DEBT OBLIGATIONS:

Our debt obligations consist of the following:



	December 31,
	2017			2016
Parent Company Indebtedness:
7.50% Senior Notes due October 15, 2020	$	1,187		$	1,187
5.875% Senior Notes due January 15, 2024	1,150			1,150
5.50% Senior Notes due June 1, 2027	1,000			1,000
4.25% Senior Notes due March 15, 2023	1,000			—
ETE Senior Secured Term Loan due December 2, 2019	—			2,190
ETE Senior Secured Term Loan due February 2, 2024	1,220			—
ETE Senior Secured Revolving Credit Facility due December 18, 2018	—			875
ETE Senior Secured Revolving Credit Facility due March 24, 2022	1,188			—
Unamortized premiums, discounts and fair value adjustments, net	(11		)	(15		)
Deferred debt issuance costs	(34		)	(30		)
	6,700			6,357

Subsidiary Indebtedness:
ETP Debt
6.125% Senior Notes due February 15, 2017	—			400
2.50% Senior Notes due June 15, 2018 ⁽¹⁾	650			650
6.70% Senior Notes due July 1, 2018 ⁽¹⁾	600			600
9.70% Senior Notes due March 15, 2019	400			400
9.00% Senior Notes due April 15, 2019	450			450
5.50% Senior Notes due February 15, 2020	250			250
5.75% Senior Notes due September 1, 2020	400			400
4.15% Senior Notes due October 1, 2020	1,050			1,050
4.40% Senior Notes due April 1, 2021	600			600
6.50% Senior Notes due July 15, 2021	—			500
4.65% Senior Notes due June 1, 2021	800			800
5.20% Senior Notes due February 1, 2022	1,000			1,000
4.65% Senior Notes due February 15, 2022	300			300
5.875% Senior Notes due March 1, 2022	900			900
5.00% Senior Notes due October 1, 2022	700			700
3.45% Senior Notes due January 15, 2023	350			350
3.60% Senior Notes due February 1, 2023	800			800
5.50% Senior Notes due April 15, 2023	—			700
4.50% Senior Notes due November 1, 2023	600			600
4.90% Senior Notes due February 1, 2024	350			350
7.60% Senior Notes due February 1, 2024	277			277
4.25% Senior Notes due April 1, 2024	500			500
9.00% Debentures due November 1, 2024	65			65
4.05% Senior Notes due March 15, 2025	1,000			1,000
5.95% Senior Notes due December 1, 2025	400			400
4.75% Senior Notes due January 15, 2026	1,000			1,000
3.90% Senior Notes due July 15, 2026	550			550
4.20% Senior Notes due April 15, 2027	600			—
4.00% Senior Notes due October 1, 2027	750			—
8.25% Senior Notes due November 15, 2029	267			267
4.90% Senior Notes due March 15, 2035	500			500
6.625% Senior Notes due October 15, 2036	400			400
7.50% Senior Notes due July 1, 2038	550			550
6.85% Senior Notes due February 15, 2040	250			250
6.05% Senior Notes due June 1, 2041	700			700
6.50% Senior Notes due February 1, 2042	1,000			1,000
6.10% Senior Notes due February 15, 2042	300			300



4.95% Senior Notes due January 15, 2043	350		350
5.15% Senior Notes due February 1, 2043	450		450
5.95% Senior Notes due October 1, 2043	450		450
5.30% Senior Notes due April 1, 2044	700		700
5.15% Senior Notes due March 15, 2045	1,000		1,000
5.35% Senior Notes due May 15, 2045	800		800
6.125% Senior Notes due December 15, 2045	1,000		1,000
5.30% Senior Notes due April 15, 2047	900		—
5.40% Senior Notes due October 1, 2047	1,500		—
Floating Rate Junior Subordinated Notes due November 1, 2066	546		546
ETP $4.0 billion Revolving Credit Facility due December 2022	2,292		—
ETP $1.0 billion 364-Day Credit Facility due November 2018 ⁽²⁾	50		—
ETLP $3.75 billion Revolving Credit Facility due November 2019	—		2,777
Legacy Sunoco Logistics $2.50 billion Revolving Credit Facility due March 2020	—		1,292
Legacy Sunoco Logistics $1.0 billion 364-Day Credit Facility due December 2017	—		630
Unamortized premiums, discounts and fair value adjustments, net	33		66
Deferred debt issuance costs	(170	)	(166	)
	29,210		29,454

Transwestern Debt
5.64% Senior Notes due May 24, 2017	—		82
5.36% Senior Notes due December 9, 2020	175		175
5.89% Senior Notes due May 24, 2022	150		150
5.66% Senior Notes due December 9, 2024	175		175
6.16% Senior Notes due May 24, 2037	75		75
Deferred debt issuance costs	(1	)	(1	)
	574		656

Panhandle Debt
6.20% Senior Notes due November 1, 2017	—		300
7.00% Senior Notes due June 15, 2018	400		400
8.125% Senior Notes due June 1, 2019	150		150
7.60% Senior Notes due February 1, 2024	82		82
7.00% Senior Notes due July 15, 2029	66		66
8.25% Senior Notes due November 14, 2029	33		33
Floating Rate Junior Subordinated Notes due November 1, 2066	54		54
Unamortized premiums, discounts and fair value adjustments, net	28		50
	813		1,135

Sunoco, Inc. Debt
5.75% Senior Notes due January 15, 2017	—		400

Bakken Project Debt
Bakken Project $2.50 billion Credit Facility due August 2019	2,500		1,100
Deferred debt issuance costs	(8	)	(13	)
	2,492		1,087
PennTex Debt
PennTex $275 million Revolving Credit Facility due December 2019	—		168

Sunoco LP Debt
5.50% Senior Notes due August 1, 2020	600		600
6.375% Senior Notes due April 1, 2023	800		800
6.25% Senior Notes due April 15, 2021	800		800
Sunoco LP $1.50 billion Revolving Credit Facility due September 25, 2019	765		1,000
Sunoco LP Term Loan due October 1, 2019	1,243		1,243
Lease-related obligations	113		118
Deferred debt issuance costs	(34	)	(47	)
	4,287		4,514




Other	8		31
Total debt	44,084		43,802
Less: current maturities of long-term debt	413		1,194
Long-term debt, less current maturities	$	43,671	$	42,608


⁽¹⁾	As of December 31, 2017 ETP’s management had the intent and ability to refinance the $650 million 2.50% senior notes due June 15, 2018 and the $600 million 6.70% senior notes due July 1, 2018, and therefore neither was classified as current.


⁽²⁾	Borrowings under 364-day credit facilities were classified as long-term debt based on the Partnership’s ability and intent to refinance such borrowings on a long-term basis.

The following table reflects future maturities of long-term debt for each of the next five years and thereafter. These amounts exclude $197 million in unamortized premiums, fair value adjustments and deferred debt issuance costs, net:



2018	$	1,705
2019	5,512
2020	3,667
2021	2,205
2022	6,540
Thereafter	24,652
Total	$	44,281

Long-term debt reflected on our consolidated balance sheets includes fair value adjustments related to interest rate swaps, which represent fair value adjustments that had been recorded in connection with fair value hedge accounting prior to the termination of the interest rate swap.

Notes and Debentures

ETE Senior Notes Offering

In October 2017, ETE issued $1 billion aggregate principal amount of 4.25% senior notes due 2023. The $990 million net proceeds from the offering were used to repay a portion of the outstanding indebtedness under its term loan facility and for general partnership purposes.

The senior notes were registered under the Securities Act of 1933 (as amended). The Partnership may redeem some or all of the senior notes at any time, or from time to time, pursuant to the terms of the indenture and related indenture supplements related to the senior notes. The balance is payable upon maturity. Interest on the senior notes is paid semi-annually.

ETE Senior Notes

The ETE Senior Notes are the Parent Company’s senior obligations, ranking equally in right of payment with our other existing and future unsubordinated debt and senior to any of its future subordinated debt. The Parent Company’s obligations under the ETE Senior Notes are secured on a first-priority basis with its obligations under the Revolver Credit Agreement and the ETE Term Loan Facility, by a lien on substantially all of the Parent Company’s and certain of its subsidiaries’ tangible and intangible assets, subject to certain exceptions and permitted liens. The ETE Senior Notes are not guaranteed by any of the Parent Company’s subsidiaries.

The covenants related to the ETE Senior Notes include a limitation on liens, a limitation on transactions with affiliates, a restriction on sale-leaseback transactions and limitations on mergers and sales of all or substantially all of the Parent Company’s assets.

As discussed above, the Parent Company’s outstanding senior notes are collateralized by its interests in certain of its subsidiaries. SEC Rule 3-16 of Regulation S-X (“Rule 3-16”) requires a registrant to file financial statements for each of its affiliates whose securities constitute a substantial portion of the collateral for registered securities. The Parent Company’s limited partner interests in ETP constitute substantial portions of the collateral for the Parent Company’s outstanding senior notes; accordingly, financial statements of ETP are required under Rule 3-16 to be included in the Partnership’s Annual Report on Form 10-K and have been included herein.

The Parent Company’s interests in ETP GP also constitutes substantial portions of the collateral for the Parent Company’s outstanding senior notes. Accordingly, the financial statements of ETP GP would be required under Rule 3-16 to be included in the Parent Company’s Annual Report on Form 10-K. ETP GP does not have substantive operations of its own; rather, ETP GP only owns 100% of the general partner interest in ETP. ETP GP does not own limited partner interests in ETP; therefore, the limited partner interests in ETP, which had a carrying value of $28.02 billion and $18.41 billion as of December 31, 2017 and 2016, respectively, would be reflected as noncontrolling interests on ETP GP’s balance sheets. Likewise, ETP’s income (loss) attributable to limited partners (including common unitholders, Class H unitholders, Class I unitholders and ETP Preferred Units) of $1.08 billion, $(660) million and $325 million for the years ended December 31, 2017, 2016 and 2015, respectively, would be reflected as income attributable to noncontrolling interest in ETP GP’s statements of operations.

ETP’s general partner interest is reflected separately in ETP’s financial statements. As a result, the financial statements of ETP GP would substantially duplicate information that is available in the financial statements of ETP. Therefore, the financial statements of ETP GP have been excluded from the Partnership’s Annual Report on Form 10-K.

ETP Senior Notes

The ETP senior notes were registered under the Securities Act of 1933 (as amended). ETP may redeem some or all of the ETP senior notes at any time, or from time to time, pursuant to the terms of the indenture and related indenture supplements related to the ETP senior notes. The balance is payable upon maturity. Interest on the ETP senior notes is paid semi-annually.

The ETP senior notes are unsecured obligations of ETP and as a result, the ETP senior notes effectively rank junior to any future indebtedness of ours or our subsidiaries that is both secured and unsubordinated to the extent of the value of the assets securing such indebtedness, and the ETP senior notes effectively rank junior to all indebtedness and other liabilities of our existing and future subsidiaries.

Transwestern Senior Notes

The Transwestern senior notes are redeemable at any time in whole or pro rata in part, subject to a premium or upon a change of control event or an event of default, as defined. The balance is payable upon maturity. Interest is payable semi-annually.

Panhandle Junior Subordinated Notes

The interest rate on the remaining portion of Panhandle’s junior subordinated notes due 2066 is a variable rate based upon the three-month LIBOR rate plus 3.0175%. The balance of the variable rate portion of the junior subordinated notes was $54 million at an effective interest rate of 4.39% at December 31, 2017.

Sunoco LP Private Offering of Senior Notes

On January 23, 2018, Sunoco LP completed a private offering of $2.2 billion of senior notes, comprised of $1.0 billion in aggregate principal amount of 4.875% senior notes due 2023, $800 million in aggregate principal amount of 5.500% senior notes due 2026 and $400 million in aggregate principal amount of 5.875% senior notes due 2028. Sunoco LP used the proceeds from the private offering, along with proceeds from the closing of the asset purchase agreement with 7-Eleven to: 1) redeem in full its existing senior notes as of December 31, 2017, comprised of $800 million in aggregate principal amount of 6.250%senior notes due 2021, $600 million in aggregate principal amount of 5.500% senior notes due 2020, and $800 million in aggregate principal amount of 6.375% senior notes due 2023; 2) repay in full and terminate the Sunoco LP Term Loan; 3) pay all closing costs and taxes in connection with the 7-Eleven transaction; 4) redeem the outstanding Sunoco LP Series A Preferred Units as mentioned above; and 5) repurchase 17,286,859 common units owned by ETP as mentioned above.

Sunoco LP Senior Notes

In April 2016, Sunoco LP issued $800 million aggregate principal amount of 6.25% Senior Notes due 2021. The net proceeds of $789 million were used to repay a portion of the borrowings under its term loan facility.

The 6.25% Senior Notes due 2021 were redeemed on January 23, 2018. See Sunoco LP Private Offering of Senior Notes above.

Term Loans, Credit Facilities and Commercial Paper

ETE Term Loan Facility

On February 2, 2017, the Partnership entered into a Senior Secured Term Loan Agreement (the “Term Credit Agreement”) with Credit Suisse AG, Cayman Islands Branch, as administrative agent, and the other lenders party thereto. The Term Credit Agreement has a scheduled maturity date of February 2, 2024, with an option for the Parent Company to extend the term subject to the terms and conditions set forth therein. The Term Credit Agreement contains an accordion feature, under which the total commitments may be increased, subject to the terms thereof. In connection with the Parent Company’s entry into the Senior Secured Term Loan Agreement on February 2, 2017, the Parent Company terminated its previous term loan agreements.

Pursuant to the Term Credit Agreement, the Term Lenders have provided senior secured financing in an aggregate principal amount of $2.2 billion (the “Term Loan Facility”). The Parent Company is not required to make any amortization payments with respect to the term loans under the Term Credit Agreement. Under certain circumstances and subject to certain reinvestment rights, the Parent Company is required to prepay the term loan in connection with dispositions of (a) IDRs in (i) prior to the consummation of the Sunoco Logistics Merger, ETP , and (ii) upon and after the consummation of the Sunoco Logistics Merger, Sunoco Logistics ; or (b) equity interests of any person which owns, directly or indirectly, IDRs in (i) prior to the consummation of the Sunoco Logistics Merger, ETP, and (ii) upon and after the consummation of the Sunoco Logistics Merger, Sunoco Logistics, in each case, with a percentage ranging from 50% to 75% of such net proceeds in excess of $50 million.

Under the Term Credit Agreement, the obligations of the Parent Company are secured by a lien on substantially all of the Parent Company’s and certain of its subsidiaries’ tangible and intangible assets including (i) approximately 27.5 million common units representing limited partner interests in ETP owned by the Partnership; and (ii) the Partnership’s 100% equity interest in Energy Transfer Partners, L.L.C. and Energy Transfer Partners GP, L.P., through which the Partnership indirectly holds all of the outstanding general partnership interests and IDRs in ETP. The Term Loan Facility initially is not guaranteed by any of the Partnership’s subsidiaries.

Interest accrues on advances at a LIBOR rate or a base rate, based on the election of the Parent Company for each interest period, plus an applicable margin. The applicable margin for LIBOR rate loans is 2.75% and the applicable margin for base rate loans is 1.75%. Proceeds of the borrowings under the Term Credit Agreement were used to refinance amounts outstanding under the Parent Company’s existing term loan facilities and to pay transaction fees and expenses related to the Term Loan Facility and other transactions incidental thereto.

On October 18, 2017, ETE amended its existing Term Credit Agreement (the “Amendment”) to reduce the applicable margin for LIBOR rate loans from 2.75% to 2.00% and for base rate loans from 1.75% to 1.00%.

In connection with the Amendment, the Partnership prepaid a portion of amounts outstanding under the senior secured term loan agreement.

ETE Revolving Credit Facility

The Parent Company had a revolver credit agreement which had a scheduled maturity date of December 2, 2018, with an option for the Parent Company to extend the term subject to the terms and conditions set forth therein. The agreement was terminated in connection with entry into the Revolver Credit Agreement, discussed below.

On March 24, 2017, the Parent Company entered into a Credit Agreement (the “Revolver Credit Agreement”) with Credit Suisse AG, Cayman Islands Branch as administrative agent and the other lenders party thereto (the “Revolver Lenders”). The Revolver Credit Agreement has a scheduled maturity date of March 24, 2022 and includes an option for the Parent Company to extend the term, in each case subject to the terms and conditions set forth therein. Pursuant to the Revolver Credit Agreement, the lenders have committed to provide advances up to an aggregate principal amount of $1.50 billion at any one time outstanding, and the Parent Company has the option to request increases in the aggregate commitments by up to $500 million in additional commitments. As part of the aggregate commitments under the facility, the Revolver Credit Agreement provides for letters of credit to be issued at the request of the Parent Company in an aggregate amount not to exceed a $150 million sublimit. Under the Revolver Credit Agreement, the obligations of the Partnership are secured by a lien on substantially all of the Partnership’s and certain of its subsidiaries’ tangible and intangible assets.

Interest accrues on advances at a LIBOR rate or a base rate, based on the election of the Parent Company for each interest period, plus an applicable margin. The issuing fees for all letters of credit are also based on an applicable margin. The applicable margin used in connection with interest rates and fees is based on the then applicable leverage ratio of the Parent Company. The applicable margin for LIBOR rate loans and letter of credit fees ranges from 1.75% to 2.50% and the applicable margin for base rate loans ranges from 0.75% to 1.50%. The Parent Company will also pay a commitment fee based on its leverage ratio on the actual daily unused amount of the aggregate commitments. As of December 31, 2017, there were $1.19 billion outstanding borrowings under the Parent Company revolver credit facility and the amount available for future borrowings was $312 million.

ETP Credit Facilities

On December 1, 2017 ETP entered into a five-year, $4.0 billion unsecured revolving credit facility, which matures December 1, 2022 (the “ETP Five-Year Facility”) and a $1.0 billion 364-day revolving credit facility that matures on November 30, 2018 (the “ETP 364-Day Facility”) (collectively, the “ETP Credit Facilities”). The ETP Five-Year Facility contains an accordion feature, under which the total aggregate commitments may be increased up to $6.0 billion under certain conditions. ETP uses the ETP Credit Facilities to provide temporary financing for its growth projects, as well as for general partnership purposes.

As of December 31, 2017, the ETP Five-Year Facility had $2.29 billion outstanding, of which $2.01 billion was commercial paper. The amount available for future borrowings was $1.56 billion after taking into account letters of credit of $150 million. The weighted average interest rate on the total amount outstanding as of December 31, 2017 was 2.48%.

As of December 31, 2017, the ETP 364-Day Facility had $50 million outstanding, and the amount available for future borrowings was $950 million. The weighted average interest rate on the total amount outstanding as of December 31, 2017 was 5.00%.

ETLP Credit Facility

The ETLP Credit Facility allowed for borrowings of up to $3.75 billion and was used to provide temporary financing for our growth projects, as well as for general partnership purposes. This facility was repaid and terminated concurrent with the establishment of the ETP Credit Facilities on December 1, 2017.

Sunoco Logistics Credit Facilities

ETP maintained a $2.50 billion unsecured revolving credit agreement (the “Sunoco Logistics Credit Facility”). This facility was repaid and terminated concurrent with the establishment of the ETP Credit Facilities on December 1, 2017.

In December 2016, Sunoco Logistics entered into an agreement for a 364-day maturity credit facility (“364-Day Credit Facility”), due to mature on the earlier of the occurrence of the Sunoco Logistics Merger or in December 2017, with a total lending capacity of $1.00 billion. In connection with the Sunoco Logistics Merger, the 364-Day Credit Facility was terminated and repaid in May 2017.

Bakken Credit Facility

In August 2016, Energy Transfer Partners, L.P., Sunoco Logistics and Phillips 66 completed project-level financing of the Bakken Pipeline. The $2.50 billion credit facility is anticipated to provide substantially all of the remaining capital necessary to complete the projects and matures in August 2019 (the “Bakken Credit Facility”). As of December 31, 2017, the Bakken Credit Facility had $2.50 billion of outstanding borrowings. The weighted average interest rate on the total amount outstanding as of December 31, 2017 was 3.00%.

PennTex Revolving Credit Facility

PennTex previously maintained a $275 million revolving credit commitment (the “PennTex Revolving Credit Facility”). In August 2017, the PennTex Revolving Credit Facility was repaid and terminated.

Sunoco LP Term Loan

Sunoco LP has a term loan agreement which provides secured financing in an aggregate principal amount of up to $2.035 billion due 2019. In January 2017, Sunoco LP entered into a limited waiver to its term loan, under which the agents and lenders party thereto waived and deemed remedied the miscalculations of Sunoco LP’s leverage ratio as set forth in its previously delivered compliance certificates and the resulting failure to pay incremental interest owed under the term loan. As of December 31, 2017, the balance on the term loan was $1.24 billion.

The Sunoco LP term loan was repaid in full and terminated on January 23, 2018. See Sunoco LP Private Offering of Senior Notes above.

Sunoco LP Credit Facility

Sunoco LP maintains a $1.50 billion revolving credit agreement, which was amended in April 2015 from the initially committed amount of $1.25 billion and matures in September 2019. In January 2017, Sunoco LP entered into a limited waiver to its revolving credit facility, under which the agents and lenders party thereto waived and deemed remedied the miscalculations of Sunoco LP’s leverage ratio as set forth in its previously delivered compliance certificates and the resulting failure to pay incremental interest owed under the revolving credit facility. As of December 31, 2017, the Sunoco LP credit facility had $9 million in standby letters of credit. The amount available for future borrowings on the revolver at December 31, 2017 was $726 million.

On October 16, 2017, Sunoco LP entered into the Fifth Amendment to the Credit Agreement with the lenders party thereto and Bank of America, N.A., in its capacity as a letter of credit issuer, as swing line lender, and as administrative agent. The Fifth Amendment amended the agreement to (i) permit the dispositions contemplated by the Retail Divestment, (ii) extend the interest coverage ratio covenant of 2.25x through maturity, (iii) modify the definition of consolidated EBITDA to include the pro forma effect of the divestitures and the new fuel supply contracts, and (iv) modify the leverage ratio covenant.

Covenants Related to Our Credit Agreements

Covenants Related to the Parent Company

The Term Loan Facility and ETE Revolving Credit Facility contain customary representations, warranties, covenants and events of default, including a change of control event of default and limitations on incurrence of liens, new lines of business, merger, transactions with affiliates and restrictive agreements.

The Term Loan Facility and ETE Revolving Credit Facility contain financial covenants as follows:


•	Maximum Leverage Ratio – Consolidated Funded Debt (as defined therein) of the Parent Company to Consolidated EBITDA (as defined therein) of the Parent Company of not more than 6.0 to 1, with a permitted increase to 7 to 1 during a specified acquisition period following the close of a specified acquisition; and


•	Consolidated EBITDA (as defined therein) to interest expense of not less than 1.5 to 1.

Covenants Related to ETP

The agreements relating to the ETP senior notes contain restrictive covenants customary for an issuer with an investment-grade rating from the rating agencies, which covenants include limitations on liens and a restriction on sale-leaseback transactions.

The ETP Credit Facilities contains covenants that limit (subject to certain exceptions) the Partnership’s and certain of the Partnership’s subsidiaries’ ability to, among other things:


•	incur indebtedness;


•	grant liens;


•	enter into mergers;


•	dispose of assets;


•	make certain investments;


•	make Distributions (as defined in the ETP Credit Facilities) during certain Defaults (as defined in the ETP Credit Facilities) and during any Event of Default (as defined in the ETP Credit Facilities);


•	engage in business substantially different in nature than the business currently conducted by the Partnership and its subsidiaries;


•	engage in transactions with affiliates; and


•	enter into restrictive agreements.

The ETP Credit Facilities applicable margin and rate used in connection with the interest rates and commitment fees, respectively, are based on the credit ratings assigned to our senior, unsecured, non-credit enhanced long-term debt. The applicable margin for eurodollar rate loans under the ETP Five-Year Facility ranges from 1.125% to 2.000% and the applicable margin for base rate loans ranges from 0.125% to 1.000%. The applicable rate for commitment fees under the ETP Five-Year Facility ranges from 0.125% to 0.300%. The applicable margin for eurodollar rate loans under the ETP 364-Day Facility ranges from 1.125% to 1.750% and the applicable margin for base rate loans ranges from 0.250% to 0.750%. The applicable rate for commitment fees under the ETP 364-Day Facility ranges from 0.125% to 0.225%.

The ETP Credit Facilities contain various covenants including limitations on the creation of indebtedness and liens, and related to the operation and conduct of our business. The ETP Credit Facilities also limit us, on a rolling four quarter basis, to a maximum Consolidated Funded Indebtedness to Consolidated EBITDA ratio, as defined in the underlying credit agreements, of 5.0 to 1, which can generally be increased to 5.5 to 1 during a Specified Acquisition Period. Our Leverage Ratio was 3.96 to 1 at December 31, 2017, as calculated in accordance with the credit agreements.

The agreements relating to the Transwestern senior notes contain certain restrictions that, among other things, limit the incurrence of additional debt, the sale of assets and the payment of dividends and specify a maximum debt to capitalization ratio.

Failure to comply with the various restrictive and affirmative covenants of our revolving credit facilities could require us to pay debt balances prior to scheduled maturity and could negatively impact the Operating Companies’ ability to incur additional debt and/or our ability to pay distributions.

Covenants Related to Panhandle

Panhandle is not party to any lending agreement that would accelerate the maturity date of any obligation due to a failure to maintain any specific credit rating, nor would a reduction in any credit rating, by itself, cause an event of default under any of Panhandle’s lending agreements. Financial covenants exist in certain of Panhandle’s debt agreements that require Panhandle to maintain a certain level of net worth, to meet certain debt to total capitalization ratios and to meet certain ratios of earnings before depreciation, interest and taxes to cash interest expense. A failure by Panhandle to satisfy any such covenant would give rise to an event of default under the associated debt, which could become immediately due and payable if Panhandle did not cure such default within any permitted cure period or if Panhandle did not obtain amendments, consents or waivers from its lenders with respect to such covenants.

Panhandle’s restrictive covenants include restrictions on debt levels, restrictions on liens securing debt and guarantees, restrictions on mergers and on the sales of assets, capitalization requirements, dividend restrictions, cross default and cross-acceleration and prepayment of debt provisions. A breach of any of these covenants could result in acceleration of Panhandle’s debt and other financial obligations and that of its subsidiaries.

In addition, Panhandle and/or its subsidiaries are subject to certain additional restrictions and covenants. These restrictions and covenants include limitations on additional debt at some of its subsidiaries; limitations on the use of proceeds from borrowing at some of its subsidiaries; limitations, in some cases, on transactions with its affiliates; limitations on the incurrence of liens; potential limitations on the abilities of some of its subsidiaries to declare and pay dividends and potential limitations on some of its subsidiaries to participate in Panhandle’s cash management program; and limitations on Panhandle’s ability to prepay debt.

Covenants Related to Bakken Credit Facility

The Bakken Credit Facility contains standard and customary covenants for a financing of this type, subject to materiality, knowledge and other qualifications, thresholds, reasonableness and other exceptions. These standard and customary covenants include, but are not limited to:


•	prohibition of certain incremental secured indebtedness;


•	prohibition of certain liens / negative pledge;


•	limitations on uses of loan proceeds;


•	limitations on asset sales and purchases;


•	limitations on permitted business activities;


•	limitations on mergers and acquisitions;


•	limitations on investments;


•	limitations on transactions with affiliates; and


•	maintenance of commercially reasonable insurance coverage.

A restricted payment covenant is also included in the Bakken Credit Facility which requires a minimum historic debt service coverage ratio (“DSCR”) of not less than 1.20 to 1 (the “Minimum Historic DSCR”) with respect each 12-month period following the commercial in-service date of the Dakota Access and ETCO Project in order to make certain restricted payments thereunder.

Covenants Related to Sunoco LP

The Sunoco LP Credit Facilities contain various customary representations, warranties, covenants and events of default, including a change of control event of default, as defined therein. The Sunoco LP Credit Facilities require Sunoco LP to maintain a leverage ratio (as defined therein) of not more than (a) as of the last day of each fiscal quarter through December 31, 2017, 6.75 to 1.0, (b) as of March 31, 2018, 6.5 to 1.0, (c) as of June 30, 2018, 6.25 to 1.0, (d) as of September 30, 2018, 6.0 to 1.0, (e) as of December 31, 2018, 5.75 to 1.0 and (f) thereafter, 5.5 to 1.0 (in the case of the quarter ending March 31, 2019 and thereafter, subject to increases to 6.0 to 1.0 in connection with certain specified acquisitions in excess of $50 million, as permitted under the Credit Facilities. Indebtedness under the Credit Facilities is secured by a security interest in, among other things, all of Sunoco LP’s present and future personal property and all of the present and future personal property of its guarantors, the capital stock of its material subsidiaries (or 66% of the capital stock of material foreign subsidiaries), and any intercompany debt. Upon the first achievement by Sunoco LP of an investment grade credit rating, all security interests securing borrowings under the Credit Facilities will be released.

Compliance With Our Covenants

Failure to comply with the various restrictive and affirmative covenants of our revolving credit facilities and note agreements could require us or our subsidiaries to pay debt balances prior to scheduled maturity and could negatively impact the subsidiaries ability to incur additional debt and/or our ability to pay distributions.

We and our subsidiaries are required to assess compliance quarterly and were in compliance with all requirements, tests, limitations, and covenants related to our debt agreements as of December 31, 2017.