8-KRegulation FDOther Events

Energy Transfer LP 8-K Report, Regulation FD Disclosure (Apr 19, 2016)

Filed April 19, 2016For Securities:ETET-PI

Summary

This 8-K filing by Energy Transfer Equity, L.P. (ET) on April 18, 2016, primarily serves as a Regulation FD disclosure concerning an amendment to the Form S-4 Registration Statement related to the proposed merger with The Williams Companies, Inc. (Williams). The updated filing includes revised financial forecasts for Energy Transfer Corp LP (ETC), an affiliate, projecting EBITDA, distributable cash, and distributions per share for 2016-2018. Crucially, it discloses updated leverage ratio forecasts for ET and highlights a significant risk: the tax opinion required for the merger's tax-free treatment (Section 721 Opinion) from Latham & Watkins LLP may not be deliverable, posing a substantial risk to the merger's closing conditions. The filing also incorporates by reference other events, including the potential merger with Williams and associated integration, regulatory, and legal risks. Investors are urged to review the detailed information in the amended registration statement and future filings, as this report does not constitute a solicitation and is not a substitute for official merger-related documents. The disclosure emphasizes the importance of the tax opinion and other closing conditions, signaling potential complexities and uncertainties surrounding the transaction's completion.

Key Highlights

  • 1Energy Transfer Corp LP (ETC) filed an amendment to its Form S-4 Registration Statement regarding the proposed merger with The Williams Companies, Inc. (Williams).
  • 2Updated financial forecasts for ETC for 2016-2018, including EBITDA, total cash available for distribution, and distributions per common share, are disclosed.
  • 3Forecasted unconsolidated and consolidated leverage ratios for Energy Transfer Equity, L.P. (ET) for the 2016-2018 period are provided.
  • 4A significant risk is disclosed regarding the inability of Latham & Watkins LLP to deliver the required tax opinion (721 Opinion) for the merger's tax-free treatment, which is a closing condition.
  • 5ET believes there is a substantial risk that the 721 Opinion condition will not be satisfied, potentially impacting the merger's completion.
  • 6The filing emphasizes that this report is not a substitute for official merger documents (proxy statements, registration statements) and urges investors to read those documents carefully when available.
  • 7The report incorporates by reference the potential merger, integration risks, regulatory approvals, stockholder approvals, and ongoing litigation as key factors affecting the transaction.

Frequently Asked Questions

The primary purpose of this 8-K filing is to disclose updated financial forecasts and a significant risk related to the proposed merger between Energy Transfer Equity, L.P. (ET) and The Williams Companies, Inc. (Williams). It announces an amendment to the Form S-4 Registration Statement which contains this updated information, particularly concerning the tax opinion required for the merger.

The '721 Opinion' refers to a tax opinion from Latham & Watkins LLP stating that the contribution of Williams' assets and liabilities to ET and ET's issuance of Class E units to Williams should qualify as an exchange under Section 721(a) of the Internal Revenue Code. This is crucial because it is a condition to the closing of the merger, aiming to provide tax-free treatment for the transaction. ET's disclosure indicates a substantial risk that this opinion may not be deliverable, which could jeopardize the merger.

The filing includes updated financial forecasts for Energy Transfer Corp LP (ETC), an affiliate of ET, for the years 2016, 2017, and 2018. These forecasts cover consolidated EBITDA, total cash available for distribution, and distributions per common share. Additionally, forecasted unconsolidated and consolidated leverage ratios for ET for the same period are provided.

Investors are strongly advised to read the amended Form S-4 Registration Statement and future filings related to the merger carefully, as this 8-K is not a substitute for those official documents. They should pay close attention to the updated financial forecasts, the risk associated with the tax opinion, and other potential closing conditions and risks outlined in the filing and referenced SEC documents.