Energy Transfer Lp · NYSE:ET
Energy Transfer Lp — Energy Transfer Equity — Merger or Acquisition (September 2015)
24 slides from Energy Transfer Lp's merger presentation, Sep 28, 2015
Slide 1: Energy Transfer Equity, L.P. to Acquire Williams
ENERGY TRANSFER EQUITY, L.P. TO ACQUIRE WILLIAMS Investor Presentation September 28, 2015
Slide 2: Legal Disclaimer
LEGAL DISCLAIMER 2 Additional Information and Where to Find It SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND THE REGISTRATION STATEMENT REGARDING THE TRANSACTION (THE "TRANSACTION”) INVOLVING THE BUSINESS COMBINATION OF ENERGY TRANSFER EQUITY, L.P. (“ETE”) AND THE WILLIAMS CO
Slide 3: Overview of ETE / WMB Merger Terms
OVERVIEW OF ETE / WMB MERGER TERMS • Energy Transfer Equity, L.P. (“ETE”) has executed a definitive agreement to combine with Williams (“WMB”) in a transaction valued at approximately $38 billion as of September 25, 2015, including approximately $4.6 billion of assumed WMB debt – Implied offer price
Slide 4: Overview of ETE / WMB Merger Terms (Cont'd)
OVERVIEW OF ETE / WMB MERGER TERMS (CONT’D) • In addition, each ETC common share received by WMB stockholders in the merger will have attached to it one contingent consideration right (“CCR”) – The WMB Board wanted protection that the newly created ETC common shares would trade at least at parity to
Slide 5: Combination Creates a Unique Collection of Compatible Businesses
COMBINATION CREATES A UNIQUE COLLECTION OF COMPATIBLE BUSINESSES THAT WILL DRIVE NEAR- AND LONG-TERM VALUE Largest Energy Infrastructure Group ETE Unitholders – Creates the largest energy infrastructure company by combining two of the largest diversified MLPs, the second largest crude and logistics
Slide 6: Illustrative Transaction
ILLUSTRATIVE TRANSACTION – Energy Transfer Corp GP LLC and Energy Transfer Corp LP (“ETC”) are formed; ETC elects to be taxed as a corporation for federal tax purposes – ETC issues shares and cash to WMB stockholders in exchange for all outstanding shares of WMB – WMB merges into ETC with ETC being
Slide 7: Consideration Overview and CCR Mechanics
CONSIDERATION OVERVIEW AND CCR MECHANICS 7 CCR Mechanics ETE Ownership Legacy WMB Ownership (1) If all WMB stockholders elect cash or, alternatively, all stock, each WMB share would be exchanged for $8.00 in cash and 1.5274 ETC shares. (2) Excluding the first 30 days following the announcement of th
Slide 8: Pro Forma Energy Transfer Organizational Structure
PRO FORMA ENERGY TRANSFER ORGANIZATIONAL STRUCTURE ENERGY TRANSFER LNG SUNOCO LOGISTICS PARTNERS L.P. (NYSE: SXL) Baa2 / BBB / BBB ~1% LP Interest 100% GP / IDRs 90% GP / IDRs (Class H Units) 27% LP Interest SUNOCO LP (NYSE: SUN) Ba2 / BB / BB ENERGY TRANSFER EQUITY, L.P. (NYSE: ETE) ENERGY TRANSFER
Slide 9: ETC Premium Value Opportunity
ETC PREMIUM VALUE OPPORTUNITY ETC Advantages 9 Vast C-Corp Market Compared to MLPs(1) US Equity Market Cap ~ $20T MLPs ~ $~500B • MLP C-Corp structure well received by the market • 60% of pro forma float at ETC • 1099 rather than K-1 for tax purposes • Provides access to broader range of high qualit
Slide 10: Balance Sheet Scale, Managing Cost of Capital, and Optionality Will Determine Long-Term Winners
$379 $332 $269 $193 $149 $139 $138 $135 $124 $113 $108 $81 $79 $73 XOM PTR RDS CVX ETE PF BP TOT PBR SNP SLB KMI COP ENB EPD BALANCE SHEET SCALE, MANAGING COST OF CAPITAL, AND OPTIONALITY WILL DETERMINE LONG-TERM WINNERS Equity Value Enterprise Value Enterprise Value vs. Top Energy Companies(1) Mids
Slide 11: Merger Creates One of the Largest Energy Franchises in the U.S.
MERGER CREATES ONE OF THE LARGEST ENERGY FRANCHISES IN THE U.S.... Largest transporter of natural gas in the U.S. 3rd largest NGL business in the U.S. Largest G&P MLP and NGL Producer in the U.S. 3rd largest MLP transporter of crude oil in the U.S. Natural Gas NGLs Crude Oil 2nd largest planned LNG
Slide 12: Diversified Portfolio of Complementary Businesses and Financial Scale
(50%) 0% 50% 100% 150% 200% 250% Jan-13 May-13 Oct-13 Mar-14 Jul-14 Dec-14 May-15 Sep-15 ETE ETP SXL SUN WPZ Alerian Index …WITH A DIVERSIFIED PORTFOLIO OF COMPLEMENTARY BUSINESSES AND FINANCIAL SCALE ACROSS THE GROUP Enterprise Value of ~$150 billion and over $10 billion of Pro Forma Consolidated E
Slide 13: Unique and Complementary Geographic Footprint
ETP Assets SXL Assets Lone Star Express Pipeline Development Projects Lake Charles LNG Rover Pipeline Dakota Access Pipeline ` Company Operated Dealer / Distributor Operated Combined Sunoco Retail Platform SUN Terminals Marcus Hook Nederland Eagle Point Crude Conversion Pipeline UNIQUE AND COMPLEMEN
Slide 14: Compelling Interstate Natural Gas Pipeline Combination
…CREATES A COMPELLING INTERSTATE NATURAL GAS PIPELINE COMBINATION THAT PROVIDES BENEFITS FOR PRODUCERS AND END USE CUSTOMERS… 14 Fayetteville Express Tiger Trunkline Florida Gas Transmission Sea Robin Transwestern Rover Panhandle Eastern Midcontinent Express Northwest Pipeline Transco Gulfstream Con
Slide 15: Fully Integrated Liquids Platform Across North America
…AND A FULLY INTEGRATED LIQUIDS PLATFORM ACROSS NORTH AMERICA NGL Pipelines Crude Projects NGL Projects Refined Products Crude Products Growth Projects LPG Pipelines Crude Products Energy Transfer Sunoco Logistics Williams Chemical Plant LPG Fractionator Facility LNG Facilities Fractionator 15 Hutch
Slide 16: ETE Will Continue to Benefit from Strong Cash Flow Growth
2011 2012 2013 2014 2015E Status Quo 2015E Pro Forma $180 $180 $268 $119 $54 $54 $441 $534 $574 $641 $1,297 $1,297$48 $48 $48 $9911 $13 $14 $36 $35 $103 $266 $266 $22 $22 $195 $196 $196 $1,191 $927 $1,834 $3,952 LP | ETP GP + IDRs | ETP LP | RGP GP + IDRs | RGP Class H | SXL GP + IDRs | SUN Lake Cha
Slide 17: Merger Accelerates ETE Towards Investment Grade Ratings
Fixed 82% Floating 18% MERGER ACCELERATES ETE TOWARDS INVESTMENT GRADE RATINGS Pro Forma Interest Rate Exposure (2) Pro Forma Maturity Profile ($ millions) Total Debt = $16,629 million Pro Forma Capital Structure (1) Assumes WMB revolver paydown and termination. Includes estimated transaction costs.
Slide 18: Organic Development and Acquisitions Drive Strong Cash Flow Growth
ORGANIC DEVELOPMENT AND ACQUISITIONS HAVE DRIVEN AND WILL CONTINUE TO DRIVE STRONG CASH FLOW GROWTH Growth Drivers • Bakken Crude Pipeline Project / Bayou Bridge Pipeline • ET Rover Pipeline Project • Natural Gas Exports to Mexico • Lone Star Expansions and NGL Export Opportunity • Eagle Ford & Perm
Slide 19: Acquisition Further Enhances Our Key Strengths
ACQUISITION FURTHER ENHANCES OUR KEY STRENGTHS WMB/WPZ is a major complement to Energy Transfer's existing business and will benefit from its integrated business model Interstate Natural Gas T&S Franchise Strengths Intrastate Natural Gas T&S Midstream Liquids Transportation & Services Lone Star NGL
Slide 20: Well Over $2 Billion of Potential EBITDA from Commercial Synergies
WELL OVER $2 BILLION OF POTENTIAL EBITDA FROM COMMERCIAL SYNERGIES West / Rockies • Northwest Pipeline / Transwestern Pipeline service optimization • WPZ / ETP Rockies liquids plants synergies Appalachia / Northeast • Integration of WPZ liquids footprint into SXL’s Mariner East / Marcus Hook franchi
Slide 21: Substantial Opportunity to Realize Shared Service Cost Savings
SUBSTANTIAL OPPORTUNITY TO REALIZE SHARED SERVICE COST SAVINGS Shared Service Implementation Is Similar to Our Highly Successful Approach With Sunoco, Inc. Compliance & Governmental Affairs Corporate Services & Real Estate ITRisk Management TreasuryAccounting & Finance InsuranceTaxSOXInternal AuditH
Slide 22: Better Positioned to Create Value with One of North America's Largest Producers
BETTER POSITIONED TO CREATE VALUE WITH ONE OF NORTH AMERICA’S LARGEST PRODUCERS 22 Source: Wall Street Research, Investor Presentations, Hart Energy Rextag (1) Based on Wall Street Research (2) Williams combined with ETP, SXL, and SUN 2016E EBITDA. Excluding synergies. Chesapeake Production Profile
Slide 23: Key Takeaways
KEY TAKEAWAYS • The merger creates numerous benefits: – Enhances overall cash flow diversification by commodity exposure, geographic areas and customer base – Increases long-term cash flow growth – Improves pro forma credit profile – ETC is strategic currency for use in future acquisitions • ETE / E
Slide 24: Illustrative Transaction Timeline
24 ILLUSTRATIVE TRANSACTION TIMELINE September 2015 • Prepare proxy / registration statement • Begin regulatory approval process File proxy statement / S-4 registration statement First half of 2016: Merger Close • File for Regulatory (HSR) Approval Expected timing from announcement to closing Subjec
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