Exhibit 99.1
ENTERPRISE PRODUCTS GP, LLC
Balance Sheets as of December 31, 2001 and
June 30, 2002 and Independent Auditors' Report
INDEPENDENT AUDITORS' REPORT
Enterprise Products GP, LLC:
Houston, Texas
We have audited the accompanying balance sheet of Enterprise Products GP, LLC (the "Company") as of December 31, 2001. This
financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial
statement based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the balance sheet is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the balance sheet.
An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall balance sheet presentation. We believe that our audit of the balance sheet provides a reasonable basis for our opinion.
In our opinion, such balance sheet presents fairly, in all material respects, the financial position of the Company, as of December
31, 2001, in conformity with accounting principles generally accepted in the United States of America.
/s/ DELOITTE and TOUCHE LLP
October 1, 2002
Houston, Texas
ENTERPRISE PRODUCTS GP, LLC
BALANCE SHEETS
December 31, June 30,
2001 2002
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(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,589,547 $ 147,218
Accounts receivable - affiliates, net 1,866
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Total current assets 2,591,413 147,218
INVESTMENTS IN UNCONSOLIDATED AFFILIATES 23,246,978 21,466,843
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TOTAL $25,838,391 $21,614,061
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LIABILITIES AND MEMBERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 241,340 $ 455,974
Accounts payable - affiliates, net 8,085
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Total current liabilities 241,340 464,059
MEMBERS' EQUITY:
Members' equity 26,853,625 22,014,739
Note receivable, Dan Duncan, LLC (1,256,574) (864,737)
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Total members' equity 25,597,051 21,150,002
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TOTAL $25,838,391 $21,614,061
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See Notes to Balance Sheets.
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ENTERPRISE PRODUCTS GP, LLC
NOTES TO BALANCE SHEETS
AS OF DECEMBER 31, 2001 AND JUNE 30, 2002
(Information pertaining to June 30, 2002 is unaudited)
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1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Enterprise Products GP, LLC (the "Company") is a Delaware limited liability company that was
formed on May 1, 1998 to become the general partner of Enterprise Products Operating L.P. ("EPOLP") and Enterprise Products
Partners L.P. ("EPPLP"). EPPLP, including its consolidated subsidiaries, is a publicly traded Delaware limited partnership
listed on the New York Stock Exchange under symbol "EPD". EPPLP conducts substantially all of its business through EPOLP,
of which EPPLP owns a 98.9899% limited partner interest. EPOLP is a limited partnership that was formed to acquire, own
and operate the natural gas liquids business of Enterprise Products Company ("EPCO").
At December 31, 2001, EPC Partners II, Inc. (a subsidiary of EPCO) owned 65%, Shell US Gas and Power (an affiliate of Shell
Oil Company) owned 30% and Dan Duncan, LLC owned 5% interests in the Company. The above entities, which own a portion of
the Company, are hereafter collectively referred to as the "Members."
Investments in Unconsolidated Affiliates - Investments in unconsolidated affiliates represents the Company's
1% ownership in EPPLP and 1.0101% ownership in EPOLP. As the general partner, the Company exercises significant influence
over EPPLP's and EPOLP's operating and financial policies. The equity method of accounting is used to account for these
investments.
Cash and cash equivalents -The Company considers all highly liquid debt instruments with an original maturity
of less than three months at the date of purchase to be cash equivalents.
Federal Income Taxes - Federal income taxes are not provided because the Company was organized as a
pass-through entity for federal income tax purposes. As a result, for federal income tax purposes, the Members are
individually responsible for taxes of their allocable share of the taxable income of the Company. State income taxes are
not material.
Use of Estimates and Assumptions - Use of estimates and assumptions by management that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements are required for the preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America. Actual results could differ from these estimates.
Cash Distributions - Cash distributions to the Members are made in accordance with their members' interests.
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2. INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED AFFILIATES
At December 31, 2001, the Company's significant unconsolidated affiliates accounted for by the equity method included its
1% economic interest in EPPLP and its 1.0101% economic interest in EPOLP. Since EPOLP owns substantially all of EPPLP's
consolidated assets and conducts substantially all of EPPLP's business and operations, the information set forth herein
constitutes combined information for EPPLP and EPOLP.
The following is condensed financial data for EPPLP (in thousands):
December 31, June 30,
2001 2002
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(Unaudited)
BALANCE SHEET DATA:
Assets:
Current assets $ 518,775 $ 481,059
Property, plant and equipment, net 1,306,790 1,570,571
Investments in advanced to unconsolidated affiliates 398,201 403,070
Other long-term assets 207,427 337,676
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Total assets $2,431,193 $2,792,376
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Liabilities and Partners' equity:
Current liabilities $ 409,216 $504,241
Long-term liabilities 863,339 1,231,471
Minority interests 11,716 10,818
Partners' equity 1,146,922 1,045,846
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Total liabilities and partners' equity $2,431,193 $2,792,376
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For the Year For the Six
Ended MonthsEnded
December 31, June 30,
2001 2002
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(Unaudited)
INCOME STATEMENT DATA:
Revenues $3,179,727 $1,464,606
Expenses 2,892,039 1,425,746
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Operating income 287,688 38,860
Other income (expense) (43,038) (33,713)
Minority interest (2,472) (30)
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Net income $ 242,178 $ 5,117
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3. NOTE RECEIVABLE
As of December 31, 2001 and June 30, 2002, the Company held a promissory note due from Dan Duncan, LLC. The note matures on December
31, 2005 and interest is payable quarterly. The rate on the note fluctuates quarterly based on the prime rate, but in no event to
exceed the maximum rate of nonusurious interest allowed from time to time by the law. Under the terms of the note, Dan Duncan, LLC
may prepay the note, in whole or in part, without premium or penalty. The note receivable from Dan Duncan, LLC is classified as
contra-equity on the balance sheet as of December 31, 2001 and June 30, 2002.
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4. FAIR VALUE OF FINANCIAL INSTRUMENTS
Cash and cash equivalents, accounts receivable - affiliates, net, accounts payable and accrued expenses, and accounts payable -
affiliates, net are carried at amounts which reasonably approximate their fair value at year end due to their short-term nature.
5. RELATED-PARTY TRANSACTIONS
At December 31, 2001, the Company had a net receivable from Dan Duncan, LLC for interest on the note receivable. At June 30, 2002,
the Company had a net payable to EPCO for payment of operating expenses. Such amounts have been included on the Company's balance
sheets.
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