Debt Obligations

9 Months Ended

Sep. 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:

	September 30, 2022			December 31, 2021
EPO senior debt obligations:
Commercial Paper Notes, variable-rates	$	1,405		$	–
Senior Notes VV, 3.50% fixed-rate, due February 2022		–			750
Senior Notes CC, 4.05% fixed-rate, due February 2022		–			650
Senior Notes HH, 3.35% fixed-rate, due March 2023		1,250			1,250
September 2022 $1.5 Billion 364-Day Revolving Credit Agreement, variable-rate, due September 2023 (1)		–			–
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 $3.0 Billion Multi-Year Revolving Credit Agreement, variable-rate, due September 2026 (2)		–			–
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		27,180			27,175
EPO Junior Subordinated Notes C, variable-rate, due June 2067 (3)		232			232
EPO Junior Subordinated Notes D, fixed/variable-rate, due August 2077 (4)		350			700
EPO Junior Subordinated Notes E, fixed/variable-rate, due August 2077 (5)		1,000			1,000
EPO Junior Subordinated Notes F, fixed/variable-rate, due February 2078 (6)		700			700
TEPPCO Junior Subordinated Notes, variable-rate, due June 2067 (3)		14			14
Total principal amount of senior and junior debt obligations		29,476			29,821
Other, non-principal amounts		(274	)		(286	)
Less current maturities of debt		(2,654	)		(1,400	)
Total long-term debt	$	26,548		$	28,135

(1)	Under the terms of the agreement, EPO may borrow up to $1.5 billion (which may be increased by up to $200 million to $1.7 billion at EPO’s election provided certain conditions are met).
(2)	Under the terms of the agreement, EPO may borrow up to $3.0 billion (which may be increased by up to $500 million to $3.5 billion at EPO’s election provided certain conditions are met).
(3)	Variable rate is reset quarterly and based on 3-month London Interbank Offered Rate (“LIBOR”), plus 2.778%.
(4)	Fixed rate of 4.875% through August 15, 2022; thereafter, a variable rate reset quarterly and based on 3-month LIBOR plus 2.986%.
(5)	Fixed rate of 5.250% through August 15, 2027; thereafter, a variable rate reset quarterly and based on 3-month LIBOR plus 3.033%.
(6)	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 nine months ended September 30, 2022:

	Range of Interest Rates Paid	Weighted-Average Interest Rate Paid
Commercial Paper Notes	0.20% to 3.52%	1.27%
EPO Junior Subordinated Notes C and TEPPCO Junior Subordinated Notes	2.95% to 5.86%	3.86%
EPO Junior Subordinated Notes D	5.91%	5.91%

Amounts borrowed under EPO’s September 2022 $1.5 Billion 364-Day Revolving Credit Agreement and September 2021 $3.0 Billion Multi-Year Revolving Credit Agreement bear interest, at EPO’s election, equal to: (i) the Secured Overnight Financing Rate ("SOFR") or LIBOR, as applicable, 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) Adjusted Term SOFR or LIBOR, as applicable, 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 September 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	$	1,405	$	1,405	$	–	$	–	$	–	$	–	$	–
Senior Notes		25,775		–		1,250		850		1,150		875		21,650
Junior Subordinated Notes		2,296		–		–		–		–		–		2,296
Total	$	29,476	$	1,405	$	1,250	$	850	$	1,150	$	875	$	23,946

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 issuances under its commercial paper program.

Partial Redemption of Junior Subordinated Notes D

In August 2022, EPO redeemed $350 million of the $700 million outstanding principal amount of its Junior Subordinated Notes D 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 was funded using cash on hand and proceeds from issuances under EPO’s commercial paper program.

September 2022 $1.5 Billion 364-Day Revolving Credit Agreement

In September 2022, EPO entered into a new 364-Day Revolving Credit Agreement (the “September 2022 $1.5 Billion 364-Day Revolving Credit Agreement”) that replaced its September 2021 364-Day Revolving Credit Agreement.  There were no principal amounts outstanding under the September 2021 364-Day Revolving Credit Agreement when it was replaced by the September 2022 $1.5 Billion 364-Day Revolving Credit Agreement.  As of September 30, 2022, there are no principal amounts outstanding under the September 2022 $1.5 Billion 364-Day Revolving Credit Agreement.

Under the terms of the September 2022 $1.5 Billion 364-Day Revolving Credit Agreement, EPO may borrow up to $1.5 billion (which may be increased by up to $200 million to $1.7 billion at EPO’s election, provided certain conditions are met) at a variable interest rate for a term of up to 364 days, subject to the terms and conditions set forth therein.  The September 2022 $1.5 Billion 364-Day Revolving Credit Agreement matures in September 2023.  To the extent that principal amounts are outstanding at the maturity date, EPO may elect to have the entire principal balance then outstanding continued as non-revolving term loans for a period of one additional year, payable in September 2024.  Borrowings under the September 2022 $1.5 Billion 364-Day Revolving Credit Agreement may be used for working capital, capital expenditures, acquisitions and general company purposes.

The September 2022 $1.5 Billion 364-Day Revolving Credit Agreement contains customary representations, warranties, covenants (affirmative and negative) and events of default, the occurrence of which would permit the lenders to accelerate the maturity date of any amounts borrowed under this credit agreement.  The September 2022 $1.5 Billion 364-Day Revolving Credit Agreement also restricts EPO’s ability to pay cash distributions to the Partnership, if an event of default (as defined in the credit agreement) has occurred and is continuing at the time such distribution is scheduled to be paid or would result therefrom.

EPO’s obligations under the September 2022 $1.5 Billion 364-Day Revolving Credit Agreement are not secured by any collateral; however, they are guaranteed by the Partnership.

Letters of Credit

At September 30, 2022, EPO had $100 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 September 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.