Debt Obligations

3 Months Ended

Mar. 31, 2024

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:

	March 31, 2024			December 31, 2023
EPO senior debt obligations:
Commercial Paper Notes, variable-rates	$	–		$	450
Senior Notes JJ, 3.90% fixed-rate, due February 2024		–			850
Senior Notes MM, 3.75% fixed-rate, due February 2025		1,150			1,150
March 2024 $1.5 Billion 364-Day Revolving Credit Agreement, variable-rate, due March 2025 (1)		–			–
Senior Notes FFF, 5.05% fixed-rate, due January 2026		750			750
Senior Notes PP, 3.70% fixed-rate, due February 2026		875			875
Senior Notes HHH, 4.60% fixed-rate, due January 2027		1,000			–
Senior Notes SS, 3.95% fixed-rate, due February 2027		575			575
March 2023 $2.7 Billion Multi-Year Revolving Credit Agreement, variable-rate, due March 2028 (2)		–			–
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 GGG, 5.35% fixed-rate, due January 2033		1,000			1,000
Senior Notes D, 6.875% fixed-rate, due March 2033		500			500
Senior Notes III, 4.85% fixed-rate, due January 2034		1,000			–
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		27,425			26,725
EPO Junior Subordinated Notes C, variable-rate, due June 2067 (3)(7)		232			232
EPO Junior Subordinated Notes D, variable-rate, due August 2077 (4)(7)		350			350
EPO Junior Subordinated Notes E, fixed/variable-rate, due August 2077 (5)(7)		1,000			1,000
EPO Junior Subordinated Notes F, fixed/variable-rate, due February 2078 (6)(7)		700			700
TEPPCO Junior Subordinated Notes, variable-rate, due June 2067 (3)(7)		14			14
Total principal amount of senior and junior debt obligations		29,721			29,021
Other, non-principal amounts		(287	)		(273	)
Less current maturities of debt		(1,149	)		(1,300	)
Total long-term debt	$	28,285		$	27,448

(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 $2.7 billion (which may be increased by up to $500 million to $3.2 billion at EPO’s election provided certain conditions are met).
(3)	Variable rate is reset quarterly and based on 3-month Chicago Mercantile Exchange (“CME”) Term Secured Overnight Financing Rate (“SOFR”) plus (a) a 0.26161% tenor spread adjustment and (b) 2.778%.
(4)	Variable rate is reset quarterly and based on 3-month CME Term SOFR plus (a) a 0.26161% tenor spread adjustment and (b) 2.986%.
(5)	Fixed rate of 5.250% through August 15, 2027; thereafter, a variable rate reset quarterly and based on 3-month CME Term SOFR plus (a) a 0.26161% tenor spread adjustment and (b) 3.033%.
(6)	Fixed rate of 5.375% through February 14, 2028; thereafter, a variable rate reset quarterly and based on 3-month CME Term SOFR plus (a) a 0.26161% tenor spread adjustment and (b) 2.57%.
(7)	Effective July 1, 2023 and in accordance with the Adjustable Interest Rate (LIBOR) Act, all series of our junior subordinated notes subject to a variable interest rate replaced the 3-month London Interbank Offered Rate (“LIBOR”) with 3-month CME Term SOFR plus a 0.26161% tenor spread adjustment.

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 three months ended March 31, 2024:

	Range of Interest Rates Paid	Weighted-Average Interest Rate Paid
Commercial Paper Notes	5.45% to 5.50%	5.45%
EPO Junior Subordinated Notes C and TEPPCO Junior Subordinated Notes	8.38% to 8.42%	8.40%
EPO Junior Subordinated Notes D	8.57% to 8.64%	8.61%

Amounts borrowed under EPO’s March 2024 $1.5 Billion 364-Day Revolving Credit Agreement and March 2023 $2.7 Billion Multi-Year Revolving Credit Agreement bear interest, at EPO’s election, equal to: (i) SOFR, 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, 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.

Scheduled Maturities of Debt

The following table presents the scheduled maturities of principal amounts of EPO’s consolidated debt obligations at March 31, 2024 for the next five years, and in total thereafter:

				Scheduled Maturities of Debt
	Total			Remainder of 2024			2025			2026			2027			2028			Thereafter
Senior Notes		$	27,425		$	–		$	1,150		$	1,625		$	1,575		$	1,000		$	22,075
Junior Subordinated Notes			2,296			–			–			–			–			–			2,296
Total		$	29,721		$	–		$	1,150		$	1,625		$	1,575		$	1,000		$	24,371

March 2024 $1.5 Billion 364-Day Revolving Credit Agreement

In March 2024, EPO entered into a new 364-Day Revolving Credit Agreement (the “March 2024 $1.5 Billion 364-Day Revolving Credit Agreement”) that replaced its prior 364-day revolving credit agreement.  There were no principal amounts outstanding under the prior 364-day revolving credit agreement when it was replaced by the March 2024 $1.5 Billion 364-Day Revolving Credit Agreement.  As of March 31, 2024, there were no principal amounts outstanding under the March 2024 $1.5 Billion 364-Day Revolving Credit Agreement.

Under the terms of the March 2024 $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 March 2024 $1.5 Billion 364-Day Revolving Credit Agreement matures in March 2025.  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 March 2026.  Borrowings under the March 2024 $1.5 Billion 364-Day Revolving Credit Agreement may be used for working capital, capital expenditures, acquisitions and general company purposes.

The March 2024 $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 March 2024 $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 March 2024 $1.5 Billion 364-Day Revolving Credit Agreement are not secured by any collateral; however, they are guaranteed by the Partnership.

Issuance of $2.0 Billion of Senior Notes in January 2024

In January 2024, EPO issued $2.0 billion aggregate principal amount of senior notes comprised of (i) $1.0 billion principal amount of senior notes due January 2027 (“Senior Notes HHH”) and (ii) $1.0 billion principal amount of senior notes due January 2034 (“Senior Notes III”).  Net proceeds from this offering were used by EPO for general company purposes, including for growth capital investments, and the repayment of debt (including the repayment of all of our $850 million principal amount of 3.90% Senior Notes JJ at their maturity in February 2024 and amounts outstanding under our commercial paper program).

Senior Notes HHH were issued at 99.897% of their principal amount and have a fixed interest rate of 4.60% per year.  Senior Notes III were issued at 99.705% of their principal amount and have a fixed interest rate of 4.85% per year.  The Partnership guaranteed these senior notes through an unconditional guarantee on an unsecured and unsubordinated basis.

Letters of Credit

At March 31, 2024, EPO had $131 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 March 31, 2024.

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.