ETP
REGENCY MERGER: KEY HIGHLIGHTS
13
ETP has executed a definitive agreement to merge with Regency in
an all unit transaction
0.4066
ETP
common
units
per
Regency
LP
unit
plus
an
additional
$0.32
per
Regency
LP
unit
in
the
form
of
an
amount
of
ETP
common
units (as
determined by the ETP common unit price prior to closing of the merger)
Implied premium at announcement:
13% to Regencys closing price on January 23, 2015
15% to Regencys 3-day VWAP ending January 23, 2015
ETP will guarantee Regencys outstanding debt and will refinance Regencys
outstanding revolver borrowings
$6.6 billion of debt at December 31, 2014
Regencys revolver to be terminated at closing
Assuming an upgrade to investment grade ratings, there is no change of control
triggered to Regencys notes All three rating agencies have affirmed
ETPs credit ratings and put Regency on review for upgrade to an investment grade rating at closing of
merger
Expected
to
be
breakeven
to
distributable
cash
flow
per
unit
for
ETP
in
2015
and
accretive
in
2016
and
beyond
ETE
will
provide
to
ETP
$320
million
of
total
IDR
subsidies
over
5
years
$80 million IDR subsidy for the first full year after closing and $60 million per
year for the following 4 years ETE and ETP have also agreed to vote their 94.8
million Regency units in support of the merger Merger subject to customary
approvals
Regency unitholder vote (simple majority of outstanding units)
HSR clearance
Expect transaction to close in 2Q15
Merger takes ETP to the next level and creates long term value for all
unitholders (1)
Based on market data as of 1/23/15
Filed by Energy Transfer Partners, L.P.
Pursuant to Rule
425 under the
Subject Company: Regency Energy Partners LP
Commission
File
No.:
001-35262
On February 25, 2015, members of management of Energy Transfer Equity, L.P.
(ETE), which owns the general partner of Energy Transfer Partners,
L.P.
(ETP),
made
a
presentation
to
analysts
at
the
Credit
Suisse
20
th
Annual
Energy
Summit
held
in
Vail,
Colorado.
The
following
is
a
portion
of
the presentation
materials relating to the Partnerships proposed merger with Regency Energy
Partners LP (Regency). ********
Commission File No.: 001-11727
Securities Act of 1933, as amended |
ETP
REGENCY MERGER: STRATEGIC CONSIDERATIONS
14
(1)
Source: Baker Hughes
(2)
Source: EIA
(3)
Lone Star is owned 70% by ETP and 30% by Regency
A winwin
for all stakeholders
LEADING POSITIONS
IN THE MOST
ATTRACTIVE
BASINS IN THE US
WORLD CLASS
MIDSTREAM
FOOTPRINT
COMPLEMENTARY
ASSETS WITH
SIGNIFICANT
GROWTH
OPPORTUNITIES
SIGNIFICANT LONG-
TERM VALUE
CREATION
Strong positions in Permian, Eagle Ford, Marcellus and Utica basins
Active
in
9
of
the
top
10
basins
by
active
rig
count
(1)
Top
3
regions
by
oil
production
and
top
3
regions
by
gas
production
(2)
Adds diversity and leadership positions in substantially all major
basins/plays
Combines strong Permian Basin / Eagle Ford positions to create the premier
franchise
Provides
additional
customer
relationships
with
some
of
the
most
active
operators
in
each
basin
Current combined gathering and processing throughput of 8.7 Bcf/d
Significant organic growth project opportunities
2015 pro forma growth capex of ~$4.9 billion
Additional
NGL
production
and
volumes
to
support
Lone
Stars
(3)
leading
NGL
position
in
Mont
Belvieu
Incremental natural gas volumes for ETPs intrastate natural gas system
Substantial cost savings and efficiencies
Higher long-term distribution growth profile than ETP stand-alone
Provides immediate and long-term value to Regency unitholders
|
ETP
REGENCY MERGER: KEY TAKEAWAYS
15
The merger of ETP and Regency creates benefits for ETE
Immediate increase in overall cash flow and long-term cash flow growth
Improved pro forma credit profile
ETP becomes the second largest MLP
Combined footprint with over 62,270 miles of pipelines and over 60 plants with 8.7
Bcf/d of gathering and processing throughput
Operations in major high-growth oil and gas shales and basins, including Eagle
Ford, Permian, Panhandle and Marcellus / Utica
Regency benefits from size and strength of ETPs diversified platform
Improved access to capital and lower cost of capital
Better potential for growth in a lower commodity price environment
ETE
will
be
stronger
and
better
positioned
for
future
strategic
opportunities
ETP
benefits
from
further
diversified
basin
exposure,
major
presence
in
Marcellus
/
Utica
basins,
increased
NGL
volumes
to
Lone
Star
and
greater
gas
volumes
in
its
intrastate
system
Regency
steps
into
an
investment
grade
balance
sheet
and
an
attractive
cost
of
capital |
(1)
Regency G&P segment included in pro forma ETP midstream segment
(2)
Excludes Retail Marketing
16
Stable Fee Based Cash Flow Profile
(2)
Pro Forma
(1)
ETP BENEFITS FROM DIVERSIFICATION OF REGENCY MERGER
WHILE MAINTAINING ATTRACTIVE FEE BASED PROFILE
Fee based
~85-90%
Non-fee based
~10-15%
Fee based
~85-87%
Hedged
commodity
3%
Non-fee based
~10-12%
Midstream
13%
Interstate
23%
Crude /
Refined
products
20%
Retail
15%
Liquids Trans.
& Svcs.
12%
Intrastate
10%
Other
7%
Gathering &
Processing
56%
Transportation
14%
Contract
Services
13%
NGL Services
13%
Natural
resources
4%
Midstream
21%
Interstate
20%
Crude /
Refined
products
16%
Retail
12%
Liquids Trans.
& Svcs.
13%
Intrastate
9%
Other
6%
Contract
Services
3%
Fee based
75%
Hedged
commodity
15%
Non-fee based
10%
2014 Adjusted EBITDA by Segment |
Cautionary Statement Regarding Forward-Looking Statements
This report includes forward-looking statements. Forward-looking statements are identified as any statement that does not relate strictly to historical or current facts. Statements using words such as anticipate, believe, intend, project, plan, expect, continue, estimate, goal, forecast, may or similar expressions help identify forward-looking statements. ETP and Regency cannot give any assurance that expectations and projections about future events will prove to be correct. Forward-looking statements are subject to a variety of risks, uncertainties and assumptions. These risks and uncertainties include the risks that the proposed transaction may not be consummated or the benefits contemplated therefrom may not be realized. Additional risks include: the ability to obtain requisite regulatory and unitholder approval and the satisfaction of the other conditions to the consummation of the proposed transaction, the ability of ETP to successfully integrate Regencys operations and employees and realize anticipated synergies and cost savings, the potential impact of the announcement or consummation of the proposed transaction on relationships, including with employees, suppliers, customers, competitors and credit rating agencies, the ability to achieve revenue, DCF and EBITDA growth, and volatility in the price of oil, natural gas, and natural gas liquids. Actual results and outcomes may differ materially from those expressed in such forward-looking statements. These and other risks and uncertainties are discussed in more detail in filings made by ETP and Regency with the Securities and Exchange Commission (the SEC), which are available to the public. ETP and Regency undertake no obligation to update publicly or to revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Additional Information and Where to Find It
SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND THE REGISTRATION STATEMENT REGARDING THE TRANSACTION CAREFULLY WHEN IT BECOMES AVAILABLE. These documents (when they become available), and any other documents filed by ETP or Regency with the SEC, may be obtained free of charge at the SECs website, at www.sec.gov. In addition, investors and security holders will be able to obtain free copies of the registration statement and the proxy statement/prospectus by phone, e-mail or written request by contacting the investor relations department of ETP or Regency at the following:
Energy Transfer Partners, L.P. 3738 Oak Lawn Ave. Dallas, TX 75219 Attention: Investor Relations Phone: 214-981-0700 |
Regency Energy Partners LP 2001 Bryan Street, Suite 3700 Dallas, TX 75201 Attention: Investor Relations Phone: 214-840-5477 |
Participants in the Solicitation
ETP, Regency and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in connection with the proposed merger. Information regarding the directors and executive officers of ETP is contained in ETPs Form 10-K for the year ended December 31, 2013, which was filed with the SEC on February 27, 2014. Information regarding the directors and executive officers of Regency is contained in Regencys Form 10-K for the year ended December 31, 2013, which was filed with the SEC on February 27, 2014. Additional information regarding the interests of participants in the solicitation of proxies in connection with the proposed merger will be included in the proxy statement/prospectus.