1379378--4/2/2007--Duncan_Energy_Partners

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Risks Inherent in Our Business Changes in demand for and production of hydrocarbon products may materially adversely affect our results of operations, cash flows and financial condition. A decrease in demand for natural gas, NGLs, NGL products or petrochemical products by the petrochemical, refining or heating industries could materially adversely affect our results of operations, cash flows and financial position. Any decrease in supplies of natural gas could adversely affect our business and operating results. Because of the natural decline in gas production from existing wells, our success depends on our ability to obtain access to new sources of natural gas, which is dependent on factors beyond our control. In accordance with industry practice, we do not obtain independent evaluations of natural gas reserves dedicated to our pipeline systems, including our DEP South Texas NGL Pipeline System. Accordingly, volumes of natural gas gathered on our pipeline systems in the future could be less than we anticipate, which could adversely affect our cash flow and our ability to make cash distributions to unitholders. We face competition from third parties in our midstream energy businesses. Our debt level may limit our flexibility to obtain additional financing and pursue We may not be able to fully execute our growth strategy if we encounter illiquid capital markets or increased competition for investment opportunities. Our revolving credit facility contains operating and financial restrictions, including covenants and restrictions that may be affected by events beyond our control, that may limit our business and financing activities. Restrictions in our revolving credit facility could limit our ability to make distributions upon the occurrence of certain events. Increases in interest rates could materially adversely affect our business, results of operations, cash flows and financial condition. Our growth strategy may adversely affect our results of operations if we do not successfully integrate the businesses that we acquire or if we substantially increase our indebtedness and contingent liabilities to make acquisitions. We may not be able to make acquisitions or to make acquisitions on economically acceptable terms, which may limit our ability to grow. Acquisitions that appear to be accretive may nevertheless reduce our cash from operations on a per unit basis. We depend in large part on Enterprise Products Partners and the continued success of its business as we operate our assets as part of their value chain, and adverse changes in its related businesses may reduce our revenue, earnings or cash The credit and risk profile of our general partner and its owners could adversely affect our credit ratings and risk profile, which could increase our borrowing costs or hinder our ability to raise capital. A natural disaster, catastrophe or other event could result in severe personal injury, property damage and environmental damage, which could curtail our operations and otherwise materially adversely affect our cash flow and, accordingly, affect the market price of our common units. Our construction of new assets is subject to regulatory, environmental, political, legal and economic risks, which may result in delays, increased costs or decreased Federal, state or local regulatory measures could materially affect our business, results of operations, cash flows and financial condition. Our partnership status may be a disadvantage to us in calculating our cost of service Environmental costs and liabilities and changing environmental regulation could materially affect our results of operations, cash flows and financial condition. Our pipeline integrity program may impose significant costs and liabilities on us. We are subject to strict regulations at many of our facilities regarding employee safety, and failure to comply with these regulations could adversely affect our ability to make distributions to our unitholders. We depend on Enterprise Products Partners and certain other key customers for a significant portion of our revenues. The loss of any of these key customers could result in a decline in our revenues and cash available to make distributions to our unitholders. We are exposed to the credit risks of our key customers, and any material nonpayment or nonperformance by our key customers could reduce our ability to make We depend on the leadership and involvement of Dan L. Duncan and other key personnel for the success of our and our subsidiaries businesses. Successful development of LNG import terminals outside our areas of operations could reduce the demand for our services. We do not own all of the land on which our pipelines and facilities are located, which could disrupt our operations. Mergers among our customers or competitors could result in lower volumes being shipped on our pipelines, thereby reducing the amount of cash we generate. Because of our lack of asset and geographic diversification, adverse developments in our pipeline operations would reduce our ability to make distributions to our Terrorist attacks aimed at our facilities or our customers facilities could adversely affect our business, results of operations, cash flows and financial Risks Inherent in an Investment in Us Enterprise Products Partners, EPCO and their affiliates may compete with us, and business opportunities may be directed by contract to those affiliates prior to us under the administrative services agreement. Our general partner and its affiliates own a controlling interest in us and have conflicts of interest and limited fiduciary duties, which may permit them to favor their own interests to your detriment. We may be limited in our ability to consummate transactions, including acquisitions with affiliates of our general partner. EPCO s employees may be subjected to conflicts in managing our business and the allocation of time and compensation costs between our business and the business of EPCO and its other affiliates. An affiliate of Enterprise Products Partners has the power to appoint and remove our directors and management. Our general partner has a limited call right that may require unitholders to sell their common units at an undesirable time or price. Our partnership agreement limits our general partner s fiduciary duties to unitholders and restricts the remedies available to unitholders for actions taken by our general partner that might otherwise constitute breaches of fiduciary duty. Unitholders have limited voting rights and are not entitled to elect our general partner or its directors, which could lower the trading price of our common units. We may issue additional units without our unitholders approval, which would dilute our unitholders Our partnership agreement restricts the voting rights of unitholders owning 20% or more of our common units. We have a holding company structure in which our subsidiaries conduct our operations and own our operating assets, which may affect our ability to make distributions to We do not have the same flexibility as other types of organizations to accumulate cash and equity to protect against illiquidity in the future. Cost reimbursements to EPCO and its affiliates will reduce cash available for Unitholders may not have limited liability if a court finds that unitholder action constitutes control of our business. Unitholders may have liability to repay distributions. Our general partner s interest in us and the control of our general partner may be transferred to a third party without unitholder consent. Tax Risks to Common Unitholders Our tax treatment depends on our status as a partnership for federal income tax purposes, as well as our not being subject to a material amount of entity-level taxation by individual states. If the IRS were to treat us as a corporation or if we were to become subject to a material amount of entity-level taxation for state tax purposes, then our cash distributions to our unitholders would be substantially reduced. A successful IRS contest of the federal income tax positions we take may adversely impact the market for our common units, and the costs of any contests will be borne by our unitholders and our general partner. Even if our common 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 common units could be different than Tax-exempt entities and foreign persons face unique tax issues from owning common units that may result in adverse tax consequences to them. We treat each purchaser of our common units as having the same tax benefits without regard to the common units purchased. The IRS may challenge this treatment, which could result in a decrease in the value of our common units. Our common unitholders will likely be subject to state and local taxes and return filing requirements in states where they do not live as a result of an investment in our common units. The sale or exchange of 50% or more of our capital and profits interests during a twelve-month period will result in the termination of our partnership for federal income tax purposes.

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1379378--4/2/2007--Duncan_Energy_Partners_L.P.