Energy Transfer 2010 Annual Report Download - page 160

We are recognizing non-cash compensation expense over the vesting period based on the grant-date fair
value of the ETE units awarded the ETP employees assuming no forfeitures. For the years ended
December 31, 2010, 2009 and 2008, we recognized non-cash compensation expense, net of forfeitures, of
$3.7 million, $6.4 million and $3.5 million, respectively, as a result of these awards. As of December 31,
2010, rights related to 365,000 ETE common units remain outstanding, for which we expect to recognize a
total of $3.2 million in compensation expense over a weighted average period of 1.5 years.
9. REGULATORY MATTERS, COMMITMENTS, CONTINGENCIES AND ENVIRONMENTAL
LIABILITIES:
Regulatory Matters
In April 2010, the application to construct and operate the Tiger pipeline was approved by the FERC and
field construction began on the pipeline in June 2010. The Tiger pipeline was placed in service in December
2010. In June 2010, we filed an application for authority to construct and operate an expansion of the Tiger
pipeline. In February 2011, we accepted the FERC’s order authorizing the construction of this expansion.
On September 29, 2006, Transwestern filed revised tariff sheets under Section 4(e) of the Natural Gas Act
(“NGA”) proposing a general rate increase to be effective on November 1, 2006. In April 2007, the FERC
approved a Stipulation and Agreement of Settlement that resolved the primary components of the rate case.
Transwestern’s tariff rates and fuel rates are now final for the period of the settlement. Transwestern is
required to file a new rate case no later than October 1, 2011.
Guarantees
MEP Guarantee
Previously, we guaranteed 50% of the obligations of MEP under its senior revolving credit facility (the
“MEP Facility”). The MEP Facility matured on February 28, 2011.
FEP Guarantee
On November 13, 2009, FEP entered into a credit agreement that provides for a $1.1 billion senior revolving
credit facility (the “FEP Facility”). We have guaranteed 50% of the obligations of FEP under the FEP
Facility, with the remainder of FEP Facility obligations guaranteed by KMP. Subject to certain exceptions,
our guarantee may be proportionately increased or decreased if our ownership percentage in FEP increases
or decreases. The FEP Facility is available through May 11, 2012 and amounts borrowed under the FEP
Facility bear interest at a rate based on either a Eurodollar rate or a prime rate.
As of December 31, 2010, FEP had $940.0 million of outstanding borrowings issued under the FEP Facility
and our contingent obligation with respect to our guaranteed portion of FEP’s outstanding borrowings was
$470.0 million, which is not reflected in our consolidated balance sheet. The weighted average interest rate
on the total amount outstanding as of December 31, 2010 was 3.2%.
Commitments
In the normal course of our business, we purchase, process and sell natural gas pursuant to long-term
contracts. In addition, we enter into long-term transportation and storage agreements. Such contracts contain
terms that are customary in the industry. We have also entered into several propane purchase and supply
commitments, which are typically one year agreements with varying terms as to quantities, prices and
expiration dates. 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.
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