1324592--2/27/2006--Enterprise_GP_Holdings

related topics

{debt, indebtedness, cash}

{tax, income, asset}

{investment, property, distribution}

{acquisition, growth, future}

{stock, price, operating}

{gas, price, oil}

{cost, regulation, environmental}

{operation, natural, condition}

{condition, economic, financial}

{system, service, information}

{financial, litigation, operation}

{cost, contract, operation}

{loan, real, estate}

{product, market, service}

{competitive, industry, competition}

{regulation, change, law}

{interest, director, officer}

{regulation, government, change}

Risks Inherent in an Investment in Us Currently, our operating cash flow is derived primarily from cash distributions from Enterprise Products Partners. In the future, we may not have sufficient cash to pay distributions at our current distribution level or to increase distributions. Restrictions in our credit facility could limit our ability to make distributions to our unitholders. Our unitholders do not elect our general partner or vote on our general partner s officers or directors. Affiliates of our general partner currently own a sufficient number of units to block any attempt to remove EPE Holdings. We may issue an unlimited number of limited partner interests without the consent of our unitholders, which will dilute your ownership interest in us and may increase the risk that we will not have sufficient available cash to maintain or increase our per unit distribution level. The market price of our units could be adversely affected by sales of substantial amounts of our units in the public markets, including sales by our existing unitholders. Risks arising in connection with the execution of our business strategy may adversely affect our ability to make or increase distributions and/or the market price of our units. The control of our general partner may be transferred to a third party without unitholder consent. All of our units and substantially all of the common units of Enterprise Products Partners that are owned by EPCO and its affiliates, other than Dan Duncan LLC and certian trusts affiliated with Dan L. Duncan, are pledged as security under the credit facility of an affiliate of EPCO. Upon an event of default under this credit facility, a change in ownership or control of us or Enterprise Products Partners could result. All of our assets are pledged under our credit facility. Our general partner has a limited call right that may require you to sell your units at an undesirable time or price. We depend on the leadership and involvement of Dan L. Duncan and other key personnel for the success of our and our subsidiaries businesses. An increase in interest rates may cause the market price of our units to decline. Enterprise Products Partners may issue additional units, which may increase the risk that Enterprise Products Partners will not have sufficient available cash to maintain or increase its per unit distribution level. Unitholders liability as a limited partner may not be limited, and our unitholders may have to repay distributions or make additional contributions to us under certain circumstances. If in the future we cease to manage and control Enterprise Products Partners through our direct or indirect ownership of Enterprise Products GP, we may be deemed to be an investment company under the Investment Company Act of 1940. Our partnership agreement restricts the rights of unitholders owning 20% or more of our units. Risks Related to Conflicts of Interest Conflicts of interest exist and may arise among us, Enterprise Products Partners, TEPPCO and our respective general partners and affiliates and entities affiliated with any general partner interests that we may acquire in the future. If we are presented with certain business opportunities, Enterprise Products Partners will have the first right to pursue such opportunities. Our general partner s affiliates may compete with us. Potential conflicts of interest may arise among our general partner, its affiliates and us. Our general partner and its affiliates have limited fiduciary duties to us and our unitholders, which may permit them to favor their own interests to the detriment of us and our unitholders. Our partnership agreement limits our general partner s fiduciary duties to us and our unitholders and restricts the remedies available to our unitholders for actions taken by our general partner that might otherwise constitute breaches of fiduciary duty. Enterprise Products GP controls Enterprise Products Partners and may influence cash distributed to us. Some of our directors and all of our executive officers face conflicts of interest in managing our business. Risks Related to Enterprise Products Partners' Business Changes in the prices of hydrocarbon products may materially adversely affect Enterprise Products Partners results of operations, cash flows and financial condition. A decline in the volume of natural gas, NGLs and crude oil delivered to Enterprise Products Partners facilities could adversely affect its results of operations, cash flows and financial condition. A decrease in demand for NGL products by the petrochemical, refining or heating industries could materially adversely affect Enterprise Products Partners' results of operations, cash flows and financial position. Enterprise Products Partners faces competition from third parties in its midstream businesses. Enterprise Products Partners future debt level may limit its future financial and operating flexibility. Enterprise Products Partners may not be able to fully execute its growth strategy if it encounters illiquid capital markets or increased competition for investment opportunities. Enterprise Products Partners growth strategy may adversely affect its results of operations if it does not successfully integrate the businesses that it acquires or if it substantially increases its indebtedness and contingent liabilities to make acquisitions. Enterprise Products Partners' growth strategy may adversely affect its results of operations if it does not successfully integrate the businesses that it acquires or if it substantially increases its indebtedness and contingent liabilities to make acquisitions. Enterprise Products Partners' operating cash flows from our capital projects may not immediate. Enterprise Products Partners actual construction, development and acquisition costs could exceed forecasted The interruption of distributions to Enterprise Products Partners from its subsidiaries and joint ventures may affect its ability to satisfy its obligations and to make distributions to its partners. Enterprise Products Partners may be unable to cause its joint ventures to take or not to take certain actions unless some or all of its joint venture participants agree. A natural disaster, catastrophe or other event could result in severe personal injury, property damage and environmental damage, which could curtail Enterprise Products Partners operations and otherwise materially adversely affect its cash flow and, accordingly, affect the market price of its common units. An impairment of goodwill and intangible assets could reduce Enterprise Products Partners Increases in interest rates could materially adversely affect Enterprise Products Partners business, results of operations, cash flows and financial condition. The use of derivative financial instruments could result in material financial losses by Enterprise Products Enterprise Products Partners pipeline integrity program may impose significant costs and liabilities on it. Environmental costs and liabilities and changing environmental regulation could materially affect Enterprise Products Partners results of operations, cash flows and financial condition. Federal, state or local regulatory measures could materially adversely affect Enterprise Products Partners business, results of operations, cash flows and financial condition. Terrorist attacks aimed at Enterprise Products Partners facilities could adversely affect its business, results of operations, cash flows and financial condition. Tax Risks to Our Unitholders If we or Enterprise Products Partners were to become subject to entity level taxation for federal or state tax purposes, then our cash available for distribution to our unitholders would be substantially reduced. If the IRS contests the federal income tax positions we take, the market for our units may be adversely impacted, and the costs of any contest will be borne by our unitholders and EPE Holdings. A successful IRS contest of the federal income tax positions taken by Enterprise Products Partners may adversely impact the market for its common units, and the costs of any contest will be borne by Enterprise Products Partners, and therefore indirectly by us and the other unitholders of Enterprise Products Partners. Even if our unitholders do not receive any cash distributions from us, they will be required to pay taxes on their share of our taxable income. Tax gain or loss on the disposition of our units could be different than expected. Tax-exempt entities, regulated investment companies and foreign persons face unique tax issues from owning units that may result in adverse tax consequences to them. We will treat each purchaser of our units as having the same tax benefits without regard to the units purchased. The IRS may challenge this treatment, which could adversely affect the value of our units. Our unitholders will likely be subject to state and local taxes and return filing requirements as a result of investing in our units.

Full 10-K form ▸

1324592--2/27/2006--Enterprise_GP_Holdings_L.P.