Related Party Transactions

12 Months Ended

Dec. 31, 2020

Note 15. Related Party Transactions

The following table summarizes our related party transactions for the years indicated:

	For the Year Ended December 31,
	2020		2019		2018
Revenues – related parties:
Unconsolidated affiliates	$	36.7	$	67.3	$	107.7
Costs and expenses – related parties:
EPCO and its privately held affiliates	$	1,143.7	$	1,145.3	$	1,089.6
Unconsolidated affiliates		203.1		403.1		447.4
Total	$	1,346.8	$	1,548.4	$	1,537.0

The following table summarizes our related party accounts receivable and accounts payable balances at the dates indicated:

	December 31,
	2020		2019
Accounts receivable - related parties:
EPCO and its privately held affiliates	$	1.9	$	–
Unconsolidated affiliates		3.7		2.5
Total	$	5.6	$	2.5

Accounts payable - related parties:
EPCO and its privately held affiliates	$	139.6	$	143.7
Unconsolidated affiliates		9.9		18.6
Total	$	149.5	$	162.3

We believe that the terms and provisions of our related party agreements are fair to us; however, such agreements and transactions may not be as favorable to us as we could have obtained from unaffiliated third parties.

Relationship with EPCO and Affiliates

We have an extensive and ongoing relationship with EPCO and its privately held affiliates (including Enterprise GP, our general partner), which are not a part of our consolidated group of companies.

At December 31, 2020, EPCO and its privately held affiliates (including Dan Duncan LLC and certain Duncan family trusts) beneficially owned the following limited partner interests in us:

Total Number of Limited Partner Interests Held	Percentage of Limited Partner Interests Outstanding
701,993,298 common units		32.2	%
15,138 preferred units		30.2	%

Of the total number of units held by EPCO and its privately held affiliates, 92,976,464 have been pledged as security under the credit facilities of EPCO and its privately held affiliates at December 31, 2020. These credit facilities contain customary and other events of default, including defaults by us and other affiliates of EPCO. An event of default, followed by a foreclosure on the pledged collateral, could ultimately result in a change in ownership of these units and affect the market price of EPD’s common units.

The Partnership and Enterprise GP are both separate legal entities apart from each other and apart from EPCO and its other affiliates, with assets and liabilities that are also separate from those of EPCO and its other affiliates. EPCO and its privately held affiliates depend on the cash distributions they receive from us and other investments to fund their other activities and to meet their debt obligations. During the years ended December 31, 2020, 2019 and 2018, we paid EPCO and its privately held affiliates cash distributions totaling $1.21 billion, $1.19 billion and $1.16 billion, respectively.

From time-to-time, EPCO and its privately held affiliates elect to purchase additional common units under EPD’s DRIP and ATM program. During the years ended December 31, 2019 and 2018, privately held affiliates of EPCO reinvested $29 million and $213 million, respectively, through our DRIP. See Note 8 for additional information regarding our DRIP and ATM program.

We lease office space from privately held affiliates of EPCO at rental rates that approximate market rates. In January 2020, we amended an office space lease with an affiliate of EPCO that extended the term through June 2037. For the years ended December 31, 2020, 2019 and 2018, we recognized $13.0 million, $14.9 million and $13.9 million, respectively, of related party operating lease expense in connection with these office space leases.

EPCO ASA. We have no employees. All of our administrative and operating functions are provided either by employees of EPCO (pursuant to the ASA) or by other service providers. We and our general partner are parties to the ASA.

Under the ASA, EPCO provides us with the administrative and operating services deemed necessary to manage and operate our businesses, properties and assets (all in accordance with prudent industry practices). Our operating costs and expenses include amounts paid to EPCO for the actual direct and indirect costs it incurs to operate our facilities, including the compensation of its employees. Likewise, our general and administrative costs include amounts paid to EPCO for management and other administrative services, including the compensation of its employees. In general, our reimbursement to EPCO for administrative services is either (i) on an actual basis for direct expenses it may incur on our behalf (e.g., the purchase of office supplies) or (ii) based on an allocation of such charges between the various parties to the ASA based on the estimated use of such services by each party (e.g., the allocation of legal or accounting salaries based on estimates of time spent on each entity’s business and affairs). In addition, we have agreed to pay all sales, use, excise, value added or similar taxes, if any, that may be applicable from time to time with respect to the services provided to us by EPCO.

The ASA allows us to participate as a named insured in EPCO’s overall insurance program, with the associated premiums and other costs being allocated to us. See Note 18 for additional information regarding our insurance programs.

The following table presents our related party costs and expenses attributable to the ASA with EPCO for the years indicated:

	For the Year Ended December 31,
	2020		2019		2018
Operating costs and expenses	$	999.0	$	1,000.2	$	948.8
General and administrative expenses		128.9		127.6		124.2
Total costs and expenses	$	1,127.9	$	1,127.8	$	1,073.0

Since the vast majority of such expenses are charged to us on an actual basis (i.e., no mark-up is charged or subsidy is received), we believe that such expenses are representative of what the amounts would have been on a standalone basis. With respect to allocated costs, we believe that the proportional direct allocation method employed by EPCO is reasonable and reflective of the estimated level of costs we would have incurred on a standalone basis.

Relationships with Unconsolidated Affiliates

Many of our unconsolidated affiliates perform supporting or complementary roles to our other business operations. The following information summarizes significant related party transactions with our unconsolidated affiliates:

•

For the years ended December 31, 2020, 2019 and 2018, we paid Seaway $71.5 million, $194.5 million and $163.2 million, respectively, for pipeline transportation and storage services in connection with our crude oil marketing activities. Revenues from Seaway were $20.2 million, $42.7 million and $74.4 million for the years ended December 31, 2020, 2019 and 2018, respectively.

•	For the years ended December 31, 2020, 2019 and 2018, we purchased $51.3 million, $89.2 million and $157.9 million, respectively, of NGLs from VESCO.

•

We pay Promix for the transportation, storage and fractionation of NGLs. Expenses with Promix were $23.5 million, $34.8 million and $31.9 million for the years ended December 31, 2020, 2019 and 2018, respectively. In addition, we sell natural gas to Promix for its plant fuel requirements. Revenues from Promix were $6.0 million, $9.1 million and $9.5 million for the years ended December 31, 2020, 2019 and 2018, respectively.

•	For the years ended December 31, 2020, 2019 and 2018, we paid Texas Express $29.1 million, $33.5 million and $57.6 million, respectively, for pipeline transportation services.

•	For the years ended December 31, 2020, 2019 and 2018, we paid Eagle Ford Crude Oil Pipeline $20.9 million, $36.0 million and $18.5 million, respectively, for pipeline transportation services.

•	We perform management services for certain of our unconsolidated affiliates. We charged such affiliates $10.1 million, $9.9 million and $11.6 million for the years ended December 31, 2020, 2019 and 2018, respectively.