SEC Filing | Energy Transfer

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): November 9, 2009

ENERGY TRANSFER EQUITY, L.P.
(Exact name of registrant as specified in its charter)


Delaware	1-32740	30-0108820
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)


3738 Oak Lawn Avenue Dallas, TX		75219
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (214) 981-0700

(Former name or former address if changed since last report.)

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:

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

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

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

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

Item 2.02. Results of Operations and Financial Condition.

On November 9, 2009, Energy Transfer Equity, L.P. (the “Partnership”) issued a press release announcing its financial and operating results for the third quarter ended September 30, 2009. A copy of this press release is furnished as Exhibit 99.1 to this report and is incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information set forth in this Item 2.02 and in the attached exhibit shall be deemed to be “furnished” and not be deemed to be “filed” for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits. In accordance with General Instruction B.2 of Form 8-K, the information set forth in the attached Exhibit 99.1 is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act.


Exhibit Number		Description of the Exhibit
Exhibit 99.1		Energy Transfer Equity, L.P. Press Release, dated November 9, 2009.

SIGNATURES

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


	Energy Transfer Equity, L.P.
	By:	LE GP, LLC, its general partner
Date: November 9, 2009		/s/ John W. McReynolds

		John W. McReynolds President and Chief Financial Officer

Exhibit Index


Exhibit Number		Description of the Exhibit
Exhibit 99.1		Energy Transfer Equity, L.P. Press Release, dated November 9, 2009.

Exhibit 99.1

Exhibit 99.1

ENERGY TRANSFER EQUITY
REPORTS QUARTERLY RESULTS
FOR THE PERIOD ENDED SEPTEMBER 30^TH

Dallas — November 9, 2009 - Energy Transfer Equity, L.P. (NYSE:ETE) today reported Distributable Cash of $123.2 million and net income of $34.3 million for the three months ended September 30, 2009. Distributable Cash is a “non-GAAP measure” as explained below.

For the three months ended September 30, 2009, ETE’s Distributable Cash was $123.2 million, an increase of $14.4 million over the three months ended September 30, 2008. For the nine months ended September 30, 2009, ETE’s Distributable Cash was $362.1 million, an increase of $56.9 million over the nine months ended September 30, 2008. The Partnership’s principal sources of cash flow are distributions it receives from its investments in the limited and general partner interests in Energy Transfer Partners, L.P. (“ETP”). ETE currently has no operating activities apart from those conducted by ETP and its operating subsidiaries. ETE’s principal uses of cash are for distributions to its general and limited partners, expenses, debt service and, at ETE’s election, capital contributions to ETP in respect of ETE’s general partner interest in ETP.

ETE’s net income attributable to its partners decreased $58.4 million for the three months ended September 30, 2009 to $47.0 million as compared to $105.4 million for the three months ended September 30, 2008. Net income attributable to its partners decreased $49.6 million for the nine months ended September 30, 2009 to $302.9 million as compared to $352.5 million for the nine months ended September 30, 2008.

ETE also announced that it has filed its quarterly report on Form 10-Q for the three months ended September 30, 2009 with the Securities and Exchange Commission. ETE has posted a copy of this Form 10-Q on its website at www.energytransfer.com. The Partnership has scheduled a conference call for 9:00 a.m. Central Time, Tuesday, November 10, 2009 to discuss the third quarter results. The conference call will be broadcast live via an internet web cast, which can be accessed through www.energytransfer.com. The call will be available for replay on the Partnership’s website for a limited time.

Use of Non-GAAP Financial Measures

This press release and accompanying schedules include the non-generally accepted accounting principle (“non-GAAP”) financial measure of Distributable Cash. The accompanying schedules provide a reconciliation of this non-GAAP financial measure to its most directly comparable financial measure calculated and presented in accordance with GAAP. The Partnership’s Distributable Cash should not be considered as an alternative to GAAP financial measures such as net income, cash flow from operating activities or any other GAAP measure of liquidity or financial performance.

Distributable Cash. The Partnership defines Distributable Cash for a period as cash distributions expected to be received from ETP in respect of such period in connection with the Partnership’s investments in limited and general partner interests of ETP, net of the Partnership’s expenditures for general and administrative costs and debt service. Distributable Cash is a significant liquidity measure used by the Partnership’s senior management to compare net cash flows generated by the Partnership’s equity investments in ETP to the distributions the Partnership expects to pay its unitholders. Using this measure, the Partnership’s management can compute the coverage ratio of estimated cash flows to planned cash distributions.

Distributable Cash is an important non-GAAP financial measure for our limited partners since it indicates to investors whether or not the Partnership’s investments are generating cash flows at a level that can sustain or support an increase in quarterly cash distribution levels. Financial measures such as Distributable Cash are quantitative standards used by the investment community with respect to publicly-traded partnerships because the value of a partnership unit is in part measured by its yield (which in turn is based on the amount of cash distributions a partnership can pay to a unitholder). The GAAP measures most directly comparable to Distributable Cash are net income and cash flow from operating activities for ETE on a stand-alone basis (“Parent Company”). The accompanying analysis of Distributable Cash is presented for the three and nine months ended September 30, 2009 and 2008 for comparative purposes.

Energy Transfer Equity, L.P. (NYSE:ETE) is a publicly traded partnership, which owns the general partner of Energy Transfer Partners, L.P. and approximately 62.5 million ETP limited partner units.

Energy Transfer Partners, L.P. (NYSE:ETP) is a publicly traded partnership owning and operating a diversified portfolio of energy assets. ETP has pipeline operations in Arizona, Colorado, Louisiana, New Mexico, and Utah, and owns the largest intrastate pipeline system in Texas. ETP’s natural gas operations include gathering and transportation pipelines, treating and processing assets, and three storage facilities located in Texas. ETP currently has more than 17,500 miles of pipeline in service and has a 50% interest in joint ventures that have approximately 500 miles of interstate pipeline in service. ETP is also one of the three largest retail marketers of propane in the United States, serving more than one million customers across the country.

The information contained in this press release is available on our website at www.energytransfer.com.

Contacts:

Investor Relations:
Brent Ratliff
Energy Transfer
214-981-0700 (office)

Media Relations:
Vicki Granado
Granado Communications Group
214-504-2260 (office)
214-498-9272 (cell)

-MORE-

ENERGY TRANSFER EQUITY, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)


	September 30,			December 31,
	2009			2008

ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	50,192		$	92,023
Marketable securities		12,682			5,915
Accounts receivable, net of allowance for doubtful accounts		352,838			591,257
Accounts receivable from related companies		30,807			15,142
Inventories		221,148			272,348
Deposits paid to vendors		99,317			78,237
Exchanges receivable		15,434			45,209
Price risk management assets		6,841			5,423
Prepaid expenses and other current assets		69,152			75,441


Total current assets		858,411			1,180,995

PROPERTY, PLANT AND EQUIPMENT		10,051,273			9,464,548
ACCUMULATED DEPRECIATION		(943,305	)		(762,014	)

		9,107,968			8,702,534

ADVANCES TO AND INVESTMENTS IN AFFILIATES		550,950			10,110
GOODWILL		765,935			773,283
INTANGIBLES AND OTHER ASSETS, net		401,244			402,980


Total assets	$	11,684,508		$	11,069,902

ENERGY TRANSFER EQUITY, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)


	September 30,			December 31,
	2009			2008

LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable	$	254,044		$	381,933
Accounts payable to related companies		7,265			34,495
Exchanges payable		22,400			54,636
Customer advances and deposits		101,258			106,679
Accrued and other current liabilities		247,919			313,140
Price risk management liabilities		82,697			142,432
Interest payable		115,455			115,487
Income taxes payable		5,234			14,298
Deferred income taxes		—			589
Current maturities of long-term debt		46,115			45,232


Total current liabilities		882,387			1,208,921

LONG-TERM DEBT, less current maturities		7,740,135			7,190,357
LONG-TERM PRICE RISK MANAGEMENT LIABILITIES		89,990			121,710
DEFERRED INCOME TAXES		197,257			194,871
OTHER NON-CURRENT LIABILITIES		21,076			14,727

COMMITMENTS AND CONTINGENCIES

		8,930,845			8,730,586


EQUITY:
Partners’ Capital (Deficit):
General Partner		149			155
Limited Partners:
Common Unitholders (222,898,248 and 222,829,956 units authorized, issued and outstanding at September 30, 2009 and December 31, 2008, respectively)		(17,399	)		(15,762	)

Accumulated other comprehensive loss		(67,257	)		(67,825	)

Total partners’ deficit		(84,507	)		(83,432	)
Noncontrolling interest		2,838,170			2,422,748

Total equity		2,753,663			2,339,316


Total liabilities and equity	$	11,684,508		$	11,069,902

ENERGY TRANSFER EQUITY, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per unit and unit data)
(unaudited)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2009			2008			2009			2008
REVENUES:
Natural gas operations	$	943,975		$	1,938,586		$	3,004,163		$	6,322,070
Retail propane		162,224			238,830			829,901			1,086,417
Other		23,650			28,674			77,449			90,199

Total revenues		1,129,849			2,206,090			3,911,513			7,498,686


COSTS AND EXPENSES:
Cost of products sold — natural gas operations		591,797			1,435,308			1,865,914			4,965,145
Cost of products sold — retail propane		80,232			187,799			378,524			744,316
Cost of products sold — other		6,119			10,347			18,842			27,783
Operating expenses		158,883			197,493			517,337			573,606
Depreciation and amortization		84,738			73,563			239,626			200,922
Selling, general and administrative		34,579			45,316			146,640			140,781

Total costs and expenses		956,348			1,949,826			3,166,883			6,652,553


OPERATING INCOME		173,501			256,264			744,630			846,133

OTHER INCOME (EXPENSE):
Interest expense, net of interest capitalized		(120,100	)		(90,300	)		(341,050	)		(261,297	)
Equity in earnings (losses) of affiliates		9,581			(654	)		11,751			(749	)
Gains (losses) on disposal of assets		(1,088	)		2,520			(1,333	)		1,584
Gains (losses) on non-hedged interest rate derivatives		(35,589	)		(9,152	)		24,373			(13,610	)
Allowance for equity funds used during construction		30			19,727			18,618			45,275
Other, net		4,235			(1,163	)		4,559			8,356


INCOME BEFORE INCOME TAX EXPENSE (BENEFIT)		30,570			177,242			461,548			625,692
Income tax expense (benefit)		(3,697	)		(7,874	)		5,773			6,600


NET INCOME		34,267			185,116			455,775			619,092

LESS: NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTEREST		(12,704	)		79,737			152,893			266,614


NET INCOME ATTRIBUTABLE TO PARTNERS		46,971			105,379			302,882			352,478

GENERAL PARTNER’S INTEREST IN NET INCOME		147			326			938			1,091


LIMITED PARTNERS’ INTEREST IN NET INCOME	$	46,824		$	105,053		$	301,944		$	351,387


BASIC NET INCOME PER LIMITED PARTNER UNIT	$	0.21		$	0.47		$	1.35		$	1.58


BASIC AVERAGE NUMBER OF UNITS OUTSTANDING		222,898,248			222,829,956			222,898,188			222,829,956


DILUTED NET INCOME PER LIMITED PARTNER UNIT	$	0.21		$	0.47		$	1.35		$	1.57


DILUTED AVERAGE NUMBER OF UNITS OUTSTANDING		222,898,248			222,829,956			222,898,188			222,829,956

ENERGY TRANSFER EQUITY, L.P.
DISTRIBUTABLE CASH
(Dollars in thousands, except per unit)
(unaudited)

The following table presents the calculation and reconciliation of Distributable Cash of Energy Transfer Equity, L.P. with respect to the following periods:


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2009			2008			2009			2008
Distributable Cash:
Cash distributions expected from Energy Transfer Partners, L.P. associated with:
General partner interest (1):
Standard distribution rights	$	4,867		$	4,384		$	14,588		$	12,740
Incentive distribution rights		87,498			75,804			255,808			219,298
Less: Expected General Partner contribution to ETP to maintain its 2% interest		—			—			(3,354	)		(13,098	)
Limited partner interest (1):
62,500,797 Common units		55,860			55,860			167,580			166,018

Total cash expected from Energy Transfer Partners, L.P. (1)		148,225			136,048			434,622			384,958
Deduct expenses of the Parent Company on a stand-alone basis:
Parent Company-related expenses		398			(1,544	)		(2,205	)		(5,600	)
Interest expense, net of amortization of financing costs, interest income, and realized gains and losses on interest rate derivatives		(25,454	)		(25,762	)		(70,342	)		(74,218	)

Distributable Cash	$	123,169		$	108,742		$	362,075		$	305,140


Cash distributions to be paid to the partners of Energy Transfer Equity, L.P. (2):

Distribution per limited partner unit as of the end of the period	$	0.5350		$	0.4800		$	0.5350		$	0.4800

Distributions to be paid to limited partners		119,250			106,958			355,523			311,961
Distributions to be paid to general partner		370			332			1,104			969

Total cash distributions to be paid by Energy Transfer Equity, L.P. to its limited and general partners (2)	$	119,620		$	107,290		$	356,627		$	312,930


Reconciliation of Non-GAAP “Distributable Cash” to GAAP “Net Income” and GAAP “Net cash provided by operating activites” for the Parent Company on a stand-alone basis:
Net income attributable to partners	$	46,971		$	105,379		$	302,882		$	352,478
Adjustments to derive Distributable Cash:
Equity in income of unconsolidated affiliates		(82,661	)		(138,955	)		(370,195	)		(441,299	)
Quarterly distribution expected to be received from Energy Transfer Partners, L.P.		148,225			136,048			434,622			384,958
Amortization included in interest expense		1,074			751			5,236			2,255
Other non-cash		138			4			415			14
Unrealized gains and losses on non-hedged interest rate swaps		9,422			5,515			(10,885	)		6,734

Distributable Cash		123,169			108,742			362,075			305,140

Adjustments to Distributable Cash to derive Net Cash Provided by Operating Activities:
Quarterly distribution expected from Energy Transfer Partners, L.P.		(148,225	)		(136,048	)		(434,622	)		(384,958	)
Cash distribution received from Energy Transfer Partners, L.P. (3)		144,733			122,831			425,938			399,295
Deferred income taxes		(76	)		—			(649	)		—
Net changes in operating assets and liabilities		(846	)		1,141			(3,348	)		9,673

Net cash provided by operating activites for Parent Company on a stand-alone basis	$	118,755		$	96,666		$	349,394		$	329,150


(1)		For the three months ended September 30, 2009, cash distributions expected to be received from Energy Transfer Partners, L.P. consists of cash distributions in respect of the three months ended September 30, 2009 payable on November 16, 2009 to holders of record on the close of business on November 9, 2009. For the three months ended September 30, 2008, cash distributions received from Energy Transfer Partners, L.P. consists of cash distributions paid on November 14, 2008 for the three months ended September 30, 2008.

		For the nine months ended September 30, 2009, cash distributions received or expected to be received from Energy Transfer Partners, L.P. consists of cash distributions paid on May 15, 2009 in respect of the quarter ended March 31, 2009, cash distributions paid on August 14, 2009 in respect of the quarter ended June 30, 2009 and cash distributions in respect of the three months ended September 30, 2009 payable on November 16, 2009 to holders of record on the close of business on November 9, 2009. For the nine months ended September 30, 2008, cash distributions received from Energy Transfer Partners, L.P. consists of cash distributions paid on May 15, 2008 in respect of the quarter ended March 31, 2008, cash distributions paid on August 14, 2008 in respect of the quarter ended June 30, 2008 and cash distributions in respect of the three months ended September 30, 2008 paid on November 14, 2008.

(2)		For the three months ended September 30, 2009, cash distributions expected to be paid from Energy Transfer Equity, L.P. consists of cash distributions in respect of the three months ended September 30, 2009 payable on November 19, 2009 to holders of record on November 9, 2009. For the three months ended September 30, 2008, cash distributions paid or expected to be paid from Energy Transfer Equity, L.P. consists of cash distributions paid on November 19, 2008 for the three months ended September 30, 2008.

		For the nine months ended September 30, 2009, cash distributions paid or expected to be paid by Energy Transfer Equity, L.P. consist of cash distributions paid on May 19, 2009 in respect of the quarter ended March 31, 2009, cash distributions paid on August 19, 2009 in respect of the quarter ended June 30, 2009 and cash distributions in respect of the three months ended September 30, 2009 payable on November 19, 2009 to holders of record on the close of business on November 9, 2009. For the nine months ended September 30, 2008, cash distributions by Energy Transfer Equity, L.P. consist of cash distributions paid on May 15, 2008 in respect of the quarter ended March 31, 2008, cash distributions paid on August 14, 2008 in respect of the quarter ended June 30, 2008 and cash distributions in respect of the three months ended September 30, 2008 paid on November 19, 2008.

(3)		Cash distributions received from Energy Transfer Partners, L.P. for the nine months ended September 30, 2008 reflect a one-time distribution for the four-month transition period related to Energy Transfer Partners, L.P.’s change of its fiscal year from August 31 to December 31 during 2007.