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

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

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 August 3, 2011, Energy Transfer Equity, L.P. (the “Partnership”) issued a press release announcing its financial and operating results for the second quarter ended June 30, 2011. 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 August 3, 2011

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: August 3, 2011				/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 August 3, 2011

Exhibit 99.1

ENERGY TRANSFER EQUITY
REPORTS QUARTERLY RESULTS

Dallas — August 3, 2011 — Energy Transfer Equity, L.P. (NYSE:ETE) today reported Distributable Cash Flow and net income attributable to partners for the quarter ended June 30, 2011, both of which were impacted by acquisition-related costs incurred by ETE in connection with its proposed merger with Southern Union Company (NYSE:SUG). Distributable Cash Flow before acquisition-related expenses was $124.6 million for the three months ended June 30, 2011, as compared to $126.2 million for the three months ended June 30, 2010. ETE’s net income attributable to partners was $66.3 million for the three months ended June 30, 2011 as compared to $19.3 million for the three months ended June 30, 2010.

In June 2011, ETE entered into a plan of merger, whereby Southern Union Company would become a wholly owned subsidiary of ETE, and, in July 2011, ETE entered into an amended and restated plan of merger which modified many of the terms of the original agreement. ETE incurred $9.0 million of general and administrative costs for the three months ended June 30, 2011 associated with this transaction. For the three months ended June 30, 2010, ETE incurred $12.8 million of general and administrative costs associated with its acquisition of a controlling interest in Regency Energy Partners LP (Nasdaq:RGNC).

For the quarter ended June 30, 2011, ETE significantly raised its cash distribution on its outstanding limited partner interests to $0.625 per limited partner unit ($2.50 annualized), an increase of approximately 11.6%. The cash distribution for the quarter ended June 30, 2011 will be paid on August 19, 2011 to Unitholders of record as of the close of business on August 5, 2011.

Distributable Cash Flow before acquisition-related expenses for the six months ended June 30, 2011 was $249.7 million, as compared to $254.5 million for the six months ended June 30, 2010. ETE’s net income attributable to partners was $154.9 million for the six months ended June 30, 2011, an increase of $22.9 million over the six months ended June 30, 2010.

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”) and Regency Energy Partners LP (“Regency”), including 100% of ETP’s and Regency’s incentive distribution rights, approximately 50.2 million of ETP’s common units and approximately 26.3 million of Regency’s common units. ETE currently has no operating activities apart from those conducted by ETP and Regency and their operating subsidiaries. ETE’s principal uses of cash are for general and administrative expenses, debt service requirements, distributions to its general partners, limited partners and holders of the Series A Convertible Preferred Units, and capital contributions to ETP and Regency in respect of ETE’s general partner interests in ETP and Regency at ETE’s election.

The Partnership has scheduled a conference call for 8:30 a.m. Central Time, Thursday, August 4, 2011 to discuss its second quarter 2011 results. The conference call will be broadcast live via an internet web cast, which can be accessed through www.energytransfer.com and will also 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 Flow. 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 Flow 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 Flow. The Partnership defines Distributable Cash Flow for a period as cash distributions expected to be received from ETP and Regency in respect of such period in connection with the Partnership’s investments in limited and general partner interests of ETP and Regency, net of the Partnership’s cash expenditures for general and administrative costs and interest expense. Distributable Cash Flow 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 and Regency 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 for a period to planned cash distributions for such period.

Distributable Cash Flow is also an important non-GAAP financial measure for our limited partners since it indicates to investors whether 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 Flow 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 measure most directly comparable to Distributable Cash Flow is net income for ETE on a stand-alone basis (“Parent Company”). The accompanying analysis of Distributable Cash Flow is presented for the three and six months ended June 30, 2011 and 2010 for comparative purposes.

Distributable Cash Flow (before acquisition-related expenses). The Partnership defines Distributable Cash Flow (before acquisition-related expenses) for a period as cash distributions expected to be received from ETP and Regency in respect of such period in connection with the Partnership’s investments in limited and general partner interests of ETP and Regency, net of the Partnership’s cash expenditures for general and administrative costs and interest expense and net of realized losses on termination of interest rate swaps. Due to the cash expenses that were incurred during the three months ended June 30, 2011 and 2010 in connection with the Partnership’s merger and acquisition activities, Distributable Cash Flow (before acquisition-related expenses) for the three months and six months ended June 30, 2011 and 2010 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 and Regency 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 for a period to planned cash distributions for such period. The GAAP measure most directly comparable to Distributable Cash Flow (before acquisition-related expenses) is net income (loss) for the Parent Company on a stand-alone basis. The accompanying analysis of Distributable Cash Flow (before acquisition-related expenses) is presented for the three and six months ended June 30, 2011 and 2010 for comparative purposes.

Energy Transfer Equity, L.P. (NYSE:ETE) is a publicly traded partnership, which owns the general partner and 100 percent of the incentive distribution rights (IDRs) of Energy Transfer Partners and approximately 50.2 million ETP limited partner units; and owns the general partner and 100 percent of the IDRs of Regency Energy Partners and approximately 26.3 million Regency limited partner units. For more information, visit the Energy Transfer Equity, L.P. web site at www.energytransfer.com.

Energy Transfer Partners, L.P. (NYSE:ETP) is a publicly traded partnership owning and operating a diversified portfolio of energy assets. ETP currently has natural gas operations that include more than 17,500 miles of gathering and transportation pipelines, treating and processing assets, and three storage facilities located in Texas. ETP also holds a 70% interest in Lone Star NGL LLC (“Lone Star”), a joint venture that owns and operates NGL storage, fractionation and transportation assets in Texas, Louisiana and Mississippi. 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. For more information, visit the Energy Transfer Partners, L.P. web site at www.energytransfer.com.

Regency Energy Partners LP (Nasdaq: RGNC) is a growth-oriented, midstream energy partnership engaged in the gathering, contract compression, processing, marketing and transporting of natural gas and natural gas liquids. Regency also owns the remaining 30% interest in Lone Star. Regency’s general partner is owned by ETE. For more information, visit the Regency Energy Partners LP Web site at www.regencyenergy.com.

—more—

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

Media Relations:
Vicki Granado
Granado Communications Group
214-599-8785 (office)
214-498-9272 (cell)

—more—

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

		June 30,				December 31,
		2011				2010
ASSETS
CURRENT ASSETS		$	1,398,971			$	1,291,010
PROPERTY, PLANT AND EQUIPMENT, net			13,774,472				11,852,732
ADVANCES TO AND INVESTMENTS IN AFFILIATES			1,350,627				1,359,979
LONG-TERM PRICE RISK MANAGEMENT ASSETS			7,468				13,971
GOODWILL			2,008,896				1,600,611
INTANGIBLES AND OTHER ASSETS, net			1,325,724				1,260,427
Total assets		$	19,866,158			$	17,378,730
LIABILITIES AND EQUITY
CURRENT LIABILITIES		$	1,259,420			$	1,081,075
LONG-TERM DEBT, less current maturities			11,123,820				9,346,067
SERIES A CONVERTIBLE PREFERRED UNITS			334,170				317,600
LONG-TERM PRICE RISK MANAGEMENT LIABILITIES			60,934				79,465
OTHER NON-CURRENT LIABILITIES			252,892				235,848
COMMITMENTS AND CONTINGENCIES
PREFERRED UNITS OF SUBSIDIARY			71,040				70,943
EQUITY:
Total partners’ capital (deficit)			(23,541	)			120,668
Noncontrolling interest			6,787,423				6,127,064
Total equity			6,763,882				6,247,732
Total liabilities and equity		$	19,866,158			$	17,378,730

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

		Three Months Ended June 30,								Six Months Ended June 30,
		2011				2010				2011				2010
REVENUES:
Natural gas operations		$	1,728,951			$	1,140,768			$	3,157,908			$	2,447,477
Retail propane			220,296				197,147				748,762				730,586
Other			25,659				24,613				57,356				56,446
Total revenues			1,974,906				1,362,528				3,964,026				3,234,509
COSTS AND EXPENSES:
Cost of products sold — natural gas operations			1,122,857				723,835				2,006,626				1,636,441
Cost of products sold — retail propane			134,728				110,282				445,592				415,263
Cost of products sold — other			6,567				6,336				13,360				13,614
Operating expenses			222,717				179,745				443,413				350,493
Depreciation and amortization			148,530				98,035				287,786				184,366
Selling, general and administrative			78,946				65,038				142,445				116,147
Total costs and expenses			1,714,345				1,183,271				3,339,222				2,716,324
OPERATING INCOME			260,561				179,257				624,804				518,185
OTHER INCOME (EXPENSE):
Interest expense, net of interest capitalized			(181,517	)			(129,036	)			(349,446	)			(250,707	)
Equity in earnings of affiliates			28,819				12,193				54,260				18,374
(Losses) gains on disposal of assets			(681	)			1,375				(2,435	)			(489	)
Gains (losses) on non-hedged interest rate derivatives			1,883				(22,468	)			3,403				(36,892	)
Impairment of investment in affiliate			—				(52,620	)			—				(52,620	)
Other, net			2,811				(5,213	)			(9,715	)			(3,070	)
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE			111,876				(16,512	)			320,871				192,781
Income tax expense			5,224				4,053				15,127				9,264
INCOME (LOSS) FROM CONTINUING OPERATIONS			106,652				(20,565	)			305,744				183,517
Income from discontinued operations			—				86				—				86
NET INCOME (LOSS)			106,652				(20,479	)			305,744				183,603
LESS: NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTEREST			40,367				(39,747	)			150,819				51,558
NET INCOME ATTRIBUTABLE TO PARTNERS			66,285				19,268				154,925				132,045
GENERAL PARTNER’S INTEREST IN NET INCOME			205				60				479				409
LIMITED PARTNERS’ INTEREST IN NET INCOME		$	66,080			$	19,208			$	154,446			$	131,636
BASIC NET INCOME PER LIMITED PARTNER UNIT		$	0.30			$	0.09			$	0.69			$	0.59
BASIC AVERAGE NUMBER OF UNITS OUTSTANDING			222,972,708				222,941,172				222,963,741				222,941,140
DILUTED NET INCOME PER LIMITED PARTNER UNIT		$	0.30			$	0.09			$	0.69			$	0.59
DILUTED AVERAGE NUMBER OF UNITS OUTSTANDING			222,972,708				222,941,172				222,963,741				222,941,140

ENERGY TRANSFER EQUITY, L.P.
DISTRIBUTABLE CASH FLOW
(Dollars in thousands)
(unaudited)

The following table presents the calculation and reconciliation of Distributable Cash Flow of Energy Transfer Equity, L.P.

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2011				2010				2011				2010
Distributable Cash Flow:
Cash distributions from Energy Transfer Partners, L.P. (“ETP”) associated with: (1)
General partner interest:
Standard distribution rights		$	4,896			$	4,874			$	9,792			$	9,754
Incentive distribution rights			103,358				89,834				206,540				184,751
Limited partner interest			44,890				44,890				89,780				100,750
Total cash distributions from ETP			153,144				139,598				306,112				295,255
Cash distributions from Regency Energy Partners LP (“Regency”) associated with: (2)
General partner interest:
Standard distribution rights			1,287				1,105				2,556				1,105
Incentive distribution rights			1,338				915				2,452				915
Limited partner interest			11,820				11,689				23,509				11,689
Total cash distributions from Regency			14,445				13,709				28,517				13,709
Total cash distributions from Subsidiaries			167,589				153,307				334,629				308,964
Net pro rata cash settlement related to Regency Transactions (3)			—				3,015				—				3,015
Total cash distributions expected from ETP and Regency including net pro rata settlement			167,589				156,322				334,629				311,979
Deduct expenses of the Parent Company on a stand-alone basis:
Selling, general and administrative expenses, excluding non-cash compensation expense			(11,950	)			(14,917	)			(13,705	)			(17,161	)
Interest expense, net of amortization of financing costs, interest income, and realized gains and losses on interest rate swaps (4)			(40,119	)			(28,007	)			(80,238	)			(53,160	)
Distributable Cash Flow			115,520				113,398				240,686				241,658
Acquisition-related expenses included in selling, general and administrative expenses			9,039				12,830				9,039				12,830
Distributable Cash Flow, before acquisition-related expenses		$	124,559			$	126,228			$	249,725			$	254,488
Cash distributions to be paid to the partners of ETE: (5)
Distributions to be paid to limited partners		$	139,358			$	120,388			$	264,206			$	240,776
Distributions to be paid to general partner			433				374				821				748
Total cash distributions to be paid to the partners of ETE		$	139,791			$	120,762			$	265,027			$	241,524
Reconciliation of Non-GAAP “Distributable Cash Flow” and “Distributable Cash Flow, before acquisition-related expenses” to GAAP “Net income” for the Parent Company on a stand-alone basis:
Net income for the Parent Company on a stand-alone basis		$	66,285			$	19,268			$	154,925			$	132,045
Adjustments to derive Distributable Cash Flow:
Equity in income of unconsolidated affiliates			(120,626	)			(75,362	)			(267,268	)			(221,740	)
Cash distributions from Subsidiaries			167,589				153,307				334,629				308,964
Net pro rata cash settlement related to Regency Transactions (3)			—				3,015				—				3,015
Amortization included in interest expense			466				1,455				1,280				2,153
Fair value adjustment of ETE Preferred Units			1,530				—				16,570				—
Other non-cash			276				228				550				457
Unrealized losses on non-hedged interest rate swaps			—				11,487				—				16,764
Distributable Cash Flow			115,520				113,398				240,686				241,658
Acquisition-related expenses included in selling, general and administrative expenses			9,039				12,830				9,039				12,830
Distributable Cash Flow, before acquisition-related expenses		$	124,559			$	126,228			$	249,725			$	254,488

ENERGY TRANSFER EQUITY, L.P.
SUPPLEMENTAL INFORMATION
(Dollars in thousands)
(unaudited)

The following summarizes the key components of the stand-alone results of operations of the Parent Company for the periods indicated:

		Three Months Ended June 30,								Six Months Ended June 30,
		2011				2010				2011				2010
Selling, general and administrative expenses		$	(12,037	)		$	(15,079	)		$	(13,879	)		$	(17,415	)
Interest expense			(40,587	)			(20,210	)			(81,526	)			(36,916	)
Equity in earnings of affiliates			120,626				75,362				267,268				221,740
Losses on non-hedged interest rate derivatives			—				(20,753	)			—				(35,177	)
Other, net			(1,653	)			(88	)			(16,812	)			(212	)

Selling, general and administrative. For the three and six months ended June 30, 2011 compared to the same period in the prior year, selling, general and administrative expense decreased primarily due to a decrease in acquisition-related costs. The three and six months ended June 30, 2011 reflect approximately $9.0 million in expenses incurred in connection with our pending acquisition of Southern Union Company, while the three and six months ended June 30, 2010 reflect approximately $12.8 million in expenses incurred related to our acquisition of a controlling interest in Regency in May 2010.

Interest Expense. For the three and six months ended June 30, 2011 compared to the same period in the prior year, interest expense increased primarily due to the issuance of $1.8 billion aggregate principal amount of 7.5% senior notes in September 2010 the proceeds from which were used to repay all of the outstanding indebtedness under our then existing revolving credit facility and term loan facility, to fund the cost to terminate interest rate swaps, and for general partnership purposes. In addition, interest expense for the periods presented reflects distributions on the ETE Preferred Units issued by ETE in connection with the acquisition of a controlling interest in Regency in May 2010.

Equity in Earnings of Affiliates. Equity in earnings of affiliates represents earnings of the Parent Company related to its investment in ETP and Regency. The increases between the three and six months period were primarily related to the Parent Company’s equity in earnings of ETP.

Losses on Non-Hedged Interest Rate Derivatives. The Parent Company terminated its interest rate swaps that were not accounted for as hedges in September 2010 in connection with the issuance of $1.8 billion of senior notes. Prior to that settlement, changes in the fair value of and cash payments related to these swaps were recorded directly in earnings. For the three and six months ended June 30, 2011, we recorded unrealized losses on our interest rate swaps as a result of decreases in the relevant floating index rates during the period.

Other, net. Other expenses increased between periods primarily due to non-cash charges recorded to increase the carrying value of the preferred units that were issued by the Parent Company in connection with the acquisition of a controlling interest in Regency in May 2010.