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): April 10, 2007
ENERGY TRANSFER PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
| Delaware | 1-11727 | 73-1493906 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
2838 Woodside Street
Dallas, Texas 75204
(Address of principal executive offices) (Zip Code)
(918) 492-7272
(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 April 10, 2007, Energy Transfer Partners, L.P. (the “Partnership”) issued a press release announcing our financial and operating results for the second quarter ended February 28, 2007. A copy of this press release is furnished as Exhibit 99.1 to this report and is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
On April 10, 2007, the Partnership issued a press release announcing that on April 11, 2007, the Partnership will be holding an earnings call to discuss the financial and operating results for the second quarter ended February 28, 2007. A copy of this press release is attached to this report as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
| (c) | Exhibits. The following exhibits are being furnished herewith: |
Exhibit Number 99.1 – Press Release dated April 10, 2007 announcing financial results for the second quarter ended February 28, 2007 and announcing earnings call.
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 Partners, L.P. | ||||
| By: | Energy Transfer Partners GP, L.P. | |||
| its general partner | ||||
| By: | Energy Transfer Partners, L.L.C. | |||
| its general partner | ||||
| Date: April 10, 2007 | By: | /s/ Ray C. Davis | ||
| Ray C. Davis | ||||
| Co-Chief Executive Officer and officer duly authorized to sign on behalf of the registrant | ||||
| By: | /s/ Kelcy L. Warren | |||
| Kelcy L. Warren | ||||
| Co-Chief Executive Officer and officer duly authorized to sign on behalf of the registrant | ||||
EXHIBIT INDEX
| Exhibit No. | Description | |
| 99.1 | Press Release dated April 10, 2007 announcing financial results for the second quarter ended February 28, 2007 and announcing earnings call. |
Exhibit 99.1
PRESS RELEASE
ENERGY TRANSFER PARTNERS
REPORTS SECOND QUARTER AND YEAR-TO-DATE RESULTS
Dallas, Texas – April 10, 2007 – Energy Transfer Partners, L.P. (NYSE:ETP) reported an increase of $90.5 million in EBITDA for the second quarter of fiscal 2007 and an increase in net income of $60.3 million for the same period.
EBITDA, as adjusted, for the second quarter of fiscal 2007 was $405.3 million versus the $314.8 million reported for the second quarter of fiscal 2006, while net income for the second quarter ended February 28, 2007 of $311.1 million, as compared to net income of $250.8 million for the same period ended February 28, 2006.
For the six months ended February 28, 2007, net income increased $11.5 million to $382.1 million as compared to $370.6 million for the six months ended February 28, 2006. EBITDA, as adjusted, increased $42.8 million to $554.7 million for the six months ended February 28, 2007 as compared to $511.9 million for the six months ended February 28, 2006.
Both the three and six month periods ended February 28, 2007 benefited by the acquisition of Titan Propane in June 2006 and the acquisition of Transwestern Pipeline in the fall of 2006.
The Partnership has scheduled a conference call for Wednesday, April 11th at 1:30pm Central Time (12:30pm Eastern Time) to discuss the fiscal 2007 second quarter results. The dial-in number is 1-800-288-8960; participant code: Energy Transfer Partners. The call will be available for replay for a limited time on the company’s website.
EBITDA, as adjusted, is a non-GAAP financial measure used by industry analysts, investors, lenders, and rating agencies to assess the financial performance and the operating results of the Partnership’s fundamental business activities. EBITDA, as adjusted, should not be considered in isolation or as a substitute for net income, income from operations, or other measures of cash flow. A table reconciling EBITDA, as adjusted, with appropriate GAAP financial measures is included in the summarized financial information included in this release.
Energy Transfer Partners, L.P. (NYSE:ETP) is a publicly traded partnership owning and operating a diversified portfolio of midstream energy assets. ETP’s natural gas operations include intrastate natural gas gathering and transportation pipelines, interstate transportation pipelines, natural gas treating and processing assets located in Texas and Louisiana, and three natural gas storage facilities located in Texas. These assets include approximately 12,200 miles
of intrastate pipeline in service, with an additional 500 miles of intrastate pipeline under construction, and 2,400 miles of interstate pipeline. ETP is also one of the three largest retail marketers of propane in the U. S., serving more than one million customers across the country.
Energy Transfer Equity, L.P. (NYSE:ETE) owns the general partner of Energy Transfer Partners and approximately 62.5 million ETP limited partners units. Together ETP and ETE have a combined enterprise value of approximately $20 billion.
The information contained in this press release is available on the Partnership’s website at www.energytransfer.com.
Contacts
Investor Relations:
Energy Transfer
Renee Lorenz
214-981-0700
Media Relations:
Vicki Granado
Gittins & Granado
214-361-0400
ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
| February 28, 2007 |
August 31, 2006 | |||||
| ASSETS | ||||||
| CURRENT ASSETS: |
||||||
| Cash and cash equivalents |
$ | 76,074 | $ | 26,041 | ||
| Marketable securities |
4,026 | 2,817 | ||||
| Accounts receivable, net of allowance for doubtful accounts |
717,957 | 675,545 | ||||
| Inventories |
194,690 | 387,140 | ||||
| Deposits paid to vendors |
32,970 | 87,806 | ||||
| Exchanges receivable |
38,185 | 23,221 | ||||
| Price risk management assets |
14,810 | 56,139 | ||||
| Prepaid expenses and other |
38,244 | 43,095 | ||||
| Total current assets |
1,116,956 | 1,301,804 | ||||
| PROPERTY, PLANT AND EQUIPMENT, net |
5,097,496 | 3,313,649 | ||||
| GOODWILL |
722,403 | 604,409 | ||||
| INTANGIBLES AND OTHER LONG-TERM ASSETS, net |
359,460 | 235,151 | ||||
| Total assets |
$ | 7,296,315 | $ | 5,455,013 | ||
| LIABILITIES AND PARTNERS’ CAPITAL | ||||||
| CURRENT LIABILITIES: |
||||||
| Accounts payable |
$ | 533,493 | $ | 603,140 | ||
| Exchanges payable |
38,526 | 24,722 | ||||
| Customer advances and deposits |
47,101 | 108,836 | ||||
| Accrued and other current liabilities |
229,773 | 202,296 | ||||
| Price risk management liabilities |
19,505 | 36,918 | ||||
| Current maturities of long-term debt |
40,558 | 40,578 | ||||
| Total current liabilities |
908,956 | 1,016,490 | ||||
| LONG-TERM DEBT, less current maturities |
3,187,894 | 2,589,124 | ||||
| DEFERRED INCOME TAXES |
104,489 | 106,842 | ||||
| OTHER NON-CURRENT LIABILITIES |
23,235 | 5,695 | ||||
| COMMITMENTS AND CONTINGENCIES |
||||||
| 4,224,574 | 3,718,151 | |||||
| PARTNERS’ CAPITAL: |
||||||
| General Partner |
123,048 | 82,450 | ||||
| Limited Partners: |
||||||
| Common Unitholders (110,890,596 and 110,726,999 units authorized, issued and outstanding at February 28, 2007 and August 31, 2006, respectively) |
1,704,289 | 1,647,345 | ||||
| Class E Unitholders (8,853,832 units authorized, issued and outstanding - held by subsidiary and reported as treasury units) |
— | — | ||||
| Class G Unitholders (26,086,957 and 0 units authorized, issued and outstanding at February 28, 2007 and August 31, 2006, respectively) |
1,228,938 | — | ||||
| 3,056,275 | 1,729,795 | |||||
| Accumulated other comprehensive income, per accompanying statements |
15,466 | 7,067 | ||||
| Total partners’ capital |
3,071,741 | 1,736,862 | ||||
| Total liabilities and partners’ capital |
$ | 7,296,315 | $ | 5,455,013 | ||
ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per unit and unit data)
(unaudited)
| Three Months Ended February 28, |
Six Months Ended February 28, |
|||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| REVENUES: |
||||||||||||||||
| Midstream and transportation and storage |
$ | 1,492,838 | $ | 2,083,303 | $ | 2,555,282 | $ | 4,291,837 | ||||||||
| Propane and other |
569,642 | 366,513 | 895,643 | 574,599 | ||||||||||||
| Total revenues |
2,062,480 | 2,449,816 | 3,450,925 | 4,866,436 | ||||||||||||
| COSTS AND EXPENSES: |
||||||||||||||||
| Cost of products sold, midstream and transportation and storage |
1,138,709 | 1,785,053 | 2,022,692 | 3,744,422 | ||||||||||||
| Cost of products sold, propane and other |
347,107 | 223,778 | 550,467 | 355,036 | ||||||||||||
| Operating expenses |
133,809 | 99,696 | 266,190 | 202,367 | ||||||||||||
| Depreciation and amortization |
45,360 | 29,014 | 79,169 | 55,927 | ||||||||||||
| Selling, general and administrative |
39,133 | 31,455 | 66,203 | 56,254 | ||||||||||||
| Total costs and expenses |
1,704,118 | 2,168,996 | 2,984,721 | 4,414,006 | ||||||||||||
| OPERATING INCOME |
358,362 | 280,820 | 466,204 | 452,430 | ||||||||||||
| OTHER INCOME (EXPENSE): |
||||||||||||||||
| Interest expense, net of interest capitalized |
(40,772 | ) | (28,542 | ) | (82,234 | ) | (56,935 | ) | ||||||||
| Equity in earnings (losses) of affiliates |
(514 | ) | 106 | 4,373 | (168 | ) | ||||||||||
| Gain (loss) on disposal of assets |
(3,229 | ) | 662 | (1,285 | ) | 534 | ||||||||||
| Interest and other income, net |
1,423 | 2,302 | 3,094 | 3,261 | ||||||||||||
| INCOME BEFORE INCOME TAX EXPENSE AND MINORITY INTERESTS |
315,270 | 255,348 | 390,152 | 399,122 | ||||||||||||
| Income tax expense |
3,300 | 4,014 | 6,896 | 26,425 | ||||||||||||
| INCOME BEFORE MINORITY INTERESTS |
311,970 | 251,334 | 383,256 | 372,697 | ||||||||||||
| Minority interests |
(856 | ) | (549 | ) | (1,110 | ) | (2,104 | ) | ||||||||
| NET INCOME |
311,114 | 250,785 | 382,146 | 370,593 | ||||||||||||
| GENERAL PARTNER’S INTEREST IN NET INCOME |
60,567 | 27,695 | 113,868 | 48,179 | ||||||||||||
| LIMITED PARTNERS’ INTEREST IN NET INCOME |
$ | 250,547 | $ | 223,090 | $ | 268,278 | $ | 322,414 | ||||||||
| BASIC NET INCOME PER LIMITED PARTNER UNIT |
$ | 1.33 | $ | 1.37 | $ | 1.91 | $ | 2.13 | ||||||||
| BASIC AVERAGE NUMBER OF UNITS OUTSTANDING |
136,977,139 | 107,815,792 | 128,184,154 | 107,352,608 | ||||||||||||
| DILUTED NET INCOME PER LIMITED PARTNER UNIT |
$ | 1.33 | $ | 1.36 | $ | 1.90 | $ | 2.12 | ||||||||
| DILUTED AVERAGE NUMBER OF UNITS OUTSTANDING |
137,297,706 | 108,017,060 | 128,492,920 | 107,551,712 | ||||||||||||
SUPPLEMENTAL INFORMATION:
(unaudited)
| Three Months Ended February 28, |
Six Months Ended February 28, |
|||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| Net income reconciliation: |
||||||||||||||||
| Net income |
$ | 311,114 | $ | 250,785 | $ | 382,146 | $ | 370,593 | ||||||||
| Depreciation and amortization |
45,360 | 29,014 | 79,169 | 55,927 | ||||||||||||
| Interest expense |
40,772 | 28,542 | 82,234 | 56,935 | ||||||||||||
| Income tax expense |
3,300 | 4,014 | 6,896 | 26,425 | ||||||||||||
| Non-cash compensation expense |
2,908 | 5,380 | 6,071 | 5,827 | ||||||||||||
| Interest (income) and other, net |
(1,423 | ) | (2,302 | ) | (3,094 | ) | (3,261 | ) | ||||||||
| (Gain) loss on disposal of assets |
3,229 | (662 | ) | 1,285 | (534 | ) | ||||||||||
| EBITDA, as adjusted (a) |
$ | 405,260 | $ | 314,771 | $ | 554,707 | $ | 511,912 | ||||||||
| Three Months Ended February 28, |
Six Months Ended February 28, |
|||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| VOLUMES: | ||||||||||||||||
| Midstream |
||||||||||||||||
| Natural gas MMBtu/d – sold |
819,611 | 1,529,856 | 900,238 | 1,528,616 | ||||||||||||
| NGLs Bbls/d – sold |
15,901 | 9,537 | 13,723 | 9,879 | ||||||||||||
| Transportation and storage |
||||||||||||||||
| Natural gas MMBtu/d – transported |
5,030,631 | 4,231,797 | 4,918,191 | 4,349,137 | ||||||||||||
| Natural gas MMBtu/d – sold |
1,655,278 | 1,868,486 | 1,481,724 | 1,709,049 | ||||||||||||
| Interstate transportation |
||||||||||||||||
| Natural gas MMBtu/d – transported |
1,728,056 | — | 1,728,056 | — | ||||||||||||
| Propane operations (in gallons) |
||||||||||||||||
| Retail propane |
253,715 | 165,758 | 394,346 | 254,496 | ||||||||||||
| Wholesale |
32,428 | 28,243 | 55,711 | 47,844 | ||||||||||||
| (a) | EBITDA, as adjusted, is defined as the Partnership’s earnings before interest, taxes, depreciation, amortization and other non-cash items, such as compensation charges for unit issuances to employees, gain or loss on disposal of assets, and other expenses. We present EBITDA, as adjusted, on a Partnership basis, which includes both the general and limited partner interests. Non-cash compensation expense represents charges for the value of the grants awarded under the Partnership’s compensation plans over the vesting terms of those plans and are charges which do not, or will not, require cash settlement. Non-cash income or loss such as the gain or loss arising from our disposal of assets and discontinued operations is not included when determining EBITDA, as adjusted. EBITDA, as adjusted, (i) is not a measure of performance calculated in accordance with generally accepted accounting principles and (ii) should not be considered in isolation or as a substitute for net income, income from operations or cash flow as reflected in our consolidated financial statements. |
EBITDA, as adjusted, is presented because such information is relevant and is used by management, industry analysts, investors, lenders and rating agencies to assess the financial performance and operating results of our fundamental business activities. Management believes that the presentation of EBITDA, as adjusted, is useful to lenders and investors because of its use in the natural gas and propane industries and for master limited partnerships as an indicator of the strength and performance of the Partnership’s ongoing business operations, including the ability to fund capital expenditures, service debt and pay distributions. Additionally, management believes that EBITDA, as adjusted, provides additional and useful information to our investors for trending, analyzing and benchmarking the operating results of our partnership from period to period as compared to other companies that may have different financing and capital structures.
The presentation of EBITDA, as adjusted, allows investors to view our performance in a manner similar to the methods used by management and provides additional insight to our operating results. In addition, out debt agreements contain financial covenants based on EBITDA, as adjusted.
EBITDA, as adjusted, is used by management to determine our operating performance and, along with other data, as internal measures for setting annual operating budgets, assessing financial performance of our numerous business locations, as a measure for evaluating targeted businesses for acquisition and as a measurement component of incentive compensation. We have a large number of business locations located in different regions of the United States. EBITDA, as adjusted, can be a meaningful measure of financial performance because it excludes factors which are outside the control of the employees responsible for operating and managing the business locations, and provides information management can use to evaluate the performance of the business locations, or the region where they are located, and the employees responsible for operating them. Our EBITDA, as adjusted, includes non-cash compensation expense which is a non-cash expense item resulting from our unit based compensation plans that does not require cash settlement and is not considered during management’s assessment of the operating results of our business. Adding these non-cash compensation expenses in EBITDA, as adjusted, allows management to compare our operating results to those of other companies in the same industry who may have compensation plans with levels and values of annual grants that are different than ours. We do not include gain or loss on the sale of assets when determining EBITDA, as adjusted, since including non-cash income or loss resulting from the sale of assets increases/decreases the performance measure in a manner that is not related to the true operating results of our business.
There are material limitations to using a measure such as EBITDA, as adjusted, including the difficulty associated with using it as the sole measure to compare the results of one company to another, and the inability to analyze certain significant items that directly affect a company’s net income or loss. In addition, our calculation of EBITDA, as adjusted, may not be consistent with similarly titled measures of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP. Management compensates for these limitations by considering EBITDA, as adjusted in conjunction with its analysis of other GAAP financial measures, such as gross margin, operating income, net income, and cash flow from operating activities.