- Filing of certain prospectuses and communications in connection with business combination transactions (425)
August 21 2009 - 9:22AM
Edgar (US Regulatory)
Filed by Enterprise Products Partners L.P.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: TEPPCO Partners, L.P.
Commission File No.: 333-161185
Enterprise Products Partners L.P. is filing an investors fact sheet that discloses a variety of
financial, operating and general information regarding the company. In addition, this material
contains references to the proposed merger with TEPPCO Partners, L.P. The fact sheet will be posted
on our website,
www.epplp.com
.
Investor Notice
In connection with the proposed merger, Enterprise has filed a registration statement on Form S-4
(Registration No. 333-161185), which includes a preliminary prospectus of Enterprise and a
preliminary proxy statement of TEPPCO and other materials, with the Securities and Exchange
Commission (SEC). INVESTORS AND SECURITY HOLDERS ARE URGED TO CAREFULLY READ THE REGISTRATION
STATEMENT FILED WITH THE SEC AND THE DEFINITIVE PROXY STATEMENT/ PROSPECTUS AND ANY OTHER MATERIALS
FILED OR TO BE FILED WITH THE SEC REGARDING THE PROPOSED TRANSACTION WHEN THEY BECOME AVAILABLE,
BECAUSE THEY CONTAIN, OR WILL CONTAIN, IMPORTANT INFORMATION ABOUT ENTERPRISE, TEPPCO AND THE
PROPOSED MERGER. A definitive proxy statement/prospectus will be sent to security holders of
TEPPCO seeking their approval of the proposed merger after the registration statement is declared
effective by the SEC. Investors and security holders may obtain a free copy of the proxy
statement/prospectus (when it is available) and other documents containing information about
Enterprise and TEPPCO, without charge, at the SECs website at
www.sec.gov
. Copies of the
registration statement and the definitive proxy statement/prospectus and the SEC filings that will
be incorporated by reference in the proxy statement/prospectus may also be obtained for free by
directing a request to: (i) Investor Relations: Enterprise Products Partners L.P., (866) 230-0745,
or (ii) Investor Relations, TEPPCO Partners, L.P., (800) 659-0059.
TEPPCO, its general partner and the directors and management of such general partner may be deemed
to be participants in the solicitation of proxies from TEPPCOs security holders in respect of
the proposed merger. INFORMATION ABOUT THESE PERSONS AND THE INTERESTS OF SUCH PERSONS IN THE
SOLICITATION OF PROXIES IN RESPECT OF THE PROPOSED MERGER CAN BE FOUND IN THE PRELIMINARY PROXY
STATEMENT/PROSPECTUS, TEPPCOS 2008 ANNUAL REPORT ON FORM 10-K AND SUBSEQUENT STATEMENTS OF CHANGES
IN BENEFICIAL OWNERSHIP ON FILE WITH THE SEC.
Enterprise Products Partners At A Glance
Closing Price 8/10/09 $28.07 Annualized Distribution $2.18/unit Yield 7.7% Ranking on the 65th
Fortune 500*
* Listed under Enterprise GP Holdings (NYSE:EPE)
SENIOR UNSECURED DEBT RATINGS
Moodys/Standard & Poors/ Fitch Baa3/BBB-/BBB
DISTRIBUTION REINVESTMENT PLAN
Available to all unitholders
Currently offers 5% discount on reinvested units
Visit the Investor Relations section at www.epplp.com for DRIP prospectus
JONAH/PINEDALE
UINTA
PICEANCE
SAN JUAN
PERMIAN
Eagle Ford
Natural Gas Pipelines NGL Pipelines Crude Oil Pipelines Propylene Pipelines Natural Gas/NGL Storage
Facility Terminal/Storage
Company Profile
Enterprise Products Partners L.P., is one of the largest publicly traded energy partnerships and
a leading North American provider of midstream energy services to producers and consumers of
natural gas, natural gas liquids (NGLs), crude oil and petrochemicals. Enterprise transports
natural gas, NGLs and crude oil through approximately 36,000 miles of onshore and offshore
pipelines.
Services include natural gas transportation, gathering, processing and storage; NGL fractionation,
transportation, storage, import and export terminaling; crude oil transportation; offshore
platform services and petrochemical transportation and services.
Enterprise has the only integrated North American natural gas and NGL network complete with import
and export services. The system links producers of natural gas and NGLs from the largest supply
basins in the United States, Canada and the Gulf of Mexico with the largest consumers of NGLs and
international markets.
NGLs (ethane, propane, normal butane, isobutane and natural gasoline) are primarily used by the
petrochemical and refining industries as raw materials to produce plastics and other consumer
products, and to enhance octane and reduce production costs of motor gasoline. NGLs are also used
as residential, commercial and industrial fuels.
Premier Network Of Midstream Energy Assets
Strong Business Positions In Key Regions
MID-CONTINENT
BARNETT SHALE HAYNESVILLE
Mt. Belvieu
GULF OF MEXICO
Natural Gas Processing/Treating Plant Key Assets
Propylene/NGL Fractionation Facility
19,890 miles of natural gas pipelines
· 14,971 miles of NGL and petrochemical pipelines and
Isomerization Facility
· 992 miles of GOM crude oil pipelines
Octane Enhancement Facility
· 157 million barrels of NGL storage capacity
Platform
27 billion cubic feet of natural gas storage capacity Import/Export Terminal
·
6 offshore hub platforms
·
13 NGL propylene fractionation facilities
·
25 natural gas processing plants
|
August 2009, Affiliates of EPCO, Inc. which is controlled by Dan L. Duncan, co-founder and
chairman, reinvested an additional $75 million of its cash distributions through the partnerships
distribution reinvestment plan, bringing the total to $219 million reinvested in 2009.
July 2009, increased the current quarterly cash distribution rate to partners to $0.545 per common
unit, a 5.8% increase over the $0.515 per unit quarterly distribution paid with respect to the
second quarter of 2008 and the 20th consecutive quarterly increase for the partnership.
June 2009, Enterprise and Enterprise GP Holdings (NYSE:EPE) announced that Enterprise and TEPPCO
(NYSE:TPP) entered into definitive agreements to merge and form the largest publicly traded energy
partnership with an enterprise value of more than $26 billion. The combined partnership would
retain the Enterprise name and would own almost 48,000 miles of pipelines, 200 million barrels of
NGL, refined product and crude oil storage capacity, 27 billion cubic feet of natural gas storage
capacity and numerous other midstream assets. In the transaction, each TEPPCO unitholder, except
for a certain affiliate of EPCO, Inc., would receive 1.24 Enterprise units for each TEPPCO unit.
The partnerships expect to complete the merger in the fourth quarter of 2009.
May 2009, announced that the partnership ranks 89th on Barrons annual list of the 500
top-performing companies, a jump of 123 spots over the 2008 survey.
March 2009, Enterprise and Duncan Energy Partners announced the completion of its 174-mile Sherman
Pipeline Extension on the Enterprise Texas Intrastate natural gas pipeline system. The 36-inch
diameter pipeline has the capacity to transport 1 billion cubic feet per day (Bcf/d) of natural gas
from the Barnett Shale to Boardwalk Pipeline Partners, L.P.s Gulf Crossing pipeline near Sherman,
Texas.
March 2009, announced the completion of the partnerships Meeker II natural gas processing plant in
the Piceance Basin in Colorado. The expansion doubled the natural gas processing capacity at the
Meeker complex to 1.5 Bcf/d with the capability to extract up to 70,000 barrels per day of natural
gas liquids. Enterprise also recently expanded the processing capacity of its Shilling and
Thompsonville natural gas processing plants in South Texas.
December 2008, Enterprise completed its second drop down transaction by contributing partnership
interests in three midstream energy companies to Duncan Energy Partners in a transaction valued at
$730 million.
February 2008, Enterprise began processing natural gas at its Pioneer cryogenic processing facility
located near the Opal hub in Wyoming. This facility has natural gas processing capacity of 750
mmcf/d and is capable of extracting up to 30,000 bbl/d of natural gas liquids.
November 2007, natural gas volumes at the Independence Hub platform reached 900 mmcf/d. All 15
initial wells are online. Initial volumes began flowing into the Independence platform and pipeline
in July 2007.
October 2007, Enterprise began processing natural gas at its Meeker cryrogenic facility located in
Colorados Piceance Basin. This state-of-the-art facility can process up to 750 mmcf/d of natural
gas and is capable of extracting up to 35 thousand bbl/d of natural gas liquids.
September 2004, Enterprise completed its $6 billion merger with GulfTerra, creating one of the
largest publicly traded energy partnerships.
July 2003, implemented a distribution reinvestment plan (DRIP) that is available to all
unitholders, including beneficial owners, who may participate through their broker and benefit from
a 5 percent discount to the market price.
December 2002, Enterprise amended its partnership agreement to eliminate the general partners (GP)
50 percent incentive distribution right (IDR), effectively capping IDR at 25 percent. This
initiative is unprecedented in the MLP sector.
August 2002, completed a $1.2 billion acquisition of the Mid-America and Seminole NGL pipelines
from Williams.
September 1999, completed a $529 million acquisition of Shell Oil Companys Louisiana and
Mississippi NGL business and entered into a 20-year natural gas processing agreement to process
Shells current and future production from the Gulf of Mexico.
CRUDE OIL PIPELINES Dry Natural Gas (principally methane with ethane)
OFFSHORE PRODUCTION PLATFORM SERVICES NATURAL GAS NATURAL GAS NATURAL GAS NATURAL GAS PIPELINES
PROCESSING PLANT STORAGE PIPELINES
Mixed NGLS ETHANE
To fractionators for separation PROPANE into NGL purity products
MIXED BUTANES
ISOBUTANE
NGL NGL
NORMAL BUTANE
PIPELINE STORAGE
NATURAL GASOLINE
Crude Oil Refining Industry
Power Generation
Industrial Fuel
Residential Fuel
Petrochemicals
Petrochemicals and Industrial/Residential Fuel
Gasoline Additives and Petrochemicals
Gasoline Additives and Petrochemicals
Motor Gasoline
NGL Fractionation
|
L.P. Equity Structure
(Millions of L.P. Units at June 30, 2009)
L.P. Beneficially Owned By: Units
Public 297 65% Management* 163 35%
Total L.P. Units
Outstanding 460 100%
* Includes common units beneficially owned by
Chairman Dan Duncan.
Gross Operating Margin By Segment
TWELVE MONTHS ENDED JUNE 30, 2009
$2.1 Billion
Petrochemical Services
NGL Pipelines & Services Offshore Pipelines & Services
Onshore Pipelines
& Services
· Large, diversified, integrated midstream energy system
Access to the most prolific supply basins and serves the
largest energy markets in the United States
· History of strong fundamentals and financial discipline while
executing growth strategy and providing attractive returns Proven Track Record Of Executing Growth
Strategy
Retained $987 million, or 15 percent, of distributable cash
JANUARY 1, 1999 July 31, 2009
flow (DCF) since initial public offering (IPO) in July 1998
CASH DISTRIBUTIONS DECLARED PER UNIT TOTAL RETURN W/ REINVESTED DISTRIBUTIONS
Raised distribution rate 20 consecutive quarters; latest
increase was 29th since IPO
· Focus on long-term cost of capital to support value creation
General Partner incentive distribution rights capped at 25 percent saving the partnership $459
million in cash distributions that otherwise would have been paid to the general partners.
· Managements interest is aligned with investors, evidenced by its substantial ownership of
enterprise units
Purchased approximately $750 million of new equity since
IPO in July 1998.
EPD
ALERIAN MLP INDEX 698%
S&P 500
347%
-3%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 JUL
2009
· Large footprint generates growth opportunities
Well positioned to benefit from the relative value, security
and environmental benefits of domestic natural gas/NGL
supplies relative to foreign-sourced crude oil
Focus ON GROWING The Partnership Leading To Increased Cash Distributions
$19.0
$18
$2.40
$20
$2.18
TOTAL ASSETS $BILLIONS
$2.00
$16
$1.60
$1.20
$14 $12
$10
$6 $4
$0.93
$0.80
$0.40
$2
$0.7
$0.00
$0
JUL-98 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2Q09*
JUL-98 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2Q09
IPO
IPO
*ANNUALIZED
|
SIX MONTHS ENDED JUNE 30, TWELVE MONTHS ENDED DECEMBER 31,
(In $ Millions, Except Per Unit Amounts)
2008
2007
2006
$ 35
$ 40
$ 23
$ 17,958
$ 16,608
$ 13,990
Total Debt
$ 9,108
$ 6,906
$ 5,296
Partners Equity
$ 6,090
$ 6,134
$ 6,480
Noncontrolling Interest
$ 389
$ 428
$ 129
Debt to Capitalization(1)
54%
46%
42%
Total Revenues $6,931
$12,024 $21,906
$16,950
$13,991
Net Income Attributable to Enterprise $412
$523 $954
$534
$601
Diluted Earnings per Unit $0.73
$ 1.03 $ 1.84
$ 0.95
$ 1.20
(1) The calculation of debt to capitalization is adjusted to reflect the partial equity treatment
as ascribed by the rating agencies to the Fixed/Floating Rate Junior Subordinated Notes A and B.
· One of the largest publicly traded energy partnerships
· Assets strategically located to serve the most prolific basins for natural gas, crude oil and NGLs
in the United States
· Strong business positions and significant cash flows from fee-based businesses across the energy
value chain
· Long-standing relationships with major industry participants
Enterprise is a publicly traded partnership which operates in the following ways that are different
from a publicly traded stock corporation:
·
Unitholders own limited partnership units and receive cash distributions instead of owning shares
of common stock and receiving dividends.
· A partnership generally is not a taxable entity and does not pay federal income taxes. All of the
annual income, gains, losses, deductions or credits flow through the partnership to the unitholders
on a per unit basis.
· Proven track record of executing growth strategy
Rapid expansion since the Companys formation in 1968
Completed $6 billion merger with GulfTerra Energy Partners, L.P. in September 2004 (includes $2
billion of debt assumed and refinanced)
Expect to generate new cash flows in 2009 and 2010 from approximately $2.6 billion of growth
capital projects put in service in late 2008 and 2009.
Low cost of capital relative to peers
The unitholders are required to report
their allocated share of these amounts
on their income tax returns whether
or not any cash distributions are paid
by the partnership.
·
Cash distributions paid by a partnership to a unitholder are generally not taxable, unless the
amount of any cash distributed is in excess of the unitholders adjusted basis in his partnership
interest.
· Generally in late February, Enterprise provides each unitholder a Schedule K-1 tax package that
includes each unitholders allocated share of reportable
· History of increasing cash distributions leading to superior attractive total returns which reduces
cost of equity capital
· Attractive yield and tax deferral
· Management team with interests aligned with the public partners
Management and their affiliates own approximately 35 percent of the limited partner units
outstanding
· General Partners incentive distribution rights are capped at 25 percent compared to 50 percent for
most other publicly traded partnerships
partnership items and other partnership information necessary to complete their income tax returns.
The K-1 provides a unitholder the required tax information for their ownership interest in the
partnership, just as a Form 1099-DIV does for a stockholders ownership interest in a corporation.
Visit Enterprise Energy Partners L.P. at its website www.epplp.com where you can:
Headquarters
P. O. Box 4324 Houston, TX 77210 713-381-6500 · Learn more about the operations,
Randy Burkhalter Ronnetta Eaton
management, financial performance and Vice President, Investor Relations Analyst, Investor
Relations history of the Partnership rburkhalter@epco.com reaton@epco.com
· Read the latest news releases, listen to the
Toll Free: 866.230.0745 www.epplp.com
conference call
s and view presentations
· Sign up for email alerts for upcoming events and new additions to the website
Investor Notice: In connection with the proposed merger, Enterprise has filed a registration
statement on Form S-4 (Registration No. 333-161185), which includes a preliminary prospectus of
Enterprise and a preliminary proxy statement of TEPPCO and other materials, with the Securities
and Exchange Commission (SEC). INVESTORS AND SECURITY HOLDERS ARE URGED TO CAREFULLY READ THE
REGISTRATION STATEMENT FILED WITH THE SEC AND THE DEFINITIVE PROXY STATEMENT/ PROSPECTUS AND ANY
OTHER MATERIALS FILED OR TO BE FILED WITH THE SEC REGARDING THE PROPOSED TRANSACTION WHEN THEY
BECOME AVAILABLE, BECAUSE THEY CONTAIN, OR WILL CONTAIN, IMPORTANT INFORMATION ABOUT ENTERPRISE,
TEPPCO AND THE PROPOSED MERGER. A definitive proxy statement/prospectus will be sent to security
holders of TEPPCO seeking their approval of the proposed merger after the registration statement is
declared effective by the SEC. Investors and security holders may obtain a free copy of the proxy
statement/prospectus (when it is available) and other documents containing information about
Enterprise and TEPPCO, without charge, at the SECs website at www.sec.gov. Copies of the
registration statement and the definitive proxy statement/prospectus and the SEC filings that will
be incorporated by reference in the proxy statement/prospectus may also be obtained for free by
directing a request to: (i) Investor Relations: Enterprise Products Partners L.P., (866) 230-0745,
or (ii) Investor Relations, TEPPCO Partners, L.P., (800) 659-0059.
TEPPCO, its general partner and the directors and management of such general partner may be deemed
to be participants in the solicitation of proxies from TEPPCOs security holders in respect of
the proposed merger. INFORMATION ABOUT THESE PERSONS AND THE INTERESTS OF SUCH PERSONS IN THE
SOLICITATION OF PROXIES IN RESPECT OF THE PROPOSED MERGER CAN BE FOUND IN THE PRELIMINARY PROXY
STATEMENT/PROSPECTUS, TEPPCOS 2008 ANNUAL REPORT ON FORM 10-K AND SUBSEQUENT STATEMENTS OF CHANGES
IN BENEFICIAL OWNERSHIP ON FILE WITH THE SEC.
This fact sheet includes forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934 based on the beliefs of the company, as well as assumptions made
by, and information currently available to, management. Although Enterprise believes that the
expectations reflected in such forward-looking statements are reasonable, it can give no assurance
that such expectations will prove to be correct. Please refer to the companys latest filings with
the Securities and Exchange Commission for a list of factors that may cause actual results to
differ materially from those in the forward-looking statements contained in this fact sheet.
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