Energy Transfer 2012 Annual Report Download - page 188

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post-trial motions. The FDOT/FTE filed a notice of appeal on July 12, 2011. On June 6, 2012, Florida's Fourth District Court
of Appeal (“4th DCA”) issued an opinion affirming the jury award of damages and also affirming or remanding for further
consideration by the trial court certain other determinations with respect to FGT's easement rights and FDOT/FTE's obligations
regarding future FDOT/FTE projects. In particular, the 4th DCA affirmed that FDOT/FTE could not pave directly over our
pipeline without FGTs' consent and remanded and directed the trial court to make reference in the final judgment to FDOT/
FTE's obligation to seek reasonable alternatives to relocation. In addition, the 4th DCA overturned the portion of the trial
court judgment defining the width of Florida Gas's easements as 15 feet on either side of its pipelines and defining the temporary
work space available to Florida Gas under its easements as 75 feet in width, stating that the width of such easements and
temporary work space should be determined on a case by case basis dependent on the needs of each particular relocation and
whether a road improvement is a material interference with the easement. Reimbursement for any future relocation expenses
will also be determined on a case by case basis. As a result of the decision by the 4th DCA affirming the monetary award of
the judgment and the trial court's November 7, 2012 issuance of a peremptory writ of mandamus, FDOT paid to FGT on
November 16, 2012 the sum of $100 million, representing the amount of judgment plus interest through that date. The amounts
received reduced FGTs' property, plant and equipment costs. FGT previously filed a petition requesting the Supreme Court
of Florida to exercise its discretionary jurisdiction and to reverse the portion of the 4th DCA decision overturning the trial
court judgment specifically defining the width of FGTs' easements and temporary work space. By order dated December 28,
2012, the Supreme Court of Florida denied that petition.
Contingent Residual Support Agreement - AmeriGas
In order to finance the cash portion of the purchase price of the Propane Transaction described in Note 3, AmeriGas Finance
LLC ("Finance Company"), a wholly owned subsidiary of AmeriGas, issued $550 million in aggregate principal amount of
6.75% senior notes due 2020 and $1.0 billion in aggregate principal amount of 7.00% senior notes due 2022. AmeriGas
borrowed $1.5 billion of the proceeds of the Senior Notes issuance from Finance Company through an intercompany borrowing
having maturity dates and repayment terms that mirror those of the Senior Notes (the "Supported Debt").
In connection with the closing of the Propane Transaction, ETP entered into and delivered a Contingent Residual Support
Agreement ("CRSA") with AmeriGas, Finance Company, AmeriGas Finance Corp. and UGI Corp., pursuant to which ETP
will provide contingent, residual support of the Supported Debt as defined in the CRSA.
NGL Pipeline Regulation
We have interests in NGL pipelines located in Texas. We believe that these pipelines do not provide interstate service and that
they are thus not subject to the jurisdiction of the FERC under the Interstate Commerce Act (“ICA”) and the Energy Policy
Act of 1992. Under the ICA, tariffs must be just and reasonable and not unduly discriminatory or confer any undue preference.
We cannot guarantee that the jurisdictional status of our NGL facilities will remain unchanged; however, should they be found
jurisdictional, the FERC’s rate-making methodologies may limit our ability to set rates based on our actual costs, may delay
or limit the use of rates that reflect increased costs and may subject us to potentially burdensome and expensive operational,
reporting and other requirements. Any of the foregoing could adversely affect our business, revenues and cash flow.
Commitments
In the normal course of our business, we purchase, process and sell natural gas pursuant to long-term contracts and we enter
into long-term transportation and storage agreements. Such contracts contain terms that are customary in the industry. We
believe that the terms of these agreements are commercially reasonable and will not have a material adverse effect on our
financial position or results of operations.
We have certain non-cancelable leases for property and equipment, which require fixed monthly rental payments and expire
at various dates through 2056. Rental expense under these operating leases has been included in operating expenses in the
accompanying statements of operations and totaled approximately $57 million, $26 million and $21 million for the years
ended December 31, 2012, 2011 and 2010, respectively, which include contingent rentals totaling $6 million in 2012. During
the three months ended December 31, 2012, approximately $4 million of rental expense was recovered through related sublease
rental income.
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