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Significant Risks and Uncertainties | 12 Months Ended
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Dec. 31, 2012
Significant Risks and Uncertainties [Abstract] |
Significant Risks and Uncertainties | Note 19. Significant Risks and Uncertainties Nature of Operations in Midstream Energy Industry Our operations are within the midstream energy industry, which includes gathering, transporting, processing, fractionating and storing natural gas, NGLs, crude oil, refined products and certain petrochemicals. We also market natural gas, NGLs, crude oil and other hydrocarbon products. A reduction in demand for natural gas, NGLs, crude oil, refined products, petrochemicals and other hydrocarbon products by the petrochemical, refining or heating industries, whether because of general economic conditions; reduced demand by customers; increased competition from other products due to pricing differences; adverse weather conditions; government regulations affecting energy commodity prices, production levels of hydrocarbons or the content of motor gasoline; or for other reasons, could adversely affect our financial position, results of operations and cash flows. Credit Risk Due to Industry Concentrations A substantial portion of our revenues are derived from companies in the domestic natural gas, NGL and petrochemical industries. This concentration could affect our overall exposure to credit risk since these customers may be affected by similar economic or other conditions. We generally do not require collateral for our accounts receivable; however, we do attempt to negotiate offset, prepayment, or automatic debit agreements with customers that are deemed to be credit risks in order to minimize our potential exposure to any defaults. Our largest non-affiliated customer for 2012 was BP and its affiliates, which accounted for 9.5% of our consolidated revenues for this period. Counterparty Risk with Respect to Derivative Instruments In those situations where we are exposed to credit risk in our derivative instrument transactions, we analyze the counterparty's financial condition prior to entering into an agreement, establish credit and/or margin limits and monitor the appropriateness of these limits on an ongoing basis. Generally, we do not require collateral for such transactions nor do we currently anticipate nonperformance by our counterparties. Insurance Matters We participate as a named insured in EPCO's insurance program, which provides us with property damage, business interruption and other insurance coverage, the scope and amounts of which we believe are customary and prudent for the nature and extent of our operations. While we believe EPCO maintains adequate insurance coverage on our behalf, insurance may not fully cover every type of damage, interruption or other loss that might occur. If we were to incur a significant loss for which we were not fully insured, it could have a material impact on our financial position, results of operations and cash flows. In addition, there may be timing differences between amounts we accrue related to property damage expense, amounts we are required to pay in connection with a loss, and amounts we subsequently receive from insurance carriers as reimbursements. Any event that materially interrupts the revenues generated by our consolidated operations, or other losses that require us to make material expenditures not reimbursed by insurance, could reduce our ability to pay distributions to our unitholders and, accordingly, adversely affect the market price of our common units. Involuntary conversions result from the loss of an asset due to some unforeseen event (e.g., destruction due to a fire). Some of these events are covered by insurance, thus resulting in a property damage insurance recovery. Amounts we receive from insurance carriers are net of any deductibles related to the covered event. We record a receivable from insurance to the extent we recognize a loss from an involuntary conversion event and the likelihood of our recovering such loss is deemed probable. To the extent that any of our insurance claim receivables are later judged not probable of recovery (e.g., due to new information), such amounts are expensed. We recognize gains on involuntary conversions when the amount received from insurance exceeds the net book value of the retired asset(s). In addition, we do not recognize gains related to insurance recoveries until all contingencies related to such proceeds have been resolved, that is, a non-refundable cash payment is received from the insurance carrier or we have a binding settlement agreement with the carrier that clearly states that a non-refundable payment will be made. To the extent that an asset is rebuilt, the associated expenditures are capitalized, as appropriate, on our Consolidated Balance Sheets and presented as capital expenditures on our Statements of Consolidated Cash Flows. Currently, EPCO's deductibles for property damage claims range from $5.0 million to $60.0 million depending on the nature of the loss (windstorm or non-windstorm) and the assets involved (onshore or offshore assets). We continue to maintain business interruption coverage for our onshore and offshore assets, except for those situations involving windstorm-related downtime for our offshore assets. After performing a cost-benefit analysis, management elected to forego windstorm coverage for our Gulf of Mexico offshore assets during the 2012 hurricane season. The combination of increasingly high deductibles and premiums resulted in such coverage being uneconomical to us; therefore, we chose to self-insure such operations for the current annual policy period. Although the new EPCO policies do not provide any windstorm coverage for offshore assets, producers affiliated with our Independence Hub and Marco Polo platforms provide physical damage windstorm coverage of $350.0 million for each of these offshore facilities. With respect to business interruption insurance claims, we recognize income only when we receive non-refundable cash proceeds from insurers. We recognized $4.3 million and $1.1 million of such income during the years ended December 31, 2011 and 2010, respectively. We did not receive any business interruption proceeds during the year ended December 31, 2012. We received $64.8 million of nonrefundable insurance proceeds in 2010 related to the disposal of a segment of an offshore natural gas pipeline and certain components of an offshore platform. The $64.8 million of cash proceeds represents the negotiated insurance value of the covered assets and is a component of proceeds from the disposal of assets as presented on our Statements of Consolidated Cash Flows for the year ended December 31, 2010. Operating income for the year ended December 31, 2010 includes $56.6 million of net gains related to the disposal of these offshore assets. We received $30.0 million and $20.0 million of nonrefundable insurance proceeds during the years ended December 31, 2012 and 2011, respectively, attributable to property damage claims we filed in connection with a February 2011 NGL release and fire at the West Storage location of our Mont Belvieu, Texas underground storage facility. We remain in negotiation with our insurance carriers regarding the overall claim, which is currently projected to be up to $150.0 million. Operating income includes $30.0 million and $4.7 million of gains related to these insurance recoveries during the years ended December 31, 2012 and 2011, respectively. To the extent that additional non-refundable insurance proceeds related to this incident are received, we expect to record gains equal to such proceeds.

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- Definition The entire disclosure for any concentrations existing at the date of the financial statements that make an entity vulnerable to a reasonably possible, near-term, severe impact. This disclosure informs financial statement users about the general nature of the risk associated with the concentration, and may indicate the percentage of concentration risk as of the balance sheet date. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13537-108611 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -SubTopic 10 -Section 50 -Paragraph 20 -URI http://asc.fasb.org/extlink&oid=6927468&loc=d3e6404-108592 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=6927468&loc=d3e6327-108592 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 107 -Paragraph 15A -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=6927468&loc=d3e6442-108592 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 20 -URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13531-108611 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 94-6 -Paragraph 21, 22, 24 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -SubTopic 10 -Section 50 -Paragraph 18 -URI http://asc.fasb.org/extlink&oid=6927468&loc=d3e6351-108592 + Details
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