Energy Transfer 2010 Annual Report Download - page 161

We have certain non-cancelable leases for property and equipment, which require fixed monthly rental
payments and expire at various dates through 2034. Rental expense under these operating leases has been
included in operating expenses in the accompanying statements of operations and totaled approximately
$21.1 million, $19.8 million and $17.2 million for the years ended December 31, 2010, 2009 and 2008,
respectively.
Future minimum lease commitments for such leases are:
Years Ending December 31:
2011 $ 23,670
2012 20,732
2013 19,384
2014 17,222
2015 16,777
Thereafter 165,403
Our propane operations have an agreement with Enterprise Products Partners L.P. (together with its
subsidiaries “Enterprise”) (see Note 12) to supply a portion of our propane requirements. The agreement
will continue until March 2015 and includes an option to extend the agreement for an additional year.
In connection with the sale of our investment in M-P Energy in October 2007, we executed a propane
purchase agreement for approximately 90.0 million gallons per year through 2015 at market prices plus a
nominal fee.
We have commitments to make capital contributions to our joint ventures and expect that capital
contributions for 2011 will be between $200 million and $230 million.
Litigation and Contingencies
We may, from time to time, be involved in litigation and claims arising out of our operations in the normal
course of business. Natural gas and propane are flammable, combustible gases. Serious personal injury and
significant property damage can arise in connection with their transportation, storage or use. In the ordinary
course of business, we are sometimes threatened with or named as a defendant in various lawsuits seeking
actual and punitive damages for product liability, personal injury and property damage. We maintain
liability insurance with insurers in amounts and with coverage and deductibles management believes are
reasonable and prudent, and which are generally accepted in the industry. However, there can be no
assurance that the levels of insurance protection currently in effect will continue to be available at
reasonable prices or that such levels will remain adequate to protect us from material expenses related to
product liability, personal injury or property damage in the future.
FERC and Related Matters. On July 26, 2007, the FERC issued to us an Order to Show Cause and Notice of
Proposed Penalties (the “Order and Notice”) that contains allegations that we violated FERC rules and
regulations. The FERC alleged that we engaged in manipulative or improper trading activities in the
Houston Ship Channel, primarily on two dates during the fall of 2005 following the occurrence of
Hurricanes Katrina and Rita, as well as on eight other occasions from December 2003 through August 2005,
in order to benefit financially from our commodities derivatives positions and from certain of our index-
priced physical gas purchases in the Houston Ship Channel. The FERC alleged that during these periods we
violated the FERC’s then-effective Market Behavior Rule 2, an anti-market manipulation rule promulgated
by the FERC under authority of the NGA. The FERC alleged that we violated this rule by artificially
suppressing prices that were included in the Platts Inside FERC Houston Ship Channel index, published by
McGraw-Hill Companies, on which the pricing of many physical natural gas contracts and financial
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