8-KMaterial AgreementsExhibits & Filings

Energy Transfer LP 8-K Report, Material Agreement (Aug 8, 2012)

Filed August 8, 2012For Securities:ETET-PI

Summary

Energy Transfer Equity, L.P. (ETE) filed an 8-K on August 7, 2012, reporting an amendment to its Senior Secured Term Loan Agreement, effective August 2, 2012. This amendment is directly linked to the previously announced merger of ETE's subsidiary, Energy Transfer Partners, L.P. (ETP), with Sunoco, Inc. The key changes introduced by the amendment provide ETE and its subsidiaries with greater flexibility in financial arrangements related to this significant merger and potential future transactions. Investors should note that the amendment allows for the relinquishment of incentive distribution rights (IDRs) by ETP's general partner in connection with the Sunoco merger. Furthermore, it permits ETE and certain subsidiaries to relinquish IDRs in future transactions under specific conditions, provided there is no adverse impact on Pro Forma Consolidated EBITDA. The amendment also broadens the calculation of Consolidated EBITDA to include distributions from non-wholly owned subsidiaries and future acquisitions, and adjusts the loan-to-value covenant to incorporate these entities. These adjustments signal a strategic move to facilitate growth and integration following the Sunoco merger.

Key Highlights

  • 1Amendment No. 1 to the Senior Secured Term Loan Agreement for Energy Transfer Equity, L.P. (ETE) was effective August 2, 2012.
  • 2The amendment is in connection with the previously announced merger of ETE's subsidiary, Energy Transfer Partners, L.P. (ETP), with Sunoco, Inc.
  • 3Allows the general partner of ETP to relinquish incentive distribution rights (IDRs) in connection with the Sunoco merger.
  • 4Permits ETE and certain subsidiaries to relinquish IDRs in future transactions, provided Pro Forma Consolidated EBITDA is not adversely affected.
  • 5Amends the calculation of Consolidated EBITDA to include distributions from non-wholly owned subsidiaries and future acquisitions.
  • 6Amends the calculation of value for the loan-to-value covenant to account for non-wholly owned subsidiaries and future acquisitions.
  • 7The amendment provides ETE with increased financial flexibility for the Sunoco merger and future strategic initiatives.

Frequently Asked Questions

This 8-K filing announces an amendment to Energy Transfer Equity, L.P.'s (ETE) Senior Secured Term Loan Agreement. The amendment is crucial for facilitating the previously announced merger between ETE's subsidiary, Energy Transfer Partners, L.P. (ETP), and Sunoco, Inc., and provides ETE with greater financial flexibility.

The amendment allows ETP's general partner to give up IDRs related to the Sunoco merger. It also permits ETE and its subsidiaries to give up IDRs in future deals, as long as the company's Pro Forma Consolidated EBITDA is not negatively impacted.

The amendment expands the definition of Consolidated EBITDA to include distributions received from entities that ETE does not fully own (non-wholly owned subsidiaries) and from companies that might be acquired in the future. This provides a more comprehensive view of the company's earnings capacity.

By adjusting the calculation of Consolidated EBITDA and the loan-to-value covenant to include non-wholly owned subsidiaries and future acquisitions, the amendment makes it easier for ETE to finance and integrate future growth opportunities and potential acquisitions, providing greater strategic maneuverability.