Energy Transfer 2013 Annual Report Download - page 101

Table of Contents
during an acquisition period. Sunoco Logistics’ ratio of total consolidated debt, excluding net unamortized fair value adjustments, to consolidated Adjusted
EBITDA was 2.8 to 1 at December 31, 2013, as calculated in accordance with the credit agreements.
The $35 million credit facility limits West Texas Gulf, on a rolling four-quarter basis, to a minimum fixed charge coverage ratio, as defined in the underlying
credit agreement. The ratio for the fiscal quarter ending December 31, 2013 shall not be less than 1.00 to 1. The minimum ratio fluctuates between 0.80 to 1
and 1.00 to 1 throughout the term of the revolver as specified in the credit agreement. In addition, the credit facility limits West Texas Gulf to a maximum
leverage ratio of 2.00 to 1. West Texas Gulf’s fixed charge coverage ratio and leverage ratio were 1.12 to 1 and 0.88 to 1, respectively, at December 31, 2013.
Contingent Residual Support Agreement – AmeriGas
In order to finance the cash portion of the purchase price of the Propane Business described in Note 6 of our consolidated financial statements, 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 contribution of the Propane Business, ETP entered into 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.
PEPL Holdings Guarantee of Collection
In connection with the SUGS Contribution, Regency issued $600 million of 4.50% Senior Notes due 2023 (the “Regency Debt”), the proceeds of which were
used by Regency to fund the cash portion of the consideration, as adjusted, and pay certain other expenses or disbursements directly related to the closing of
the SUGS Contribution. In connection with the closing of the SUGS Contribution on April 30, 2013, Regency entered into an agreement with PEPL Holdings,
a subsidiary of Southern Union, pursuant to which PEPL Holdings provided a guarantee of collection (on a nonrecourse basis to Southern Union) to Regency
and Regency Energy Finance Corp. with respect to the payment of the principal amount of the Regency Debt through maturity in 2023. In connection with the
completion of the Panhandle Merger, in which PEPL Holdings was merged with and into Panhandle, the guarantee of collection for the Regency Debt was
assumed by Panhandle.
Contractual Obligations
The following table summarizes our long-term debt and other contractual obligations as of December 31, 2013:
Payments Due by Period
Contractual Obligations
Total
Less Than 1 Year
1-3 Years
3-5 Years
More Than 5 Years
Long-term debt
$16,780
$ 812
$ 1,422
$2,425
$12,121
Interest on long-term debt(1)
13,706
973
1,762
1,582
9,389
Payments on derivatives
74
35
39
—
—
Purchase commitments(2)
25,512
12,197
7,883
2,175
3,257
Transportation, natural gas storage and
fractionation contracts
122
33
48
37
4
Operating lease obligations
767
80
148
119
420
Other
246
77
89
56
24
Total(3)
$57,207
$14,207
$11,391
$6,394
$25,215
(1) Interest payments on long-term debt are based on the principal amount of debt obligations as of December 31, 2013. With respect to variable rate debt, the
interest payments were estimated using the interest rate as of December 31, 2013. To the extent interest rates change, our contractual obligations for interest
payments will change. See “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” for further discussion.
(2) We define a purchase commitment as an agreement to purchase goods or services that is enforceable and legally binding (unconditional) on us that
specifies all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the
approximate timing of the transactions. We have long and short-term product purchase obligations for refined product and energy commodities with third-
party suppliers. These purchase obligations are entered into at either variable or fixed prices. The purchase prices that we are obligated to pay under
variable price contracts
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