View:
Download DOC
Download PDF
Download XLS
Form 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): September 5, 2006

 

ENERGY TRANSFER EQUITY, L.P.

(Exact name of registrant as specified in its charter)

 

Delaware   001-32740   30-0108820
(State or other jurisdiction
of incorporation)		   (Commission File Number)   (IRS. Employer
Identification No.)

2828 Woodside Street

Dallas, Texas 75204

(Address of principal executive offices, including zip code)

214-981-0700

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Item 7.01. Regulation FD Disclosure.

On September 5, 2006, Ray C. Davis, Co-Chairman of the Board of the general partner of Energy Transfer Equity, L.P. (“ETE”) will give a presentation regarding ETE and its subsidiary, Energy Transfer Partners, L.P. (“ETP”) at the CEO Energy/Power Conference presented by Lehman Brothers in New York City, New York. Mr. Davis’ presentation will include a description of ETE and ETP and their assets, and updated information on the status of previously announced expansion projects of ETP. A copy of Mr. Davis’ slide presentation is furnished as an exhibit to this report and will be available on the website of ETE and ETP at www.energytransfer.com.

 

Item 9.01. Financial Statements and Exhibits.

 

  (d)   The following exhibit is being furnished herewith:

 

Exhibit No.   

Description

99.1    Slide presentation given by Mr. Davis on September 5, 2006, during the CEO Energy/Power Conference presented by Lehman Brothers.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

ENERGY TRANSFER EQUITY, L.P.
By:  

LE GP, LLC, its general partner

By:  

/s/ John W. McReynolds

 

John W. McReynolds,

 

President and Chief Financial Officer

Dated: September 5, 2006

Slide presentation given by Mr. Davis September 5, 2006
September 2006
September 2006
Lehman Brothers Energy Conference
Lehman Brothers Energy Conference
Lehman Brothers Energy Conference
Energy Transfer Equity, L.P.
Energy Transfer Equity, L.P.
Energy
Energy Transfer
Partners, L.P.
Partners, L.P.
Exhibit 99.1

2
The
statements
made
by
representatives
of
Energy
Transfer
Partners
(ETP)
or
Energy
Transfer
Equity
(ETE)
during
the
course
of
this
presentation
that
are
not
historical
facts
are
forward-
looking
statements.
Although
the
assumptions
underlying
these
statements
are
believed
to
be
reasonable,
investors
are
cautioned
that
such
forward-looking
statements
are
inherently
uncertain
and
necessarily
involve
risks
that
may
affect
the
business
prospects
and
performance
of
ETP
and
ETE,
causing
actual
results
to
differ
from
those
discussed
during
this
presentation.
When
considering
forward-looking
statements,
you
should
keep
in
mind
the
risk
factors
and
other
cautionary
statements
included
in
the
prospectus.
Any
forward-looking
statements
made
are
subject
to
all
of
the
risks
and
uncertainties,
many
of
which
are
beyond
management’s
control,
involved
in
the
transportation,
gathering,
compression,
treating,
processing,
storage
and
marketing
of
natural
gas
and
in
the
propane
business.
These
risks
include
the
risks
described
in
the
prospectus.
Should
one
or
more
of
these
risks
or
uncertainties
occur,
or
should
underlying
assumptions
prove
incorrect,
the
actual
results
and
plans
of
ETP
and
ETE
could
differ
materially
from
those
anticipated,
estimated,
projected
or
expected.
ETP
and
ETE
undertake
no
obligation
to
publicly
update
any
forward-looking
statements,
whether
as
a
result
of
new
information
or
future
events.
Legal Disclaimer
Legal Disclaimer

3
Agenda
Overview
ETP/ETE Corporate Structure
Asset Profile
Investment Highlights
Asset Overview
Midstream Overview
Propane Overview
Project Update
Energy Transfer Equity, L.P.
ETP/ETE Unitholder
Returns
Summary

4
ETP Corporate Structure
Public Unitholders
Energy Transfer Equity, L.P.
Energy Transfer Partners, L.P.
110,726,999 Units Outstanding
67.1% Limited
Partner Interest
La Grange Acquisition, L.P
Natural Gas
Midstream Operations
Heritage  Operating, L.P.
Propane
Operations
Heritage
Holdings
Inc
50% Incentive
Distribution Rights
32.9% Limited Partner
Interest
2% General Partner
Interest
Titan
Propane,
L.P.

5
ETE Corporate Structure
Management
and Affiliates
Public
Unitholders
LE GP, LLC
Energy Transfer Equity, L.P.
124,360,520 Common Units Outstanding
81.8% Limited
Partner Interest
17.7% Limited
Partner Interest
50% Incentive Distribution
Rights
32.9% Limited Partner
Interest
2% General Partner  
Interest
0.5% General
Partner Interest

6
Asset Profile
A diversified midstream and propane MLP:
3rd largest MLP in the U.S. (based on market cap)
Largest
intrastate
pipeline
system
in
U.S.
with
interconnects
to
major
consumption
areas throughout U.S.
Significant strategically located natural gas storage capacity
Third largest retail propane marketer in the United States with concentration in
highest population growth areas
Annual Revenue (LTM 5/31/06)
$8.1 B
Total Assets (5/31/06)             
$4.6 B
Enterprise Value (1)
$7.1 B
Equity Market Cap. (1)
$5.3 B
Units Outstanding (8/31/06)    
110,726,999
EBITDA (Fiscal 2006)
$730 million (2)
ETP Financial Summary
(1)
Unit
price
as
of
August
30,
2006
&total
debt
as
of
5/31/06;
excludes
value
of
GP
and
ETE.
(2) Public guidance.
(3) Based on ETP annual  distribution of $2.55/ unit
ETE Financial Summary
Annual EBITDA (3)
$157 million
Enterprise Value (1)
$3.72 B
Equity Market Cap. (1)
$3.35 B
Units Outstanding (8/31/06)
124,360,520
Current Annual DCF/ Unit
$.95

7
Investment Highlights
Substantial competitive advantage
High quality portfolio of assets
Strong credit statistics
Compares favorably with BBB+ / BBB peers
Management commitment to credit quality
High common unit coverage
ETP retains cash to fund internal growth and strengthen balance sheet
Low risk, high rate of return growth opportunities
Attractive construction price to EBITDA multiples
Long-term contracts in place prior to construction
Excellent access to public debt and equity markets
Significant liquidity
History of consistent distribution growth
Experienced management with substantial equity ownership

8
Energy Transfer Midstream System

9
Competitive Advantages
Texas Infrastructure
Multiple Market Options for Producers
Strong Position in Active Supply Basins
Operating Expertise
Producer Relationships
Substantial Organic Growth Opportunities
Bypass Capability at Processing Plants

10
Project Update

11
Project Update
Provides 2.3 Bcf/d
additional outlet
capacity to Fort Worth Basin and
East Texas producers
Links high growth production with
major market hubs and multiple
interstate interconnects across Texas
Provides accretive returns on
significant capital spending
Backed by long-term contracts
with investment grade
counterparties

12
Propane Operations
ETP’s propane operations are concentrated in higher than average population growth areas where natural gas
distribution may not be cost effective, and its geographic diversification minimizes the impact of weather patterns in
individual regions.
Fee-based, pass-through business, subject to weather volatility
that impacts volumes
Focus on higher-margin residential customers
Record fiscal 2004 and 2005 operating and financial
performance
Realized 1%-3% internal growth excluding acquisitions
Trend of increasing margins due to higher vehicle fuel costs,
steel costs, benefit, and insurance cost
Assets owned
Purchase land, buildings and vehicles
90% of customer tanks
Retail Gallons Sold (Millions)
126
147
160
181
330
330
376
398
406
0
50
100
150
200
250
300
350
400
450

13
Updated Propane Operations Map

14
Financial Review
ETP/ETE Credit Statistics
Distributable Cash Flow Forecast
Common Unit Coverage
Potential Distribution @ 1.15 X
Historical Returns (ETP/ETE)
Distribution Review

15
ETP/ETE Credit Statistics (5/31/2006)
Outstanding Debt (5/31/2006)
$1.5 billion
(excluding working capital)
2006E EBITDA
$730 mllion
2006E Interest Exp.
$110 million
Debt/ EBITDA
2.06 X
EBITDA/ Interest
6.64 X
ETP
ETP
Outstanding Debt (5/31/2006)
$377 million
2006E EBITDA
$157 million*
2006E Interest Exp.
$24 million
Debt/ EBITDA
2.40 X
EBITDA/ Interest
6.54 X
ETE
ETE
* Based on current ETP distribution annualized
* Based on current ETP distribution annualized

16
ETP Distributable Cash Flow/ Coverage
ETP Distributable Cash Flow Calculation (in thousands)
(@ $2.55/ LP Unit)
2006E EBITDA
     Midstream
595,000
$          
     Propane
135,000
$          
Total
730,000
$          
Less: Maintenance Capital
(50,000)
$           
Less: Interest Expense
(110,000)
$         
Less: Taxes
(28,000)
$           
Distributable Cash Flow
542,000
$          
Less: Distributions to GP (IDRs)
(120,365)
$         
Distributable Cash Flow to LP
421,635
$          
LP Unit Distributions
282,096
$          
Excess Distributable Cash Flow
139,540
$          
Distribution Coverage Ratio
1.50 X

17
Potential Distribution @ 1.15X
•
Based on EBITDA guidance of $730 million
•
Excludes impact of previously announced internal growth projects
ETP Common Distribution @ 1.15X
Distributable Cash Flow (000's)
542,000
$          
ETP DCF/ LP Unit
3.00
$                 
Less: Distributions to GP (IDRs)
(160,004)
$         
Distributable Cash Flow to LP
381,996
$          
LP Unit Distributions
331,991
$          
Excess Distributable Cash Flow
50,005
$            
Distribution Coverage Ratio
1.15 X

18
Historical Returns vs. Peers
5-Year Average Annual Total Return
8/29/01 - 8/29/06
Source:    FactSet
Note:
1   BWP, BPL, EEP, ETP, EPD, KMP, MMP, OKS, PPX, PAA, SXL, TPP, and VLI
28.1%
14.5%
(9.0%)
2.6%
(20.0%)
(10.0%)
0.0%
10.0%
20.0%
30.0%
40.0%
ETP
Large Cap MLP
Average¹
Dow Jones
S&P 500

19
Distribution Review
ETP Distribution History
$1.30
$1.40
$1.50
$1.65
$1.75
$1.85
$1.95
$2.00
$2.20
$2.35
$2.55
$1.00
$1.40
$1.80
$2.20
$2.60
$3.00

20
Distribution History vs. Peers
2-Year Average Annual Distribution Growth
8/29/01 - 8/29/06
30%
15%
14%
12%
10%
9%
8%
7%
7%
5%
1%
0%
0%
5%
10%
15%
20%
25%
30%
35%
ETP
SXL
MMP
PAA
EPD
OKS
PPX
BPL
KMP
VLI
TPP
EEP

21
Distribution History vs. Peers
Average Annual Distribution Growth
Note:
1   Includes BWP, BPL, EEP, ETP, EPD, KMP, MMP, OKS, PPX, PAA, SXL, TPP, and VLI
26.0%
30.4%
30.8%
6.5%
7.3%
7.6%
0%
5%
10%
15%
20%
25%
30%
35%
3 Yr CAGR (8/29/03-8/29/06)
2 Yr CAGR (8/29/04-8/29/06)
1 Yr CAGR (8/29/05-8/29/06)
ETP
Large Cap MLP Average¹

22
Investment Highlights
Substantial competitive advantage
High quality portfolio of assets
Strong credit statistics
Compares favorably with BBB+ / BBB peers
Management commitment to credit quality
High common unit coverage
ETP retains cash to fund internal growth and strengthen balance sheet
Low risk, high rate of return growth opportunities
Attractive construction price to EBITDA multiples
Long-term contracts in place prior to construction
Excellent access to public debt and equity markets
Significant liquidity
History of consistent distribution growth
Experienced management with substantial equity ownership