Energy Transfer 2012 Annual Report Download - page 41

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We may sell additional limited partner interests, diluting existing interests of Unitholders.
Our partnership agreement allows us to issue an unlimited number of additional limited partner interests, including securities
senior to the Common Units, without the approval of our Unitholders. The issuance of additional Common Units or other equity
securities will have the following effects:
• the current proportionate ownership interest of our Unitholders in us will decrease;
• the amount of cash available for distribution on each Common Unit or partnership security may decrease;
• the relative voting strength of each previously outstanding Common Unit may be diminished; and
• the market price of the Common Units or partnership securities may decline.
Future sales of our units or other limited partner interests in the public market could reduce the market price of Unitholders’
limited partner interests.
As of December 31, 2012, ETE owned 50,226,967 ETP Common Units. If ETE were to sell and/or distribute its Common Units
to the holders of its equity interests in the future, those holders may dispose of some or all of these units. The sale or disposition
of a substantial portion of these units in the public markets could reduce the market price of our outstanding Common Units.
In August 2012, we filed a registration statement to register 12,000,000 ETP Common Units held by ETE, which allows ETE to
offer and sell these ETP Common Units from time to time in one or more public offerings, direct placements or by other means.
Our debt level and debt agreements may limit our ability to make distributions to Unitholders and may limit our future financial
and operating flexibility.
As of December 31, 2012, we had approximately $16.22 billion of consolidated debt, excluding the debt of our joint ventures.
Our level of indebtedness affects our operations in several ways, including, among other things:
• a significant portion of our and our subsidiaries' cash flow from operations will be dedicated to the payment of principal and
interest on outstanding debt and will not be available for other purposes, including payment of distributions;
• covenants contained in our and our subsidiaries' existing debt agreements require us and them, as applicable, to meet financial
tests that may adversely affect our flexibility in planning for and reacting to changes in our business;
• our and our subsidiaries' ability to obtain additional financing for working capital, capital expenditures, acquisitions and
general partnership, corporate or limited liability company purposes, as applicable, may be limited;
• we may be at a competitive disadvantage relative to similar companies that have less debt;
• we may be more vulnerable to adverse economic and industry conditions as a result of our significant debt level; and
• failure by us or our subsidiaries to comply with the various restrictive covenants of our respective debt agreements could
negatively impact our ability to incur additional debt, including our ability to utilize the available capacity under our revolving
credit facility, and our ability to pay our distributions.
Capital projects will require significant amounts of debt and equity financing which may not be available to us on acceptable
terms, or at all.
We plan to fund our growth capital expenditures, including any new pipeline construction projects and improvements or repairs
to existing facilities that we may undertake, with proceeds from sales of our debt and equity securities and borrowings under our
revolving credit facility; however, we cannot be certain that we will be able to issue our debt and equity securities on terms
satisfactory to us, or at all. If we are unable to finance our expansion projects as expected, we could be required to seek alternative
financing, the terms of which may not be attractive to us, or to revise or cancel our expansion plans.
A significant increase in our indebtedness that is proportionately greater than our issuances of equity could negatively impact our
and our subsidiaries' credit ratings or our ability to remain in compliance with the financial covenants under our revolving credit
agreement, which could have a material adverse effect on our financial condition, results of operations and cash flows.
Increases in interest rates could adversely affect our business, results of operations, cash flows and financial condition.
In addition to our exposure to commodity prices, we have exposure to changes in interest rates. Approximately $2.21 billion of
our consolidated debt as of December 31, 2012 bears interest at variable interest rates and the remainder bears interest at fixed
rates. To the extent that we have debt with floating interest rates, our results of operations, cash flows and financial condition could
be materially adversely affected by increases in interest rates. We manage a portion of our interest rate exposures by utilizing
interest rate swaps.
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