Energy Transfer 2010 Annual Report Download - page 30

Construction of new pipeline 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 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.
As of December 31, 2010, we had approximately $6.44 billion of consolidated debt, excluding the credit
facilities of our joint ventures, which we guarantee in part. A significant increase in our indebtedness that is
proportionately greater than our issuances of equity could negatively impact our 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 increases in interest rates. As of
December 31, 2010, we had approximately $6.44 billion of consolidated debt, excluding the credit facilities of
our joint ventures, which we guarantee in part. Approximately $402.3 million of our consolidated debt bears
interest at variable interest rates and the remainder bears interest at fixed rates. We manage a portion of our
interest rate exposures by utilizing interest rate swaps and similar arrangements. To the extent that we have debt
with variable interest rates that is not hedged, our results of operations, cash flows and financial condition could
be materially adversely affected by significant increases in interest rates. We had the following interest rate
swaps outstanding as of December 31, 2010, none of which are designated as hedges for accounting purposes:
Term
Notional
Amount Type
August 2012 (1) $ 400,000 Forward starting to pay a fixed rate
of 3.64% and receive a floating rate
July 2018 500,000 Pay a floating rate and receive a
fixed rate of 6.70%
(1) These forward starting swaps have an effective date of August 2012 and a term of 10 years; however, the
swaps have a mandatory termination provision and will be settled in August 2012.
An increase in interest rates may also cause a corresponding decline in demand for equity investments, in
general, and in particular for yield-based equity investments such as our Common Units. Any such reduction in
demand for our Common Units resulting from other more attractive investment opportunities may cause the
trading price of our Common Units to decline.
The credit and risk profile of our General Partner and its owners could adversely affect our credit ratings and
profile.
The credit and business risk profiles of our General Partner, and of ETE as the indirect owner of our General
Partner, may be factors in credit evaluations of us as a publicly traded limited partnership due to the significant
influence of our General Partner and ETE over our business activities, including our cash distributions,
acquisition strategy and business risk profile. Another factor that may be considered is the financial condition of
our General Partner and its owners, including the degree of their financial leverage and their dependence on cash
flow from the Partnership to service their indebtedness.
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