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ETE Form 8-K 12.31.2014







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
 
February 18, 2015
Date of Report (Date of earliest event reported)
 
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 Number)
 
3738 Oak Lawn Avenue
Dallas, TX 75219
(Address of principal executive offices)
 
(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 2.02. Results of Operations and Financial Condition.
On February 18, 2015, Energy Transfer Equity, L.P. (the “Partnership”) issued a press release announcing its financial and operating results for the fourth quarter ended December 31, 2014. 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 February 18, 2015


 
 
 




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: February 18, 2015
/s/ Jamie Welch
 
Jamie Welch
 
Chief Financial Officer (duly
authorized to sign on behalf of the registrant)






Exhibit Index



Exhibit Number
 
Description of the Exhibit
Exhibit 99.1
 
Energy Transfer Equity, L.P. Press Release dated February 18, 2015






ETE - Exhibit 99.1 12.31.2014


ENERGY TRANSFER EQUITY
REPORTS FOURTH QUARTER AND FULL YEAR RESULTS
Dallas - February 18, 2015 - Energy Transfer Equity, L.P. (NYSE:ETE) (“ETE” or the “Partnership”) today reported financial results for the fourth quarter ended December 31, 2014.
Distributable Cash Flow, as adjusted, was $243 million for the three months ended December 31, 2014 as compared to $185 million for the same period last year, an increase of $58 million. ETE’s net income attributable to partners was $113 million for the three months ended December 31, 2014, as compared to a net loss of $172 million for the same period last year, an increase of $285 million, including the impacts of non-cash goodwill impairments in 2013 and 2014.
Distributable Cash Flow, as adjusted, for the year ended December 31, 2014 was $895 million as compared to $719 million for last year, an increase of $176 million. Distributable Cash Flow per unit was $1.63 for 2014, an overall increase of 27% from 2013. ETE’s net income attributable to partners was $633 million for the year ended December 31, 2014, as compared to $196 million for last year, an increase of $437 million or over 220%.
In January 2015, ETE’s Board of Directors approved its ninth consecutive increase in its quarterly distribution to $0.45 per unit on ETE Common Units for the quarter ended December 31, 2014, an increase of 30% on an annualized basis compared to the fourth quarter of 2013. For the quarter ended December 31, 2014, ETE’s distribution coverage ratio was 1.00x. For the full year ended December 31, 2014, ETE’s distribution coverage ratio was 1.03x.
The Partnership’s recent key accomplishments and other developments include the following:
•
In December 2014, ETE and Energy Transfer Partners, L.P. (“ETP”) announced the final terms of a transaction whereby ETE will transfer 30.8 million ETP Common Units, ETE’s 45% interest in the Dakota Access Pipeline and Energy Transfer Crude Oil Pipeline (collectively, the “Bakken pipeline project”), and $879 million in cash (less amounts funded prior to closing by ETE for capital expenditures for the Bakken pipeline project) in exchange for 30.8 million newly issued Class H Units of ETP that, when combined with the 50.2 million previously issued Class H Units, generally entitle ETE to receive 90.05% of the cash distributions and other economic attributes of the general partner interest and IDRs of Sunoco Logistics. In addition, ETE and ETP agreed to reduce the IDR subsidies that ETE previously agreed to provide to ETP, with such reductions occurring in 2015 and 2016. The transaction is expected to close in March 2015.
•
As of December 31, 2014, ETE’s $1.2 billion revolving credit facility had $940 million of outstanding borrowings and its leverage ratio, as defined by the credit agreement, was 3.31x. In February 2015, ETE amended its revolving credit facility to increase the capacity to $1.5 billion.
•
In January 2015, ETP and Regency Energy Partners LP (“Regency”) announced their entry into a definitive merger agreement pursuant to which ETP will acquire Regency. Under the terms of the definitive merger agreement, holders of Regency common units will receive 0.4066 ETP common units for each Regency common unit. Regency unitholders will also receive at closing an additional $0.32 per common unit in the form of ETP common units (based on the price for ETP common units prior to the merger closing). The transaction is expected to close in the second quarter of 2015.
•
Regarding our Lake Charles LNG project, the Federal Energy Regulatory Commission (“FERC”) has issued the Notice of Schedule for the Lake Charles LNG project. The Notice of Schedule from FERC that was issued on January 26, 2015 has reset the timeframe under which we are working in terms of the Final Investment Decision (“FID”) on the project. FERC has set August 14, 2015 for the release of the Environmental Impact Statement (“EIS”) on the project and November 12, 2015 as the Federal Authorization Decision deadline (90 days from the date of the EIS).
Based on the FERC schedule, the FID for the project has been pushed to 2016. We continue to meet our development milestones and both BG and ETE/ETP remain fully committed to the project and the timetable as Lake Charles remains one of the lowest cost and most flexible LNG supply options in BG’s global portfolio.

1


•
ETE’s Board of Directors has approved a $2 billion common unit buyback program, which is intended to be used opportunistically and will be utilized and sequenced from time to time depending on the trading price activity and performance of ETE’s common units.
The Partnership has scheduled a conference call for 8:00 a.m. Central Time, Thursday, February 19, 2015 to discuss its fourth quarter 2014 results. The conference call will be broadcast live via an internet webcast, which can be accessed through www.energytransfer.com and will also be available for replay on the Partnership’s website for a limited time.
The Partnership’s principal sources of cash flow are derived from distributions related to its direct and indirect investments in the limited and general partner interests in ETP and Regency, including 100% of ETP’s and Regency’s incentive distribution rights, ETP common units, Regency common units, ETP Class H Units, and the Partnership’s ownership of Lake Charles LNG. The Partnership’s primary cash requirements are for general and administrative expenses, debt service requirements and distributions to its partners.
Energy Transfer Equity, L.P. (NYSE: ETE) is a master limited partnership which owns the general partner and 100% of the incentive distribution rights (IDRs) of Energy Transfer Partners, L.P. (NYSE: ETP), approximately 30.8 million ETP common units, and approximately 50.2 million ETP Class H Units, which track 50% of the underlying economics of the general partner interest and IDRs of Sunoco Logistics Partners L.P. (NYSE: SXL). ETE also owns the general partner and 100% of the IDRs of Regency Energy Partners LP (NYSE: RGP) and approximately 57.2 million RGP common units. On a consolidated basis, ETE’s family of companies owns and operates approximately 71,000 miles of natural gas, natural gas liquids, refined products, and crude oil pipelines. 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 master limited partnership owning and operating one of the largest and most diversified portfolios of energy assets in the United States. ETP currently owns and operates approximately 35,000 miles of natural gas and natural gas liquids pipelines. ETP owns 100% of Panhandle Eastern Pipe Line Company, LP (the successor of Southern Union Company) and a 70% interest in Lone Star NGL LLC, a joint venture that owns and operates natural gas liquids storage, fractionation and transportation assets. ETP also owns the general partner, 100% of the incentive distribution rights, and approximately 67.1 million common units in Sunoco Logistics Partners L.P. (NYSE: SXL), which operates a geographically diverse portfolio of crude oil and refined products pipelines, terminalling and crude oil acquisition and marketing assets. ETP owns 100% of Sunoco, Inc. and 100% of Susser Holdings Corporation. Additionally ETP owns the general partner, 100% of the incentive distribution rights and approximately 43% of the limited partnership interests in Sunoco LP (formerly Susser Petroleum Partners LP) (NYSE: SUN), a wholesale fuel distributor and convenience store operator. ETP’s general partner is owned by ETE. For more information, visit the Energy Transfer Partners, L.P. web site at www.energytransfer.com.
Regency Energy Partners LP (NYSE: RGP) is a growth-oriented, midstream energy partnership engaged in the gathering and processing, compression, treating and transportation of natural gas; the transportation, fractionation and storage of natural gas liquids; the gathering, transportation and terminaling of oil (crude and/or condensate) received from producers; and the management of coal and natural resource properties in the United States. Regency’s general partner is owned by Energy Transfer Equity, L.P. (NYSE:ETE). For more information, visit the Regency Energy Partners LP web site at www.regencyenergy.com
Sunoco Logistics Partners L.P. (NYSE: SXL), headquartered in Philadelphia, is a master limited partnership that owns and operates a logistics business consisting of a geographically diverse portfolio of complementary crude oil, refined products, and natural gas liquids pipeline, terminalling and acquisition and marketing assets which are used to facilitate the purchase and sale of crude oil, refined products, and natural gas liquids. SXL’s general partner is owned by Energy Transfer Partners, L.P. (NYSE: ETP). For more information, visit the Sunoco Logistics Partners, L.P. web site at www.sunocologistics.com.
Sunoco LP (NYSE: SUN) is a master limited partnership that primarily distributes motor fuel to convenience stores, independent dealers, commercial customers and distributors. Sunoco LP also operates more than 150 convenience stores and retail fuel sites. Sunoco LP’s general partner is owned by Energy Transfer Partners, L.P. (NYSE:ETP). For more information, visit the Sunoco LP web site at www.sunocolp.com.

Contacts

Investor Relations:             Media Relations:
Energy Transfer                Vicki Granado, Granado Communications Group
Brent Ratliff                214-599-8785 (office)
214-981-0700 (office)            214-498-9272 (cell)



2



ENERGY TRANSFER EQUITY, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
(unaudited)
 
December 31,
 
2014
 
2013
ASSETS
 
 
 
 
 
 
 
CURRENT ASSETS
$
6,153

 
$
6,536

 
 
 
 
PROPERTY, PLANT AND EQUIPMENT, net
40,292

 
30,682

 
 
 
 
ADVANCES TO AND INVESTMENTS IN UNCONSOLIDATED AFFILIATES
3,659

 
4,014

NON-CURRENT PRICE RISK MANAGEMENT ASSETS
10

 
18

GOODWILL
7,865

 
5,894

INTANGIBLES ASSETS, net
5,582

 
2,264

OTHER NON-CURRENT ASSETS, net
908

 
922

Total assets
$
64,469

 
$
50,330

 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
 
 
CURRENT LIABILITIES
$
6,782

 
$
6,500

 
 
 
 
LONG-TERM DEBT, less current maturities
29,653

 
22,562

DEFERRED INCOME TAXES
4,325

 
3,865

NON-CURRENT PRICE RISK MANAGEMENT LIABILITIES
154

 
73

OTHER NON-CURRENT LIABILITIES
1,193

 
1,019

 
 
 
 
COMMITMENTS AND CONTINGENCIES
 
 
 
 
 
 
 
PREFERRED UNITS OF SUBSIDIARY
33

 
32

REDEEMABLE NONCONTROLLING INTEREST
15

 
—

 
 
 
 
EQUITY:
 
 
 
Total partners’ capital
664

 
1,078

Noncontrolling interest
21,650

 
15,201

Total equity
22,314

 
16,279

Total liabilities and equity
$
64,469

 
$
50,330





3


ENERGY TRANSFER EQUITY, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions, except per unit data)
(unaudited)
 
Three Months Ended December 31,
 
Years Ended
December 31,
 
2014
 
2013
 
2014
 
2013
REVENUES:
$
13,481

 
$
12,607

 
$
55,691

 
$
48,335

COSTS AND EXPENSES:
 
 
 
 
 
 
 
Cost of products sold
11,581

 
11,118

 
48,389

 
42,554

Operating expenses
719

 
466

 
2,127

 
1,695

Depreciation, depletion and amortization
476

 
351

 
1,724

 
1,313

Selling, general and administrative
170

 
136

 
611

 
533

Goodwill impairment
370

 
689

 
370

 
689

Total costs and expenses
13,316

 
12,760

 
53,221

 
46,784

OPERATING INCOME (LOSS)
165

 
(153
)
 
2,470

 
1,551

OTHER INCOME (EXPENSE):
 
 
 
 
 
 
 
Interest expense, net of interest capitalized
(354
)
 
(308
)
 
(1,369
)
 
(1,221
)
Equity in earnings of unconsolidated affiliates
67

 
54

 
332

 
236

Losses on extinguishments of debt
(27
)
 
(155
)
 
(25
)
 
(162
)
Gains (losses) on interest rate derivatives
(84
)
 
(2
)
 
(157
)
 
53

Gain on sale of AmeriGas common units
—

 
—

 
177

 
87

Non-operating environmental remediation
—

 
(168
)
 
—

 
(168
)
Other, net
27

 
(1
)
 
(11
)
 
(1
)
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE
(206
)
 
(733
)
 
1,417

 
375

Income tax expense (benefit) from continuing operations
86

 
(43
)
 
357

 
93

INCOME (LOSS) FROM CONTINUING OPERATIONS
(292
)
 
(690
)
 
1,060

 
282

Income (loss) from discontinued operations
(2
)
 
(11
)
 
64

 
33

NET INCOME (LOSS)
(294
)
 
(701
)
 
1,124

 
315

LESS: NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTEREST
(407
)
 
(529
)
 
491

 
119

NET INCOME (LOSS) ATTRIBUTABLE TO PARTNERS
113

 
(172
)
 
633

 
196

GENERAL PARTNER’S INTEREST IN NET INCOME (LOSS)
1

 
(1
)
 
2

 
—

CLASS D UNITHOLDER’S INTEREST IN NET INCOME
1

 
—

 
2

 
—

LIMITED PARTNERS’ INTEREST IN NET INCOME (LOSS)
$
111

 
$
(171
)
 
$
629

 
$
196

INCOME (LOSS) FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT:
 
 
 
 
 
 
 
Basic
$
0.21

 
$
(0.31
)
 
$
1.15

 
$
0.33

Diluted
$
0.21

 
$
(0.31
)
 
$
1.14

 
$
0.33

NET INCOME (LOSS) PER LIMITED PARTNER UNIT:
 
 
 
 
 
 
 
Basic
$
0.21

 
$
(0.31
)
 
$
1.16

 
$
0.35

Diluted
$
0.21

 
$
(0.31
)
 
$
1.15

 
$
0.35



4


ENERGY TRANSFER EQUITY, L.P.
DISTRIBUTABLE CASH FLOW (1) 
(Dollars in millions, except per unit amounts)
(unaudited)
 
Three Months Ended
 December 31,
 
Years Ended
December 31,
 
2014
 
2013
 
2014
 
2013
Cash distributions from ETP associated with:
 
 
 
 
 
 
 
Limited partner interest
$
31

 
$
45

 
$
119

 
$
268

Class H Units
60

 
54

 
219

 
105

General partner interest
5

 
5

 
21

 
20

Incentive distribution rights
208

 
173

 
754

 
701

IDR relinquishments
(68
)
 
(57
)
 
(250
)
 
(199
)
Distributions credited to Holdco consideration (2)
—

 
—

 
—

 
(68
)
Total cash distributions from ETP
236

 
220

 
863

 
827

Cash distributions from Regency associated with:
 
 
 
 
 
 
 
Limited partner interest
29

 
12

 
99

 
48

General partner interest
2

 
2

 
6

 
5

Incentive distribution rights
10

 
4

 
33

 
12

IDR relinquishment
(1
)
 
(1
)
 
(3
)
 
(3
)
Total cash distributions from Regency
40

 
17

 
135

 
62

Cash dividends from Holdco
—

 
—

 
—

 
50

Total cash distributions from ETP, Regency and Holdco
276

 
237

 
998

 
939

 
 
 
 
 
 
 
 
Distributable cash flow attributable to Lake Charles LNG:
 
 
 
 
 
 
 
Revenues
54

 
—

 
216

 
—

Operating expenses
(4
)
 
—

 
(17
)
 
—

Selling, general and administrative expenses
(1
)
 
—

 
(4
)
 
—

Distributable cash flow attributable to Lake Charles LNG
49

 
—

 
195

 
—

 
 
 
 
 
 
 
 
Deduct expenses of the Parent Company on a stand-alone basis:
 
 
 
 
 
 
 
Selling, general and administrative expenses, excluding non-cash compensation expense
(3
)
 
(6
)
 
(13
)
 
(34
)
Management fee to ETP (3)
(24
)
 
(5
)
 
(95
)
 
(15
)
Interest expense, net of amortization of financing costs, interest income, and realized gains and losses on interest rate swaps
(56
)
 
(41
)
 
(197
)
 
(190
)
Distributable Cash Flow
242

 
185

 
888

 
700

Transaction-related expenses
1

 
—

 
7

 
19

Distributable Cash Flow, as adjusted
$
243

 
$
185

 
$
895

 
$
719

 
 
 
 
 
 
 
 
Distributable Cash Flow, as adjusted, per Unit
$
0.45

 
$
0.33

 
$
1.63

 
$
1.28

 
 
 
 
 
 
 
 
Cash distributions to be paid to the partners of ETE:
 
 
 
 
 
 
 
Distributions to be paid to limited partners
$
242

 
$
194

 
$
866

 
$
748

Distributions to be paid to general partner
—

 
1

 
2

 
2

Distributions to be paid to Class D unitholder
—

 
—

 
2

 
—

Total cash distributions to be paid to the partners of ETE
$
242

 
$
195

 
$
870

 
$
750

 
 
 
 
 
 
 
 
Distribution Coverage Ratio (4)
1.00x

 
0.95x

 
1.03x

 
0.96x

 
 
 
 
 
 
 
 
(1) 
This press release and accompanying schedules include the non-generally accepted accounting principle (“non-GAAP”) financial measures of Distributable Cash Flow, Distributable Cash Flow, as adjusted, and Distributable Cash Flow, as adjusted, per Unit. See supplemental information below for a reconciliation of these non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with GAAP. The Partnership’s non-GAAP financial measures should not be considered as alternatives to GAAP financial measures such as net income, cash flow from operating activities or any other GAAP measure of liquidity or financial performance.

5


(2) 
For the year ended December 31, 2013, cash distributions paid by ETP exclude distributions paid in respect of the quarter ended March 31, 2013 on 49.5 million ETP common units issued to ETE as a portion of the consideration for ETP’s acquisition of ETE’s interest in Holdco on April 30, 2013. These newly acquired ETP common units received cash distributions on May 15, 2013; however, such distributions were reduced from the total cash portion of the consideration paid to ETE in connection with the April 30, 2013 Holdco transaction pursuant to the contribution agreement.    
(3) 
In exchange for management services, ETE has agreed to pay to ETP fees totaling $95 million, $95 million and $5 million for the years ending December 31, 2014, 2015 and 2016, respectively.
(4) 
Distribution Coverage Ratio is calculated as Distributable Cash Flow, as adjusted, divided by total cash distributions to be paid to the partners of ETE.

6


SUPPLEMENTAL INFORMATION
RECONCILIATION OF DISTRIBUTABLE CASH FLOW
(In millions, except per unit amounts)
(unaudited)
 
Three Months Ended
December 31,
 
Years Ended
December 31,
 
2014
 
2013
 
2014
 
2013
Net income (loss) attributable to partners
$
113

 
$
(172
)
 
$
633

 
$
196

Equity in earnings related to investments in ETP, Regency and Holdco
(160
)
 
(44
)
 
(799
)
 
(617
)
Total cash distributions from ETP, Regency and Holdco
276

 
237

 
998

 
939

Amortization included in interest expense (excluding ETP and Regency)
2

 
4

 
8

 
18

Fair value adjustment of ETE Preferred Units
—

 
—

 
—

 
9

Loss on debt tender offering
—

 
156

 
—

 
156

Other non-cash (excluding ETP, Regency and Holdco)
11

 
4

 
48

 
(1
)
Distributable Cash Flow
242

 
185

 
888

 
700

Transaction-related expenses
1

 
—

 
7

 
19

Distributable Cash Flow, as adjusted
$
243

 
$
185

 
$
895

 
$
719

 
 
 
 
 
 
 
 
Weighted average units outstanding (common, Class D and General Partner)
541.7

 
561.3

 
547.5

 
562.3

 
 
 
 
 
 
 
 
Distributable Cash Flow, as adjusted, per Unit
$
0.45

 
$
0.33

 
$
1.63

 
$
1.28

Distributable Cash Flow and Distributable Cash Flow, as adjusted. The Partnership defines Distributable Cash Flow and Distributable Cash Flow, as adjusted, 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 (including the ETP Class H units which track the general partner and IDRs in SXL) and Regency, net of the Partnership’s cash expenditures for general and administrative costs and interest expense. The Partnership’s definitions of Distributable Cash Flow and Distributable Cash Flow, as adjusted, also include distributable cash flow from Lake Charles LNG to the Partnership beginning January 1, 2014. Distributable Cash Flow and Distributable Cash Flow, as adjusted, for the year ended December 31, 2013 also included Holdco until ETE’s 60% interest in Holdco was contributed to ETP on April 30, 2013. For Distributable Cash Flow, as adjusted, certain transaction-related expenses that are included in net income are excluded.
Distributable Cash Flow is a significant liquidity measure used by the Partnership’s senior management to compare net cash flows generated by the Partnership to the distributions the Partnership expects to pay its unitholders. Due to cash expenses incurred from time to time in connection with the Partnership’s merger and acquisition activities and other transactions, Distributable Cash Flow, as adjusted, is also a significant liquidity measure used by the Partnership’s senior management to compare net cash flows generated by the Partnership to the distributions the Partnership expects to pay its unitholders. Using these measures, 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 and Distributable Cash Flow, as adjusted, are also important non-GAAP financial measures for our limited partners since these indicate 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 and Distributable Cash Flow, as adjusted, 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, and Distributable Cash Flow, as adjusted, 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 twelve months ended December 31, 2014 and 2013 for comparative purposes.
Distributable Cash Flow, as adjusted, per Unit. The Partnership defines Distributable Cash Flow, as adjusted, per Unit for a period as the quotient of Distributable Cash Flow, as adjusted, divided by the weighted average number of units outstanding. For purposes of this calculation, the number of units outstanding represents the Partnership’s basic average common units outstanding plus Class D units outstanding and general partner common unit equivalent.

7


Similar to Distributable Cash Flow, as adjusted, as described above, Distributable Cash Flow, as adjusted, per Unit is a significant liquidity measure used by the Partnership’s senior management to compare net cash flows generated by the Partnership to the distributions the Partnership expects to pay to its unitholders. Using this measure, the Partnership’s management can compare Distributable Cash Flow, as adjusted, among different periods on a per-unit basis.

SUPPLEMENTAL INFORMATION
FINANCIAL STATEMENTS FOR PARENT COMPANY
Following are condensed balance sheets and statements of operations of the Parent Company on a stand-alone basis.
BALANCE SHEETS
(Amounts in millions)
(unaudited)
 
 
December 31,
 
2014
 
2013
ASSETS
 
 
 
CURRENT ASSETS
$
17

 
$
13

ADVANCES TO AND INVESTMENTS IN UNCONSOLIDATED AFFILIATES
5,390

 
3,841

INTANGIBLE ASSETS, net
10

 
14

GOODWILL
9

 
9

OTHER NON-CURRENT ASSETS, net
46

 
41

Total assets
$
5,472

 
$
3,918

LIABILITIES AND PARTNERS’ CAPITAL
 
 
 
CURRENT LIABILITIES
$
72

 
$
38

LONG-TERM DEBT, less current maturities
4,680

 
2,801

NOTE PAYABLE FROM AFFILIATE
54

 
—

OTHER NON-CURRENT LIABILITIES
2

 
1

 
 
 
 
COMMITMENTS AND CONTINGENCIES

 

 
 
 
 
PARTNERS’ CAPITAL:
 
 
 
General Partner
(1
)
 
(3
)
Limited Partners:
 
 
 
Limited Partners – Common Unitholders (538,766,899 and 559,923,300 units authorized, issued and outstanding at December 31, 2014 and 2013, respectively)
648

 
1,066

Class D Units (1,540,000 units authorized, issued and outstanding)
22

 
6

Accumulated other comprehensive income (loss)
(5
)
 
9

Total partners’ capital
664

 
1,078

Total liabilities and partners’ capital
$
5,472

 
$
3,918


8


STATEMENTS OF OPERATIONS
(Amounts in millions)
(unaudited)

 
 
Three Months Ended
December 31,
 
Years Ended
December 31,
 
2014
 
2013
 
2014
 
2013
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
$
(28
)
 
$
(16
)
 
$
(111
)
 
$
(56
)
OTHER INCOME (EXPENSE):
 
 
 
 
 
 
 
Interest expense, net of interest capitalized
(58
)
 
(46
)
 
(205
)
 
(210
)
Equity in earnings of unconsolidated affiliates
199

 
44

 
955

 
617

Gains (losses) on interest rate derivatives
—

 
—

 
—

 
9

Loss on extinguishment of debt
—

 
(157
)
 
—

 
(157
)
Other, net
(1
)
 
3

 
(5
)
 
(8
)
INCOME BEFORE INCOME TAXES
112

 
(172
)
 
634

 
195

Income tax expense (benefit)
(1
)
 
—

 
1

 
(1
)
NET INCOME
113

 
(172
)
 
633

 
196

GENERAL PARTNER’S INTEREST IN NET INCOME
1

 
(1
)
 
2

 
—

CLASS D UNITHOLDER’S INTEREST IN NET INCOME
1

 
—

 
2

 
—

LIMITED PARTNERS’ INTEREST IN NET INCOME
$
111

 
$
(171
)
 
$
629

 
$
196



9