Debt Obligations

6 Months Ended

Jun. 30, 2022

Debt Obligations [Abstract]

Debt Obligations

Note 7.  Debt Obligations

The following table presents our consolidated debt obligations (arranged by company and maturity date) at the dates indicated:

	June 30, 2022			December 31, 2021
EPO senior debt obligations:
Commercial Paper Notes, variable-rates	$	640		$	–
Senior Notes VV, 3.50% fixed-rate, due February 2022		–			750
Senior Notes CC, 4.05% fixed-rate, due February 2022		–			650
September 2021 364-Day Revolving Credit Agreement, variable-rate, due September 2022		–			–
Senior Notes HH, 3.35% fixed-rate, due March 2023		1,250			1,250
Senior Notes JJ, 3.90% fixed-rate, due February 2024		850			850
Senior Notes MM, 3.75% fixed-rate, due February 2025		1,150			1,150
Senior Notes PP, 3.70% fixed-rate, due February 2026		875			875
September 2021 Multi-Year Revolving Credit Agreement, variable-rate, due September 2026		–			–
Senior Notes SS, 3.95% fixed-rate, due February 2027		575			575
Senior Notes WW, 4.15% fixed-rate, due October 2028		1,000			1,000
Senior Notes YY, 3.125% fixed-rate, due July 2029		1,250			1,250
Senior Notes AAA, 2.80% fixed-rate, due January 2030		1,250			1,250
Senior Notes D, 6.875% fixed-rate, due March 2033		500			500
Senior Notes H, 6.65% fixed-rate, due October 2034		350			350
Senior Notes J, 5.75% fixed-rate, due March 2035		250			250
Senior Notes W, 7.55% fixed-rate, due April 2038		400			400
Senior Notes R, 6.125% fixed-rate, due October 2039		600			600
Senior Notes Z, 6.45% fixed-rate, due September 2040		600			600
Senior Notes BB, 5.95% fixed-rate, due February 2041		750			750
Senior Notes DD, 5.70% fixed-rate, due February 2042		600			600
Senior Notes EE, 4.85% fixed-rate, due August 2042		750			750
Senior Notes GG, 4.45% fixed-rate, due February 2043		1,100			1,100
Senior Notes II, 4.85% fixed-rate, due March 2044		1,400			1,400
Senior Notes KK, 5.10% fixed-rate, due February 2045		1,150			1,150
Senior Notes QQ, 4.90% fixed-rate, due May 2046		975			975
Senior Notes UU, 4.25% fixed-rate, due February 2048		1,250			1,250
Senior Notes XX, 4.80% fixed-rate, due February 2049		1,250			1,250
Senior Notes ZZ, 4.20% fixed-rate, due January 2050		1,250			1,250
Senior Notes BBB, 3.70% fixed-rate, due January 2051		1,000			1,000
Senior Notes DDD, 3.20% fixed-rate, due February 2052		1,000			1,000
Senior Notes EEE, 3.30% fixed-rate, due February 2053		1,000			1,000
Senior Notes NN, 4.95% fixed-rate, due October 2054		400			400
Senior Notes CCC, 3.95% fixed rate, due January 2060		1,000			1,000
Total principal amount of senior debt obligations		26,415			27,175
EPO Junior Subordinated Notes C, variable-rate, due June 2067 (1)		232			232
EPO Junior Subordinated Notes D, fixed/variable-rate, due August 2077 (2)		700			700
EPO Junior Subordinated Notes E, fixed/variable-rate, due August 2077 (3)		1,000			1,000
EPO Junior Subordinated Notes F, fixed/variable-rate, due February 2078 (4)		700			700
TEPPCO Junior Subordinated Notes, variable-rate, due June 2067 (1)		14			14
Total principal amount of senior and junior debt obligations		29,061			29,821
Other, non-principal amounts		(280	)		(286	)
Less current maturities of debt		(1,889	)		(1,400	)
Total long-term debt	$	26,892		$	28,135

(1)	Variable rate is reset quarterly and based on 3-month London Interbank Offered Rate (“LIBOR”), plus 2.778%.
(2)	Fixed rate of 4.875% through August 15, 2022; thereafter, a variable rate reset quarterly and based on 3-month LIBOR plus 2.986%.
(3)	Fixed rate of 5.250% through August 15, 2027; thereafter, a variable rate reset quarterly and based on 3-month LIBOR plus 3.033%.
(4)	Fixed rate of 5.375% through February 14, 2028; thereafter, a variable rate reset quarterly and based on 3-month LIBOR plus 2.57%.

References to “TEPPCO” mean TEPPCO Partners, L.P. prior to its merger with one of our wholly owned subsidiaries in October 2009.

Variable Interest Rates

The following table presents the range of interest rates and weighted-average interest rates paid on our consolidated variable-rate debt during the six months ended June 30, 2022:

	Range of Interest Rates Paid	Weighted-Average Interest Rate Paid
Commercial Paper Notes	0.20% to 1.85%	0.72%
EPO Junior Subordinated Notes C and TEPPCO Junior Subordinated Notes	2.95% to 4.36%	3.36%

Amounts borrowed under EPO’s September 2021 364-Day Revolving Credit Agreement and September 2021 Multi-Year Revolving Credit Agreement bear interest, at EPO’s election, equal to: (i) LIBOR, plus an additional variable spread; or (ii) an alternate base rate, which is the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 0.5%, or (c) LIBOR for an interest period of one month in effect on such day plus 1%, and a variable spread. The applicable spreads are determined based on EPO's debt ratings.

In July 2017, the Financial Conduct Authority in the U.K. announced a desire to phase out LIBOR as a benchmark by the end of June 2023. Financial industry working groups are developing replacement rates and methodologies to transition existing agreements that depend on LIBOR as a reference rate.  We currently do not expect the transition from LIBOR to have a material financial impact on us.

Scheduled Maturities of Debt

The following table presents the scheduled maturities of principal amounts of EPO’s consolidated debt obligations at June 30, 2022 for the next five years, and in total thereafter:

			Scheduled Maturities of Debt
	Total		Remainder of 2022		2023		2024		2025		2026		Thereafter
Commercial Paper Notes	$	640	$	640	$	–	$	–	$	–	$	–	$	–
Senior Notes		25,775		–		1,250		850		1,150		875		21,650
Junior Subordinated Notes		2,646		–		–		–		–		–		2,646
Total	$	29,061	$	640	$	1,250	$	850	$	1,150	$	875	$	24,296

In February 2022, EPO repaid all of the $750 million and $650 million in principal amount of its Senior Notes VV and CC, respectively, using remaining cash on hand attributable to its September 2021 senior notes offering and proceeds from the issuance of short-term notes under its commercial paper program.

March 2022 Delayed Draw Term Loan Agreement

On March 1, 2022, EPO entered into a delayed draw term loan agreement (the “March 2022 Delayed Draw Term Loan Agreement”). Under the terms of the March 2022 Delayed Draw Term Loan Agreement, EPO could have borrowed up to an aggregate of $500 million by April 30, 2022 at a variable interest rate based on EPO’s senior debt credit rating.  However, because EPO elected not to borrow under the facility by April 30, 2022, the March 2022 Delayed Draw Term Loan Agreement automatically terminated at that date in accordance with its terms.

Expected Renewal of September 2021 364-Day Revolving Credit Agreement

EPO’s September 2021 364-Day Revolving Credit Agreement is scheduled to mature in September 2022.  As a result, EPO expects to renew this credit agreement during the third quarter of 2022.  At June 30, 2022, there were no principal amounts outstanding under the September 2021 364-Day Revolving Credit Agreement.

Partial Redemption of Junior Subordinated Notes D

On August 1, 2022, EPO called for redemption $350 million of the $700 million outstanding principal amount of its Junior Subordinated Notes D.  The redemption date for such notes is August 31, 2022.  These notes are redeemable at EPO’s election on or after August 16, 2022 at a redemption price equal to 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest thereon to, but not including, the redemption date.  The redemption is expected to be made using cash on hand and proceeds from the issuance of short-term notes under EPO’s commercial paper program.

Letters of Credit

At June 30, 2022, EPO had $117 million of letters of credit outstanding primarily related to our commodity hedging activities.

Lender Financial Covenants

We were in compliance with the financial covenants of our consolidated debt agreements at June 30, 2022.

Parent-Subsidiary Guarantor Relationships

The Partnership acts as guarantor of the consolidated debt obligations of EPO, with the exception of the remaining debt obligations of TEPPCO.  If EPO were to default on any of its guaranteed debt, the Partnership would be responsible for full and unconditional repayment of such obligations.