8-KLeadership Changes

Energy Transfer LP 8-K Report, Executive Changes (Jul 18, 2018)

Filed July 18, 2018For Securities:ETET-PI

Summary

Energy Transfer LP (ET) announced a significant change in its governance structure with the appointment of Ray C. Davis to the Board of Directors of LE GP, LLC, the general partner of ET. This appointment, effective July 17, 2018, brings Mr. Davis, who previously served on the Board of Energy Transfer Partners, L.P. (ETP), onto the parent entity's board. Investors should note that ET directly or indirectly owns the general partner of ETP, suggesting a strategic integration or alignment. Mr. Davis's compensation will follow the standard structure for non-employee directors, as detailed in ET's 2017 10-K. The filing also discloses past financial arrangements between ETP and former owners of Energy Transfer Group LLC, including Mr. Davis. Specifically, ETP made annual operating lease payments of $5 million and a one-time payment of $8.8 million in August 2017 for equipment that ETP retained upon lease expiration. This information provides context for Mr. Davis's past business dealings and potential influence.

Key Highlights

  • 1Ray C. Davis appointed to the Board of Directors of LE GP, LLC, the general partner of Energy Transfer LP (ET).
  • 2Mr. Davis previously served on the Board of Directors of Energy Transfer Partners, L.P. (ETP).
  • 3ET owns the general partner of ETP, indicating potential strategic alignment or integration.
  • 4Mr. Davis's director compensation will be consistent with other non-employee directors.
  • 5ETP previously had an operating lease agreement with former owners of Energy Transfer Group LLC, including Mr. Davis.
  • 6ETP made $5 million in annual lease payments and a $8.8 million one-time payment to former owners, including Mr. Davis.
  • 7ETP retained the leased equipment upon expiration of the lease agreement.

Frequently Asked Questions

Ray C. Davis is a new appointee to the Board of Directors of LE GP, LLC, the general partner of Energy Transfer LP. His significance stems from his prior board experience with ETP, a subsidiary-like entity of ET, suggesting a strengthening of governance or strategic oversight at the parent level.

ETP had an operating lease agreement with former owners of Energy Transfer Group LLC, including Mr. Davis. ETP paid $5 million annually in lease payments and a one-time payment of $8.8 million in August 2017 for equipment that ETP retained when the lease expired.

Mr. Davis will receive compensation for his services as a director that is consistent with the compensation provided to other non-employee directors of LE GP, as previously disclosed in ET's 2017 Form 10-K.

The filing states there are no arrangements or understandings with the Partnership or other persons pursuant to which Mr. Davis was appointed, suggesting no immediate conflicts. However, investors should review ET's full disclosure on director independence and related party transactions for a comprehensive understanding.