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Equity and Distributions | 9 Months Ended
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Sep. 30, 2015
Equity and Distributions [Abstract] |
Equity and Distributions | Note 11. Equity and Distributions Partners’ equity reflects the various classes of limited partner interests (i.e., common units, including restricted common units) that we have outstanding. The following table summarizes changes in the number of our outstanding units since December 31, 2014:
| Common Units (Unrestricted) |  | Restricted Common Units |  | Total Common Units
Number of units outstanding at December 31, 2014 | 1,933,095,027 |  | 4,229,790 |  | 1,937,324,817
Common units issued in connection with ATM program | 23,258,453 |  | -- |  | 23,258,453
Common units issued in connection with DRIP and EUPP | 8,251,315 |  | -- |  | 8,251,315
Common units issued in connection with Step 2 of Oiltanking acquisition | 36,827,517 |  | -- |  | 36,827,517
Common units issued in connection with the vesting and exercise of unit options | 333,002 |  | -- |  | 333,002
Common units issued in connection with the vesting of phantom unit awards | 613,689 |  | -- |  | 613,689
Common units issued in connection with the vesting of restricted common unit awards | 1,997,194 |  | (1,997,194) |  | --
Forfeiture of restricted common unit awards | -- |  | (157,750) |  | (157,750)
Acquisition and cancellation of treasury units in connection with the vesting of equity-based awards | (680,496) |  | -- |  | (680,496)
Other | 15,054 |  | -- |  | 15,054
Number of units outstanding at September 30, 2015 | 2,003,710,755 |  | 2,074,846 |  | 2,005,785,601
We may issue additional equity or debt securities to assist us in meeting our future liquidity and capital spending requirements. We have a universal shelf registration statement (the “2013 Shelf”) on file with the SEC. The 2013 Shelf allows Enterprise Products Partners L.P. and EPO (on a standalone basis) to issue an unlimited amount of equity and debt securities. On July 1, 2015, we filed a registration statement with the SEC covering the issuance of up to $1.92 billion of our common units in amounts, at prices and on terms to be determined by market conditions and other factors at the time of such offerings. Pursuant to this “at-the-market” program (“ATM program”), we may sell common units under an equity distribution agreement between Enterprise Products Partners L.P. and certain broker-dealers from time-to-time by means of ordinary brokers’ transactions through the NYSE at market prices, in block transactions or as otherwise agreed to with the broker-dealer parties to the agreement. The new registration statement was declared effective on August 3, 2015 and replaced our prior registration statement with respect to the ATM program, which was filed with the SEC in October 2013 and covered the issuance of up to $1.25 billion of our common units. Immediately prior to the effectiveness of the new registration statement, we had the capacity to issue additional common units under the ATM program up to an aggregate sales price of $424.6 million (after giving effect to sales of common units previously made under the program). Following the effectiveness of the new registration statement and after taking into account the aggregate sales price of common units sold under our ATM program through September 30, 2015 as described below, we now have the capacity to issue additional common units under our ATM program up to an aggregate sales price of $1.92 billion. During the nine months ended September 30, 2015, we issued 23,258,453 common units under the ATM program for aggregate gross proceeds of $767.1 million. This includes 3,225,057 common units sold in March 2015 to a privately held affiliate of EPCO, which generated gross proceeds of $100 million. After taking into account applicable costs, our transactions under the ATM program resulted in aggregate net cash proceeds of $759.7 million during the nine months ended September 30, 2015. During the nine months ended September 30, 2014, we issued 1,590,334 common units under this program for aggregate gross cash proceeds of $58.3 million, resulting in total net cash proceeds of $57.7 million. We also have registration statements on file with the SEC collectively authorizing the issuance of up to 140,000,000 of our common units in connection with a distribution reinvestment plan (“DRIP”). We issued a total of 7,965,318 common units under our DRIP during the nine months ended September 30, 2015, which generated net cash proceeds of $242.8 million. During the nine months ended September 30, 2014, we issued 7,148,778 common units under our DRIP, which generated net cash proceeds of $239.8 million. Privately held affiliates of EPCO reinvested $50 million and $75 million through the DRIP in each of the nine month periods ending September 30, 2015 and 2014, respectively (this amount being a component of the net cash proceeds presented for both periods). After taking into account the number of common units issued under the DRIP through September 30, 2015, we have the capacity to issue an additional 19,516,031 common units under this plan. In addition to the DRIP, we have registration statements on file with the SEC authorizing the issuance of up to 8,000,000 of our common units in connection with our employee unit purchase plan (“EUPP”). We issued 285,997 common units under our EUPP during the nine months ended September 30, 2015, which generated net cash proceeds of $8.9 million. During the nine months ended September 30, 2014, we issued 207,126 common units under our EUPP, which generated net cash proceeds of $7.4 million. After taking into account the number of common units issued under the EUPP through September 30, 2015, we may issue an additional 6,867,071 common units under this plan. The net cash proceeds we received from the issuance of common units during the nine months ended September 30, 2015 were used to temporarily reduce amounts outstanding under EPO’s commercial paper program and revolving credit facilities and for general company purposes. Completion of Oiltanking Acquisition In October 2014, we completed the first step (“Step 1”) of a two-step acquisition of Oiltanking by paying approximately $4.41 billion to OTA for Oiltanking GP, the related IDRs and approximately 65.9% of the limited partner interests of Oiltanking. As a second step (“Step 2”) of the Oiltanking acquisition (separately negotiated by the conflicts committee of Oiltanking GP on behalf of Oiltanking), we entered into an Agreement and Plan of Merger (the “merger agreement”) with Oiltanking in November 2014 that provided for the following:
§ | the merger of a wholly owned subsidiary of Enterprise with and into Oiltanking, with Oiltanking surviving the merger as a wholly owned subsidiary of Enterprise; and
§ | all outstanding common units of Oiltanking at the effective time of the merger held by Oiltanking’s public unitholders (which consisted of Oiltanking unitholders other than Enterprise and its subsidiaries) to be cancelled and converted into Enterprise common units based on an exchange ratio of 1.30 Enterprise common units for each Oiltanking common unit.
In accordance with the merger agreement and Oiltanking’s partnership agreement, the merger was submitted to a vote of Oiltanking’s common unitholders, with the required majority of unitholders (including our ownership interests) voting to approve the merger on February 13, 2015. Upon approval of the merger, a total of 36,827,517 of our common units were issued to Oiltanking’s former public unitholders. With the completion of Step 2, total consideration paid by Enterprise for Oiltanking was approximately $5.9 billion. Step 2 of the acquisition was accounted for in accordance with ASC Topic 810, Consolidations – Overall – Changes in Parent’s Ownership Interest in a Subsidiary. Since we had a controlling financial interest in Oiltanking before and after completion of Step 2, the increase in our ownership interest in Oiltanking was accounted for as an equity transaction with no gain or loss recognized. Step 2 represented our acquisition of the noncontrolling interests in Oiltanking; therefore, approximately $1.4 billion of noncontrolling interests attributable to Oiltanking was reclassified to limited partners’ equity to reflect the February 2015 issuance of 36,827,517 new common units. See Note 15 for information regarding requests from the Federal Trade Commission (“FTC”) and the Attorney General of the State of Texas in connection with the Oiltanking acquisition. We consider our purchase price allocation for the Oiltanking acquisition to be final. We finalized the determination of the fair value of the Liquidity Option Agreement during the third quarter of 2015. Subsequent changes in the fair value of this option will be recorded in earnings each reporting period until the option expires or is exercised. Noncontrolling Interests Noncontrolling interests represent third party equity ownership interests in our consolidated subsidiaries, including Enterprise EF78 LLC, Rio Grande Pipeline Company, Tri-States NGL Pipeline L.L.C., Panola Pipeline Company, LLC and Wilprise Pipeline Company LLC. In July 2015, as part of the sale of our Offshore Business to Genesis, we sold our ownership interests in Independence Hub LLC and no longer report this third party ownership as noncontrolling interests. As previously described, we reclassified approximately $1.4 billion of noncontrolling interests to limited partners’ equity in connection with completing Step 2 of the Oiltanking acquisition in February 2015. Cash distributions paid in the first quarter of 2015 to the limited partners of Oiltanking other than EPO and its subsidiaries are presented as amounts paid to noncontrolling interests. In February 2015, we formed a joint venture involving our Panola NGL Pipeline with affiliates of Anadarko Petroleum Corporation (“Anadarko”), DCP Midstream Partners, LP (“DCP”) and MarkWest Energy Partners, L.P. (“MarkWest”). We will continue to serve as operator of the Panola Pipeline and own 55% of the member interests in the joint venture. Affiliates of Anadarko, DCP and MarkWest will own the remaining 45% member interests, with each holding a 15% interest. The Panola Pipeline transports mixed NGLs from points near Carthage, Texas to Mont Belvieu, Texas and supports the Haynesville and Cotton Valley oil and gas production areas. Accumulated Other Comprehensive Income (Loss) The following tables present the components of accumulated other comprehensive income (loss) as reported on our Unaudited Condensed Consolidated Balance Sheets at the dates indicated:
|  | Gains (Losses) on Cash Flow Hedges |  |  |  |  |  |  |
|  | Commodity Derivative Instruments |  |  | Interest Rate Derivative Instruments |  |  | Other |  |  | Total |
Balance, December 31, 2014 |  | $ | 69.9 |  |  | $ | (314.8 | ) |  | $ | 3.3 |  |  | $ | (241.6 | )
Other comprehensive income before reclassifications |  |  | 112.3 |  |  |  | -- |  |  |  | 0.4 |  |  |  | 112.7 |
Amounts reclassified from accumulated other comprehensive loss (income) |  |  | (128.1 | ) |  |  | 26.3 |  |  |  | -- |  |  |  | (101.8 | )
Total other comprehensive income (loss) |  |  | (15.8 | ) |  |  | 26.3 |  |  |  | 0.4 |  |  |  | 10.9 |
Balance, September 30, 2015 |  | $ | 54.1 |  |  | $ | (288.5 | ) |  | $ | 3.7 |  |  | $ | (230.7 | )
|  | Gains (Losses) on Cash Flow Hedges |  |  |  |  |  |  |
|  | Commodity Derivative Instruments |  |  | Interest Rate Derivative Instruments |  |  | Other |  |  | Total |
Balance, December 31, 2013 |  | $ | (14.7 | ) |  | $ | (347.2 | ) |  | $ | 2.9 |  |  | $ | (359.0 | )
Other comprehensive income before reclassifications |  |  | 16.1 |  |  |  | -- |  |  |  | -- |  |  |  | 16.1 |
Amounts reclassified from accumulated other comprehensive loss |  |  | 12.9 |  |  |  | 23.9 |  |  |  | -- |  |  |  | 36.8 |
Total other comprehensive income |  |  | 29.0 |  |  |  | 23.9 |  |  |  | -- |  |  |  | 52.9 |
Balance, September 30, 2014 |  | $ | 14.3 |  |  | $ | (323.3 | ) |  | $ | 2.9 |  |  | $ | (306.1 | )
The following table presents reclassifications out of accumulated other comprehensive income (loss) into net income during the periods indicated:
|  |  | For the Three Months Ended September 30, |  |  | For the Nine Months Ended September 30, |
| Location |  | 2015 |  |  | 2014 |  |  | 2015 |  |  | 2014 |
Losses (gains) on cash flow hedges: |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate derivatives | Interest expense |  | $ | 8.9 |  |  | $ | 8.0 |  |  | $ | 26.3 |  |  | $ | 23.9 |
Commodity derivatives | Revenue |  |  | (46.8 | ) |  |  | (17.8 | ) |  |  | (128.6 | ) |  |  | 14.5 |
Commodity derivatives | Operating costs and expenses |  |  | -- |  |  |  | (0.2 | ) |  |  | 0.5 |  |  |  | (1.6 | )
Total |  |  | $ | (37.9 | ) |  | $ | (10.0 | ) |  | $ | (101.8 | ) |  | $ | 36.8 |
Cash Distributions The following table presents our declared quarterly cash distribution rates per common unit with respect to the quarter indicated:
|  | Distribution Per Common Unit |  | Record Date | Payment Date
2014: |  |  |  |  |
1st Quarter |  | $ | 0.3550 |  | 4/30/2014 | 5/7/2014
2nd Quarter |  | $ | 0.3600 |  | 7/31/2014 | 8/7/2014
3rd Quarter |  | $ | 0.3650 |  | 10/31/2014 | 11/7/2014
2015: |  |  |  |  |  |
1st Quarter |  | $ | 0.3750 |  | 4/30/2015 | 5/7/2015
2nd Quarter |  | $ | 0.3800 |  | 7/31/2015 | 8/7/2015
3rd Quarter |  | $ | 0.3850 |  | 10/30/2015 | 11/6/2015
In November 2010, we completed our merger with Enterprise GP Holdings L.P. (the “Holdings Merger”). In connection with the Holdings Merger, a privately held affiliate of EPCO agreed to temporarily waive the regular cash distributions it would otherwise receive from us with respect to a certain number of our common units it owns (the “Designated Units”). Distributions paid by us to this privately held affiliate of EPCO during 2015 excluded 35,380,000 Designated Units. The temporary distribution waiver expires at the end of calendar year 2015; therefore, distributions to be paid, if any, during calendar year 2016 will include all common units owned by the privately held affiliates of EPCO.

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