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Subsequent Event | 9 Months Ended
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Sep. 30, 2014
Subsequent Event [Abstract] |
Subsequent Event | Note 18. Subsequent Events Acquisition of Oiltanking's General Partner and 65.9% of Oiltanking's Limited Partner Interests; Enterprise Proposes Merger of Oiltanking On October 1, 2014, we announced our acquisition of the general partner and related incentive distribution rights, 15,899,802 common units and 38,899,802 subordinated units of Oiltanking Partners, L.P. ("Oiltanking") from Oiltanking Holding Americas, Inc. and its affiliates (collectively, "OTA"). We paid total consideration of approximately $4.41 billion to OTA comprised of $2.21 billion in cash and 54,807,352 of our common units. We also paid $228 million to acquire from OTA outstanding loans payable by Oiltanking or its subsidiaries. Collectively, these transactions are referred to as "Step 1" of the Oiltanking acquisition. Oiltanking owns marine terminals located on the Houston Ship Channel and at the Port of Beaumont with a total of 12 ship and barge docks and approximately 24 MMBbls of crude oil and petroleum products storage capacity. Oiltanking's marine terminal on the Houston Ship Channel is connected by pipeline to our Mont Belvieu complex and is integral to our growing LPG export, octane enhancement and propylene businesses. Our Enterprise Crude Houston ("ECHO") facilities are also connected to Oiltanking's system. We funded the cash consideration for Step 1 using borrowings under our new $1.5 billion 364-Day Credit Agreement (see Note 9), borrowings under our commercial paper program and cash on hand. As a second step of the Oiltanking acquisition, we submitted a proposal to the conflicts committee of the general partner of Oiltanking to merge Oiltanking with a wholly owned subsidiary of ours (the "Proposed Merger"). Under the terms of the Proposed Merger, we would exchange 1.23 Enterprise common units for each Oiltanking common unit outstanding. The proposed consideration, valued at approximately $1.4 billion as of the offer date, represents an at-the-market value for Oiltanking common units based upon the volume weighted average trading prices of both Oiltanking and Enterprise common units on September 30, 2014. As a result, the total consideration for Step 1 of the Oiltanking acquisition and the Proposed Merger would approximate $6.0 billion. The terms of the Proposed Merger are subject to negotiation, review and approval by the board of directors of our general partner and the conflicts committee of the board of directors of the general partner of Oiltanking. The Proposed Merger will also be subject to approval by holders of Oiltanking common units in accordance with the Oiltanking partnership agreement. We cannot predict whether the terms of a potential combination will be agreed upon by the conflicts committee of the board of directors of the general partner of Oiltanking or the board of directors of our general partner. Upon payment of Oiltanking's distribution with respect to the third quarter of 2014, which is expected to be paid in mid-November 2014, the subordination period with respect to the Oiltanking subordinated units will end. At that time, the subordinated units we now own will convert into common units on a one-for-one basis. Upon conversion, we will own 54,799,604 Oiltanking common units, or approximately 65.9% of its outstanding common units. In order to fund the equity consideration paid in Step 1, we issued 54,807,352 common units to OTA on October 1, 2014 in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Section 4(a)(2) thereof, and we granted OTA registration rights with respect to these common units under a Registration Rights Agreement between us and OTA (the "Registration Rights Agreement"). The Registration Rights Agreement provides that, subject to the terms and conditions set forth therein, at any time after the earlier of (i) 90 days after October 1, 2014 and (ii) the execution of definitive agreements to acquire (through merger or otherwise) all or substantially all of the Oiltanking common units not owned by Enterprise or its affiliates, OTA may request that we prepare and file a registration statement to permit and otherwise facilitate the public resale of all or a portion of the 54,807,352 Enterprise common units that OTA owns. Our obligation to OTA to effect such transactions is limited to five registration statements and underwritten offerings. In connection with the Step 1 transaction, we entered into a Liquidity Option Agreement (the "Liquidity Option Agreement") with Marquard & Bahls, an affiliate of OTA ("M&B"). Pursuant to the Liquidity Option Agreement, we granted M&B the option (the "Liquidity Option") to sell to us 100% of the issued and outstanding capital stock of OTA (the "Option Securities"). The Liquidity Option may be exercised at any time within a 90-day period commencing on February 1, 2020. Pursuant to the Liquidity Option Agreement, the aggregate consideration to be paid by us for the Option Securities pursuant to the Liquidity Option would equal to 100% of the then-current fair market value of the OTA-owned Enterprise common units at the closing of the transactions contemplated under the Liquidity Option Agreement. The fair market value would be determined by multiplying the number of our common units owned by OTA at the time of exercise by the volume-weighted sales price per unit of our common units as reported by the New York Stock Exchange (or other national securities exchange, as applicable) for the ten (10) consecutive trading days preceding the exercise. We may pay this consideration in all cash, all common units, or in any mix of cash or units, as determined solely by us. If a defined "Trigger Event" occurs, the Liquidity Option may be exercised earlier within a 135-day period following notice of such event. Pursuant to the Liquidity Option Agreement, a "Trigger Event" means: (i) any transaction, event, circumstance, condition or state of facts by which our common units (or any other reference security) cease to be "regularly traded" within the meaning of Section 897 of the U.S. Internal Revenue Code (the "Code") and the Treasury Regulations thereunder; (ii) any transaction, event, circumstance, condition or state of facts by which OTA becomes the owner, for purposes of Section 897 of the Code, of our common units (or any other reference security) representing more than 5% of our outstanding common units (or such reference securities) other than as a result solely of the acquisition of our common units or other reference securities by OTA, M&B or any affiliate after the date of the Liquidity Option Agreement; or (iii) any "Enterprise Tax Event" as defined in the agreement, which includes certain events in which OTA would recognize taxable gain on the common units owned by OTA. The aggregate consideration to be paid by us for the Option Securities in connection with a Trigger Event exercise will be payable solely in cash, determined in the same manner as the price otherwise payable upon the exercise of the Liquidity Option. The Liquidity Option Agreement contains indemnification by M&B for certain specified liabilities of OTA following the closing of any exercise of the Liquidity Option, and certain conditions to closing. OTA is wholly owned by an affiliate of Oiltanking GmbH, an independent storage provider for crude oil, refined products, liquid chemicals and gases. Dr. Christian Flach, managing director of Oiltanking GmbH and former chairman of the board of Oiltanking, has been named as a director of our general partner. As a result of our acquisition of the general partner of Oiltanking, we began consolidating the financial statements of Oiltanking and its general partner on October 1, 2014. Prior to completion of the Proposed Merger, Oiltanking will also continue to file its periodic reports with the SEC. In October 2014, EPCO amended the ASA to add Oiltanking and its general partner to the agreement. These new subsidiaries are entitled to receive services from EPCO on the same terms as services are being provided to us. Issuance of $2.75 Billion of Senior Notes in October 2014 On October 14, 2014, EPO issued $800 million in principal amount of 2.55% senior notes due October 2019 ("Senior Notes LL"), $1.15 billion in principal amount of 3.75% senior notes due February 2025 ("Senior Notes MM") and $400 million in principal amount of 4.95% senior notes due October 2054 ("Senior Notes NN"). Senior Notes LL, MM and NN were issued at 99.981%, 99.681% and 98.356% of their principal amounts, respectively. EPO also issued an additional $400 million in principal amount of its 4.85% Senior Notes II due March 2044. The additional Senior Notes II were issued at 100.836% of their principal amount. Net proceeds from the issuance of these senior notes of $2.73 billion were used as follows: (i) to repay debt principal amounts outstanding under EPO's 364-Day Credit Agreement and commercial paper program (both of which were used to partially fund the cash consideration paid in Step 1 of the Oiltanking acquisition), (ii) to repay $650.0 million in principal amount of Senior Notes G that matured in October 2014, and (iii) for general company purposes. Enterprise Products Partners L.P. has unconditionally guaranteed these senior notes on an unsecured and unsubordinated basis. These senior notes rank equal with EPO's existing and future unsecured and unsubordinated indebtedness and are senior to any existing and future subordinated indebtedness of EPO. These senior notes are subject to make-whole redemption rights and were issued under indentures containing certain covenants, which generally restrict EPO's ability (with certain exceptions) to incur debt secured by liens and engage in sale and leaseback transactions.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References No definition available. + Details
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