Energy Transfer Partners Announces Amended Agreement for 50% Interest in Citrus Corp., Owner of Florida Gas Transmission

Energy Transfer Partners, LP. ETP and Energy Transfer Equity, L.P. ETE today announced that the two partnerships have signed an amended definitive agreement pursuant to which there will be a contribution by merger of an indirect 50% interest in Citrus Corp., which owns 100% of the Florida Gas Transmission pipeline system, to ETP in exchange for approximately $2.0 billion. The contribution by merger of the 50% equity interest in Citrus is subject to the successful consummation of the merger between Southern Union Company SUG and ETE. Citrus Corp. is currently jointly owned by SUG and El Paso Corporation. The revised agreement amends the definitive merger agreement that was announced on July 5, 2011. Earlier today, ETE and SUG announced that they have entered into an amended and restated merger agreement under which ETE will acquire all of the outstanding common stock of SUG for cash and ETE common units. That acquisition is expected to close in the first quarter of 2012. Under the terms of the amended agreement between ETE and ETP, upon the closing of ETE's acquisition of SUG, ETP would receive the interest in Citrus in exchange for $1.9 billion of cash and $100 million of ETP common units. The remaining terms of the amended agreement between ETP and ETE are substantially similar to the agreement announced on July 5, 2011. ETP expects to fund substantially all of the cash portion of the purchase price initially through the issuance of debt and borrowings from our revolving credit facility. In turn, ETE will use these proceeds to repay a substantial portion of the acquisition financing incurred by ETE to fund the cash consideration to be paid to SUG shareholders. ETP also intends to issue sufficient additional equity to maintain its investment grade credit rating and to use the proceeds from such equity issuances to repay other indebtedness and fund capital expenditures. In order to increase the expected accretion to be derived from Citrus, ETE has agreed to relinquish its rights to approximately $220 million of the incentive distributions from ETP that ETE would otherwise be entitled to receive over 16 consecutive quarters following the closing of the transaction. Based on the projections used in connection with the transaction, it is expected that Citrus would be immediately accretive to ETP unitholders. As part of the transaction, ETE has also granted ETP a right of first offer with respect to any disposition of another SUG subsidiary, Southern Union Gas Services (SUGS). SUGS owns and operates a natural gas gathering and processing system serving the Permian Basin in West Texas and New Mexico.