Duncan
Energy Partners L.P.
1100
Louisiana, 10th
Floor
Houston,
Texas 77002
May 22,
2009
Mr. H
Christopher Owings
Assistant
Director
Division
of Corporation Finance
United
States Securities and Exchange Commission
100 F
Street, N.E.
Washington,
D.C. 20549-0404
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Re:
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Duncan
Energy Partners L.P. (the “Registrant”)
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Form
10-K for the Fiscal Year Ended December 31, 2008
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Filed
March 2, 2009
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File
No. 001-33266
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Dear Mr.
Owings:
In this letter, we are setting forth
the response of the Registrant to the comments contained in the letter from the
staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”)
dated May 11, 2009 (the “Comment Letter”), with respect to the above captioned
filing. For your convenience, we have repeated the Staff’s comments
as set forth in the Comment Letter. The Registrant’s response to each
comment is set forth immediately below the text of the applicable
comment.
Unless the context requires otherwise,
references to “we,” “us,” “our,” “Partnership,” and similar expressions are
intended to mean the business and operations of Duncan Energy Partners L.P. and
its consolidated subsidiaries.
Annual Report on
Form 10-K for
the Fiscal Year Ended December 31, 2008
Items 1 and 2. Business and
Properties, page 3
Segment
Discussion,
page 7
1. We
reviewed Note 13 of the Notes to Consolidated Financial Statements included
under Item 8 of your Form 10-K. Please disclose total assets for each
segment for each of the last three fiscal years as opposed to the last two
fiscal years. Refer to Item 101(b) of Regulation S-K.
Response
We note your comment and in future
filings will revise our presentation to disclose three fiscal years of
data.
Items 1A. Risk Factors, page
22
2. In
the second paragraph under this heading you state that “[t]he following section
lists some, but not all, of the key risk factors that may have a direct impact
on [your] business, financial position, results of operations and cash
flows.” All material risks should be described. If risks
are not deemed material, you should not reference them. Please revise
or advise.
Division
of Corporation Finance
May
22, 2009
Page
2
Response
We confirm to you that we believe all
material risks are described. We also do not deem any of the risks
referenced immaterial. We will revise the subject sentence in future
filings as follows:
“The
following section lists the key risk factors that may have a direct and material
impact on our business, financial position, results of operations and cash
flows.”
Item 13. Certain
Relationships and Related Transactions, and Director…, page
97
Related Party Transactions,
page 97
Relationship with
EPCO, page
100
3. In
the second paragraph under the heading “Summary Compensation Table” on page 85,
you disclose that “[c]ompensation paid by [you] with respect to [your] Named
Executive Officers reflects only that portion of compensation paid by EPCO that
is allocated to [you] pursuant to the ASA” and that you also “receive an
allocation of a portion of the cost of EPCO’s equity-based long-term incentive
plans.” In your description of the administrative services agreement
under this heading, please disclose how compensation paid by EPCO, including the
cost of EPCO’s equity-based long-term incentive plans, is allocated under the
administrative services agreement to you and your affiliates.
We also note that Messrs. Fowler and
Bachmann are not only named executive officers of Duncan Energy Partners L.P.
but that they also are named executive officers of Enterprise Products Partners
L.P. and Enterprise GP Holdings L.P. Please disclose how much time
each of these named executive officers devotes to these businesses.
Response
Under the EPCO administrative services
agreement, the total compensation costs of our named executive officers are
allocated to us and our affiliates based on the estimated amount of time that
each officer spends on the affairs of that business in any fiscal
year. These percentages are reassessed at least
quarterly. For clarification purposes, we will modify the lead-in
paragraphs to the Summary Compensation Table in future filings to read as
follows:
“Summary
Compensation Table
The
following table presents total compensation amounts paid, accrued or otherwise
expensed by us with respect to the year ended December 31, 2008 and 2007 for our
CEO, CFO and three other most highly compensated executive officers as of
December 31, 2008. Collectively, these five individuals were our
“Named Executive Officers” for 2008.
Compensation
paid or awarded by us with respect to such Named Executive Officers reflects
only that portion of compensation paid by EPCO that is allocated to us pursuant
to the ASA, including an allocation of a portion of the cost of EPCO’s
equity-based long-term incentive plans. Under the ASA, the
compensation costs of our named executive officers are allocated to us and our
affiliates based on the estimated amount of time that each officer spends on our
consolidated businesses in any fiscal year. These percentages are reassessed at
least quarterly.”
Division
of Corporation Finance
May
22, 2009
Page 3
Supplementally for your information,
the following table presents the estimated amount of time that Messrs. Fowler
and Bachmann devoted to each of the businesses of EPCO and affiliates during the
year ended December 31, 2008 on an unconsolidated basis:
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Enterprise
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Enterprise
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Duncan
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Total
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GP
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Products
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Energy
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Time
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Holdings
L.P.
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Partners
L.P.
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Partners
L.P.
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EPCO,
Inc.
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Allocated
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W.
Randall Fowler
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12.5%
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25%
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12.5%
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50%
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100%
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Richard
H. Bachmann
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15%
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30%
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25%
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30%
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100%
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Item 15. Exhibits and
Financial Statement Schedules, page 107
4. Under
this heading you disclose that the “agreements included as exhibits are included
only to provide information to investors regarding their terms” and that the
“agreements…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 factual disclosures about
[you], any other persons, and state of affairs or other
matters.” Please revise to remove any potential implication that the
referenced agreements do not constitute public disclosure under federal
securities laws. Please also be advised that, notwithstanding the
inclusion of this general disclaimer, you are responsible for considering
whether additional specific disclosures of material information regarding
material contractual provisions are required to make the statements in your 10-K
not misleading.
Response
We acknowledge that, notwithstanding
the general disclaimer, the registrant is responsible for considering whether
additional specific disclosure of material information regarding material
contractual provisions is required to make the statements in the Form 10-K not
misleading. We will revise the disclaimer in future filings as
follows to remove any potential implication that the referenced agreements do
not constitute public disclosure under the federal securities laws:
“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. Accordingly, while these agreements constitute public
disclosure under the federal securities laws, the following exhibits should not
be relied upon as constituting or providing any factual disclosures about us,
any other persons, any state of affairs or other matters, other than the
existence of these agreements and the applicable terms contained
therein.”
5. With
your next current or periodic report, please file as a material agreement the
Administrative Services Agreement with EPCO or tell us why it is not appropriate
to do so. Refer to Item 601(b) of Regulation S-K.
Response
The most recent version of the
Administrative Services Agreement with EPCO, the Fifth Amended and Restated
Administrative Services Agreement dated January 30, 2009, was filed on
February 5, 2009 on Form 8-K. It was incorporated by reference to
Exhibit 10.1 to a Form 8-K filed by Enterprise Products Partners L.P. on
February 5, 2009. The Administrative Services Agreement was also
listed as Exhibit 10.1 to our Form 10-Q filed on May 11,
2009. Earlier versions of the Administrative Services Agreement were
filed as exhibits in connection with prior annual reports and other filings in
accordance with Item 601(b) of Regulation S-K.
Division
of Corporation Finance
May
22, 2009
Page
4
We apologize for the oversight in not
listing this agreement in the Exhibit List presented in our Form 10-K for the
year ended December 31, 2008.
*
* * * *
In
connection with responding to the Staff’s comments, the Registrant acknowledges
that:
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it
is responsible for the adequacy and accuracy of disclosures in its
filings;
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Staff
comments or changes to disclosures in response to Staff comments do not
foreclose the Commission from taking any action with respect to its
filings; and
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§
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it
may not assert Staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the
United States.
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Please
direct any questions that you have with respect to the foregoing responses to
the undersigned at (713) 381-6545 (direct line) or (713) 381-6938
(fax).
| Regards, | ||||
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/s/ Michael J. Knesek | |||
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Name:
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Michael
J. Knesek
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Title:
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Senior
Vice President, Controller and
Principal
Accounting Officer of
DEP
Holdings LLC, general partner of
Duncan Energy Partners L.P.
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cc:
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Richard
H. Bachmann
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W.
Randall Fowler
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Stephanie
Hildebrandt
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Michael
Hanson
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David
Buck (Andrews Kurth)
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