Energy Transfer LP

7. REDEEMABLE NONCONTROLLING INTERESTS:

Certain redeemable noncontrolling interests in the Partnership’s subsidiaries are reflected as mezzanine equity on the consolidated balance sheet. As of December 31, 2023 and 2022, redeemable noncontrolling interests included $476 million and $477 million, respectively, related to the USAC Preferred Units, described below, and $22 million and $16 million, respectively, related to noncontrolling interest holders in one of the Partnership’s consolidated subsidiaries that have the option to sell their interests to the Partnership. As of December 31, 2023, redeemable noncontrolling interests also included $280 million related to the Niobrara Preferred Units described below.

USAC Series A Preferred Units

As of December 31, 2023 and 2022, USAC had 500,000 preferred units issued and outstanding. The USAC Preferred Units are entitled to receive cumulative quarterly distributions equal to $24.375 per USAC Preferred Unit, subject to increase in certain limited circumstances. The USAC Preferred Units will have a perpetual term, unless converted or redeemed. Certain portions of the USAC Preferred Units are convertible into USAC common units at the election of the holders. The USAC Preferred Units are convertible, at the option of the holder, into a maximum of 24,985,633 USAC common units in the aggregate. USAC has the option to redeem all or any portion of the USAC Preferred Units then outstanding, subject to certain minimum redemption threshold amounts, for a redemption price set forth in USAC’s partnership agreement. In addition, beginning April 2028, the holders of the USAC Preferred Units will have the right to require USAC to redeem all or any portion of the USAC Preferred Units, and USAC may elect to pay up to 50% of such redemption amount in USAC common units.

On January 12, 2024, the holders of the USAC Preferred Units elected to convert 40,000 USAC Preferred Units into 1,998,850 USAC common units.

Niobrara Preferred Units

Crestwood Niobrara LLC (“Crestwood Niobrara”), a subsidiary acquired in the Crestwood acquisition in November 2023, has outstanding two series of preferred units (collectively, the “Niobrara Preferred Units”) held by a third party. The Niobrara Preferred Units are redeemable by the Partnership or the preferred interest holder and are also convertible by the

F - 33 preferred interest holder into Crestwood Niobrara common units. The preferred interest holder also has the option to contribute additional capital to Crestwood Niobrara to increase their common ownership percentage in Crestwood Niobrara to 50% upon the conversion.