Acquisitions and Related Transactions

12 Months Ended

Dec. 31, 2021

Acquisitions and Dispositions [Abstract]

ACQUISITIONS, DIVESTITURES AND RELATED TRANSACTIONS:

Enable Acquisition

On December 2, 2021, the Partnership completed the previously announced merger with Enable (the “Enable Acquisition”). Under the terms of the merger agreement, Enable’s common unitholders received 0.8595 of an Energy Transfer common unit in exchange for each Enable common unit. In addition, each outstanding Enable Series A preferred unit was exchanged for 0.0265 of an Energy Transfer Series G Preferred Unit. A total of 384,780 Series G Preferred Units were issued in connection with the Enable Acquisition. The total fair value of Energy Transfer common units and Series G Preferred Units issued was approximately $3.5 billion at the closing date. Energy Transfer also made a $10 million cash payment for Enable’s general partner and assumed $3.18 billion aggregate principal amount of Enable senior notes. In addition, Enable’s $800 million term loan and $35 million revolving credit facility were repaid and terminated in December 2021, immediately subsequent to the close of the Enable Acquisition.

The Enable Acquisition was recorded using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized on the balance sheet at their estimated fair values on the date of acquisition with any excess purchase price over the fair value of net assets acquired recorded to goodwill. Determining the fair value of acquired assets requires management’s judgment and the utilization of an independent valuation specialist, if applicable, and involves the use of significant estimates and assumptions. Acquired assets were valued based on a combination of the discounted cash flow, the guideline company and the reproduction and replacement methods. The purchase price allocation below is preliminary, as management is currently evaluating certain assumptions and may adjust the allocation in the subsequent period.

The following table summarizes the assumed allocation of the purchase price among the assets acquired and liabilities assumed:


	At December 2, 2021
Total current assets	$	593
Property, plant and equipment, net	7,076
Investments in unconsolidated affiliates	40

Other non-current assets	39
Intangible assets, net	440
Goodwill	138
Total assets	8,326

Total current liabilities	488
Long-term debt, less current maturities(1)	4,267
Other non-current liabilities	18
Total liabilities	4,773

Noncontrolling interests	34

Total consideration	3,519
Cash received	61
Total consideration	$	3,458

(1)Long-term debt at December 2, 2021 includes Enable senior notes with an aggregate principal amount of $3.18 billion in senior notes and a fair value of $3.43 billion. It also includes $800 million outstanding on the Enable 2019 Term Loan Agreement and $35 million outstanding on the Enable Five-Year Revolving Credit Facility, both of which were repaid and terminated in December 2021, immediately subsequent to the close of the Enable Acquisition.

SemGroup Acquisition and Energy Transfer Contribution of SemGroup Assets to ETO

On December 5, 2019, Energy Transfer completed the acquisition of SemGroup pursuant to the terms of the Agreement and Plan of Merger, dated as of September 15, 2019 (the “SemGroup Merger Agreement”). Under the terms of the SemGroup Merger Agreement, a wholly owned subsidiary of Energy Transfer merged with and into SemGroup (the “SemGroup Transaction”), with SemGroup surviving the merger. At the effective time of the SemGroup Transaction on

December 5, 2019, each share of class A common stock, par value $0.01 per share, of SemGroup issued and outstanding immediately prior to the effective time was converted into the right to receive (i) $6.80 in cash, without interest, and (ii) 0.7275 Energy Transfer Common Units representing limited partner interests in Energy Transfer. Each share of Series A Cumulative Perpetual Convertible Preferred Stock, par value $0.01 per share, of SemGroup that was issued and outstanding as of immediately prior to the effective time was redeemed by SemGroup for cash at a price per share equal to 101% of the liquidation preference.

During the first and second quarters of 2020, Energy Transfer contributed former SemGroup assets to ETO through sale and contribution transactions. The following table represents the fair value, as of December 5, 2019, of the SemGroup assets and liabilities transferred from Energy Transfer to ETO:


	At December 5, 2019
Total current assets	$	794
Property, plant and equipment	3,891
Other non-current assets	617
Goodwill	295
Intangible assets	460
Total assets	$	6,057

Total current liabilities	$	629
Long-term debt, less current maturities (1)	2,576
Other non-current liabilities	197
Energy Transfer Canada Preferred shares	241
Total liabilities	3,643

Noncontrolling interest	822

Partners’ capital	1,592
Total liabilities and partners’ capital	$	6,057

(1)Long-term debt at December 5, 2019 includes SemGroup senior notes with an aggregate principal amount of $1.375 billion and SemGroup subsidiary debt of $593 million, all of which was redeemed in December 2019, subsequent to the close of the SemGroup Transaction.

During 2020, the Partnership has recorded impairments on certain of the contributed SemGroup assets. Those impairments include a $244 million impairment of goodwill and a $129 million impairment of other non-current assets.