01—Abstract
Summary
Summary of the 10-K/A filed June 30, 2011. Cited figures are marked; the original filing is the authoritative source.
This document is Amendment No. 1 (Form 10-K/A) to Enterprise Products Partners L.P.'s annual report for fiscal year 2010.
It was filed in response to SEC staff comments on the original report and amends only Part III, Item 11 (Executive Compensation) and Part IV, Item 15 (Exhibits). It contains no financial statements, and the filing text does not state its filing date. It does not update the financial results, operations, or other disclosures in the original 10-K, so it should be read alongside that report.
The amendment shows that Enterprise has no directly employed executives. Its general partner's officers are EPCO employees, and Enterprise reimburses EPCO for 100% of their compensation costs under the Administrative Services Agreement (ASA). Named executive officer total 2010 compensation ranged from about $1.6 million to $4.3 milliona.
CEO Michael A. Creel received $4.34 millionb, A. James Teague received $3.56 million, William Ordemann received $2.20 million, W.
Randall Fowler received $1.61 millionc, and Mark A. Hurley received $1.61 million. Compensation is discretionary, with no formula or specific performance metrics tied to pay.
The filing states this design is intended to discourage excessive risk-taking. For investors, the main points are the 2010 retention agreements and the executive equity holdings. Creel, Teague, Fowler, and Ordemann each received retention agreements in late 2010 with cash payments of $10 milliond, $10 million, $5 million, and $2.5 million, payable after 48 months of service or upon certain involuntary terminations or a sale of EPCO or Enterprise.
Teague also has a performance payment of at least $6 million tied to hiring a Chief Operating Officer for Enterprise GP. Restricted unit and option awards, along with the 2010 liquidation of the Employee Partnerships, are also disclosed. Enterprise's share of compensation costs is allocated under the ASA based on each executive's time spent on Enterprise's consolidated businesses, so the amounts shown are only Enterprise's portion of total EPCO pay.
02—Key points
Key Highlights
- This is Amendment No. 1 (10-K/A) for fiscal year 2010, filed in response to SEC staff comments. It amends only Item 11 (Executive Compensation) and Item 15 (Exhibits) and contains no financial statements.
- Enterprise has no directly employed executives. Its general partner's officers are EPCO employees, and Enterprise reimburses EPCO for 100% of their compensation costs under the Administrative Services Agreement.
- 2010 total compensation for named executive officers ranged from about $1.61 million (Fowler and Hurley) to $4.34 million (CEO Michael A. Creel), with Teague at $3.56 million and Ordemann at $2.20 million.
- In late 2010, EPCO entered into retention agreements with Creel ($10 million), Teague ($10 million plus a performance payment of at least $6 million), Fowler ($5 million), and Ordemann ($2.5 million), payable after 48 months of service or on qualifying involuntary termination.
- Compensation has no formula or specific performance-based targets. The board and the ACG Committee use case-by-case discretion, and the company states this design discourages excessive risk-taking.
- Unvested option value that would accelerate on a qualifying termination was about $5.4 million for Creel, $4.0 million for Teague, $3.7 million for Fowler, and $3.4 million for Ordemann, based on the $41.61 closing price at December 31, 2010.
- Independent directors each received a one-time 2010 payment of $819,000, and the 2011 director pay structure is set at a $75,000 annual retainer plus $75,000 in annual common unit grants.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2010, Enterprise Products Partners L.P. kept $0.01.
- Revenue$33.74B100.0%
- Cost of revenue−$28.72B85.1%
- Gross profit$5.02B14.9%
- Operating costs−$2.87B8.5%
- Operating income$2.15B6.4%
- Interest, other & tax−$1.83B5.4%
- Net income$320.8M1.0%
Where FY2010 revenue went
$33.74B- Cost of revenue: $28.72B, 85% of revenue
- Net income: $320.8M, 1.0% of revenue
- Operating costs: $2.87B, 8.5% of revenue
- Interest, other & tax: $1.83B, 5.4% of revenue
Kept 1.0% as net incomeNet income $320.8M · 1.0%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-K/AFY2010filed June 30, 2011Financial Statements
FY2010 against FY2009
| Line item | FY2010FY2009 | Change |
|---|---|---|
| Revenue | $33.74B$25.51B | +32.3% |
| Cost of Revenue | $28.72B$20.92B | +37.3% |
| Gross Profit | $5.02B$4.59B | +9.3% |
| Operating Expenses | $31.65B$23.75B | +33.3% |
| Operating Income | $2.15B$1.85B | +15.8% |
| Interest Expense | $741.90M$687.30M | +7.9% |
| Net Income | $320.80M$204.10M | +57.2% |
| EPS (Basic) | $0.58$0.49 | +18.2% |
| EPS (Diluted) | $0.57$0.49 | +16.2% |
| Shares Outstanding (Basic) | 549.00M413.40M | +32.8% |
| Shares Outstanding (Diluted) | 557.00M413.40M | +34.7% |
05—Questions
Frequently Asked Questions
Does this amendment change Enterprise Products Partners' 2010 financial results?
No. The amendment states it does not modify or update the original report, other than the Item 11 and Item 15 changes noted. It contains no financial statements and does not reflect events after the original filing.
Who pays the executives who run Enterprise Products Partners?
Enterprise does not directly employ them. Its executives are employees of EPCO, and Enterprise reimburses EPCO for 100% of their compensation costs related to the partnership under the Administrative Services Agreement. Enterprise's reported amounts reflect only its allocated share based on time spent on its consolidated businesses.
What retention payments are the top executives eligible to receive?
Creel is eligible for $10 million, Teague for $10 million, Fowler for $5 million, and Ordemann for $2.5 million, each after 48 months of continuous employment with EPCO from the effective date of their agreements. Teague may instead elect a performance payment of the greater of $6 million or $10 million prorated for his performance period, but not both. Retention payments are also triggered by certain involuntary terminations, including job elimination, reorganization, or a sale of EPCO or Enterprise.
How is executive pay linked to performance?
The filing states that EPCO and the board do not use any formula or specific performance-based criteria for named executive officers. Bonuses reflect general consideration of 2010 financial performance and individual contributions, without assigned weights. Equity awards are long-term, with restricted units generally vesting 25% per year starting one year after grant for 2010 awards.
06—Continue