herein by
reference).
|
|
10.39
|
Guaranty
Agreement, dated as of September 27, 2002, between TE Products Pipeline
Company, Limited Partnership and Marathon Ashland Petroleum LLC for Note
Agreements of Centennial Pipeline LLC (Filed as Exhibit 10.50 to Form 10-K
of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the year ended
December 31, 2002 and incorporated herein by
reference).
|
|
10.40
|
Assignment,
Assumption and Amendment No. 2 to Guaranty Agreement, dated as of May 21,
2007, by and among TE Products Pipeline Company, Limited Partnership,
Marathon Petroleum Company, LLC and Marathon Oil Corporation (Filed as
Exhibit 10.7 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No.
1-10403) for the quarter ended June 30, 2007 and incorporated herein by
reference).
|
|
10.41
|
LLC
Membership Interest Purchase Agreement By and Between CMS Panhandle
Holdings, LLC, As Seller and Marathon Ashland Petroleum LLC and TE
Products Pipeline Company, Limited Partnership, Severally as Buyers, dated
February 10, 2003
|
|
(Filed as Exhibit 10.51 to Form 10-K of
TEPPCO Partners, L.P. (Commission File No. 1-10403) for the
year ended December 31, 2002 and incorporated herein by
reference).
|
|
10.42
|
Amended
and Restated Credit Agreement among TEPPCO Partners, L.P., as Borrower,
SunTrust Bank, as Administrative Agent and LC Issuing Bank and The Lenders
Party Hereto, as Lenders dated as of October 21, 2004 ($600,000,000
Revolving Facility) (Filed
as Exhibit 99.1 to Form 8-K of TEPPCO Partners, L.P. (Commission File
No. 1-10403) dated as of October 21,
2004 and incorporated herein by
reference).
|
|
10.43
|
First
Amendment to Amended and Restated Credit Agreement, dated as of February
23, 2005, by and among TEPPCO Partners, L.P., the Borrower, several banks
and other financial institutions, the Lenders,
SunTrust Bank, as the Administrative Agent for the Lenders, Wachovia Bank,
National Association, as Syndication Agent, and BNP Paribas, JPMorgan
Chase Bank, N.A. and KeyBank, N.A. as Co-Documentation Agents (Filed as
Exhibit 99.1 to Form 8-K of TEPPCO Partners, L.P. (Commission File No.
1-10403) dated as of March 1, 2005 and incorporated herein by
reference).
|
|
10.44
|
Second
Amendment to Amended and Restated Credit Agreement, dated as of December
13, 2005, by and among TEPPCO Partners, L.P., the Borrower, several banks
and other financial institutions, the Lenders, SunTrust Bank, as the
Administrative Agent for the Lenders, Wachovia Bank, National Association,
as Syndication Agent, and BNP Paribas, JPMorgan Chase Bank,
N.A. and KeyBank, N.A., as Co-Documentation Agents (Filed as Exhibit 99.1
to Form 8-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) dated
as of December 15, 2005 and incorporated herein by
reference).
|
|
10.45
|
Third
Amendment to Amended and Restated Credit Agreement, dated as of July 31,
2006, by and among TEPPCO Partners, L.P., the Borrower, several banks and
other financial institutions, the Lenders, SunTrust Bank, as the
Administrative Agent for the Lenders and as the LC Issuing Bank, Wachovia
Bank, National Association, as Syndication Agent, and BNP Paribas,
JPMorgan Chase Bank, N.A., and The Royal Bank of Scotland Plc, as
Co-Documentation Agents (Filed as Exhibit 10.3 to Current Report on Form
8-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) dated as of
August 3, 2006 and incorporated herein by
reference).
|
|
10.46
|
Fourth
Amendment to Amended and Restated Credit Agreement and Waiver, dated as of
June 29, 2007, by and among TEPPCO Partners, L.P., the Borrower, several
banks and other financial institutions, the Lenders, SunTrust Bank, as the
Administrative Agent for the Lenders and as the LC Issuing Bank, Wachovia
Bank, National Association, as Syndication Agent, and BNP Paribas,
JPMorgan Chase Bank, N.A., and The Royal Bank of Scotland Plc, as
Co-Documentation. (Filed as Exhibit 4.14 to Form 10-Q of TEPPCO Partners,
L.P. (Commision File No. 1-10403) for the quarter ended June 30, 2007 and
incorporated herein by reference).
|
|
10.47
|
Fifth
Amendment to Amended and Restated Credit Agreement, dated as of December
18, 2007, by and among TEPPCO Partners, L.P., the Borrower, the several
banks and other financial institutions party thereto and SunTrust Bank, as
the administrative agent for the lenders (Filed as Exhibit 10.1 to Current
Report on Form 8-K of TEPPCO Partners, L.P. (Commission File No. 1-10403)
filed December 21, 2007 and incorporated herein by
reference).
|
10.48
|
Sixth
Amendment to Amended and Restated Credit Agreement, dated as of July 1,
2008, by and among TEPPCO Partners, L.P., the Borrower, the several banks
and other financial institutions party thereto and SunTrust Bank, as the
Administrative Agent for the Lenders (Filed as Exhibit 10.1 to Form 10-Q
of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the quarter
ended June 30, 2008 and incorporated herein by
reference).
|
|
10.49
|
Supplement
and Joinder Agreement dated as of July 17, 2008 of the Amended and
Restated Credit Agreement dated as of October 21, 2004, among TEPPCO
Partners, L.P., as Borrower, the banks and other financial institutions
party thereto and SunTrust Bank, as the Administrative Agent for the
Lenders (Filed as Exhibit 10.2 to Form 10-Q of TEPPCO Partners, L.P.
(Commission File No. 1-10403) for the quarter ended September 30, 2008 and
incorporated herein by reference).
|
|
10.50
|
Amended
and Restated Partnership Agreement of Jonah Gas Gathering Company dated as
of August 1, 2006 (Filed as Exhibit 10.1 to Current Report on Form 8-K of
TEPPCO Partners, L.P. (Commission File No. 1-10403) dated as of August 3,
2006 and incorporated herein by
reference).
|
|
10.51
|
Contribution
Agreement among TEPPCO GP, Inc., TEPPCO Midstream Companies, L.P. and
Enterprise Gas Processing, LLC dated as of August 1, 2006 (Filed as
Exhibit 10.2
to Current Report on Form 8-K of TEPPCO Partners, L.P. (Commission File
No. 1-10403) dated as of August 3, 2006 and incorporated
herein by reference).
|
|
10.52
|
Transaction
Agreement by and between TEPPCO Partners, L.P. and Texas Eastern Products
Pipeline Company, LLC dated as of September 5, 2006 (Filed as Exhibit 10
to Current Report on Form 8-K of TEPPCO Partners, L.P. (Commission File
No. 1-10403) filed September 12, 2006 and incorporated herein by
reference).
|
|
10.53
|
Second
Amended and Restated Agreement of Limited Partnership of TCTM, L.P. by and
between TEPPCO GP, Inc. and TEPPCO Partners, L.P. dated as of February 27,
2007 (Filed as Exhibit 10.65 to Form 10-K of TEPPCO Partners, L.P.
(Commission File No. 1-10403) for the year ended December 31, 2006 and
incorporated herein by reference).
|
|
10.54
|
Company
Agreement of TE Products Pipeline Company, LLC by and between TEPPCO GP,
Inc. and TEPPCO Partners, L.P. dated as of June 30, 2007 (Filed as Exhibit
3.2 to the Current Report on Form 8-K of TE Products Pipeline Company, LLC
(Commission File No. 1-13603) filed on July 6, 2007 and incorporated
herein by reference).
|
|
10.55
|
Company
Agreement of TEPPCO Midstream Companies, LLC by and between TEPPCO GP,
Inc. and TEPPCO Partners, L.P. dated as of June 30, 2007 (Filed as Exhibit
10.5 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403)
for the quarter ended June 30, 2007 and incorporated herein by
reference).
|
10.56+
|
Unit
Purchase Agreement dated September 4, 2008 by and between TEPPCO Unit L.P.
and TEPPCO Partners, L.P. (Filed as Exhibit 10.1 to Current Report on Form
8-K of TEPPCO Partners, L.P. (Commission File No. 1-10403) filed on
September 9, 2008 and incorporated herein by
reference).
|
|
10.57+
|
Agreement
of Limited Partnership of TEPPCO Unit L.P., dated September 4, 2008 (Filed
as Exhibit 10.2 to Current Report on Form 8-K of TEPPCO Partners, L.P.
(Commission File No. 1-10403) filed on September 9, 2008 and incorporated
herein by reference).
|
|
10.58
|
Term
Credit Agreement dated as of December 21, 2007, by and among TEPPCO
Partners, L.P., the banks and other financial institutions party thereto
and SunTrust Bank, as the administrative agent for the lenders (Filed as
Exhibit 10.1 to Current Report on Form 8-K of TEPPCO Partners, L.P.
(Commission File No. 1-10403) filed December 28, 2007 and incorporated
herein by reference).
|
|
10.59
|
Amended
and Restated Guaranty Agreement, dated as of January 17, 2008, by and
among The Prudential Insurance Company of America, TCTM, L.P., TEPPCO
Midstream Companies, LLC, TEPPCO Partners, L.P. and TE Products Pipeline
Company, LLC (Filed as Exhibit 10.1 to Current Report on Form 8-K of
TEPPCO Partners, L.P. (Commission File No. 1-10403) filed January 24, 2008
and incorporated herein by
reference).
|
|
10.60
|
Asset
Purchase Agreement, dated February 1, 2008, by and among TEPPCO Marine
Services, LLC, TEPPCO Partners, L.P., Cenac Towing Co., Inc., Cenac
Offshore, L.L.C. and Mr. Arlen B. Cenac, Jr. (Filed as Exhibit 2 to
Current Report on Form 8-K of TEPPCO Partners, L.P. (Commission File No.
1-10403) filed February 7, 2008 and incorporated herein by
reference).
|
|
10.61
|
Asset
Purchase Agreement, dated February 29, 2008, by and among TEPPCO Marine
Services, LLC, Horizon Maritime, L.L.C., Mr. Arlen B. Cenac, Jr., Mr.
Steven G. Proehl, Mr. John P. Binion, Mr. Richard M. Seale and CHO, LLC
(Filed as Exhibit 10 to Current Report on Form 8-K of TEPPCO Partners,
L.P. (Commission File No. 1-10403) filed March 6, 2008 and
incorporated herein by reference).
|
|
10.62
|
Amendment
No. 1, dated February 29, 2008, to Asset Purchase Agreement, dated
February 1, 2008, by and among TEPPCO Marine Serivces, LLC, TEPPCO
Partners, L.P., Cenac Towing Co., Inc., Cenac Offshore, L.L.C. and Mr.
Arlen B. Cenac, Jr. (Filed
|
|
as
Exhibit 10.5 to Form 10-Q of TEPPCO Partners, L.P. (Commission File No.
1-10403) for the quarter ended March 31, 2008 and incorporated herein by
reference).
|
|
10.63
|
Transitional
Operating Agreement, dated February 1, 2008, by and among TEPPCO Marine
Services, LLC, Cenac Towing Co., Inc., Cenac Offshore, L.L.C. and Mr.
Arlen B. Cenac, Jr. (Filed as Exhibit 10 to Current Report on Form 8-K of
TEPPCO Partners, L.P. (Commission File No. 1-10403) filed February 7, 2008
and incorporated herein by
reference).
|
10.64
|
Amendment
No. 1, dated February 29, 2008, to Transitional Operating Agreement, dated
February 1, 2008, by and among Cenac Towing Co., Inc., Cenac Offshore,
L.L.C., Mr. Arlen
B. Cenac, Jr., and TEPPCO Marine Serivces, LLC (Filed as Exhibit 10.6 to
Form 10-Q of TEPPCO Partners, L.P. (Commission File No. 1-10403) for the
quarter ended March 31, 2008 and incorporated herein by
reference).
|
|
10.65
|
Partnership
Agreement of Texas Offshore Port System, dated as of August 14, 2008
(Filed as Exhibit 10.1 to Current Report on Form 8-K of TEPPCO Partners,
L.P. (Commission File No. 1-10403) filed on August 20, 2008 and
incorporated herein by reference).
|
|
10.66+
|
Agreement
of Limited Partnership of TEPPCO Unit II L.P., dated November 13, 2008
(Filed as Exhibit 10.1 to Current Report on Form 8-K of TEPPCO Partners,
L.P. (Commission File No. 1-10403) filed on November 19, 2008 and
incorporated herein by reference).
|
|
10.67
|
Fourth
Amended and Restated Administrative Services Agreement by and among EPCO,
Inc., Enterprise Products Partners L.P., Enterprise Products Operating
L.P., Enterprise Products GP, LLC, Enterprise Products OLPGP, Inc.,
Enterprise GP Holdings L.P., Duncan Energy Partners L.P., DEP Holdings,
LLC, DEP Operating Partnership, L.P., EPE Holdings, LLC, TEPPCO Partners,
L.P., Texas Eastern Products Pipeline Company, LLC, TE Products Pipeline
Company, Limited Partnership, TEPPCO Midstream Companies, L.P., TCTM, L.P.
and TEPPCO GP, Inc. dated January 30, 2007, but effective as of February
5, 2007 (Filed as Exhibit 10.18 to Current Report on Form 8-K of Duncan
Energy Partners L.P. (Commission File No. 1-33266) filed February 5, 2007
and incorporated herein by
reference).
|
|
10.68
|
First
Amendment to the Fourth Amended and Restated Administrative Services
Agreement by and among EPCO, Inc., Enterprise Products Partners L.P.,
Enterprise Products Operating L.P., Enterprise Products GP, LLC,
Enterprise Products OLPGP, Inc., Enterprise GP Holdings L.P., Duncan
Energy Partners L.P., DEP Holdings, LLC, DEP Operating Partnership, L.P.,
EPE Holdings, LLC, TEPPCO Partners, L.P., Texas Eastern Products Pipeline
Company, LLC, TE Products Pipeline Company, Limited Partnership, TEPPCO
Midstream Companies, L.P., TCTM, L.P. and TEPPCO GP, Inc. dated February
28, 2007 (Filed as Exhibit 10.8 to Form 10-K of Enterprise Products
Partners L.P. (Commission File No. 1-14323) for the year ended December
31, 2006 and incorporated herein by
reference).
|
|
10.69
|
Second
Amendment to Fourth Amended and Restated Administrative Services Agreement
dated August 7, 2007, but effective as of May 7, 2007 (Filed as Exhibit
10.1 to Form 10-Q of Duncan Energy Partners L.P. (Commission File No.
1-33266) for the quarter ended June 30, 2007 and incorporated herein by
reference).
|
|
10.70
|
Fifth
Amended and Restated Administrative Services Agreement by and among EPCO,
Inc., Enterprise Products Partners L.P., Enterprise Products Operating
L.P., Enterprise Products GP, LLC, Enterprise Products OLPGP, Inc.,
Enterprise GP Holdings L.P., EPE Holdings, LLC, DEP Holdings, LLC, Duncan
Energy Partners L.P., DEP OLPGP, LLC, DEP Operating Partnership L.P.,
TEPPCO Partners, L.P., Texas Eastern Products Pipeline Company, LLC, TE
Products Pipeline Company, Limited Partnership, TEPPCO Midstream
Companies, L.P., TCTM, L.P. and TEPPCO GP, Inc. dated January 30, 2009
(Filed as Exhibit 10.1 to Current Report on Form 8-K of Enterprise
Products Partners L.P. (Commission File No. 1-14323) filed on February 5,
2009 and incorporated herein by
reference).
|
12.1*
|
Statement
of Computation of Ratio of Earnings to Fixed
Charges.
|
|
21*
|
Subsidiaries
of TEPPCO Partners, L.P.
|
|
23.1*
|
Consent
of Deloitte & Touche LLP – TEPPCO Partners, L.P. and
subsidiaries.
|
|
23.2*
|
Consent
of Deloitte & Touche LLP – Jonah Gas Gathering Company and
subsidiary.
|
24* | Powers of Attorney. |
|
31.1*
|
Certification
of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a),
promulgated under the Securities Exchange Act of 1934, as
amended.
|
|
31.2*
|
Certification
of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a),
promulgated under the Securities Exchange Act of 1934, as
amended.
|
32.1**
|
Certification
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
|
|
32.2**
|
Certification
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
|
TEPPCO Partners, L.P. |
Date: March
2, 2009
|
By: /s/ JERRY
E. THOMPSON
Jerry
E. Thompson,
President
and Chief Executive Officer of
Texas
Eastern Products Pipeline Company, LLC, General Partner
|
Date: March
2, 2009
|
By: /s/ TRACY
E.
OHMART
Tracy
E. Ohmart,
Acting
Chief Financial Officer of
Texas
Eastern Products Pipeline Company, LLC, General
Partner
|
Signature
|
Title
|
Date
|
/s/ JERRY
E. THOMPSON
|
President
and Chief Executive Officer
|
March
2, 2009
|
Jerry
E. Thompson
|
of
Texas Eastern Products Pipeline Company, LLC
(Principal
Executive Officer)
|
|
/s/ TRACY
E. OHMART
|
Acting
Chief Financial Officer
|
March
2, 2009
|
Tracy
E. Ohmart
|
of
Texas Eastern Products Pipeline Company, LLC
(Principal
Financial and Accounting Officer)
|
|
MICHAEL
B. BRACY*
|
Director
of Texas Eastern
|
March
2, 2009
|
Michael
B. Bracy
|
Products
Pipeline Company, LLC
|
|
RICHARD
S. SNELL*
|
Director
of Texas Eastern
|
March
2, 2009
|
Richard
S. Snell
|
Products
Pipeline Company, LLC
|
|
MURRAY
H. HUTCHISON*
|
Chairman
of the Board of Texas Eastern
|
March
2, 2009
|
Murray
H. Hutchison
|
Products
Pipeline Company, LLC
|
|
DONALD
H. DAIGLE*
|
Director
of Texas Eastern
|
March
2, 2009
|
Donald
H. Daigle
|
Products
Pipeline Company, LLC
|
|
Page
|
|
F-2
|
|
F-3
|
|
F-4
|
|
F-6
|
|
F-7
|
|
F-8
|
|
F-9
|
|
F-9
|
|
F-10
|
|
F-20
|
|
F-22
|
|
F-29
|
|
F-31
|
|
F-35
|
|
F-36
|
|
F-37
|
|
F-40
|
|
F-46
|
|
F-49
|
|
F-53
|
|
F-57
|
|
F-62
|
|
F-67
|
|
F-69
|
|
F-75
|
|
F-76
|
|
F-77
|
|
F-77
|
TEPPCO
PARTNERS, L.P.
(Dollars
in thousands)
|
||||||||
December
31,
|
||||||||
2008
|
2007
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash and cash
equivalents
|
$ | 28 | $ | 23 | ||||
Accounts receivable, trade (net
of allowance for doubtful accounts of
$2,559 and
$125)
|
790,374 | 1,381,871 | ||||||
Accounts receivable, related
parties
|
15,758 | 6,525 | ||||||
Inventories
|
52,906 | 80,299 | ||||||
Other
|
48,496 | 47,271 | ||||||
Total current
assets
|
907,562 | 1,515,989 | ||||||
Property, plant and equipment,
at cost (net of accumulated depreciation of
$678,784 and
$582,225)
|
2,439,910 | 1,793,634 | ||||||
Equity
investments
|
1,255,923 | 1,146,995 | ||||||
Intangible assets (net
of accumulated amortization of $158,391 and $130,094)
|
207,653 | 164,681 | ||||||
Goodwill
|
106,611 | 15,506 | ||||||
Other
assets
|
132,161 | 113,252 | ||||||
Total assets
|
$ | 5,049,820 | $ | 4,750,057 |
LIABILITIES
AND PARTNERS’ CAPITAL
|
||||||||
Current
liabilities:
|
||||||||
Senior notes
|
$ | -- | $ | 353,976 | ||||
Accounts payable and accrued
liabilities
|
792,469 | 1,413,447 | ||||||
Accounts payable, related
parties
|
17,219 | 38,980 | ||||||
Accrued interest
|
36,401 | 35,491 | ||||||
Other accrued
taxes
|
23,038 | 20,483 | ||||||
Other
|
30,869 | 84,848 | ||||||
Total current
liabilities
|
899,996 | 1,947,225 | ||||||
Long-term
debt:
|
||||||||
Senior
notes
|
1,713,291 | 721,545 | ||||||
Junior
subordinated notes
|
299,574 | 299,538 | ||||||
Other
long-term debt
|
516,654 | 490,000 | ||||||
Total
long-term debt
|
2,529,519 | 1,511,083 | ||||||
Other
liabilities and deferred credits
|
28,826 | 27,122 | ||||||
Commitments
and contingencies
|
||||||||
Partners’
capital:
|
||||||||
Limited partners’
interests:
|
||||||||
Limited partner units
(104,547,561 and 89,849,132 units outstanding)
|
1,746,210 | 1,394,812 | ||||||
Restricted limited partner
units (157,300 and 62,400 units outstanding)
|
1,373 | 338 | ||||||
General partner’s
interest
|
(110,309 | ) | (87,966 | ) | ||||
Accumulated other comprehensive
loss
|
(45,795 | ) | (42,557 | ) | ||||
Total partners’
capital
|
1,591,479 | 1,264,627 | ||||||
Total liabilities and partners’
capital
|
$ | 5,049,820 | $ | 4,750,057 |
For
Year Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Operating
revenues:
|
||||||||||||
Sales of petroleum
products
|
$ | 12,840,649 | $ | 9,147,104 | $ | 9,080,516 | ||||||
Transportation – Refined
products
|
164,120 | 170,231 | 152,552 | |||||||||
Transportation –
LPGs
|
105,419 | 101,076 | 89,315 | |||||||||
Transportation – Crude
oil
|
57,305 | 45,952 | 38,822 | |||||||||
Transportation –
NGLs
|
52,192 | 46,542 | 43,838 | |||||||||
Transportation –
Marine
|
164,265 | -- | -- | |||||||||
Gathering – Natural
gas
|
57,097 | 61,634 | 123,933 | |||||||||
Other
|
91,842 | 85,521 | 78,509 | |||||||||
Total operating
revenues
|
13,532,889 | 9,658,060 | 9,607,485 | |||||||||
Costs and
expenses:
|
||||||||||||
Purchases of petroleum
products
|
12,703,534 | 9,017,109 | 8,967,062 | |||||||||
Operating
expense
|
285,760 | 191,697 | 203,015 | |||||||||
Operating fuel and
power
|
99,079 | 61,458 | 57,450 | |||||||||
General and
administrative
|
41,364 | 33,657 | 31,348 | |||||||||
Depreciation and
amortization
|
126,329 | 105,225 | 108,252 | |||||||||
Taxes – other than income
taxes
|
23,401 | 18,012 | 17,983 | |||||||||
(Gains) losses on sales of
assets
|
2 | (18,653 | ) | (7,404 | ) | |||||||
Total costs and
expenses
|
13,279,469 | 9,408,505 | 9,377,706 | |||||||||
Operating
income
|
253,420 | 249,555 | 229,779 | |||||||||
Other income
(expense):
|
||||||||||||
Interest
expense –
net
|
(139,988 | ) | (101,223 | ) | (86,171 | ) | ||||||
Gain
on sale of ownership interest in Mont Belvieu Storage
|
||||||||||||
Partners,
L.P.
|
-- | 59,628 | -- | |||||||||
Equity
earnings
|
82,693 | 68,755 | 36,761 | |||||||||
Interest
income
|
1,091 | 1,676 | 2,077 | |||||||||
Other
income
|
953 | 1,346 | 888 | |||||||||
Income before provision for
income
taxes
|
198,169 | 279,737 | 183,334 | |||||||||
Provision
for income taxes
|
4,617 | 557 | 652 | |||||||||
Income from continuing
operations
|
193,552 | 279,180 | 182,682 | |||||||||
Income
from discontinued
operations
|
-- | -- | 1,497 | |||||||||
Gain
on sale of discontinued
operations
|
-- | -- | 17,872 | |||||||||
Discontinued
operations
|
-- | -- | 19,369 | |||||||||
Net
income
|
$ | 193,552 | $ | 279,180 | $ | 202,051 |
For
Year Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Net Income Allocation:
|
||||||||||||
Limited
Partners:
|
||||||||||||
Income
from continuing
operations
|
$ | 160,969 | $ | 233,193 | $ | 130,483 | ||||||
Income
from discontinued
operations
|
-- | -- | 13,835 | |||||||||
Total Limited
Partner’s interest in net
income
|
160,969 | 233,193 | 144,318 | |||||||||
General
Partner:
|
||||||||||||
Income
from continuing
operations
|
32,583 | 45,987 | 52,199 | |||||||||
Income
from discontinued
operations
|
-- | -- | 5,534 | |||||||||
Total General
Partner’s interest in net
income
|
32,583 | 45,987 | 57,733 | |||||||||
Total net income
allocated
|
$ | 193,552 | $ | 279,180 | $ | 202,051 | ||||||
Basic
and diluted net income per Limited Partner Unit:
|
||||||||||||
Continuing
operations
|
$ | 1.65 | $ | 2.60 | $ | 1.77 | ||||||
Discontinued
operations
|
-- | -- | 0.19 | |||||||||
Basic and diluted net income
per Limited Partner Unit
|
$ | 1.65 | $ | 2.60 | $ | 1.96 | ||||||
Weighted
average Limited Partner Units outstanding
|
97,530 | 89,850 | 73,657 |
For
Year Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Net
income
|
$ | 193,552 | $ | 279,180 | $ | 202,051 | ||||||
Other
comprehensive income (loss):
|
||||||||||||
Cash
flow hedges:
|
||||||||||||
Change in fair
values of interest rate and treasury lock
|
||||||||||||
financial
instruments
|
(26,802 | ) | (23,604 | ) | (248 | ) | ||||||
Reclassification
adjustment for (gain) loss included in net income
|
||||||||||||
related
to interest rate and treasury lock financial instruments
|
4,923 | (64 | ) | -- | ||||||||
Changes in
fair values of crude oil financial instruments
|
(19,257 | ) | (21,036 | ) | 991 | |||||||
Reclassification
adjustment for (gain) loss included in net income
|
||||||||||||
related
to crude oil financial
instruments
|
37,898 | 1,654 | (261 | ) | ||||||||
Changes
in plan assets and projected benefit obligation
|
-- | (67 | ) | -- | ||||||||
Total
cash flow
hedges
|
(3,238 | ) | (43,117 | ) | 482 | |||||||
Total
other comprehensive income
(loss)
|
(3,238 | ) | (43,117 | ) | 482 | |||||||
Comprehensive
income
|
$ | 190,314 | $ | 236,063 | $ | 202,533 |
For
Year Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Operating
activities:
|
||||||||||||
Net income
|
$ | 193,552 | $ | 279,180 | $ | 202,051 | ||||||
Adjustments to reconcile net
income to cash provided by continuing operating
activities:
|
||||||||||||
Income from discontinued
operations
|
-- | -- | (19,369 | ) | ||||||||
Deferred income tax
provision
|
36 | (679 | ) | 652 | ||||||||
Depreciation and
amortization
|
126,329 | 105,225 | 108,252 | |||||||||
Amortization of deferred
compensation
|
993 | 830 | -- | |||||||||
Amortization in interest
expense
|
2,224 | (2,762 | ) | (2,798 | ) | |||||||
Changes in fair market value of
financial instruments
|
(258 | ) | 198 | 143 | ||||||||
Earnings in equity
investments
|
(82,693 | ) | (68,755 | ) | (36,761 | ) | ||||||
Distributions from equity
investments
|
146,095 | 122,900 | 63,483 | |||||||||
(Gains) losses on sales of
assets
|
2 | (18,653 | ) | (7,404 | ) | |||||||
Gain on sale of ownership
interest in Mont Belvieu Storage
|
||||||||||||
Partners,
L.P.
|
-- | (59,628 | ) | -- | ||||||||
Loss on early extinguishment of
debt
|
8,689 | 1,356 | -- | |||||||||
Net effect of changes in
operating
accounts
|
(48,108 | ) | (8,640 | ) | (36,697 | ) | ||||||
Net
cash provided by continuing operating activities
|
346,861 | 350,572 | 271,552 | |||||||||
Net cash provided by
discontinued operations
|
-- | -- | 1,521 | |||||||||
Net
cash provided by operating activities
|
346,861 | 350,572 | 273,073 | |||||||||
Investing
activities:
|
||||||||||||
Proceeds from sales of
assets
|
-- | 27,784 | 51,558 | |||||||||
Proceeds from sale of ownership
interest
|
-- | 137,326 | -- | |||||||||
Purchase of
assets
|
-- | (12,909 | ) | (4,771 | ) | |||||||
Cash used for business
combinations
|
(351,327 | ) | -- | (15,702 | ) | |||||||
Investment in Mont Belvieu
Storage Partners, L.P.
|
-- | -- | (4,767 | ) | ||||||||
Investment in Centennial
Pipeline LLC
|
-- | (11,081 | ) | (2,500 | ) | |||||||
Investment in Jonah Gas
Gathering Company
|
(129,759 | ) | (187,547 | ) | (121,035 | ) | ||||||
Investment in Texas Offshore
Port System
|
(35,953 | ) | -- | -- | ||||||||
Acquisition of intangible
assets
|
(694 | ) | (3,283 | ) | -- | |||||||
Cash paid for linefill on assets
owned
|
(12,784 | ) | (39,418 | ) | (6,453 | ) | ||||||
Capital
expenditures
|
(300,503 | ) | (228,272 | ) | (170,046 | ) | ||||||
Net cash used in
investing activities
|
(831,020 | ) | (317,400 | ) | (273,716 | ) | ||||||
Financing
activities:
|
||||||||||||
Proceeds from term credit
facility
|
1,000,000 | -- | -- | |||||||||
Repayments on term credit
facility
|
(1,000,000 | ) | -- | -- | ||||||||
Proceeds from revolving credit
facility
|
2,508,089 | 1,305,750 | 924,125 | |||||||||
Repayments on revolving credit
facility
|
(2,481,436 | ) | (1,305,750 | ) | (840,025 | ) | ||||||
Repayment of debt assumed in
Cenac
acquisition
|
(63,157 | ) | -- | -- | ||||||||
Redemption of 7.51% TE Products
Senior
Notes
|
(181,571 | ) | (36,138 | ) | -- | |||||||
Repayment of 6.45% TE Products
Senior
Notes
|
(180,000 | ) | -- | -- | ||||||||
Issuance of Limited Partner
Units,
net
|
275,856 | 1,696 | 195,060 | |||||||||
Issuance of senior
notes
|
996,349 | -- | -- | |||||||||
Issuance of junior subordinated
notes
|
-- | 299,517 | -- | |||||||||
Debt issuance
costs
|
(9,862 | ) | (4,052 | ) | -- | |||||||
Settlement of treasury lock
agreements
|
(52,098 | ) | 1,443 | -- | ||||||||
Payment for termination of
interest rate swap
|
-- | (1,235 | ) | -- | ||||||||
Acquisition of treasury
units
|
(9 | ) | -- | -- | ||||||||
Distributions
paid
|
(327,997 | ) | (294,450 | ) | (278,566 | ) | ||||||
Net cash provided
by (used in) financing activities
|
484,164 | (33,219 | ) | 594 | ||||||||
Net
change in cash and cash equivalents
|
5 | (47 | ) | (49 | ) | |||||||
Cash
and cash equivalents, January 1
|
23 | 70 | 119 | |||||||||
Cash
and cash equivalents, December 31
|
$ | 28 | $ | 23 | $ | 70 |
Accumulated
|
||||||||||||||||
General
|
Limited
|
Other
|
||||||||||||||
Partner’s
|
Partners’
|
Comprehensive
|
||||||||||||||
Interest
|
Interests
|
(Loss)
Income
|
Total
|
|||||||||||||
Balance,
December 31, 2005
|
$ | (61,487 | ) | $ | 1,262,846 | $ | 11 | $ | 1,201,370 | |||||||
Net proceeds from issuance of
Limited Partner Units
|
-- | 195,060 | -- | 195,060 | ||||||||||||
Net income
allocation
|
57,733 | 144,318 | -- | 202,051 | ||||||||||||
Cash
distributions
|
(81,901 | ) | (196,665 | ) | -- | (278,566 | ) | |||||||||
Changes in fair values of crude
oil financial instruments
|
-- | -- | 991 | 991 | ||||||||||||
Reclassification adjustment for
gain included in net income
|
||||||||||||||||
related to
crude oil financial instruments
|
-- | -- | (261 | ) | (261 | ) | ||||||||||
Changes in fair values of
interest rate and treasury lock financial instruments
|
-- | -- | (248 | ) | (248 | ) | ||||||||||
Adjustment to initially apply
SFAS 158
|
-- | -- | (67 | ) | (67 | ) | ||||||||||
Balance,
December 31, 2006
|
(85,655 | ) | 1,405,559 | 426 | 1,320,330 | |||||||||||
Net proceeds from issuance of
Limited Partner Units
in connection
with Employee Unit Purchase Plan
|
-- | 180 | -- | 180 | ||||||||||||
Net proceeds from issuance of
Limited Partner Units
in connection
with Distribution Reinvestment Plan
|
-- | 1,516 | -- | 1,516 | ||||||||||||
Net income
allocation
|
45,987 | 233,193 | -- | 279,180 | ||||||||||||
Cash
distributions
|
(48,298 | ) | (246,152 | ) | -- | (294,450 | ) | |||||||||
Non-cash
contribution
|
-- | 426 | -- | 426 | ||||||||||||
Amortization of equity
awards
|
-- | 428 | -- | 428 | ||||||||||||
Changes in fair values of crude
oil financial instruments
|
-- | -- | (21,036 | ) | (21,036 | ) | ||||||||||
Reclassification adjustment for
loss included in net income
|
||||||||||||||||
related to
crude oil financial instruments
|
-- | -- | 1,654 | 1,654 | ||||||||||||
Changes in fair values of
interest rate and treasury lock financial instruments
|
-- | -- | (23,604 | ) | (23,604 | ) | ||||||||||
Reclassification adjustment for
gain included in net income
|
||||||||||||||||
related to
interest rate and treasury lock financial instruments
|
-- | -- | (64 | ) | (64 | ) | ||||||||||
SFAS 158 pension benefit
adjustment
|
-- | -- | 67 | 67 | ||||||||||||
Balance,
December 31, 2007
|
(87,966 | ) | 1,395,150 | (42,557 | ) | 1,264,627 | ||||||||||
Issuance of units in connection
with Cenac acquisition on
February
1, 2008
|
-- | 186,558 | -- | 186,558 | ||||||||||||
Net proceeds from issuance of
Limited Partner Units
in
connection with Distribution Reinvestment Plan
|
-- | 11,455 | -- | 11,455 | ||||||||||||
Net proceeds from issuance of
Limited Partner Units
in
connection with Employee Unit Purchase Plan
|
-- | 758 | -- | 758 | ||||||||||||
Net proceeds from issuance of
Limited Partner Units
|
-- | 263,643 | -- | 263,643 | ||||||||||||
Acquisition of treasury
units
|
-- | (9 | ) | -- | (9 | ) | ||||||||||
Net income
allocation
|
32,583 | 160,969 | -- | 193,552 | ||||||||||||
Cash
distributions
|
(54,926 | ) | (273,071 | ) | -- | (327,997 | ) | |||||||||
Non-cash
contribution
|
-- | 797 | -- | 797 | ||||||||||||
Amortization of equity
awards
|
-- | 1,333 | -- | 1,333 | ||||||||||||
Changes in fair values of crude
oil financial instruments
|
-- | -- | (19,257 | ) | (19,257 | ) | ||||||||||
Reclassification adjustment for
loss included in net income
|
||||||||||||||||
related to
crude oil financial instruments
|
-- | -- | 37,898 | 37,898 | ||||||||||||
Changes in fair values of
treasury lock financial instruments
|
-- | -- | (26,802 | ) | (26,802 | ) | ||||||||||
Reclassification adjustment for
loss included in net income
|
||||||||||||||||
related to
treasury lock financial instruments
|
-- | -- | 4,923 | 4,923 | ||||||||||||
Balance,
December 31,
2008
|
$ | (110,309 | ) | $ | 1,747,583 | $ | (45,795 | ) | $ | 1,591,479 |
§
|
changes
to certain provisions that relate to distributions and capital
contributions, including the reduction in the General Partner’s incentive
distribution rights from 50% to 25% (“IDR Reduction Amendment”),
elimination of the General Partner’s requirement to make capital
contributions to us to maintain a 2% capital account, and adjustment of
our minimum quarterly distribution and target distribution levels for
entity-level taxes;
|
§
|
changes
to various voting percentage requirements, in most cases from 66 2/3% of
outstanding Units to a majority of outstanding
Units;
|
§
|
the
percentage of holders of outstanding Units necessary to constitute a
quorum was reduced from 66 2/3% to a majority of the outstanding
Units;
|
§
|
removal
of provisions requiring unitholder approval for specified actions with
respect to our operating companies, TCTM, TE Products and TEPPCO
Midstream;
|
§
|
changes
to supplement and revise certain provisions that relate to conflicts of
interest and fiduciary duties; and
|
§
|
changes
to provide for certain registration rights of the General Partner and its
affiliates (including with respect to the Units issued in respect of the
IDR Reduction Amendment, as described below), for the maintenance of the
separateness of us from any other person or entity and other miscellaneous
matters.
|
§
|
pipeline
transportation, marketing and storage of refined products, liquefied
petroleum gases (“LPGs”) and petrochemicals (“Downstream
Segment”);
|
§
|
gathering,
pipeline transportation, marketing and storage of crude oil, distribution
of lubrication oils and specialty chemicals and fuel transportation
services (“Upstream Segment”);
|
§
|
gathering
of natural gas, fractionation of natural gas liquids (“NGLs”) and pipeline
transportation of NGLs (“Midstream Segment”);
and
|
§
|
marine
transportation of refined products, crude oil, condensate, asphalt, heavy
fuel oil and other heated oil products via tow boats and tank barges
(“Marine Services Segment”).
|
For
Year Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Balance at January
1
|
$ | 125 | $ | 100 | $ | 250 | ||||||
Charges to expense
(1)
|
2,434 | 25 | 64 | |||||||||
Deductions and
other
|
-- | -- | (214 | ) | ||||||||
Balance
at December 31
|
$ | 2,559 | $ | 125 | $ | 100 |
(1)
|
Charges
to expense for the year ended December 31, 2008 include the write-off of
receivables primarily attributable to two customer
bankruptcies.
|
For
Year Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Balance at January
1
|
$ | 4,002 | $ | 1,802 | $ | 2,447 | ||||||
Charges to
expense
|
4,981 | 3,402 | 1,887 | |||||||||
Deductions and
other
|
(2,047 | ) | (1,202 | ) | (2,532 | ) | ||||||
Balance
at December 31
|
$ | 6,936 | $ | 4,002 | $ | 1,802 |
§
|
recognizes
and measures in its financial statements the identifiable assets acquired,
the liabilities assumed, and any noncontrolling interests in the
acquiree.
|
§
|
recognizes
and measures the goodwill acquired in the business combination or a gain
resulting from a bargain purchase. SFAS 141(R) defines a
bargain purchase as a business combination in which the total
acquisition-date fair value of the identifiable net assets acquired
exceeds the fair value of the consideration transferred plus any
noncontrolling interest in the acquiree, and requires the acquirer to
recognize that excess in net income as a gain attributable to the
acquirer.
|
§
|
determines
what information to disclose to enable users of the financial statements
to evaluate the nature and financial effects of the business
combination.
|
For
Year Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Phantom
Unit Plans: (1) (2)
|
||||||||||||
1994
Long-Term Incentive Plan (“1994 LTIP”) (3)
|
$ | -- | $ | -- | $ | 4 | ||||||
1999
Phantom Unit Retention
Plan
|
(128 | ) | 865 | 885 | ||||||||
2000
Long Term Incentive
Plan
|
(265 | ) | 397 | 352 | ||||||||
2005
Phantom Unit
Plan
|
(144 | ) | 976 | 1,152 | ||||||||
EPCO,
Inc. 2006 TPP Long-Term Incentive Plan:
|
||||||||||||
Unit
options
|
158 | 65 | -- | |||||||||
Restricted
units
(4)
|
1,019 | 338 | -- | |||||||||
Unit
appreciation rights (“UARs”) (1) (2)
|
2 | 67 | -- | |||||||||
Phantom
units
(1)
|
8 | 12 | -- | |||||||||
TEPPCO
Unit
L.P.
|
113 | -- | -- | |||||||||
TEPPCO
Unit II
L.P.
|
35 | -- | -- | |||||||||
Compensation
expense allocated under ASA (5)
|
1,683 | 1,062 | 201 | |||||||||
Total
compensation
expense
|
$ | 2,481 | $ | 3,782 | $ | 2,594 |
(1)
|
These
awards are accounted for as liability awards under the provisions of SFAS
123(R). Accruals for plan award payouts are based on the Unit
price.
|
(2)
|
The
decrease in compensation expense for the year ended December 31, 2008, is
primarily due to a decrease in the Unit price at December 31, 2008, as
compared to the Unit price at December 31,
2007.
|
(3)
|
The
1994 LTIP provided certain key employees with an incentive award whereby
the participant was granted an option to purchase Units and performance
units. The 1994 LTIP was terminated effective as of June 19,
2006.
|
(4)
|
As
used in the context of the EPCO, Inc. 2006 TPP Long-Term Incentive Plan,
the term “restricted unit” represents a time-vested unit under SFAS
123(R). Such awards are non-vested until the required service
period expires.
|
(5)
|
Represents
compensation expense under equity awards under other EPCO compensation
plans allocated to us from EPCO under the ASA in connection with shared
service employees working on our behalf (see Note
15).
|
Weighted-
|
||||||||||||
Weighted-
|
Average
|
|||||||||||
Average
|
Remaining
|
|||||||||||
Number
|
Strike
Price
|
Contractual
|
||||||||||
of Units
|
(dollars/Unit)
|
Term
(in years)
|
||||||||||
Unit
Options:
|
||||||||||||
Outstanding at
December 31, 2006
|
-- | $ | -- | |||||||||
Granted (1)
(2)
|
155,000 | 45.35 | ||||||||||
Outstanding
at December 31, 2007
|
155,000 | 45.35 | ||||||||||
Granted
(3)
|
200,000 | 35.86 | ||||||||||
Outstanding
at December 31, 2008
|
355,000 | 40.00 | 4.57 | |||||||||
Options
exercisable at:
|
||||||||||||
December
31,
2008
|
-- | $ | -- | -- |
(1)
|
During
2008, these unit option grants were amended. The expiration
dates of these awards granted on May 22, 2007 were modified from May 22,
2017 to December 31, 2012.
|
(2)
|
The
total grant date fair value of these awards was $0.4 million based upon
the following assumptions: (i) expected life of the option of 7
years, (ii) risk-free interest rate of 4.78%; (iii) expected distribution
yield on Units of 7.92%; and (iv) expected Unit price volatility on Units
of 18.03%.
|
(3)
|
The
total grant date fair value of these awards granted on May 19, 2008 was
$0.3 million based upon the following assumptions: (i) expected
life of the option of 4.7 years; (ii) risk-free interest rate of 3.3%;
(iii) expected distribution yield on Units of 7.9%; (iv) estimated
forfeiture rate of 17%; and (v) expected Unit price volatility on Units of
18.7%.
|
Weighted-
|
||||||||
Average
Grant
|
||||||||
Number
|
Date
Fair Value
|
|||||||
of
Units
|
per
Unit (1)
|
|||||||
Restricted Units at December 31,
2006
|
-- | |||||||
Granted
(2)
|
62,900 | $ | 37.64 | |||||
Forfeited
|
(500 | ) | $ | 37.64 | ||||
Restricted Units at December 31,
2007
|
62,400 | |||||||
Granted
(3)
|
96,900 | $ | 29.54 | |||||
Vested
|
(1,000 | ) | $ | 40.61 | ||||
Forfeited
|
(1,000 | ) | $ | 35.86 | ||||
Restricted Units at December 31,
2008
|
157,300 |
(1)
|
Determined
by dividing the aggregate grant date fair value of awards (including an
allowance for forfeitures) by the number of awards
issued.
|
(2)
|
Aggregate
grant date fair value of restricted unit awards issued during 2007 was
$2.4 million based on a grant date market price of $45.35 per Unit and an
estimated forfeiture rate of 17%.
|
(3)
|
Aggregate
grant date fair value of restricted unit awards issued during 2008 was
$2.8 million based on grant date market prices ranging from $34.63 to
$35.86 per Unit and an estimated forfeiture rate of
17%.
|
§
|
Distributions
of Cash Flow –
Each quarter, 100% of the cash distributions received by TEPPCO
Unit from us in that quarter will be distributed to the Class A
limited partner until the Class A limited partner has received an amount
equal to the Class A preferred return (as defined below), and any
excess distributions received by TEPPCO Unit in that quarter will be
distributed to the Class B limited partners. The
Class A preferred return equals the Class A capital base (as defined
below) multiplied by a floating rate determined by EPCO, in its sole
discretion, that will be no less than 4.5% and no greater than 5.725% per
annum. The Class A limited partner’s capital base equals
the amount of any contributions of cash or cash equivalents made by the
Class A limited partner to TEPPCO Unit, plus any unpaid Class A
preferred return from prior periods, less any distributions of cash or
Units previously made to the Class A limited partner by TEPPCO
Unit.
|
§
|
Liquidating
Distributions –
Upon liquidation of TEPPCO Unit (after satisfaction of any debt or
other obligations of TEPPCO Unit), Units having a fair market value equal
to the Class A capital base will be distributed to EPCO Holdings,
plus any accrued Class A preferred return for the quarter in which
liquidation occurs. Any remaining Units will be distributed to
the Class B limited partners.
|
§
|
Sale
Proceeds – If
TEPPCO Unit sells any Units that it owns, the sale proceeds will be
distributed to the Class A limited partner and the Class B
limited partners in the same manner as liquidating distributions described
above.
|
§
|
Distributions
of Cash Flow –
Each quarter, 100% of the cash distributions received by TEPPCO
Unit II from us in that quarter will be distributed to the Class A
limited partner until the Class A limited partner has received an amount
equal to the Class A preferred return (as defined below), and any
remaining excess distributions received by TEPPCO Unit II in that quarter
will be distributed to the Class B limited partner. The
Class A preferred return equals the Class A capital base (as defined
below) multiplied by a rate of 6.31% per annum. The
Class A limited partner’s capital base equals the amount of any
contributions of cash or cash equivalents made by the Class A limited
partner to TEPPCO Unit II, plus any unpaid Class A preferred return
from prior periods, less any distributions of cash or Units previously
made to the Class A limited partner by TEPPCO Unit II (as described
below).
|
§
|
Liquidating
Distributions –
Upon liquidation of TEPPCO Unit II (after satisfaction of any debt
or other obligations of TEPPCO Unit II), Units having a fair market value
equal to the Class A capital base will be distributed to DFI, plus
any accrued Class A preferred return for the quarter in which
liquidation occurs. Any remaining Units will be distributed to
the Class B limited partner.
|
§
|
Sale
Proceeds – If
TEPPCO Unit II sells any Units that it owns, the sale proceeds will be
distributed to the Class A limited partner and the Class B
limited partner in the same manner as liquidating distributions described
above.
|
For
Year Ended
December
31,
|
||||||||
2007
|
2006
|
|||||||
Interest
cost on projected benefit obligation
|
$ | 14 | $ | 891 | ||||
Expected
return on plan
assets
|
103 | (412 | ) | |||||
Recognized
net actuarial
loss
|
38 | 135 | ||||||
SFAS
88 settlement
charge
|
87 | 3,545 | ||||||
Net pension benefits
costs
|
$ | 242 | $ | 4,159 |
Change
in benefit obligation
|
||||
Benefit
obligation at January 1,
2007
|
$ | 477 | ||
Interest
cost
|
14 | |||
Actuarial
loss
|
60 | |||
Benefits
paid
|
(534 | ) | ||
Impact
of settlement
|
(17 | ) | ||
Benefit
obligation at December 31,
2007
|
$ | -- | ||
Change
in plan assets
|
||||
Fair
value of plan assets at January 1,
2007
|
$ | 1,311 | ||
Actual
return on plan assets
|
(72 | ) | ||
Benefits
paid
|
(534 | ) | ||
Impact
of settlement
|
(46 | ) | ||
Fair
value of plan assets at December 31, 2007
|
$ | 659 | ||
Funded
status
|
$ | 659 | ||
Amount
Recognized in the Balance Sheet:
|
||||
Noncurrent
assets
|
$ | 659 | ||
Net pension asset at December
31, 2007
|
$ | 659 | ||
Amount
Recognized in Other Comprehensive Income:
|
||||
Net
actuarial loss
|
$ | 57 | ||
Amortization
of net actuarial gain
|
(124 | ) | ||
Total recognized in other
comprehensive income
|
$ | (67 | ) |
December
31,
|
||||||||||||||||
2008
|
2007
|
|||||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
Financial
Instruments
|
Value
|
Value
|
Value
|
Value
|
||||||||||||
Financial
assets:
|
||||||||||||||||
Cash
and cash equivalents (1)
|
$ | 28 | $ | 28 | $ | 23 | $ | 23 | ||||||||
Accounts receivable
(1)
|
790,374 | 790,374 | 1,381,871 | 1,381,871 | ||||||||||||
Commodity financial instruments
(2) (3)
|
15,711 | 15,711 | 10,458 | 10,458 | ||||||||||||
Interest rate swaps (3)
(4)
|
-- | -- | 254 | 254 | ||||||||||||
Financial
liabilities:
|
||||||||||||||||
Accounts payable and accrued
liabilities (1)
|
792,469 | 792,469 | 1,413,447 | 1,413,447 | ||||||||||||
Fixed-rate debt (principal
amount) (5)
|
2,000,000 | 1,553,218 | 1,355,000 | 1,370,830 | ||||||||||||
Variable-rate debt
(6)
|
516,654 | 516,654 | 490,000 | 490,000 | ||||||||||||
Commodity financial instruments
(2) (3)
|
15,708 | 15,708 | 29,355 | 29,355 | ||||||||||||
Treasury rate locks (3)
(4)
|
-- | -- | 25,296 | 25,296 |
(1)
|
Cash
and cash equivalents, accounts receivable and accounts payable and accrued
liabilities are carried at amounts which reasonably approximate their fair
values due to their short-term
nature.
|
(2)
|
Represents
commodity financial instrument transactions that either have not settled
or have settled and not been invoiced. Settled and invoiced
transactions are reflected in either accounts receivable or accounts
payable depending on the outcome of the
transaction.
|
(3)
|
The
fair values associated with our interest rate and commodity hedging
portfolios were developed using available market information and
appropriate valuation techniques.
|
(4)
|
Represents
interest rate hedging financial instrument transactions that have not
settled. Settled transactions are reflected in either accounts
receivable or accounts payable depending on the outcome of the
transaction.
|
(5)
|
The
estimated fair values of our fixed rate debt are based on quoted market
prices for such debt or debt of similar terms and maturities (see Note
12).
|
(6)
|
The
carrying amount of our variable-rate debt obligation reasonably
approximates its fair value due to its variable interest
rate.
|
§
|
Level
1 fair values are based on quoted prices, which are available in active
markets for identical assets or liabilities as of the measurement
date. Active markets are defined as those in which transactions
for identical assets or liabilities occur in sufficient frequency so as to
provide pricing information on an ongoing basis (e.g., the NYSE or New
York Mercantile Exchange). Level 1 primarily consists of
financial assets and liabilities such as exchange-traded financial
instruments, publicly-traded equity securities and U.S. government
treasury securities.
|
§
|
Level
2 fair values are based on pricing inputs other than quoted prices in
active markets (as reflected in Level 1 fair values) and are either
directly or indirectly observable as of the measurement
date. Level 2 fair values include instruments that are valued
using financial models or other appropriate valuation
methodologies. Such financial models are primarily
industry-standard models that consider various assumptions, including
quoted forward prices for commodities, time value of money, volatility
factors for stocks, and current market and contractual prices for the
underlying instruments, as well as other relevant economic
measures. Substantially all of these assumptions are observable
in the marketplace throughout the full term of the instrument, can be
derived from observable data, or are validated by inputs other than quoted
prices (e.g., interest rates and yield curves at commonly quoted
intervals). Level 2 includes non-exchange-traded instruments
such as over-the-counter forward contracts, options, and repurchase
agreements.
|
§
|
Level
3 fair values are based on unobservable inputs. Unobservable
inputs are used to measure fair value to the extent that observable inputs
are not available, thereby allowing for situations in which there is
little, if any, market activity for the asset or liability at the
measurement date. Unobservable inputs reflect the reporting
entity’s own ideas about the assumptions that market participants would
use in pricing an asset or liability (including assumptions about
risk). Unobservable inputs are based on the best information
available in the circumstances, which might include the reporting entity’s
internally-developed data. The reporting entity must not ignore
information about market participant assumptions that is reasonably
available without undue cost and effort. Level 3 inputs are
typically used in connection with internally developed valuation
methodologies where management makes its best estimate of an instrument’s
fair value. Level 3 generally includes specialized or unique
financial instruments that are tailored to meet a customer’s specific
needs.
|
Level
2
|
Level
3
|
Total
|
||||||||||
Financial
assets:
|
||||||||||||
Commodity financial
instruments
|
$ | 15,488 | $ | 223 | $ | 15,711 | ||||||
Total
|
$ | 15,488 | $ | 223 | $ | 15,711 | ||||||
Financial
liabilities:
|
||||||||||||
Commodity financial
instruments
|
$ | 15,338 | $ | 370 | $ | 15,708 | ||||||
Total
|
$ | 15,338 | $ | 370 | $ | 15,708 | ||||||
Net
financial liabilities, Level 3
|
$ | (147 | ) |
Net
|
||||
Commodity
|
||||
Financial
|
||||
Instruments
|
||||
Balance,
January 1, 2008
|
$ | (394 | ) | |
Total gains included in net
income (1)
|
247 | |||
Balance,
December 31, 2008
|
$ | (147 | ) |
(1)
|
Total
commodity financial instrument gains, recognized in revenues and included
in net income on our statements of consolidated income, was $0.2 million
for the year ended December 31,
2008.
|
December
31,
|
||||||||
2008
|
2007
|
|||||||
Crude
oil (1)
|
$ | 32,792 | $ | 44,542 | ||||
Refined
products and LPGs (2)
|
406 | 18,616 | ||||||
Lubrication
oils and specialty chemicals
|
11,127 | 9,160 | ||||||
Materials
and supplies
|
8,581 | 7,178 | ||||||
NGLs
|
-- | 803 | ||||||
Total
|
$ | 52,906 | $ | 80,299 |
(1)
|
At
December 31, 2008 and 2007, $30.7 million and $16.5 million, respectively,
of our crude oil inventory was subject to forward sales
contracts. Decrease in crude oil inventory is primarily due to
a decrease in the market price of crude oil from December 31, 2007 to
December 31, 2008.
|
(2)
|
Refined
products and LPGs inventory is managed on a combined
basis. Decrease in refined products and LPGs inventory is
primarily due to sales of product inventory in
2008.
|
Estimated
|
||||||||||||
Useful
Life
|
December
31,
|
|||||||||||
In
Years
|
2008
|
2007
|
||||||||||
Plants
and pipelines (1)
|
5-40 | (4) | $ | 1,919,646 | $ | 1,810,195 | ||||||
Underground
and other storage facilities (2)
|
5-40 | (5) | 296,806 | 254,677 | ||||||||
Transportation
equipment (3)
|
5-10 | 11,303 | 7,780 | |||||||||
Marine
vessels
|
20-30 | 453,041 | -- | |||||||||
Land
and right of way
|
143,823 | 117,628 | ||||||||||
Construction
work in progress
|
294,075 | 185,579 | ||||||||||
Total property, plant and
equipment
|
3,118,694 | 2,375,859 | ||||||||||
Less accumulated
depreciation
|
678,784 | 582,225 | ||||||||||
Property, plant and equipment,
net
|
$ | 2,439,910 | $ | 1,793,634 |
(1)
|
Plants
and pipelines include refined products, LPGs, NGL, petrochemical, crude
oil and natural gas pipelines; terminal loading and unloading facilities;
office furniture and equipment; buildings, laboratory and shop equipment;
and related assets.
|
(2)
|
Underground
and other storage facilities include underground product storage caverns,
storage tanks and other related
assets.
|
(3)
|
Transportation
equipment includes vehicles and similar assets used in our
operations.
|
(4)
|
The
estimated useful lives of major components of this category are as
follows: pipelines, 20-40 years (with some equipment at 5
years); terminal facilities, 10-40 years; office furniture and equipment,
5-10 years; buildings 20-40 years; and laboratory and shop equipment, 5-40
years.
|
(5)
|
The
estimated useful lives of major components of this category are as
follows: underground storage facilities, 20-40 years (with some
components at 5 years) and storage tanks, 20-30
years.
|
For
Year Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Depreciation expense
(1)
|
$ | 96,252 | $ | 81,093 | $ | 78,888 | ||||||
Capitalized interest
(2)
|
19,170 | 11,030 | 10,681 |
(1)
|
Depreciation
expense is a component of depreciation and amortization expense as
presented in our statements of consolidated
income.
|
(2)
|
Capitalized
interest increases the carrying value of the associated asset and reduces
interest expense during the period it is
recorded.
|
ARO
liability balance, December 31, 2006
|
$ | 1,228 | ||
Accretion
expense
|
118 | |||
ARO
liability balance, December 31, 2007
|
1,346 | |||
Accretion
expense
|
128 | |||
ARO
liability balance, December 31, 2008
|
$ | 1,474 |
Ownership
Percentage at
|
||||||||||||
December
31,
|
December
31,
|
|||||||||||
2008
|
2008
|
2007
|
||||||||||
Downstream
Segment:
|
||||||||||||
Centennial
|
50.0 | % | $ | 71,841 | $ | 78,962 | ||||||
Other
|
25.0 | % | 332 | 362 | ||||||||
Upstream
Segment:
|
||||||||||||
Seaway
|
50.0 | % | 190,129 | 188,650 | ||||||||
Texas Offshore Port
System
|
33.3 | % | 35,915 | -- | ||||||||
Midstream
Segment:
|
||||||||||||
Jonah
|
80.64 | % | 957,706 | 879,021 | ||||||||
Total
|
$ | 1,255,923 | $ | 1,146,995 |
For
Year Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Equity
earnings (losses):
|
||||||||||||
Downstream Segment
(1)
|
$ | (14,603 | ) | $ | (12,396 | ) | $ | (8,018 | ) | |||
Upstream
Segment
|
11,693 | 2,602 | 11,905 | |||||||||
Midstream
Segment
|
90,004 | 83,060 | 35,052 | |||||||||
Intersegment
eliminations
|
(4,401 | ) | (4,511 | ) | (2,178 | ) | ||||||
Total
equity earnings
|
$ | 82,693 | $ | 68,755 | $ | 36,761 |
(1)
|
On
March 1, 2007, we sold our ownership interest in Mont Belvieu Storage
Partners, L.P. (“MB Storage”) to Louis Dreyfus Energy Services L.P.
(“Louis Dreyfus”) (see Note 10).
|
For
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||||
2008
|
2007
|
2006
|
||||||||||||||||||||||||||||||||||
Revenues
|
Operating
Income
|
Net
Income
(Loss)
|
Revenues
|
Operating
Income
|
Net
Income
|
Revenues
|
Operating
Income
|
Net
Income
(Loss)
|
||||||||||||||||||||||||||||
Downstream
Segment (1)
|
$ | 39,109 | $ | 6,335 | $ | (4,428 | ) | $ | 56,816 | $ | 13,156 | $ | 2,365 | $ | 73,124 | $ | 10,374 | $ | (583 | ) | ||||||||||||||||
Upstream
Segment
|
93,878 | 45,783 | 45,969 | 67,337 | 21,266 | 21,589 | 87,284 | 34,206 | 34,608 | |||||||||||||||||||||||||||
Midstream
Segment (2)
|
232,825 | 111,070 | 111,791 | 204,146 | 92,212 | 93,120 | 79,618 | 34,646 | 34,743 |
(1)
|
On
March 1, 2007, we sold our ownership interest in MB Storage to Louis
Dreyfus (see Note 10).
|
(2)
|
Effective
August 1, 2006, with the formation of a joint venture with Enterprise
Products Partners, Jonah was deconsolidated and has been subsequently
accounted for as an equity
investment.
|
December
31, 2008
|
||||||||||||||||||||||||
Current
Assets
|
Noncurrent
Assets
|
Current
Liabilities
|
Long-term
Debt
|
Noncurrent
Liabilities
|
Equity
|
|||||||||||||||||||
Downstream
Segment
|
$ | 12,870 | $ | 239,414 | $ | 20,673 | $ | 120,000 | $ | 358 | $ | 111,253 | ||||||||||||
Upstream
Segment (1)
|
52,423 | 338,616 | 11,155 | -- | 22 | 379,862 | ||||||||||||||||||
Midstream
Segment
|
53,810 | 1,163,257 | 28,224 | -- | 378 | 1,188,465 |
December
31, 2007
|
||||||||||||||||||||||||
Current
Assets
|
Noncurrent
Assets
|
Current
Liabilities
|
Long-term
Debt
|
Noncurrent
Liabilities
|
Equity
|
|||||||||||||||||||
Downstream
Segment
|
$ | 20,864 | $ | 248,896 | $ | 23,814 | $ | 129,900 | $ | 365 | $ | 115,681 | ||||||||||||
Upstream
Segment
|
16,429 | 251,635 | 6,457 | -- | 38 | 261,569 | ||||||||||||||||||
Midstream
Segment
|
55,396 | 1,065,304 | 22,545 | -- | 264 | 1,097,891 |
(1)
|
Includes
our ownership interest in Texas Offshore Port System as of December 31,
2008.
|
Cash
payment for Cenac acquisition
|
$ | 256,593 | ||
Fair
value of our 4,854,899 Units
|
186,558 | |||
Other
cash acquisition costs paid to third-parties
|
1,589 | |||
Total
consideration
|
$ | 444,740 |
Property,
plant and equipment
|
$ | 360,146 | ||
Intangible
assets
|
63,500 | |||
Other
assets
|
2,726 | |||
Total
assets acquired
|
426,372 |
Long-term
debt
|
(63,157 | ) | ||
Total
liabilities assumed
|
(63,157 | ) | ||
Total
assets acquired less liabilities assumed
|
363,215 | |||
Total
consideration given
|
444,740 | |||
Goodwill
|
$ | 81,525 |
For
the Year Ended
December
31,
|
||||||||
2008
|
2007
|
|||||||
Pro
forma earnings data:
|
||||||||
Revenues
|
$ | 13,544,440 | $ | 9,762,597 | ||||
Costs
and expenses
|
13,288,363 | 9,502,334 | ||||||
Operating
income
|
256,077 | 260,263 | ||||||
Net
income
|
195,626 | 282,902 | ||||||
Basic and diluted earnings per
Unit:
|
||||||||
Units
outstanding, as reported
|
97,530 | 89,850 | ||||||
Units
outstanding, pro forma
|
100,000 | 94,690 | ||||||
Basic
and diluted earnings per Unit, as reported
|
$ | 1.65 | $ | 2.60 | ||||
Basic
and diluted earnings per Unit, pro forma
|
$ | 1.63 | $ | 2.50 |
Property,
plant and equipment
|
$ | 71,216 | ||
Intangible
assets
|
6,500 | |||
Other
assets
|
981 | |||
Total
assets acquired
|
78,697 | |||
Total
consideration given
|
87,584 | |||
Goodwill
|
$ | 8,887 |
For
Year Ended
|
||||
December
31,
|
||||
2006
|
||||
Operating
revenues:
|
||||
Sales
of petroleum products
|
$ | 3,828 | ||
Other
|
932 | |||
Total
operating revenues
|
4,760 | |||
Costs
and expenses:
|
||||
Purchases
of petroleum products
|
3,000 | |||
Operating
expense
|
182 | |||
Depreciation
and amortization
|
51 | |||
Taxes
– other than income taxes
|
30 | |||
Total
costs and expenses
|
3,263 | |||
Income
from discontinued operations
|
$ | 1,497 |
For
Year Ended
|
||||
December
31,
|
||||
2006
|
||||
Cash
flows from discontinued operations:
|
||||
Net
income
|
$ | 19,369 | ||
Depreciation
and amortization
|
51 | |||
Gain
on sale of Pioneer plant
|
(17,872 | ) | ||
Increase
in inventories
|
(27 | ) | ||
Net
operating cash provided by discontinued operations
|
$ | 1,521 |
December
31, 2008
|
December
31, 2007
|
|||||||||||||||
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
|||||||||||||
Intangible
assets:
|
||||||||||||||||
Downstream
Segment:
|
||||||||||||||||
Transportation
agreements
|
$ | 1,000 | $ | (408 | ) | $ | 1,000 | $ | (358 | ) | ||||||
Other
|
5,621 | (764 | ) | 4,927 | (325 | ) | ||||||||||
Subtotal
|
6,621 | (1,172 | ) | 5,927 | (683 | ) | ||||||||||
Upstream Segment:
|
||||||||||||||||
Transportation
agreements
|
888 | (395 | ) | 888 | (335 | ) | ||||||||||
Other
|
10,580 | (3,009 | ) | 10,005 | (3,046 | ) | ||||||||||
Subtotal
|
11,468 | (3,404 | ) | 10,893 | (3,381 | ) | ||||||||||
Midstream Segment:
|
||||||||||||||||
Gathering
agreements
|
239,649 | (125,811 | ) | 239,649 | (107,356 | ) | ||||||||||
Fractionation
agreements
|
38,000 | (20,425 | ) | 38,000 | (18,525 | ) | ||||||||||
Other
|
306 | (164 | ) | 306 | (149 | ) | ||||||||||
Subtotal
|
277,955 | (146,400 | ) | 277,955 | (126,030 | ) | ||||||||||
Marine Services
Segment:
|
||||||||||||||||
Customer relationship
intangibles
|
51,320 | (3,121 | ) | -- | -- | |||||||||||
Other
|
18,680 | (4,294 | ) | -- | -- | |||||||||||
Subtotal
|
70,000 | (7,415 | ) | -- | -- | |||||||||||
Total
intangible assets
|
366,044 | (158,391 | ) | 294,775 | (130,094 | ) | ||||||||||
Excess
investments: (1)
|
||||||||||||||||
Downstream Segment
(2)
|
33,390 | (26,128 | ) | 33,390 | (21,861 | ) | ||||||||||
Upstream Segment
(3)
|
26,908 | (5,820 | ) | 26,908 | (5,135 | ) | ||||||||||
Midstream Segment
(4)
|
12,580 | (241 | ) | 6,988 | (95 | ) | ||||||||||
Subtotal
|
72,878 | (32,189 | ) | 67,286 | (27,091 | ) | ||||||||||
Total
intangible assets, including
excess
investments
|
$ | 438,922 | $ | (190,580 | ) | $ | 362,061 | $ | (157,185 | ) |
(1)
|
Excess
investments are included in “Equity Investments” in our consolidated
balance sheets.
|
(2)
|
Relates
to our investment in Centennial.
|
(3)
|
Relates
to our investment in Seaway.
|
(4)
|
Relates
to our investment in Jonah.
|
For
Year Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Intangible
assets:
|
||||||||||||
Downstream Segment
|
$ | 489 | $ | 628 | $ | 59 | ||||||
Upstream Segment
|
698 | 652 | 716 | |||||||||
Midstream Segment
|
20,370 | 22,734 | 28,044 | |||||||||
Marine Services
Segment
|
7,415 | -- | -- | |||||||||
Subtotal
|
28,972 | 24,014 | 28,819 | |||||||||
Excess
investments: (1)
|
||||||||||||
Downstream Segment
|
4,267 | 5,282 | 3,632 | |||||||||
Upstream Segment
|
685 | 685 | 686 | |||||||||
Midstream Segment
|
146 | 95 | -- | |||||||||
Subtotal
|
5,098 | 6,062 | 4,318 | |||||||||
Total
amortization expense
|
$ | 34,070 | $ | 30,076 | $ | 33,137 |
(1)
|
Amortization
of excess investments is included in equity
earnings.
|
Intangible
Assets
|
Excess
Investments
|
|||||||
2009
|
$ | 26,417 | $ | 5,771 | ||||
2010
|
24,558 | 1,141 | ||||||
2011
|
22,672 | 1,141 | ||||||
2012
|
17,200 | 1,141 | ||||||
2013
|
15,543 | 1,141 |
December
31,
|
||||||||
2008
|
2007
|
|||||||
Downstream
Segment
|
$ | 1,339 | $ | 1,339 | ||||
Upstream
Segment
|
14,860 | 14,167 | ||||||
Marine
Services Segment
|
90,412 | -- | ||||||
Total
goodwill
|
$ | 106,611 | $ | 15,506 |
December
31,
|
||||||||
2008
|
2007
|
|||||||
Short-term
senior debt obligations:
|
||||||||
6.45%
TE Products Senior Notes, due January 2008 (1)
|
$ | -- | $ | 180,000 | ||||
7.51%
TE Products Senior Notes, due January 2028 (1)
|
-- | 175,000 | ||||||
Total
principal amount of short-term senior debt obligations
|
-- | 355,000 | ||||||
Adjustment to carrying value
associated with hedges of
|
||||||||
Fair value and
unamortized discounts (2)
|
-- | (1,024 | ) | |||||
Total
short-term senior debt obligations
|
$ | -- | $ | 353,976 | ||||
Long-term:
|
||||||||
Senior debt obligations:
(3)
|
||||||||
Revolving
Credit Facility, due December 2012
|
$ | 516,654 | $ | 490,000 | ||||
7.625%
Senior Notes, due February
2012
|
500,000 | 500,000 | ||||||
6.125%
Senior Notes, due February 2013
|
200,000 | 200,000 | ||||||
5.90%
Senior Notes, due April 2013
|
250,000 | -- | ||||||
6.65%
Senior Notes, due April 2018
|
350,000 | -- | ||||||
7.55%
Senior Notes, due April 2038
|
400,000 | -- | ||||||
Total principal amount of
long-term senior debt obligations
|
2,216,654 | 1,190,000 | ||||||
7.000%
Junior Subordinated Notes, due June 2067 (3)
|
300,000 | 300,000 | ||||||
Total principal
amount of long-term debt obligations
|
2,516,654 | 1,490,000 | ||||||
Adjustment to carrying value
associated with hedges of fair value and
unamortized
discounts (4)
|
12,865 | 21,083 | ||||||
Total
long-term debt obligations
|
2,529,519 | 1,511,083 | ||||||
Total
Debt Instruments (4)
|
$ | 2,529,519 | $ | 1,865,059 | ||||
Standby
letters of credit outstanding (5)
|
$ | -- | $ | 23,494 |
(2)
|
Includes
$1.0 million related to fair value hedges and $2 thousand in unamortized
discount. In January 2008, with the redemption of the 7.51% TE
Products Senior Notes, the remaining unamortized loss was recognized in
the statement of consolidated
income.
|
(3)
|
TE
Products, TCTM, TEPPCO Midstream and Val Verde (collectively, the
“Subsidiary Guarantors”) have issued full, unconditional, joint and
several guarantees of our senior notes, junior subordinated notes and
revolving credit facility.
|
(4)
|
From
time to time we enter into interest rate swap agreements to hedge our
exposure to changes in the fair value on a portion of the debt obligations
presented above (see Note 6). At December 31, 2008 and 2007,
amount includes $5.2 million and $2.1 million of unamortized discounts,
respectively, and $18.1 million and $23.2 million related to fair value
hedges, respectively.
|
(5)
|
Letters
of credit were issued in connection with crude oil purchased during
2007.
|
Fair
Value
|
||||||||||||
December
31,
|
||||||||||||
Face
Value
|
2008
|
2007
|
||||||||||
6.45%
TE Products Senior Notes, due January 2008 (1)
|
$ | 180,000 | $ | -- | $ | 179,982 | ||||||
7.625%
Senior Notes, due February 2012
|
500,000 | 468,083 | 536,765 | |||||||||
6.125%
Senior Notes, due February 2013
|
200,000 | 174,201 | 202,027 | |||||||||
7.51%
TE Products Senior Notes, due January 2028 (1)
|
175,000 | -- | 181,571 | |||||||||
5.90%
Senior Notes, due April 2013
|
250,000 | 214,506 | -- | |||||||||
6.65%
Senior Notes, due April 2018
|
350,000 | 280,698 | -- | |||||||||
7.55%
Senior Notes, due April 2038
|
400,000 | 295,190 | -- | |||||||||
7.000%
Junior Subordinated Notes, due June 2067
|
300,000 | 120,540 | 270,485 |
(1)
|
In
October 2007, TE Products redeemed $35.0 million principal amount of the
7.51% TE Products Senior Notes for $36.1 million and accrued interest, and
on January 28, 2008, TE Products redeemed the remaining $175.0 million of
7.51% TE Products Senior Notes at a redemption price of 103.755% of the
principal amount plus accrued and unpaid interest at the date of
redemption. Additionally, the $180.0 million principal amount
of 6.45% TE Products Senior Notes matured and was repaid on January 15,
2008. We funded the retirement of both series with borrowings
under our term credit agreement.
|
Scheduled
Maturities of Debt
|
||||
2009
|
$ | 9,900 | ||
2010
|
9,100 | |||
2011
|
9,000 | |||
2012
|
8,900 | |||
2013
|
8,600 | |||
After
2013
|
84,400 | |||
Total
scheduled maturities of debt
|
$ | 129,900 |
General
|
||||||||
Unitholders
|
Partner
|
|||||||
Quarterly
Cash Distribution per Unit:
|
||||||||
Up to Minimum Quarterly
Distribution ($0.275 per Unit)
|
98 | % | 2 | % | ||||
First Target – $0.276 per Unit up
to $0.325 per
Unit
|
85 | % | 15 | % | ||||
Over First Target – Cash
distributions greater than $0.325 per Unit
|
75 | % | 25 | % |
For
Year Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Limited
Partner Units
|
$ | 273,071 | $ | 246,152 | $ | 196,665 | ||||||
General
Partner Ownership Interest
|
5,573 | 5,024 | 4,014 | |||||||||
General
Partner Incentive
|
49,353 | 43,274 | 77,887 | |||||||||
Total Cash Distributions
Paid
|
$ | 327,997 | $ | 294,450 | $ | 278,566 | ||||||
Total
Cash Distributions Paid Per Unit
|
$ | 2.84 | $ | 2.74 | $ | 2.70 |
Cash
Distribution History
|
||||||
Distribution
per
Unit
|
Record
Date
|
Payment
Date
|
||||
2007
|
||||||
1st
Quarter
|
$ | 0.6850 |
Apr.
28, 2007
|
May
7, 2007
|
||
2nd
Quarter
|
0.6850 |
Jul.
31, 2007
|
Aug.
7, 2007
|
|||
3rd
Quarter
|
0.6950 |
Oct.
31, 2007
|
Nov.
7, 2007
|
|||
4th
Quarter
|
0.6950 |
Jan.
31, 2008
|
Feb.
7, 2008
|
|||
2008
|
||||||
1st
Quarter
|
$ | 0.7100 |
Apr. 30, 2008
|
May 7, 2008
|
||
2nd
Quarter
|
0.7100 |
Jul. 31, 2008
|
Aug. 7, 2008
|
|||
3rd
Quarter
|
0.7250 |
Oct. 31, 2008
|
Nov. 6, 2008
|
|||
4th
Quarter (1)
|
0.7250 |
Jan. 30, 2009
|
Feb. 6,
2009
|
(1)
|
The
fourth quarter 2008 cash distribution totaled approximately $91.4
million.
|
Limited
|
||||||||||||||||
Partner
|
Restricted
|
Treasury
|
||||||||||||||
Units
|
Units
|
Units
|
Total
|
|||||||||||||
Balance,
December 31, 2005
|
69,963,554 | -- | -- | 69,963,554 | ||||||||||||
Units issued in connection with
underwritten public
offering
|
5,750,000 | -- | -- | 5,750,000 | ||||||||||||
Issuance of Units to General
Partner
|
14,091,275 | -- | -- | 14,091,275 | ||||||||||||
Balance,
December 31, 2006
|
89,804,829 | -- | -- | 89,804,829 | ||||||||||||
Issuance of restricted units
under 2006 LTIP
|
-- | 62,900 | -- | 62,900 | ||||||||||||
Forfeiture of restricted
units
|
-- | (500 | ) | -- | (500 | ) | ||||||||||
Units issued in connection with
Unit Purchase Plan
|
4,507 | -- | -- | 4,507 | ||||||||||||
Units issued in connection with
DRIP
|
39,796 | -- | -- | 39,796 | ||||||||||||
Balance,
December 31, 2007
|
89,849,132 | 62,400 | -- | 89,911,532 | ||||||||||||
Issuance of Units in connection
with Cenac acquisition
on
February 1, 2008
|
4,854,899 | -- | -- | 4,854,899 | ||||||||||||
Units issued in connection with
DRIP
|
378,437 | ---- | ---- | 378,437 | ||||||||||||
Units issued in connection with
Unit Purchase Plan
|
23,097 | -- | -- | 23,097 | ||||||||||||
Issuance of restricted units
under 2006 LTIP
|
-- | 96,900 | -- | 96,900 | ||||||||||||
Forfeiture of restricted
units
|
-- | (1,000 | ) | -- | (1,000 | ) | ||||||||||
Conversion of restricted units
to Units
|
1,000 | (1,000 | ) | -- | -- | |||||||||||
Acquisition of treasury
units
|
(384 | ) | -- | 384 | -- | |||||||||||
Cancellation of treasury
units
|
-- | -- | (384 | ) | (384 | ) | ||||||||||
Issuance of unregistered Units
to TEPPCO Unit
|
241,380 | -- | -- | 241,380 | ||||||||||||
Units issued in connection with
underwritten public
offering
|
9,200,000 | -- | -- | 9,200,000 | ||||||||||||
Balance, December 31,
2008
|
104,547,561 | 157,300 | -- | 104,704,861 |
§
|
Our
Downstream Segment, which is engaged in the pipeline transportation,
marketing and storage of refined products, LPGs and
petrochemicals;
|
§
|
Our
Upstream Segment, which is engaged in the gathering, pipeline
transportation, marketing and storage of crude oil, distribution of
lubrication oils and specialty chemicals and fuel transportation
services;
|
§
|
Our
Midstream Segment, which is engaged in the gathering of natural gas,
fractionation of NGLs and pipeline transportation of NGLs;
and
|
§
|
Our
Marine Services Segment, which is engaged in the marine transportation of
refined products, crude oil, condensate, asphalt, heavy fuel oil and other
heated oil products via tow boats and tank
barges.
|
For Year
Ended December
31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Total
operating revenues
|
$ | 13,532,889 | $ | 9,658,060 | $ | 9,607,485 | ||||||
Less: Total
costs and expenses
|
13,279,469 | 9,408,505 | 9,377,706 | |||||||||
Operating
income
|
253,420 | 249,555 | 229,779 | |||||||||
Add: Gain
on sale of ownership interest in MB Storage
|
-- | 59,628 | -- | |||||||||
Equity earnings
|
82,693 | 68,755 | 36,761 | |||||||||
Interest income
|
1,091 | 1,676 | 2,077 | |||||||||
Other income
|
953 | 1,346 | 888 | |||||||||
Earnings
before interest expense, provision for income
taxes
and discontinued
operations
|
$ | 338,157 | $ | 380,960 | $ | 269,505 |
For
Year Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Earnings
before interest expense, provision for income
taxes
and discontinued
operations
|
$ | 338,157 | $ | 380,960 | $ | 269,505 | ||||||
Interest
expense –
net
|
(139,988 | ) | (101,223 | ) | (86,171 | ) | ||||||
Income
before provision for income taxes
|
198,169 | 279,737 | 183,334 | |||||||||
Provision
for income
taxes
|
4,617 | 557 | 652 | |||||||||
Income
from continuing
operations
|
193,552 | 279,180 | 182,682 | |||||||||
Discontinued
operations
|
-- | -- | 19,369 | |||||||||
Net
income
|
$ | 193,552 | $ | 279,180 | $ | 202,051 |
Downstream
Segment
|
Upstream
Segment
|
Midstream
Segment
|
Marine
Services
Segment
|
Partnership
and Other
|
Consolidated
|
|||||||||||||||||||
Revenues
from third parties:
|
||||||||||||||||||||||||
Year
ended December 31, 2008
|
$ | 350,896 | $ | 12,872,544 | $ | 108,531 | $ | 164,274 | $ | -- | $ | 13,496,245 | ||||||||||||
Year
ended December 31, 2007
|
355,495 | 9,172,707 | 109,082 | -- | -- | 9,637,284 | ||||||||||||||||||
Year
ended December 31, 2006
|
298,866 | 9,108,283 | 181,486 | -- | -- | 9,588,635 | ||||||||||||||||||
Revenues
from related parties:
|
||||||||||||||||||||||||
Year
ended December 31, 2008
|
$ | 22,068 | $ | 882 | $ | 13,886 | $ | -- | $ | (192 | ) | $ | 36,644 | |||||||||||
Year
ended December 31, 2007
|
7,196 | 896 | 13,153 | -- | (469 | ) | 20,776 | |||||||||||||||||
Year
ended December 31, 2006
|
5,435 | 598 | 13,137 | -- | (320 | ) | 18,850 | |||||||||||||||||
Intersegment
and intrasegment revenues:
|
||||||||||||||||||||||||
Year
ended December 31, 2008
|
$ | -- | $ | -- | $ | -- | $ | -- | $ | -- | $ | -- | ||||||||||||
Year
ended December 31, 2007
|
-- | 80 | -- | -- | (80 | ) | -- | |||||||||||||||||
Year
ended December 31, 2006
|
-- | 748 | 6,646 | -- | (7,394 | ) | -- | |||||||||||||||||
Total
revenues:
|
||||||||||||||||||||||||
Year
ended December 31, 2008
|
$ | 372,964 | $ | 12,873,426 | $ | 122,417 | $ | 164,274 | $ | (192 | ) | $ | 13,532,889 | |||||||||||
Year
ended December 31, 2007
|
362,691 | 9,173,683 | 122,235 | -- | (549 | ) | 9,658,060 | |||||||||||||||||
Year
ended December 31, 2006
|
304,301 | 9,109,629 | 201,269 | -- | (7,714 | ) | 9,607,485 | |||||||||||||||||
Depreciation
and amortization:
|
||||||||||||||||||||||||
Year
ended December 31, 2008
|
$ | 43,063 | $ | 20,928 | $ | 39,323 | $ | 23,015 | $ | -- | $ | 126,329 | ||||||||||||
Year
ended December 31, 2007
|
46,141 | 18,257 | 40,827 | -- | -- | 105,225 | ||||||||||||||||||
Year
ended December 31, 2006
|
41,405 | 14,400 | 52,447 | -- | -- | 108,252 | ||||||||||||||||||
Operating
income:
|
||||||||||||||||||||||||
Year
ended December 31, 2008
|
$ | 91,270 | $ | 95,683 | $ | 27,559 | $ | 34,507 | $ | 4,401 | $ | 253,420 | ||||||||||||
Year
ended December 31, 2007
|
135,055 | 84,222 | 25,767 | -- | 4,511 | 249,555 | ||||||||||||||||||
Year
ended December 31, 2006
|
91,262 | 70,840 | 65,499 | -- | 2,178 | 229,779 | ||||||||||||||||||
Equity
earnings (losses):
|
||||||||||||||||||||||||
Year
ended December 31, 2008
|
$ | (14,603 | ) | $ | 11,693 | $ | 90,004 | $ | -- | $ | (4,401 | ) | $ | 82,693 | ||||||||||
Year
ended December 31, 2007
|
(12,396 | ) | 2,602 | 83,060 | -- | (4,511 | ) | 68,755 | ||||||||||||||||
Year
ended December 31, 2006
|
(8,018 | ) | 11,905 | 35,052 | -- | (2,178 | ) | 36,761 |
Downstream
Segment
|
Upstream
Segment
|
Midstream
Segment
|
Marine
Services
Segment
|
Partnership
and
Other
|
Consolidated
|
|||||||||||||||||||
Earnings
before interest expense, provision for income taxes and discontinued
operations:
|
||||||||||||||||||||||||
Year
ended December 31, 2008
|
$ | 77,526 | $ | 108,164 | $ | 117,947 | $ | 34,520 | $ | -- | $ | 338,157 | ||||||||||||
Year
ended December 31, 2007
|
184,251 | 87,246 | 109,463 | -- | -- | 380,960 | ||||||||||||||||||
Year
ended December 31, 2006
|
84,746 | 83,540 | 101,219 | -- | -- | 269,505 | ||||||||||||||||||
Capital
expenditures:
|
||||||||||||||||||||||||
At
December 31, 2008
|
$ | 209,753 | $ | 33,429 | $ | 5,215 | $ | 43,557 | $ | 8,549 | $ | 300,503 | ||||||||||||
At
December 31, 2007
|
165,353 | 54,583 | 7,412 | -- | 924 | 228,272 | ||||||||||||||||||
At
December 31, 2006
|
75,344 | 48,351 | 42,929 | -- | 3,422 | 170,046 | ||||||||||||||||||
Segment
assets:
|
||||||||||||||||||||||||
At
December 31, 2008
|
$ | 1,320,870 | $ | 1,586,345 | $ | 1,529,125 | $ | 653,262 | $ | (39,782 | ) | $ | 5,049,820 | |||||||||||
At
December 31, 2007
|
1,221,316 | 2,084,830 | 1,512,621 | -- | (68,710 | ) | 4,750,057 | |||||||||||||||||
Investments
in unconsolidated affiliates:
|
||||||||||||||||||||||||
At
December 31, 2008
|
$ | 63,222 | $ | 226,044 | $ | 957,706 | $ | -- | $ | 8,951 | $ | 1,255,923 | ||||||||||||
At
December 31, 2007
|
79,324 | 188,650 | 879,021 | -- | -- | 1,146,995 | ||||||||||||||||||
Intangible
assets:
|
||||||||||||||||||||||||
At
December 31, 2008
|
$ | 5,449 | $ | 8,064 | $ | 131,555 | $ | 62,585 | $ | -- | $ | 207,653 | ||||||||||||
At
December 31, 2007
|
5,244 | 7,512 | 151,925 | -- | -- | 164,681 | ||||||||||||||||||
Goodwill:
|
||||||||||||||||||||||||
At
December 31, 2008
|
$ | 1,339 | $ | 14,860 | $ | -- | $ | 90,412 | $ | -- | $ | 106,611 | ||||||||||||
At
December 31, 2007
|
1,339 | 14,167 | -- | -- | -- | 15,506 |
For
Year Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Revenues
from EPCO and affiliates:
|
||||||||||||
Sales
of petroleum products (1)
|
$ | 715 | $ | 320 | $ | 3,165 | ||||||
Transportation
– NGLs
(2)
|
13,785 | 13,153 | 10,225 | |||||||||
Transportation
– LPGs
(3)
|
8,735 | 5,191 | 3,648 | |||||||||
Other
operating revenues
(4)
|
13,318 | 1,761 | 1,517 | |||||||||
Revenues
from unconsolidated affiliates:
|
||||||||||||
Other
operating revenues
(5)
|
91 | 351 | 295 | |||||||||
Related
party
revenues
|
$ | 36,644 | $ | 20,776 | $ | 18,850 | ||||||
Costs
and Expenses from EPCO and affiliates:
|
||||||||||||
Purchases
of petroleum products
(6)
|
$ | 132,624 | $ | 61,596 | $ | 52,982 | ||||||
Operating
expense
(7)
|
104,878 | 96,947 | 103,924 | |||||||||
General
and administrative
(8)
|
31,601 | 25,500 | 21,709 | |||||||||
Costs
and Expenses from unconsolidated affiliates:
|
||||||||||||
Purchases
of petroleum products
(9)
|
7,143 | 5,493 | 2,987 | |||||||||
Operating
expense
(10)
|
7,926 | 8,736 | 5,094 | |||||||||
Costs
and Expenses from Cenac and affiliates:
|
||||||||||||
Operating
expense
(11)
|
45,382 | -- | -- | |||||||||
General
and administrative
(12)
|
2,912 | -- | -- | |||||||||
Related
party costs and
expenses
|
$ | 332,466 | $ | 198,272 | $ | 186,696 |
(1)
|
Includes
sales from Lubrication Services, LLC (“LSI”) to Enterprise Products
Partners and certain of its
subsidiaries.
|
(2)
|
Includes
revenues from NGL transportation on the Chaparral and Panola NGL pipelines
from Enterprise Products Partners and certain of its
subsidiaries.
|
(3)
|
Includes
revenues from LPG transportation on the TE Products pipeline from
Enterprise Products Partners and certain of its
subsidiaries.
|
(4)
|
Includes
sales of product inventory from TE Products to Enterprise Products
Partners and other operating revenues on the TE Products pipeline and the
Val Verde system from Enterprise Products Partners and certain of its
subsidiaries.
|
(5)
|
Includes
sales of petroleum products, management fees and rental revenues from
Centennial, Jonah and Seaway.
|
(6)
|
Includes
TCO purchases of petroleum products of $113.9 million, $45.1 million and
$41.6 million from Enterprise Products Partners and certain of its
subsidiaries for the years ended December 31, 2008, 2007 and 2006,
respectively, and expenses related to TCO’s and LSI’s use of an affiliate
of EPCO as a transporter.
|
(7)
|
Includes
operating payroll, payroll related expenses and other operating expenses,
including reimbursements related to employee benefits and employee benefit
plans, incurred by EPCO in managing us and our subsidiaries in accordance
with the ASA. Also includes insurance expense for the years
ended December 31, 2008, 2007 and 2006, of $10.4 million, $13.6 million
and $15.8 million, respectively, related to premiums paid by EPCO on our
behalf. The majority of our insurance coverage, including property,
liability, business interruption, auto and directors’ and officers’
liability insurance, is obtained through
EPCO.
|
(8)
|
Includes
administrative payroll, payroll related expenses and other administrative
expenses, including reimbursements related to employee benefits and
employee benefit plans, incurred by EPCO in managing and operating us and
our subsidiaries in accordance with the
ASA.
|
(9)
|
Includes
TCO purchases of petroleum products from Jonah and Seaway and pipeline
transportation expense from Seaway.
|
(10)
|
Includes
rental expense and other operating
expense.
|
(11)
|
Includes
reimbursement for operating payroll, payroll related expenses, certain
repairs and maintenance expenses and insurance premiums on our equipment
under the transitional operating agreement with Cenac, pursuant to which,
our fleet of acquired tow boats and tank barges (including those acquired
from Horizon) are operated by employees of Cenac for a period of up to two
years following the
acquisition.
|
(12)
|
Includes
reimbursement for administrative payroll and payroll related expenses, as
well as payment of a $42 thousand monthly service fee and a 5% overhead
fee charged on direct costs incurred by Cenac to operate the marine assets
in accordance with the transitional operating
agreement.
|
December
31,
|
||||||||
2008
|
2007
|
|||||||
Accounts
receivable, related parties (1)
|
$ | 15,758 | $ | 6,525 | ||||
Accounts
payable, related parties (2)
|
17,219 | 38,980 |
(1)
|
Relates
to sales and transportation services provided to Enterprise Products
Partners and certain of its subsidiaries and EPCO and certain of its
affiliates and direct payroll, payroll related costs and other operational
expenses charged to unconsolidated
affiliates.
|
(2)
|
Relates
to direct payroll, payroll related costs and other operational related
charges from Enterprise Products Partners and certain of its subsidiaries
and EPCO and certain of its affiliates, transportation and other services
provided by unconsolidated affiliates and advances from Seaway for
operating expenses and $3.4 million related to operational related charges
from Cenac.
|
§
|
EPCO
and its consolidated private company
subsidiaries;
|
§
|
Texas
Eastern Products Pipeline Company, LLC, our General
Partner;
|
§
|
Enterprise
GP Holdings, which owns and controls our General
Partner;
|
§
|
Enterprise
Products Partners, which is controlled by affiliates of EPCO, including
Enterprise GP Holdings;
|
§
|
Duncan
Energy Partners, which is controlled by affiliates of
EPCO;
|
§
|
Enterprise
Gas Processing LLC, which is controlled by affiliates of EPCO and is our
joint venture partner in Jonah;
|
§
|
Enterprise
Offshore Port System, LLC, which is controlled by affiliates of EPCO and
is one of our joint venture partners in Texas Offshore Port System;
and
|
§
|
the
Employee Partnerships, which are controlled by EPCO (see Note
4).
|
§
|
EPCO
provides administrative, management and operating services as may be
necessary to manage and operate our business, properties and assets (in
accordance with prudent industry practices). EPCO will employ
or otherwise retain the services of such personnel as may be necessary to
provide such services.
|
§
|
We
are required to reimburse EPCO for its services in an amount equal to the
sum of all costs and expenses (direct and indirect) incurred by EPCO which
are directly or indirectly related to our business or activities
(including EPCO expenses reasonably allocated to us). In
addition, we have agreed to pay all sales, use, excise, value added or
similar taxes, if any, that may be applicable from time to time in respect
of the services provided to us by
EPCO.
|
§
|
EPCO
allows us to participate as named insureds in its overall insurance
program with the associated costs being allocated to
us.
|
For
Year Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Income
from continuing
operations
|
$ | 193,552 | $ | 279,180 | $ | 182,682 | ||||||
Discontinued
operations
|
-- | -- | 19,369 | |||||||||
Net
income
|
193,552 | 279,180 | 202,051 | |||||||||
General
Partner’s interest in net
income
|
16.83 | % | 16.47 | % | 28.57 | % | ||||||
Earnings allocated to General
Partner:
|
||||||||||||
Income
from continuing
operations
|
$ | 32,583 | $ | 45,987 | $ | 52,199 | ||||||
Discontinued
operations
|
-- | -- | 5,534 | |||||||||
Net
income
allocated
|
32,583 | 45,987 | 57,733 | |||||||||
BASIC
EARNINGS PER UNIT:
|
||||||||||||
Numerator:
|
||||||||||||
Income
from continuing
operations
|
$ | 160,969 | $ | 233,193 | $ | 130,483 | ||||||
Discontinued
operations
|
-- | -- | 13,835 | |||||||||
Limited
partners’ interest in net
income
|
$ | 160,969 | $ | 233,193 | $ | 144,318 | ||||||
Denominator:
|
||||||||||||
Units
|
97,408 | 89,812 | 73,657 | |||||||||
Time-vested
restricted
units
|
122 | 38 | -- | |||||||||
Total
Weighted average Units outstanding
|
97,530 | 89,850 | 73,657 | |||||||||
Basic
earnings per Unit:
|
||||||||||||
Income
from continuing
operations
|
$ | 1.65 | $ | 2.60 | $ | 1.77 | ||||||
Discontinued
operations
|
-- | -- | 0.19 | |||||||||
Limited
partners’ interest in net
income
|
$ | 1.65 | $ | 2.60 | $ | 1.96 | ||||||
DILUTED
EARNINGS PER UNIT:
|
||||||||||||
Numerator:
|
||||||||||||
Income
from continuing
operations
|
$ | 160,969 | $ | 233,193 | $ | 130,483 | ||||||
Discontinued
operations
|
-- | -- | 13,835 | |||||||||
Limited
partners’ interest in net
income
|
$ | 160,969 | $ | 233,193 | $ | 144,318 | ||||||
Denominator:
|
||||||||||||
Units
|
97,408 | 89,812 | 73,657 | |||||||||
Time-vested
restricted
units
|
122 | 38 | -- | |||||||||
Total
Weighted average Units outstanding
|
97,530 | 89,850 | 73,657 | |||||||||
Diluted earnings per
Unit:
|
||||||||||||
Income
from continuing
operations
|
$ | 1.65 | $ | 2.60 | $ | 1.77 | ||||||
Discontinued
operations
|
-- | -- | 0.19 | |||||||||
Limited
partners’ interest in net
income
|
$ | 1.65 | $ | 2.60 | $ | 1.96 |
Payment
or Settlement due by Period
|
||||||||||||||||||||||||||||
Total
|
2009
|
2010
|
2011
|
2012
|
2013
|
Thereafter
|
||||||||||||||||||||||
Maturities
of long-term debt (1)
|
$ | 2,516,654 | $ | -- | $ | -- | $ | -- | $ | 1,016,654 | $ | 450,000 | $ | 1,050,000 | ||||||||||||||
Interest
payments (2)
|
$ | 2,624,102 | $ | 146,838 | $ | 146,838 | $ | 146,839 | $ | 127,474 | $ | 87,975 | $ | 1,968,138 | ||||||||||||||
Operating
leases (3)
|
$ | 55,696 | $ | 12,467 | $ | 10,640 | $ | 9,712 | $ | 9,045 | $ | 6,156 | $ | 7,676 | ||||||||||||||
Purchase
obligations (4):
|
||||||||||||||||||||||||||||
Product
purchase commitments:
|
||||||||||||||||||||||||||||
Estimated
payment obligation:
|
||||||||||||||||||||||||||||
Crude
oil
|
$ | 212,435 | $ | 212,435 | $ | -- | $ | -- | $ | -- | $ | -- | $ | -- | ||||||||||||||
Refined
Products
|
$ | 10,594 | $ | 10,594 | $ | -- | $ | -- | $ | -- | $ | -- | $ | -- | ||||||||||||||
Other
|
$ | 3,057 | $ | 1,772 | $ | 884 | $ | 401 | $ | -- | $ | -- | $ | -- | ||||||||||||||
Underlying major volume commitments:
|
||||||||||||||||||||||||||||
Crude
oil (in barrels)
|
$ | 4,409 | $ | 4,409 | $ | -- | $ | -- | $ | -- | $ | -- | $ | -- | ||||||||||||||
Refined
Products (in barrels)
|
$ | 353 | $ | 353 | $ | -- | $ | -- | $ | -- | $ | -- | $ | -- | ||||||||||||||
Service
payment commitments (5)
|
$ | 5,024 | $ | 4,675 | $ | 349 | $ | -- | $ | -- | $ | -- | $ | -- | ||||||||||||||
Contributions
to Jonah (6)
|
$ | 27,000 | $ | 27,000 | $ | -- | $ | -- | $ | -- | $ | -- | $ | -- | ||||||||||||||
Contributions
to Texas Offshore Port
System (7)
|
$ | 70,000 | $ | 70,000 | $ | -- | $ | -- | $ | -- | $ | -- | $ | -- | ||||||||||||||
Capital
expenditure obligations (8)
|
$ | 116,733 | $ | 116,733 | $ | -- | $ | -- | $ | -- | $ | -- | $ | -- | ||||||||||||||
Other
liabilities and deferred credits (9)
|
$ | 28,826 | $ | -- | $ | 5,616 | $ | 5,607 | $ | 5,607 | $ | 2,096 | $ | 9,900 |
(1)
|
We
have long-term payment obligations under our Revolving Credit Facility,
our senior notes and our junior subordinated notes. Amounts
shown in the table represent our scheduled future maturities of long-term
debt principal for the periods indicated (see Note 12 for additional
information regarding our consolidated debt
obligations).
|
(2)
|
Includes
interest payments due on our senior notes and junior subordinated notes
and interest payments and commitment fees due on our Revolving Credit
Facility. The interest amount calculated on the Revolving
Credit Facility and the junior subordinated notes is based on the
assumption that the amount outstanding and the interest rate charged both
remain at their current levels.
|
(3)
|
We
lease certain property, plant and equipment under noncancelable and
cancelable operating leases. Amounts shown in the table
represent minimum cash lease payment obligations under our operating
leases with terms in excess of one year for the periods
indicated. Lease expense is charged to operating costs and
expenses on a straight line basis over the period of expected economic
benefit. Contingent rental payments are expensed as
incurred. Total rental expense for the years ended December 31,
2008, 2007 and 2006, was $20.0 million, $22.1 million and $25.3 million,
respectively.
|
(4)
|
We
have long and short-term purchase obligations for products and services
with third-party suppliers. The prices that we are obligated to
pay under these contracts approximate current market
prices. The preceding table shows our commitments and estimated
payment obligations under these contracts for the periods
indicated. Our estimated future payment obligations are based
on the contractual price under each contract for products and services at
December 31, 2008. The majority of contractual commitments we
make for the purchase of crude oil range in term from a thirty-day
evergreen to one year. A substantial portion of the contracts
for the purchase of crude oil that extend beyond thirty days include
cancellation provisions that allow us to cancel the contract with thirty
days written notice.
|
(5)
|
Includes
approximately $4.5 million related to a shipment commitment on Centennial,
approximately $0.4 million related to a commitment to pay for compression
services on Val Verde and approximately $0.1 million related to the
monthly service fee we pay Cenac to operate the marine assets in
accordance with the transitional operating
agreement.
|
(6)
|
Expected
contributions to Jonah in 2009 for our share of capital
expenditures.
|
(7)
|
Expected
contributions to Texas Offshore Port System for our share of costs related
to the TOPS and PACE projects. We are obligated under the joint
venture agreement to contribute one-third of the funds to complete the
projects, which we currently estimate will total $600.0 million for our
share.
|
(8)
|
We
have short-term payment obligations relating to capital projects we have
initiated. These commitments represent unconditional payment
obligations that we have agreed to pay vendors for services rendered or
products purchased.
|
(9)
|
Includes
approximately $9.6 million of long-term deferred revenue payments,
primarily in the Downstream and Upstream segments, which are being
recognized into income as the services are performed and approximately
$12.0 million related to our estimated long-term portions of our
liabilities under our guarantees to Centennial for its credit agreement
and for a catastrophic event. The amount of commitment by year
is our best estimate of projected payments of these long-term
liabilities.
|
For
Year Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Decrease
(increase) in:
|
||||||||||||
Accounts receivable,
trade
|
$ | 591,498 | $ | (529,055 | ) | $ | (67,317 | ) | ||||
Accounts receivable, related
parties
|
(8,884 | ) | (5,986 | ) | 1,736 | |||||||
Inventories
|
28,526 | (8,255 | ) | (45,002 | ) | |||||||
Other current
assets
|
4,669 | (7,356 | ) | 25,850 | ||||||||
Other
|
(13,763 | ) | (17,527 | ) | (10,740 | ) | ||||||
Increase
(decrease) in:
|
||||||||||||
Accounts payable and accrued
liabilities
|
(627,198 | ) | 558,111 | 44,348 | ||||||||
Accounts payable, related
parties
|
(12,877 | ) | 3,374 | 15,696 | ||||||||
Other
|
(10,079 | ) | (1,946 | ) | (1,268 | ) | ||||||
Net
effect of changes in operating
accounts
|
$ | (48,108 | ) | $ | (8,640 | ) | $ | (36,697 | ) | |||
Non-cash
investing activities:
|
||||||||||||
Net
assets transferred to Jonah Gas Gathering Company.
|
$ | -- | $ | -- | $ | 572,609 | ||||||
Payable
to Enterprise Gas Processing, LLC for spending
for
Phase V expansion of Jonah Gas Gathering Company
(see
Note
9)
|
$ | 995 | $ | 9,878 | $ | 8,732 | ||||||
Liabilities
for Construction work in progress
|
$ | 17,213 | $ | 11,334 | $ | 10,786 | ||||||
Non-cash
financing activities:
|
||||||||||||
Issuance of Units in Cenac
acquisition (see Note 10)
|
$ | 186,558 | $ | -- | $ | -- | ||||||
Supplemental
disclosure of cash flows:
|
||||||||||||
Cash
paid for interest (net of amounts capitalized)
|
$ | 128,136 | $ | 104,220 | $ | 88,107 | ||||||
Cash
payments for state income
taxes
|
$ | 1,947 | $ | 20 | $ | -- |
§
|
The
timing of cash receipts from revenue transactions and cash payments for
expense transactions near the end of each reporting
period. For example, if significant cash receipts are
posted on the last day of the current reporting period, but subsequent
payments on expense invoices are made on the first day of the next
reporting period, net cash flows provided by operating activities will
reflect an increase in the current reporting period that will be reduced
as payments are made in the next
period.
|
§
|
If
commodity or other prices increase between reporting periods, changes in
accounts receivable and accounts payable and accrued expenses may appear
larger than in previous periods; however, overall levels of receivables
and payables may still reflect normal
ranges.
|
§
|
Additions
to inventory for forward sales transactions or other reasons or increased
expenditures for prepaid items would be reflected as a use of cash and
reduce overall cash provided by operating activities in a given reporting
period. As these assets are charged to expense in subsequent
periods, the expense amount is reflected as a positive change in operating
accounts; however, there is no impact on operating cash
flows.
|
First
|
Second
|
Third
|
Fourth
|
|||||||||||||
Quarter
|
Quarter
|
Quarter
|
Quarter
|
|||||||||||||
2008:
|
||||||||||||||||
Operating
revenues
|
$ | 2,808,488 | $ | 4,180,463 | $ | 4,205,744 | $ | 2,338,194 | ||||||||
Operating
income
|
83,519 | 59,276 | 59,860 | 50,765 | ||||||||||||
Net
income
|
64,139 | 47,682 | 47,031 | 34,700 | ||||||||||||
Basic
and diluted net income per Limited
Partner
Unit (1) (2)
|
$ | 0.57 | $ | 0.42 | $ | 0.40 | $ | 0.28 |
First
|
Second
|
Third
|
Fourth
|
|||||||||||||
Quarter
|
Quarter
|
Quarter
|
Quarter
|
|||||||||||||
2007:
|
||||||||||||||||
Operating
revenues
|
$ | 1,978,429 | $ | 2,049,436 | $ | 2,580,657 | $ | 3,049,538 | ||||||||
Operating
income
|
83,434 | 50,729 | 54,719 | 60,673 | ||||||||||||
Net
income
|
138,191 | 47,760 | 47,631 | 45,598 | ||||||||||||
Basic
and diluted net income per Limited
Partner
Unit (1) (2)
|
$ | 1.29 | $ | 0.44 | $ | 0.44 | $ | 0.42 |
(1)
|
Per
Unit calculations include 14,793,329 Units issued in 2008 (4,854,899 Units
issued in connection with Cenac acquisition, 378,437 Units issued under
the DRIP, 23,097 Units issued under the Unit Purchase Plan, 95,516 net
restricted units issued and 9,441,380 Units issued in September 2008) and
106,703 Units issued in 2007 (62,400 restricted units issued, 4,507 Units
issued under the Unit Purchase Plan and 39,796 Units issued under the
DRIP).
|
(2)
|
The
sum of the four quarters does not equal the total year due to
rounding.
|
December
31, 2008
|
||||||||||||||||||||
TEPPCO
Partners, L.P.
|
Guarantor
Subsidiaries
|
Non-Guarantor
Subsidiaries
|
Consolidating
Adjustments
|
TEPPCO
Partners, L.P. Consolidated
|
||||||||||||||||
Assets
|
||||||||||||||||||||
Current
assets
|
$ | 23,095 | $ | 145,146 | $ | 1,147,976 | $ | (408,655 | ) | $ | 907,562 | |||||||||
Property,
plant and equipment – net
|
13,505 | 1,294,785 | 1,131,620 | -- | 2,439,910 | |||||||||||||||
Equity
investments
|
8,951 | 1,020,928 | 226,044 | -- | 1,255,923 | |||||||||||||||
Investments
|
1,685,985 | 398,946 | 21 | (2,084,952 | ) | -- | ||||||||||||||
Intercompany
notes receivable
|
2,628,274 | -- | -- | (2,628,274 | ) | -- | ||||||||||||||
Intangible
assets
|
-- | 117,936 | 89,717 | -- | 207,653 | |||||||||||||||
Goodwill
|
-- | -- | 106,611 | -- | 106,611 | |||||||||||||||
Other
assets
|
14,371 | 33,373 | 84,417 | -- | 132,161 | |||||||||||||||
Total assets
|
$ | 4,374,181 | $ | 3,011,114 | $ | 2,786,406 | $ | (5,121,881 | ) | $ | 5,049,820 | |||||||||
Liabilities
and partners’ capital
|
||||||||||||||||||||
Current
liabilities
|
$ | 244,452 | $ | 215,397 | $ | 848,802 | $ | (408,655 | ) | $ | 899,996 | |||||||||
Long-term
debt
|
2,529,519 | -- | -- | -- | 2,529,519 | |||||||||||||||
Intercompany
notes payable
|
-- | 1,424,240 | 1,204,034 | (2,628,274 | ) | -- | ||||||||||||||
Other
long term liabilities
|
8,731 | 17,035 | 3,060 | -- | 28,826 | |||||||||||||||
Total
partners’ capital
|
1,591,479 | 1,354,442 | 730,510 | (2,084,952 | ) | 1,591,479 | ||||||||||||||
Total liabilities and
partners’ capital
|
$ | 4,374,181 | $ | 3,011,114 | $ | 2,786,406 | $ | (5,121,881 | ) | $ | 5,049,820 |
December
31, 2007
|
||||||||||||||||||||
TEPPCO
Partners, L.P.
|
Guarantor
Subsidiaries
|
Non-Guarantor
Subsidiaries
|
Consolidating
Adjustments
|
TEPPCO
Partners, L.P. Consolidated
|
||||||||||||||||
Assets
|
||||||||||||||||||||
Current
assets
|
$ | 32,302 | $ | 77,083 | $ | 1,499,653 | $ | (93,049 | ) | $ | 1,515,989 | |||||||||
Property,
plant and equipment – net
|
-- | 1,142,630 | 651,004 | -- | 1,793,634 | |||||||||||||||
Equity
investments
|
-- | 958,345 | 188,650 | -- | 1,146,995 | |||||||||||||||
Investments
|
1,286,021 | 388,968 | 19 | (1,675,008 | ) | -- | ||||||||||||||
Intercompany
notes receivable
|
1,511,168 | -- | -- | (1,511,168 | ) | -- | ||||||||||||||
Intangible
assets
|
-- | 136,050 | 28,631 | -- | 164,681 | |||||||||||||||
Goodwill
|
-- | -- | 15,506 | -- | 15,506 | |||||||||||||||
Other
assets
|
8,580 | 34,839 | 69,895 | (62 | ) | 113,252 | ||||||||||||||
Total assets
|
$ | 2,838,071 | $ | 2,737,915 | $ | 2,453,358 | $ | (3,279,287 | ) | $ | 4,750,057 | |||||||||
Liabilities
and partners’ capital
|
||||||||||||||||||||
Current
liabilities
|
$ | 61,926 | $ | 493,184 | $ | 1,485,164 | $ | (93,049 | ) | $ | 1,947,225 | |||||||||
Long-term
debt
|
1,511,083 | -- | -- | -- | 1,511,083 | |||||||||||||||
Intercompany
notes payable
|
-- | 1,006,801 | 504,367 | (1,511,168 | ) | -- | ||||||||||||||
Other
long term liabilities
|
435 | 24,466 | 2,283 | (62 | ) | 27,122 | ||||||||||||||
Total
partners’ capital
|
1,264,627 | 1,213,464 | 461,544 | (1,675,008 | ) | 1,264,627 | ||||||||||||||
Total liabilities and
partners’ capital
|
$ | 2,838,071 | $ | 2,737,915 | $ | 2,453,358 | $ | (3,279,287 | ) | $ | 4,750,057 |
For
Year Ended December 31, 2008
|
||||||||||||||||||||
TEPPCO
Partners, L.P.
|
Guarantor
Subsidiaries
|
Non-Guarantor
Subsidiaries
|
Consolidating
Adjustments
|
TEPPCO
Partners, L.P. Consolidated
|
||||||||||||||||
Operating
revenues
|
$ | -- | $ | 383,771 | $ | 13,149,310 | $ | (192 | ) | $ | 13,532,889 | |||||||||
Costs
and expenses
|
-- | 292,741 | 12,991,319 | (4,593 | ) | 13,279,467 | ||||||||||||||
Gains
(losses) on sales of assets
|
-- | (2 | ) | 4 | -- | 2 | ||||||||||||||
Operating
income
|
-- | 91,032 | 157,987 | 4,401 | 253,420 | |||||||||||||||
Interest
expense – net
|
-- | (83,139 | ) | (56,849 | ) | -- | (139,988 | ) | ||||||||||||
Equity
earnings
|
193,552 | 175,393 | 11,693 | (297,945 | ) | 82,693 | ||||||||||||||
Other
income
|
-- | 959 | 1,085 | -- | 2,044 | |||||||||||||||
Income
before provision for income taxes
|
193,552 | 184,245 | 113,916 | (293,544 | ) | 198,169 | ||||||||||||||
Provision
for income taxes
|
-- | 1,492 | 3,125 | -- | 4,617 | |||||||||||||||
Net
income
|
$ | 193,552 | $ | 182,753 | $ | 110,791 | $ | (293,544 | ) | $ | 193,552 |
For
Year Ended December 31, 2007
|
||||||||||||||||||||
TEPPCO
Partners, L.P.
|
Guarantor
Subsidiaries
|
Non-Guarantor
Subsidiaries
|
Consolidating
Adjustments
|
TEPPCO
Partners, L.P. Consolidated
|
||||||||||||||||
Operating
revenues
|
$ | -- | $ | 385,902 | $ | 9,272,707 | $ | (549 | ) | $ | 9,658,060 | |||||||||
Costs
and expenses
|
-- | 278,630 | 9,153,588 | (5,060 | ) | 9,427,158 | ||||||||||||||
Gains
on sales of assets
|
-- | (18,653 | ) | -- | -- | (18,653 | ) | |||||||||||||
Operating
income
|
-- | 125,925 | 119,119 | 4,511 | 249,555 | |||||||||||||||
Interest
expense – net
|
-- | (72,705 | ) | (28,518 | ) | -- | (101,223 | ) | ||||||||||||
Gain
on sale of ownership interest in MB
|
||||||||||||||||||||
Storage
|
-- | 59,628 | -- | -- | 59,628 | |||||||||||||||
Equity
earnings
|
279,180 | 164,107 | 2,602 | (377,134 | ) | 68,755 | ||||||||||||||
Other
income
|
-- | 2,255 | 767 | -- | 3,022 | |||||||||||||||
Income
before provision for income taxes
|
279,180 | 279,210 | 93,970 | (372,623 | ) | 279,737 | ||||||||||||||
Provision
for income taxes
|
-- | 30 | 527 | -- | 557 | |||||||||||||||
Net
income
|
$ | 279,180 | $ | 279,180 | $ | 93,443 | $ | (372,623 | ) | $ | 279,180 |
For
Year Ended December 31, 2006
|
||||||||||||||||||||
TEPPCO
Partners, L.P.
|
Guarantor
Subsidiaries
|
Non-Guarantor
Subsidiaries
|
Consolidating
Adjustments
|
TEPPCO
Partners, L.P. Consolidated
|
||||||||||||||||
Operating
revenues
|
$ | -- | $ | 352,844 | $ | 9,263,451 | $ | (8,810 | ) | $ | 9,607,485 | |||||||||
Costs
and expenses
|
-- | 278,973 | 9,117,359 | (11,222 | ) | 9,385,110 | ||||||||||||||
Gains
on sales of assets
|
-- | (1,415 | ) | (5,989 | ) | -- | (7,404 | ) | ||||||||||||
Operating
income
|
-- | 75,286 | 152,081 | 2,412 | 229,779 | |||||||||||||||
Interest
expense – net
|
-- | (52,980 | ) | (33,191 | ) | -- | (86,171 | ) | ||||||||||||
Equity
earnings
|
202,051 | 178,335 | 11,896 | (355,521 | ) | 36,761 | ||||||||||||||
Other
income
|
-- | 1,545 | 1,420 | -- | 2,965 | |||||||||||||||
Income
before provision for income taxes
|
202,051 | 202,186 | 132,206 | (353,109 | ) | 183,334 | ||||||||||||||
Provision
for income taxes
|
-- | 135 | 517 | -- | 652 | |||||||||||||||
Income
from continuing operations
|
202,051 | 202,051 | 131,689 | (353,109 | ) | 182,682 | ||||||||||||||
Discontinued
operations
|
-- | -- | 19,369 | -- | 19,369 | |||||||||||||||
Net
income
|
$ | 202,051 | $ | 202,051 | $ | 151,058 | $ | (353,109 | ) | $ | 202,051 |
For
Year Ended December 31, 2008
|
||||||||||||||||||||
TEPPCO
Partners, L.P.
|
Guarantor
Subsidiaries
|
Non-Guarantor
Subsidiaries
|
Consolidating
Adjustments
|
TEPPCO
Partners, L.P. Consolidated
|
||||||||||||||||
Operating
activities:
|
||||||||||||||||||||
Net
income
|
$ | 193,552 | $ | 182,753 | $ | 110,791 | $ | (293,544 | ) | $ | 193,552 | |||||||||
Adjustments
to reconcile net income to net cash from operating
activities:
|
||||||||||||||||||||
Depreciation
and amortization
|
-- | 70,457 | 55,872 | -- | 126,329 | |||||||||||||||
Earnings
in equity investments
|
-- | (75,401 | ) | (11,693 | ) | 4,401 | (82,693 | ) | ||||||||||||
Distributions
from equity investments
|
-- | 132,295 | 13,800 | -- | 146,095 | |||||||||||||||
Other,
net
|
(71,475 | ) | 138,403 | (338,563 | ) | 235,213 | (36,422 | ) | ||||||||||||
Net
cash from operating activities
|
122,077 | 448,507 | (169,793 | ) | (53,930 | ) | 346,861 | |||||||||||||
Cash
flows from investing activities:
|
||||||||||||||||||||
Cash
used for business combinations
|
-- | -- | (351,327 | ) | -- | (351,327 | ) | |||||||||||||
Investment
in Jonah
|
-- | (129,759 | ) | -- | -- | (129,759 | ) | |||||||||||||
Investment
in Texas Offshore Port System
|
-- | -- | (35,953 | ) | -- | (35,953 | ) | |||||||||||||
Capital
expenditures
|
-- | (193,313 | ) | (98,641 | ) | (8,549 | ) | (300,503 | ) | |||||||||||
Other,
net
|
-- | (694 | ) | (12,784 | ) | -- | (13,478 | ) | ||||||||||||
Net
cash flows from investing activities
|
-- | (323,766 | ) | (498,705 | ) | (8,549 | ) | (831,020 | ) | |||||||||||
Cash
flows from financing activities:
|
||||||||||||||||||||
Proceeds
from term credit facility
|
1,000,000 | -- | -- | -- | 1,000,000 | |||||||||||||||
Repayments
on term credit facility
|
(1,000,000 | ) | -- | -- | -- | (1,000,000 | ) | |||||||||||||
Proceeds
on revolving credit facility
|
2,508,089 | -- | -- | -- | 2,508,089 | |||||||||||||||
Repayments
on revolving credit facility
|
(2,481,436 | ) | -- | -- | -- | (2,481,436 | ) | |||||||||||||
Repayment
of debt assumed in Cenac acquisition
|
-- | -- | (63,157 | ) | -- | (63,157 | ) | |||||||||||||
Redemption
of 7.51% TE Products Senior Notes
|
-- | (181,571 | ) | -- | -- | (181,571 | ) | |||||||||||||
Repayment
of 6.45% TE Products Senior Notes
|
-- | (180,000 | ) | -- | -- | (180,000 | ) | |||||||||||||
Issuance
of Limited Partner Units, net
|
275,856 | -- | -- | -- | 275,856 | |||||||||||||||
Issuance
of senior notes
|
996,349 | -- | -- | -- | 996,349 | |||||||||||||||
Acquisition
of treasury units
|
(9 | ) | -- | -- | -- | (9 | ) | |||||||||||||
Debt
issuance costs
|
(9,862 | ) | -- | -- | -- | (9,862 | ) | |||||||||||||
Settlement
of treasury lock agreements
|
(52,098 | ) | -- | -- | -- | (52,098 | ) | |||||||||||||
Intercompany
debt activities
|
(1,023,002 | ) | 564,757 | 882,971 | (424,726 | ) | -- | |||||||||||||
Distributions
|
(327,997 | ) | (327,997 | ) | (151,316 | ) | 479,313 | (327,997 | ) | |||||||||||
Net
cash flows from financing activities
|
(114,110 | ) | (124,811 | ) | 668,498 | 54,587 | 484,164 | |||||||||||||
Net
change in cash and cash equivalents
|
7,967 | (70 | ) | -- | (7,892 | ) | 5 | |||||||||||||
Cash
and cash equivalents, January 1
|
8,147 | 70 | 22 | (8,216 | ) | 23 | ||||||||||||||
Cash
and cash equivalents, December 31
|
$ | 16,114 | $ | -- | $ | 22 | $ | (16,108 | ) | $ | 28 |
For
Year Ended December 31, 2007
|
||||||||||||||||||||
TEPPCO
Partners, L.P.
|
Guarantor
Subsidiaries
|
Non-Guarantor
Subsidiaries
|
Consolidating
Adjustments
|
TEPPCO
Partners, L.P. Consolidated
|
||||||||||||||||
Operating
activities:
|
||||||||||||||||||||
Net
income
|
$ | 279,180 | $ | 279,180 | $ | 93,443 | $ | (372,623 | ) | $ | 279,180 | |||||||||
Adjustments
to reconcile net income to net cash from operating
activities:
|
||||||||||||||||||||
Depreciation
and amortization
|
-- | 75,377 | 29,848 | -- | 105,225 | |||||||||||||||
Earnings
in equity investments
|
-- | (70,664 | ) | (2,602 | ) | 4,511 | (68,755 | ) | ||||||||||||
Distributions
from equity investments
|
-- | 110,500 | 12,400 | -- | 122,900 | |||||||||||||||
Gains
in sales of assets
|
-- | (18,653 | ) | -- | -- | (18,653 | ) | |||||||||||||
Gain
on sale of ownership interest in Mont Belvieu Storage Partners,
L.P.
|
-- | (59,628 | ) | -- | -- | (59,628 | ) | |||||||||||||
Other,
net
|
(286,162 | ) | (68,940 | ) | 56,230 | 289,175 | (9,697 | ) | ||||||||||||
Net
cash from operating activities
|
(6,982 | ) | 247,172 | 189,319 | (78,937 | ) | 350,572 | |||||||||||||
Cash
flows from investing activities:
|
||||||||||||||||||||
Proceeds
from sales of assets
|
-- | 26,550 | 1,234 | -- | 27,784 | |||||||||||||||
Proceeds
from sale of ownership interest
|
-- | 137,326 | -- | -- | 137,326 | |||||||||||||||
Purchase
of assets
|
-- | (6,180 | ) | (6,729 | ) | -- | (12,909 | ) | ||||||||||||
Investment
in Centennial
|
-- | (11,081 | ) | -- | -- | (11,081 | ) | |||||||||||||
Investment
in Jonah
|
-- | (187,547 | ) | -- | -- | (187,547 | ) | |||||||||||||
Capital
expenditures
|
-- | (153,715 | ) | (74,557 | ) | -- | (228,272 | ) | ||||||||||||
Other,
net
|
-- | (18,144 | ) | (24,557 | ) | -- | (42,701 | ) | ||||||||||||
Net
cash flows from investing activities
|
-- | (212,791 | ) | (104,609 | ) | -- | (317,400 | ) | ||||||||||||
Cash
flows from financing activities:
|
||||||||||||||||||||
Proceeds
on revolving credit facility
|
1,305,750 | -- | -- | -- | 1,305,750 | |||||||||||||||
Repayments
on revolving credit facility
|
(1,305,750 | ) | -- | -- | -- | (1,305,750 | ) | |||||||||||||
Issuance
of Limited Partner Units, net
|
1,696 | -- | -- | -- | 1,696 | |||||||||||||||
Redemption
of portion of 7.51% Senior Notes
|
-- | (36,138 | ) | -- | -- | (36,138 | ) | |||||||||||||
Issuance
of Junior Subordinated Notes
|
299,517 | -- | -- | -- | 299,517 | |||||||||||||||
Debt
issuance costs
|
(4,052 | ) | -- | -- | -- | (4,052 | ) | |||||||||||||
Intercompany
debt activities
|
-- | 297,512 | 2,005 | (299,517 | ) | -- | ||||||||||||||
Distributions
|
(294,450 | ) | (294,450 | ) | (86,765 | ) | 381,215 | (294,450 | ) | |||||||||||
Other,
net
|
1,443 | (1,235 | ) | 2 | (2 | ) | 208 | |||||||||||||
Net
cash flows from financing activities
|
4,154 | (34,311 | ) | (84,758 | ) | 81,696 | (33,219 | ) | ||||||||||||
Net
change in cash and cash equivalents
|
(2,828 | ) | 70 | (48 | ) | 2,759 | (47 | ) | ||||||||||||
Cash
and cash equivalents, January 1
|
10,975 | -- | 70 | (10,975 | ) | 70 | ||||||||||||||
Cash
and cash equivalents, December 31
|
$ | 8,147 | $ | 70 | $ | 22 | $ | (8,216 | ) | $ | 23 |
For
Year Ended December 31, 2006
|
||||||||||||||||||||
TEPPCO
Partners, L.P.
|
Guarantor
Subsidiaries
|
Non-Guarantor
Subsidiaries
|
Consolidating
Adjustments
|
TEPPCO
Partners, L.P. Consolidated
|
||||||||||||||||
Operating
activities:
|
||||||||||||||||||||
Net
income
|
$ | 202,051 | $ | 202,051 | $ | 151,058 | $ | (353,109 | ) | $ | 202,051 | |||||||||
Adjustments to reconcile net income to net cash from operating
activities:
|
||||||||||||||||||||
Depreciation
and amortization
|
-- | 71,100 | 37,152 | -- | 108,252 | |||||||||||||||
Earnings
in equity investments
|
-- | (27,034 | ) | (11,905 | ) | 2,178 | (36,761 | ) | ||||||||||||
Distributions
from equity investments
|
-- | 42,965 | 20,518 | -- | 63,483 | |||||||||||||||
Other,
net
|
1,412 | (31,926 | ) | (47,279 | ) | 13,841 | (63,952 | ) | ||||||||||||
Net
cash from operating activities
|
203,463 | 257,156 | 149,544 | (337,090 | ) | 273,073 | ||||||||||||||
Cash
flows from investing activities:
|
||||||||||||||||||||
Proceeds
from sales of assets
|
-- | 11,888 | 39,670 | -- | 51,558 | |||||||||||||||
Purchase
of assets
|
-- | (20,473 | ) | -- | -- | (20,473 | ) | |||||||||||||
Investment
in MB Storage
|
-- | (4,767 | ) | -- | (4,767 | ) | ||||||||||||||
Investment
in Centennial
|
-- | (2,500 | ) | -- | -- | (2,500 | ) | |||||||||||||
Investment
in Jonah
|
-- | (121,035 | ) | -- | -- | (121,035 | ) | |||||||||||||
Capital
expenditures
|
-- | (54,430 | ) | (118,132 | ) | 2,516 | (170,046 | ) | ||||||||||||
Intercompany
activities
|
(195,060 | ) | 243,823 | -- | (48,763 | ) | -- | |||||||||||||
Other,
net
|
-- | (4,270 | ) | (2,183 | ) | -- | (6,453 | ) | ||||||||||||
Net
cash flows from investing activities
|
(195,060 | ) | 48,236 | (80,645 | ) | (46,247 | ) | (273,716 | ) | |||||||||||
Cash
flows from financing activities:
|
||||||||||||||||||||
Proceeds
on revolving credit facility
|
924,125 | -- | -- | -- | 924,125 | |||||||||||||||
Repayments
on revolving credit facility
|
(840,025 | ) | -- | -- | -- | (840,025 | ) | |||||||||||||
Issuance
of Limited Partner Units, net
|
195,060 | -- | -- | -- | 195,060 | |||||||||||||||
Intercompany
debt activities
|
-- | 37,219 | 90,163 | (127,382 | ) | -- | ||||||||||||||
Distributions
|
(278,566 | ) | (342,611 | ) | (159,099 | ) | 501,710 | (278,566 | ) | |||||||||||
Net
cash flows from financing activities
|
594 | (305,392 | ) | (68,936 | ) | 374,328 | 594 | |||||||||||||
Net
change in cash and cash equivalents
|
8,997 | -- | (37 | ) | (9,009 | ) | (49 | ) | ||||||||||||
Cash
and cash equivalents, January 1
|
1,978 | -- | 107 | (1,966 | ) | 119 | ||||||||||||||
Cash
and cash equivalents, December 31
|
$ | 10,975 | $ | -- | $ | 70 | $ | (10,975 | ) | $ | 70 |
Page
|
|
1
|
|
2
|
|
3
|
|
4
|
|
5
|
|
6
|
|
December
31,
|
||||||||
2008
|
2007
|
|||||||
ASSETS
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
and cash equivalents
|
$ | 5,246 | $ | 11,459 | ||||
Accounts
receivable, trade
|
37,361 | 35,236 | ||||||
Accounts
receivable, related parties
|
470 | 845 | ||||||
Natural gas imbalances receivable
|
7,121 | 4,838 | ||||||
Inventories
|
2,420 | 1,717 | ||||||
Other
|
1,192 | 1,301 | ||||||
Total
current assets
|
53,810 | 55,396 | ||||||
PROPERTY,
PLANT AND EQUIPMENT, NET
|
1,022,058 | 910,398 | ||||||
INTANGIBLE ASSETS (net
of accumulated amortization of
$86,799
and $74,016)
|
136,001 | 148,784 | ||||||
GOODWILL
|
2,776 | 2,776 | ||||||
OTHER
ASSETS
|
2,422 | 3,346 | ||||||
Total
assets
|
$ | 1,217,067 | $ | 1,120,700 | ||||
LIABILITIES
AND PARTNERS’ CAPITAL
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Accounts
payable and accrued liabilities
|
$ | 4,030 | $ | 8,288 | ||||
Accounts
payable, related parties
|
10,818 | 6,973 | ||||||
Natural
gas imbalances payable
|
6,963 | 5,071 | ||||||
Accrued
taxes other than income
|
3,097 | 1,464 | ||||||
Other
|
3,316 | 749 | ||||||
Total
current liabilities
|
28,224 | 22,545 | ||||||
OTHER
LIABILITIES
|
378 | 264 | ||||||
Total
liabilities
|
28,602 | 22,809 | ||||||
COMMITMENTS AND CONTINGENCIES
(see Note 9)
|
||||||||
PARTNERS’
CAPITAL
|
1,188,465 | 1,097,891 | ||||||
Total
liabilities and partners’ capital
|
$ | 1,217,067 | $ | 1,120,700 |
For
Year Ended December 31,
|
||||||||||||
|
2008
|
2007
|
2006
|
|||||||||
REVENUES
|
||||||||||||
Gathering
– Natural gas
|
$ | 181,082 | $ | 135,583 | $ | 104,415 | ||||||
Sales
of natural gas
|
31,281 | 63,210 | 50,866 | |||||||||
Other
revenue (see Note 2)
|
20,462 | 5,353 | 4,849 | |||||||||
Total
revenues
|
232,825 | 204,146 | 160,130 | |||||||||
COSTS
AND EXPENSES
|
||||||||||||
Purchases
of natural gas
|
30,161 | 57,189 | 48,290 | |||||||||
Operating
expenses
|
23,015 | 19,297 | 12,802 | |||||||||
Operating
fuel and power (see Note 2)
|
15,666 | 6 | 123 | |||||||||
General
and administrative expenses
|
1,086 | 917 | 242 | |||||||||
Depreciation,
amortization and accretion expense
|
45,709 | 30,700 | 19,647 | |||||||||
Taxes
– other than income taxes
|
6,345 | 3,825 | 2,748 | |||||||||
Gains
on sales of assets
|
(227 | ) | -- | -- | ||||||||
Total
costs and expenses
|
121,755 | 111,934 | 83,852 | |||||||||
OPERATING
INCOME
|
111,070 | 92,212 | 76,278 | |||||||||
OTHER
INCOME (EXPENSE)
|
||||||||||||
Interest
expense – net
|
-- | -- | (6,812 | ) | ||||||||
Other
income
|
721 | 908 | 198 | |||||||||
Total
other income (expense)
|
721 | 908 | (6,614 | ) | ||||||||
INCOME
FROM CONTINUING OPERATIONS
|
111,791 | 93,120 | 69,664 | |||||||||
DISCONTINUED
OPERATIONS
|
||||||||||||
Income
from discontinued operations
|
-- | -- | 1,497 | |||||||||
Gain
on sale of discontinued operations
|
-- | -- | 17,872 | |||||||||
Total
discontinued operations
|
-- | -- | 19,369 | |||||||||
NET
INCOME
|
$ | 111,791 | $ | 93,120 | $ | 89,033 |
For
Year Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
OPERATING
ACTIVITIES
|
||||||||||||
Net
income
|
$ | 111,791 | $ | 93,120 | $ | 89,033 | ||||||
Adjustments
to reconcile net income to net cash provided by continuing
|
||||||||||||
operating
activities:
|
||||||||||||
Income
from discontinued operations
|
-- | -- | (19,369 | ) | ||||||||
Depreciation,
amortization and accretion expense
|
45,709 | 30,700 | 19,647 | |||||||||
Non-cash
portion of interest expense
|
-- | -- | 174 | |||||||||
Gains
on sales of assets
|
(227 | ) | -- | -- | ||||||||
Net
effect of changes in operating accounts
|
(2,343 | ) | (48 | ) | 31,404 | |||||||
Net
cash provided by continuing operating activities
|
154,930 | 123,772 | 120,889 | |||||||||
Net
cash provided by discontinued operations
|
-- | -- | 1,521 | |||||||||
Net
cash provided by operating activities
|
154,930 | 123,772 | 122,410 | |||||||||
INVESTING
ACTIVITIES
|
||||||||||||
Proceeds
from the sales of assets
|
6,335 | -- | 38,000 | |||||||||
Capital
expenditures
|
(101,375 | ) | (37,199 | ) | (51,211 | ) | ||||||
Net
cash used in investing activities
|
(95,040 | ) | (37,199 | ) | (13,211 | ) | ||||||
FINANCING
ACTIVITIES
|
||||||||||||
Proceeds
from Note Payable, TEPPCO Midstream Companies, LLC
|
-- | -- | 66,375 | |||||||||
Repayments
of Note Payable, TEPPCO Midstream Companies, LLC
|
-- | -- | (96,990 | ) | ||||||||
Contributions
from partners
|
97,829 | 34,592 | 20,000 | |||||||||
Distributions
paid to partners
|
(163,932 | ) | (109,706 | ) | (98,646 | ) | ||||||
Net
cash used in financing activities
|
(66,103 | ) | (75,114 | ) | (109,261 | ) | ||||||
NET
CHANGE IN CASH AND CASH EQUIVALENTS
|
(6,213 | ) | 11,459 | (62 | ) | |||||||
CASH
AND CASH EQUIVALENTS, JANUARY 1
|
11,459 | -- | 62 | |||||||||
CASH
AND CASH EQUIVALENTS, DECEMBER 31
|
$ | 5,246 | $ | 11,459 | $ | -- |
TEPPCO
|
Enterprise
|
|||||||||||||||
Midstream
|
Gas
|
|||||||||||||||
TEPPCO
GP,
|
Companies,
|
Processing,
|
||||||||||||||
Inc.
|
LLC
|
LLC
|
Total
|
|||||||||||||
BALANCE
AT DECEMBER 31, 2005
|
$ | 3 | $ | 294,862 | $ | -- | $ | 294,865 | ||||||||
Net income
|
1 | 88,794 | 238 | 89,033 | ||||||||||||
Contributions from
partners
|
-- | 418,840 | 116,874 | 535,714 | ||||||||||||
Distributions to
partners
|
-- | (110,162 | ) | (200 | ) | (110,362 | ) | |||||||||
Transfer of partnership
interest
|
(4 | ) | 4 | -- | -- | |||||||||||
BALANCE
AT DECEMBER 31, 2006
|
-- | 692,338 | 116,912 | 809,250 | ||||||||||||
Net income
|
-- | 83,702 | 9,418 | 93,120 | ||||||||||||
Contributions from
partners
|
-- | 184,627 | 108,884 | 293,511 | ||||||||||||
Distributions to
partners
|
-- | (88,539 | ) | (9,451 | ) | (97,990 | ) | |||||||||
BALANCE
AT DECEMBER 31, 2007
|
-- | 872,128 | 225,763 | 1,097,891 | ||||||||||||
Net income
|
-- | 90,148 | 21,643 | 111,791 | ||||||||||||
Contributions from
partners
|
-- | 115,284 | 27,431 | 142,715 | ||||||||||||
Distributions to
partners
|
-- | (132,195 | ) | (31,737 | ) | (163,932 | ) | |||||||||
BALANCE
AT DECEMBER 31, 2008
|
$ | -- | $ | 945,365 | $ | 243,100 | $ | 1,188,465 |
2009
|
$ |
12,896
|
2010
|
13,570
|
|
2011
|
13,523
|
|
2012
|
13,624
|
|
2013
|
13,409
|
For
Year Ended December
31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Revenues and Expenses from TEPPCO and its
subsidiaries:
|
||||||||||||
Sales
of natural gas liquids (“NGLs”)(1)
|
$ | -- | $ | -- | $ | 3,764 | ||||||
Other
operating revenues (2)
|
5,695 | 5,341 | 4,622 | |||||||||
Operating
expense (3)
|
238 | 501 | -- | |||||||||
Revenues and Expenses from Enterprise and its
subsidiaries:
|
||||||||||||
Sales
of natural gas (4)
|
$ | 38,254 | $ | 4,887 | $ | 8,585 | ||||||
Purchases
of natural gas (5)
|
50 | 542 | 251 | |||||||||
Gain
on sale of Pioneer plant
|
-- | -- | 17,872 | |||||||||
Expenses from EPCO:
|
||||||||||||
Operating
expense (6)
|
$ | 9,940 | $ | 8,965 | $ | 6,149 |
(1)
|
Includes
NGL sales to TEPPCO Crude Oil, LLC (“TCO”) from our Pioneer processing
plant prior to its sale to an affiliate of Enterprise. These
sales are classified as income from discontinued operations in the
accompanying statements of consolidated
income.
|
(2)
|
Includes
condensate sales to TCO.
|
(3)
|
Includes
supplies purchased from Lubrication Services, LLC, a subsidiary of
TEPPCO.
|
(4)
|
Includes
natural gas sales primarly to Enterprise Products Operating LLC, a
subsidiary of Enterprise.
|
(5)
|
Includes
processing fees paid to Enterprise for processing services performed at
the Pioneer processing plant after its sale to a subsidiary of
Enterprise.
|
(6)
|
Includes
payroll, payroll related expenses, administrative expenses, including
reimbursements related to employee benefits and employee benefit plans,
and other operating expenses incurred in managing us and our
subsidiary.
|
December
31, 2008
|
December
31, 2007
|
|||||||||||||||||||||||
Other
|
Other
|
|||||||||||||||||||||||
Accounts
|
Accounts
|
Current
|
Accounts
|
Accounts
|
Current
|
|||||||||||||||||||
Receivable
|
Payable
|
Liabilities
(1)
|
Receivable
|
Payable
|
Liabilities
(1)
|
|||||||||||||||||||
Partners:
|
||||||||||||||||||||||||
TEPPCO
Midstream and affiliates
|
$ | -- | $ | 4,748 | $ | -- | $ | -- | $ | 6,033 | $ | -- | ||||||||||||
EGP
and affiliates
|
470 | 6,070 | 70 | 845 | 940 | 1,625 | ||||||||||||||||||
Total
|
$ | 470 | $ | 10,818 | $ | 70 | $ | 845 | $ | 6,973 | $ | 1,625 |
(1)
|
Relates
to pipeline imbalances with EGP.
|
Estimated
|
||||||||||||
Useful
Life
|
December
31,
|
|||||||||||
In
Years
|
2008
|
2007
|
||||||||||
Plants
and pipelines
|
5-40(1)
|
$ | 1,024,809 | $ | 681,772 | |||||||
Underground
and other storage facilities
|
20-40
|
6,368 | 6,183 | |||||||||
Transportation
equipment
|
837 | 590 | ||||||||||
Land
and right of way
|
56,121 | 54,720 | ||||||||||
Construction
work in progress
|
25,293 | 228,686 | ||||||||||
Total property, plant and
equipment
|
$ | 1,113,428 | $ | 971,951 | ||||||||
Less accumulated
depreciation
|
91,370 | 61,553 | ||||||||||
Property, plant and equipment,
net
|
$ | 1,022,058 | $ | 910,398 |
(1)
|
The
estimated useful lives of major components of this category are as
follows: pipelines, 20-40 years (with some equipment at 5
years); office furniture and equipment, 5-10 years and buildings, 20-40
years.
|
ARO
liability balance, December 31, 2006
|
$ | 191 | |||
Liabilities
incurred
|
48 | ||||
Accretion
expense
|
25 | ||||
ARO
liability balance, December 31, 2007
|
264 | ||||
Revisions
in estimated cash flows
|
3,589 | ||||
Accretion
expense
|
198 | ||||
Liabilities
settled
|
(1,012 | ) | |||
ARO
liability balance, December 31, 2008
|
$ | 3,039 |
For
Year Ended
|
||||
December
31,
|
||||
2006
|
||||
Operating
revenues:
|
||||
Sales
of NGLs
|
$ | 3,828 | ||
Other
|
932 | |||
Total
operating revenues
|
4,760 | |||
Costs
and expenses:
|
||||
Purchases
of natural gas
|
3,000 | |||
Operating
expense
|
182 | |||
Depreciation
|
51 | |||
Taxes
– other than income taxes
|
30 | |||
Total
costs and expenses
|
3,263 | |||
Income
from discontinued operations
|
$ | 1,497 |
For
Year Ended
|
||||
December
31,
|
||||
2006
|
||||
Cash
flows from discontinued operating activities:
|
||||
Net
income
|
$ | 19,369 | ||
Depreciation
|
51 | |||
Gain
on sale of Pioneer plant
|
(17,872 | ) | ||
Increase
in inventories
|
(27 | ) | ||
Net
cash provided by discontinued operations
|
$ | 1,521 |
Payment
or Settlement due by Period
|
|||||||||||||||||||||||||||
Total
|
2009
|
2010
|
2011
|
2012
|
2013
|
Thereafter
|
|||||||||||||||||||||
Operating
leases (1)
|
$ | 1,176 | $ | 134 | $ | 53 | $ | 53 | $ | 58 | $ | 56 | $ | 822 | |||||||||||||
Purchase
obligations (2)
|
26,143 | 3,246 | 3,246 | 3,247 | 3,247 | 3,247 | 9,910 | ||||||||||||||||||||
Capital
expenditure obligations (3)
|
16,574 | 16,574 | -- | -- | -- | -- | -- |
(1)
|
We
use leased assets in several areas of our operations. Total
rental expense for the years ended December 31, 2008, 2007 and 2006 were
$0.8 million, $0.8 million and $1.0 million,
respectively.
|
(2)
|
We
have long and short-term purchase obligations for products and services
with third-party suppliers. The prices that we are obligated to
pay under these contracts approximate current market
prices. The preceding table shows our commitments and estimated
payment obligations under these contracts for the periods
indicated. Our estimated future payment obligations are based
on the contractual price under each contract for products and services at
December 31, 2008.
|
(3)
|
We
have short-term payment obligations relating to capital projects we have
initiated. These commitments represent unconditional payment
obligations that we have agreed to pay vendors for services rendered or
products purchased.
|
For
Year Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Decrease
(increase) in:
|
||||||||||||
Accounts
receivable, trade
|
$ | (2,125 | ) | $ | (10,607 | ) | $ | (6,232 | ) | |||
Accounts
receivable, related parties
|
376 | 1,647 | (2,492 | ) | ||||||||
Inventories
|
(703 | ) | (398 | ) | 254 | |||||||
Other
current assets
|
(2,174 | ) | (616 | ) | 13,675 | |||||||
Other
|
242 | 697 | (662 | ) | ||||||||
Increase
(decrease) in:
|
||||||||||||
Accounts
payable and accrued liabilities
|
(1,804 | ) | 2,256 | (3,202 | ) | |||||||
Accounts
payable, related parties
|
3,845 | 6,973 | 30,113 | |||||||||
Other
|
-- | -- | (50 | ) | ||||||||
Net
effect of changes in operating accounts
|
$ | (2,343 | ) | $ | (48 | ) | $ | 31,404 | ||||
Non-cash financing activities: | ||||||||||||
Non-cash
contributions from partners for Expansions of the Jonah
System
|
$ | 44,886 | $ | 258,919 | $ | 243,718 | ||||||
Liabilities
for construction work in progress
|
143 | 178 | 259 | |||||||||
Distributions
payable to partners
|
-- | -- | 11,716 | |||||||||
Contribution
of Note Payable, TEPPCO Midstream
|
-- | -- | 231,220 | |||||||||
Contribution
of accrued interest to partners’ capital
|
-- | -- | 19,900 | |||||||||
Contribution
of accounts payable, related party to partners’ capital
|
-- | -- | 20,876 | |||||||||
Supplemental
disclosure of cash flows:
|
||||||||||||
Cash
paid for interest (net of amounts capitalized)
|
$ | -- | $ | -- | $ | 6,188 |
|
A.
|
Phantom
Units awarded to a Participant shall be credited to a Participant’s
Phantom Unit Account as of the credit date (also called Vesting Date) set
forth in the Award Agreement or Phantom Unit Award Certificate and
redemption and payment shall automatically occur within 60 days following
the date of credit in accordance with such terms and conditions as the
Committee shall prescribe.
|
|
B.
|
Any
Phantom Units that have been awarded, but not credited, to a Participant’s
Account shall be deemed forfeited as of the date of the Participant’s
retirement or termination of employment for any reason except termination
of employment due to death or disability (as defined in Section 409A of
the Code and applicable regulatory
guidance).
|
|
C.
|
Notwithstanding
anything to the contrary herein, if the Committee, in its sole discretion,
determines that the Participant has an unforeseeable emergency as defined
in Treasury Regulation Section 1.409A-3(i)(3) and meets all the conditions
as set forth therein, then it shall accelerate the crediting of Phantom
Units to the Participant’s Phantom Unit Account and redemption and
payment
|
|
shall
occur within 60 days after the occurrence of the unforeseeable
emergency. The Committee’s decision as to the determination of
an unforeseeable emergency under this paragraph shall be
conclusive.
|
|
D.
|
The
cash value of each Phantom Unit will be based on the Market Value of a
Limited Partnership Unit as of the date of credit (also called Vesting
Date). The Committee shall establish the necessary procedures for
redemption of Phantom Units. Redemption and cash payments under
this Plan shall be made no later than 60 days following the credit date of
the Phantom Units. Cash payment shall be made to the Participant; provided
however, payment upon the death of a Participant shall be made to the
Participant’s surviving spouse, or if no surviving spouse exists, to his
or her estate or legal representative.
|
|
E.
|
Specified
Employee Limitation. Notwithstanding any provisions in the Plan
or Award Agreement to the contrary, to the extent that the Participant is
a “specified employee” (as defined in Section 409A of the Code and
applicable regulatory guidance), and any stock or units of TEPPCO (or of
any entity that together with TEPPCO is treated as a single employer under
Section 414(b) or (c) of the Code), is publicly traded on an established
securities market or otherwise, no distribution or payment that is subject
to Section 409A of the Code shall be made hereunder on account of a
Participant’s “separation from service” (as defined in Section 409A of the
Code and applicable regulatory guidance) before the date that it the first
day of the month that occurs six months after the date of the
Participant’s separation from service (or earlier, the date of death of
the Participant or any other date permitted under Section 409A of the Code
and applicable regulatory guidance) Any such payments shall be aggregated
and paid in a lump sum, without
interest.”
|
|
A.
|
As
of each quarterly distribution date, and no later than 60 days after each
quarterly distribution date, TEPPCO shall pay to each Participant, if he
or she is then an Eligible Employee and has not had a termination of
employment, an amount equal to the product
of:
|
|
1.
|
the
total number of Phantom Units awarded (whether or not then credited to the
Participant’s Phantom Unit Account) to a Participant less the total number
of Phantom Units redeemed and paid before the distribution record date,
multiplied by
|
2. | the distribution paid with respect to a Limited Partnership Unit for such quarter. |
TEXAS EASTERN PRODUCTS PIPELINE COMPANY, LLC |
By: /s/ JERRY E. THOMPSON | ||
Jerry E. Thompson | ||
President & Chief Executive Officer |
TEXAS EASTERN PRODUCTS | |
PIPELINE COMPANY, LLC |
By: /s/ JERRY E. THOMPSON | ||
Jerry E. Thompson | ||
President & Chief Executive Officer |
TEXAS EASTERN PRODUCTS | |
PIPELINE COMPANY, LLC | |
/s/ Jerry E. Thompson | |
Jerry E. Thompson | |
TPPL CEO & President | |
TEXAS EASTERN PRODUCTS PIPELINE COMPANY, LLC | |
/s/ Jerry E. Thompson | |
Jerry E. Thompson | |
TPPL CEO & President |
TPP
Unit Appreciation Right Grant
|
|||
(Texas
Eastern Products Pipeline Company, LLC)
|
|||
Grant
No.
|
TPP
UAR-[______]
|
||
Date
of Grant:
|
[________________]
|
||
Name
of Grantee:
|
[________________]
|
||
Grant
Price per Unit:
|
$[______]
|
||
Grant
Quarterly DER per Unit:
|
$[______]
|
||
Number
of UARs Granted:
|
[_____________]
|
1.
|
Vesting. The
UARs shall become automatically payable on the earlier of (“the “Vesting
Date”) (i) the date which is the fifth anniversary of the Date of Grant or
(ii) the date on which you have had a Qualifying Event. A
“Qualifying Event” means you employment with the Company and its
Affiliates is terminated due to your (x) death, (y) being disabled and
entitled to receive long-term disability benefits under the Company’s
long-term disability plan or (z) retirement with the approval of the
Committee on or after reaching age 60. In the event your
employment with the Company and its Affiliates terminates for any reason
other than a Qualifying Event, the UARs shall automatically and
immediately be forfeited and cancelled without payment on such
date.
|
2.
|
No Right to
Employment. Nothing in this Award or in the Plan shall
confer any right on you to continue employment with the Company or its
Affiliates or restrict the Company or its Affiliates from terminating your
employment at any time. Employment with an Affiliate shall be
deemed to be employment with the Company for purposes of the
Plan. Unless you have a separate written employment agreement
with the Company or an Affiliate, you are, and shall continue to be, an
“at will” employee.
|
3.
|
UAR
Payment. On the Vesting Date, the General Partner will
pay you, with respect to each UAR, an amount equal to the excess, if any,
of the Fair Market Value of a Unit on the Vesting Date over the Grant
Price per Unit. In the sole discretion of the Committee,
payment may be made in Units, cash or any combination
thereof.
|
4.
|
DER
Payment. Each quarterly distribution date beginning on
the distribution date occurring in the quarter immediately succeeding the
Grant Date and ending the
|
|
quarter
immediately preceding the Vesting Date, the General Partner will pay you
if you are an employee of EPCO, a cash payment equal to the product
of:
|
(a)
|
the
total number of UAR, multiplied by
|
(b)
|
an
amount equal to the excess, if any, of that quarterly distribution paid
with respect to a Unit for such quarter over the Grant Quarterly DER per
Unit.
|
5.
|
Transferability. None
of the UARs are transferable (by operation of law or otherwise) by you,
other than by will or the laws of descent and distribution. If,
in the event of your divorce, legal separation or other dissolution of
your marriage, your former spouse is awarded ownership of, or an interest
in, all or part of the UARs granted hereby to you, the Award shall
automatically and immediately be forfeited and cancelled in full without
payment on such date.
|
6.
|
Governing
Law. This Award shall be governed by, and construed in
accordance with, the laws of the State of Texas, without regard to
conflicts of laws principles
thereof.
|
7.
|
Plan
Controls. This Award is subject to the terms of the
Plan, which is hereby incorporated by reference as if set forth in its
entirety herein. In the event of a conflict between the terms
of this Award and the Plan, the Plan shall be the controlling
document. Capitalized terms which are used, but are not
defined, in this Award have the respective meanings provided for in the
Plan.
|
/s/ MICHAEL B. BRACY
|
/s/ MURRAY H.
HUTCHISON
|
Michael
B. Bracy
|
Murray
H. Hutchison
|
Director
|
Director
|
/s/ RICHARD
S. SNELL
|
/s/ JERRY
E.
THOMPSON
|
Richard
S. Snell
|
Jerry
E. Thompson
|
Director
|
Director
|
/s/ DONALD
H. DAIGLE
|
/s/ TRACY
E.
OHMART
|
Donald
H. Daigle
|
Tracy
E. Ohmart
|
Director
|
Acting
Chief Financial Officer
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
|
a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
March
2, 2009
|
/s/ JERRY E.
THOMPSON
|
Jerry
E. Thompson
|
|
President
and Chief Executive Officer
|
|
Texas
Eastern Products Pipeline Company, LLC,
|
|
as
General
Partner
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
|
a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
March
2, 2009
|
/s/ TRACY E.
OHMART
|
Tracy
E. Ohmart
|
|
Acting
Chief Financial Officer
|
|
Texas
Eastern Products Pipeline Company, LLC,
|
|
as
General
Partner
|
Exhibit
12.1
|
||||||||||||||||||||
Statement
of Computation of Ratio of Earnings to Fixed Charges
|
||||||||||||||||||||
2004
|
2005
|
2006
|
2007
|
2008
|
||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Earnings
|
||||||||||||||||||||
Income From Continuing Operations *
|
112,658 | 138,639 | 158,538 | 132,701 | 115,476 | |||||||||||||||
Fixed
Charges
|
80,695 | 93,414 | 101,905 | 119,603 | 165,832 | |||||||||||||||
Distributed Income of
|
||||||||||||||||||||
Equity Investment
|
47,213 | 37,085 | 63,483 | 122,900 | 146,095 | |||||||||||||||
Capitalized
Interest
|
(4,227 | ) | (6,759 | ) | (10,681 | ) | (11,030 | ) | (19,170 | ) | ||||||||||
Total
Earnings
|
236,339 | 262,379 | 313,245 | 364,174 | 408,233 | |||||||||||||||
Fixed
Charges
|
||||||||||||||||||||
Interest
Expense
|
72,053 | 81,861 | 86,171 | 101,223 | 139,988 | |||||||||||||||
Capitalized
Interest
|
4,227 | 6,759 | 10,681 | 11,030 | 19,170 | |||||||||||||||
Rental Interest Factor
|
4,415 | 4,794 | 5,053 | 7,350 | 6,674 | |||||||||||||||
Total Fixed Charges
|
80,695 | 93,414 | 101,905 | 119,603 | 165,832 | |||||||||||||||
Ratio: Earnings
/ Fixed Charges
|
2.93 | 2.81 | 3.07 | 3.04 | 2.46 | |||||||||||||||
* Excludes discontinued operations, gain on sale of assets, provision
for income taxes and equity earnings.
|
||||||||||||||||||||