Enterprise Products Partners L.p. · NYSE:EPD
Enterprise Products Partners L.p — Corporate Update (December 2002)
12 slides from Enterprise Products Partners L.p's corporate update, Dec 17, 2002
Slide 1: Eliminating the General Partner's 50% Splits
EXHIBIT 99.2 Enterprise Products Partners L.P. Eliminating the General Partner’s 50% Splits December 17, 2002 ©All rights reserved. Enterprise Products Partners LP.
Slide 2: Forward Looking Statements
Forward Looking Statements (© This resentation contains various forward-looking statements and information that are based on the Companys beliefs and those of ts general partner, os wellas assumptions made by and information cunently available to the Company. ‘When used inthis press release, words s
Slide 3: Summary
Summary E @EPD’s partnership agreement has been amended to eliminate the GP’s 50% incentive distribution rights @No consideration was paid to the GP to give up its 50% incentive distribution rights @ Amendment is effective immediately @ Transfers significant intrinsic value from the GP to the Limite
Slide 4: Significance of Eliminating 50% Splits
Significance of Eliminating 50% Splits E @ As EPD’s annual LP distribution rate grows beyond $1.568 per unit, this action will substantially increase the amount of cash available to * Increase the cash distribution rate to limited partners, * Reinvest in capital projects and acquisitions to grow the
Slide 5: Comparison of Old & New GP Splits
Comparison of Old & New GP Splits [z Old Splits New Splits Tier LP% GP% Upto LP% GP% Upto 2% Tier 98% 2% $ 1.012 98% 2% $ 1.012 15% Tier 85% 15% $ 1.234 85% 15% $ 1.234 25% Tier 75% 25% $ 1.568 75% 25% $ - 50% Tier 50% 50% The distributions to the general partner shown above in excess of its aggrega
Slide 6: Illustration of Free Cash Flow Generated from Eliminating GP Splits
Illustration of Free Cash Flow Generated from Eliminating 50% GP Splits $000; ‘Assumed Units Outstanding (Millions) LP Distribution Rate > Old Splits: LP Distributions GP Distributions ‘Cash Required for Distribution New Spl LP Distributions GP Distributions ‘Cash Required for Distribution (Free Cas
Slide 7: Lower Cost of Capital = Greater Cash Accretion to LP Units
Lower Cost of Capital = Greater Cash Accretion to LP Units from Investment Fully Diluted Cash Accretion per EPD Unit ® Hypothetical 70x Multiple Bix Maliple Investment Od New Od New & Millions Splits _ Splits Increase Splits __Splits Increase S$ 1500 $ 0189 -$ 0324 = 72% = $0130 $ 0234 BOK S$ 1250 §
Slide 8: Effect of Eliminating GP Splits Case Study
Effect of Eliminating GP Splits E Case Stud @ Base Assumptions Case Study begins with cash distribution rate of $1.568, the threshhold for GP’s 50% splits Assumes all growth comes from capital investment (for illustration purposes only) Assumes 15% cash return on investment Pre-Tax cost of debt is 7
Slide 9: Investment Required to Grow LP Distribution Rate 10% per Year
Investment Required to Grow LP E Distribution Rate 10% per Year 2,500 Investments - Old Splits BOO) preveccrrecnru Splits 1,500 . Tl I 0 ys SY SY SY > y s) Distribution Rate per Unit - 10% Growth ° Ss Ss Investment Required ($Millions) ©All rights reserved. Enterprise Products Partners LP. 9
Slide 10: Total Distributions Required to Grow LP Distribution Rate
Total Distributions Required to Grow LP Distribution Rate 10%/Year 1,250 Distributions - Old Splits Total Distributions to LP & GP (SMillions) Distribution Rate per Unit - 10% Growth ©All rights reserved. Enterprise Products Partners LP. LOO") weeasperieneomen Splits 750 500 . i J ti 0 10
Slide 11: Unique Ownership Structure
Unique Ownership Structure E ®@ Largest % ownership of LP units by Management & GP in the energy Manegement industry 64% 22% 14% @ GP owns 86% of LP units. Focused on long- term total return of LP anita Enterprise Products Partners L.P. (NYSE -EPD) ©All rights reserved. Enterprise Products Partners
Slide 12: GP's Focus on Total Return of LP Units
GP’s Focus on Total Return of LP Units E ®@ September 1999, Management contributed 30% of EPD’s GP to Shell Oil Company for nominal value to complete the acquisition of Shell’s midstream business and enhance the value of LP units @ From 3Q1999 through 3Q2002, EPD has retained $294 million of cash to
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