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.

Delaware		001-32740		30-0108820
(State or other jurisdiction		(Commission		(IRS Employer
of incorporation)		File Number)		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:

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 11, 2008, Energy Transfer Equity, L.P. (the “Partnership”) issued a press release announcing its earnings for the second quarter ended June 30, 2008. 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 11, 2008.

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.

Exhibit Index

Exhibit
Number		Description of the Exhibit
Exhibit 99.1		Energy Transfer Equity, L.P. Press Release, dated August 11, 2008.

Exhibit 99.1

ENERGY TRANSFER EQUITY
REPORTS QUARTERLY RESULTS
FOR THE PERIOD ENDED JUNE 30^th

Dallas, Texas — August 11, 2008 — Energy Transfer Equity, L.P. (NYSE:ETE) today reported net income of $120.4 million and Distributable Cash of $97.1 million for the three months ended June 30, 2008. Distributable Cash is a “non-GAAP financial measure”, as explained below.

The principal sources of cash flow of Energy Transfer Equity, L.P. (“ETE” or the “Partnership”) 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 other operating activities apart from those conducted by the operating subsidiaries within ETP. ETE’s principal uses of cash are for expenses, debt service and distributions to its general and limited partners.

ETE’s net income increased $31.3 million for the three months ended June 30, 2008 to $120.4 million as compared to $89.1 million for the three months ended May 31, 2007. Net income for the six months ended June 30, 2008 was $247.1 million as compared to $236.4 million for the six months ended May 31, 2007. These increases were due primarily to the increased earnings of ETP.

ETE also announced that it has filed its quarterly report on Form 10-Q for the period ended June 30, 2008 with the Securities and Exchange Commission. ETE has posted a copy of this Form 10-Q on its website at www.energytransfer.com.

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 as cash distributions expected to be received from ETP 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 computes 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. The accompanying analysis of Distributable Cash is presented for the six-month periods ended June 30, 2008 and May 31, 2007 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 intrastate natural gas gathering and transportation pipelines, natural gas treating and processing assets and three natural gas storage facilities located in Texas. These assets include approximately 14,450 miles of intrastate pipeline in service, with approximately 350 miles of intrastate pipeline under construction. In addition, ETP owns 2,400 miles of interstate pipeline in service, with approximately 250 miles of interstate pipeline under construction. 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

Media Relations:
Vicki Granado
Gittins & Granado
214-504-2260 (office)
214-498-9272 (cell)

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

		June 30,				December 31,
		2008				2007
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	68,938			$	56,557
Marketable securities			16,831				3,002
Accounts receivable, net of allowance for doubtful accounts			1,047,478				822,027
Accounts receivable from related companies			17,077				18,070
Inventories			179,235				361,954
Exchanges receivable			66,825				37,321
Deposits paid to vendors			60,383				42,273
Prepaid expenses and other current assets			73,124				62,592
Total current assets			1,529,891				1,403,796
PROPERTY, PLANT AND EQUIPMENT, net			7,870,049				6,852,458
ADVANCES TO AND INVESTMENT IN AFFILIATES			1,281				86,167
GOODWILL			775,965				757,698
INTANGIBLES AND OTHER LONG-TERM ASSETS, net			379,611				361,975
Total assets		$	10,556,797			$	9,462,094

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

		June 30,				December 31,
		2008				2007
LIABILITIES AND PARTNERS’ CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable		$	1,007,796			$	673,116
Accounts payable to related companies			25,576				48,012
Exchanges payable			68,863				40,382
Customer advances and deposits			83,112				75,831
Accrued and other current liabilities			205,225				190,469
Accrued capital expenditures			173,776				87,622
Interest payable			87,711				78,933
Current maturities of long-term debt			43,744				47,068
Total current liabilities			1,695,803				1,241,433
LONG-TERM DEBT, less current maturities			6,441,776				5,870,106
LONG-TERM PRICE RISK MANAGEMENT LIABILITIES			28,366				46,479
DEFERRED INCOME TAXES			201,568				199,934
OTHER LONG-TERM LIABILITIES			15,264				12,986
MINORITY INTERESTS			2,162,636				2,106,819
COMMITMENTS AND CONTINGENCIES
Total liabilities			10,545,413				9,477,757
PARTNERS’ CAPITAL (DEFICIT):
General Partner			293				192
Limited Partners — Common Unitholders (222,829,956 units authorized, issued and outstanding at June 30, 2008 and December 31, 2007)			27,882				(4,628	)
			28,175				(4,436	)
Accumulated other comprehensive loss			(16,791	)			(11,227	)
Total partners’ capital (deficit)			11,384				(15,663	)
Total liabilities and partners’ capital (deficit)		$	10,556,797			$	9,462,094

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

		Three Months Ended								Six Months Ended
		June 30,				May 31,				June 30,				May 31,
		2008				2007				2008				2007
REVENUES:
Natural gas operations		$	2,375,637			$	1,406,598			$	4,383,484			$	2,899,436
Retail propane			249,449				252,584				847,587				751,836
Other			28,265				55,604				61,525				125,994
Total revenues			2,653,351				1,714,786				5,292,596				3,777,266
COSTS AND EXPENSES:
Cost of products sold, natural gas operations			1,952,569				1,095,040				3,529,837				2,233,749
Cost of products sold, retail propane			163,962				158,167				556,517				462,801
Cost of products sold, other			7,541				34,180				17,436				76,653
Operating expenses			197,143				148,903				376,113				282,712
Depreciation and amortization			65,476				50,458				127,359				98,873
Selling, general and administrative			44,720				40,779				95,465				83,369
Total costs and expenses			2,431,411				1,527,527				4,702,727				3,238,157
OPERATING INCOME			221,940				187,259				589,869				539,109
OTHER INCOME (EXPENSE):
Interest expense, net of interest capitalized			(90,543	)			(72,939	)			(170,997	)			(138,016	)
Equity in earnings (losses) of affiliates			(169	)			839				(95	)			325
Gain (loss) on disposal of assets			515				(2,500	)			(936	)			(5,729	)
Gains (losses) on non-hedged interest rate derivatives			27,178				29,048				(4,458	)			29,048
Other income, net			17,227				1,505				35,067				3,157
INCOME BEFORE INCOME TAX EXPENSE AND MINORITY INTERESTS			176,148				143,212				448,450				427,894
Income tax expense			9,330				3,213				14,474				5,789
INCOME BEFORE MINORITY INTERESTS			166,818				139,999				433,976				422,105
Minority interests			(46,424	)			(50,906	)			(186,877	)			(185,657	)
NET INCOME			120,394				89,093				247,099				236,448
GENERAL PARTNER’S INTEREST IN NET INCOME			373				276				765				743
LIMITED PARTNERS’ INTEREST IN NET INCOME		$	120,021			$	88,817			$	246,334			$	235,705
BASIC NET INCOME PER LIMITED PARTNER UNIT		$	0.54			$	0.40			$	1.11			$	1.07
BASIC AVERAGE NUMBER OF UNITS OUTSTANDING			222,829,956				222,773,916				222,829,956				220,324,902
DILUTED NET INCOME PER LIMITED PARTNER UNIT		$	0.54			$	0.40			$	1.10			$	1.07
DILUTED AVERAGE NUMBER OF UNITS OUTSTANDING			222,829,956				222,773,916				222,829,956				220,324,902

     The Partnership previously announced a change in its year end from August 31 to December 31. The unaudited consolidated financial statements contained in this press release cover the three and six-month periods ended June 30, 2008 and the three and six-month periods ended May 31, 2007 (the six-month period of the previous fiscal year most nearly comparable to the six-month period ended June 30, 2008). The Partnership did not recast the financial data for the prior fiscal periods because the financial reporting processes in place at that time included certain procedures that were completed only on a fiscal quarterly basis. The Partnership believes the information, data and indicated trends for the three and six-month periods ended May 31, 2007 is comparable to what would have been reported for the three and six-month periods ended June 30, 2007 if they had recast the prior period information. Such comparability is impacted primarily by weather, fluctuations in commodity prices, volumes of natural gas sold and transported, our hedging strategies and the use of financial instruments, trading activities, basis differences between market hubs and interest rates.

ENERGY TRANSFER EQUITY, L.P. AND SUBSIDIARIES
VOLUMES TRANSACTED THROUGH ENERGY TRANSFER PARTNERS, L.P.

		Three Months Ended								Six Months Ended
		June 30,				May 31,				June 30,				May 31,
		2008				2007				2008				2007
Midstream:
Natural gas MMBtu/d — sold			1,518,209				1,042,641				1,377,495				932,368
NGLs bbls/d — sold			28,097				21,586				29,590				18,757
Transportation and storage Natural gas MMBtu/d — transported			10,355,466				6,752,447				9,938,323				6,805,881
Natural gas MMBtu/d — sold			1,582,022				1,204,609				1,639,467				1,427,467
Interstate transportation:
Natural gas MMBtu/d — transported			1,768,406				1,802,486				1,693,882				1,765,677
Retail propane gallons (in thousands)			97,309				127,612				331,723				381,326

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

The following table presents the calculation and reconciliation of Distributable Cash of the Parent Company with respect to the following periods:

		Three Months Ended								Six Months Ended
		June 30,				May 31,				June 30,				May 31,
		2008				2007				2008				2007
Distributable Cash:
Cash distributions expected from Energy Transfer Partners, L.P. associated with:
General partner interest:
Standard distribution rights		$	4,377			$	3,477			$	8,357			$	6,851
Incentive distribution rights			75,692				56,812				143,494				111,158
Less: General Partner contribution to ETP to maintain its 2% interest			(13,098	)			—				(13,098	)			—
Limited partner interest:
26,086,957 class G units (converted to common units May 2007)			—				29,359				—				41,576
62,500,797 common units			55,860				21,033				110,158				58,034
Total cash expected from Energy Transfer Partners, L.P.			122,831				110,681				248,911				217,619
Deduct expenses of the Parent Company on a stand-alone basis:
General and administrative expenses			(1,207	)			(2,068	)			(4,056	)			(5,532	)
Interest expense, net of amortization of financing costs, interest income, and realized gains on interest rate derivatives			(24,553	)			(25,842	)			(48,456	)			(49,054	)
Distributable Cash		$	97,071			$	82,771			$	196,399			$	163,033
Cash distributions to be paid to the partners of Energy Transfer Equity, L.P.:
Distribution per limited partner unit as of the end of the period		$	0.4800			$	0.3725			$	0.4800			$	0.3725
Distributions to be paid to public unitholders			45,562				35,357				87,327				69,149
Distributions to be paid to affiliates			61,396				47,646				117,676				93,182
Distributions to be paid to general partner			332				258				637				504
Total cash distributions to be paid by Energy Transfer Equity, L.P. to its limited and general partners		$	107,290			$	83,261			$	205,640			$	162,835
Reconciliation of Non-GAAP “Distributable Cash” to GAAP “Net Income” and GAAP “Net cash provided by operating activities” for the Parent Company on a stand-alone basis:
Net income		$	120,394			$	89,093			$	247,099			$	236,448
Adjustments to derive Distributable Cash:
Equity in income of unconsolidated affiliates			(116,872	)			(104,449	)			(302,344	)			(279,238	)
Quarterly distribution expected to be received from Energy Transfer Partners, L.P.			122,831				110,681				248,911				217,619
Amortization of financing costs			752				761				1,504				1,501
Other non-cash			(3	)			—				10				18
Unrealized gains and losses on non-hedged interest rate swaps			(30,031	)			(13,315	)			1,219				(13,315	)
Distributable Cash			97,071				82,771				196,399				163,033
Adjustments to Distributable Cash to derive Net Cash Provided by Operating Activities:
Quarterly distribution expected to be received from Energy Transfer Partners, L.P.			(122,831	)			(110,681	)			(248,911	)			(217,619	)
Cash distribution received from Energy Transfer Partners, L.P.			126,079				103,565				276,463				203,492
Net changes in other operating assets and liabilities			(236	)			(5,944	)			8,532				(4,101	)
Net cash provided by operating activities for Parent Company on stand-alone basis		$	100,083			$	69,711			$	232,483			$	144,805

(1) For the three months ended June 30, 2008, cash distributions expected to be received from Energy Transfer Partners, L.P. consists of cash distributions in respect of the three months ended June 30, 2008 payable on August 14, 2008 to holders of record on the close of business on August 7, 2008. For the three months ended May 31, 2007, cash distributions expected to be received from Energy Transfer Partners, L.P. consists of cash distributions paid on July 16, 2007 for the three months ended May 31, 2007.

For the six months ended June 30, 2008, cash distributions received or expected to be 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 and cash distributions in respect of the three months ended June 30, 2008 payable on August 14, 2008 to holders of record on the close of business on August 7, 2008. For the six months ended May 31, 2007, cash distributions expected to be received from Energy Transfer Partners, L.P. consists of cash distributions paid on April 13, 2007 for the three months ended February 28, 2007 and cash distributions paid on July 16, 2007 for the three months ended May 31, 2007.

(2) For the three months ended June 30, 2008, cash distributions expected to be paid from Energy Transfer Equity, L.P. consists of cash distributions in respect of the three months ended June 30, 2008 payable on August 19, 2008 to holders of record on August 7, 2008. For the three months ended May 31, 2007, cash distributions paid or expected to be paid from Energy Transfer Equity, L.P. consists of cash distributions paid on July 19, 2007 for the three months ended May 31, 2007.

For the six months ended June 30, 2008, cash distributions paid or expected to be paid by Energy Transfer Equity, L.P. consist of cash distributions paid on May 15, 2008 in respect of the quarter ended March 31, 2008 and cash distributions in respect of the three months ended June 30, 2008 payable on August 14, 2008 to holders of record on the close of business on August 7, 2008.. For the six months ended May 31, 2007, cash distributions expected to be paid from Energy Transfer Equity, L.P. consists cash distributions paid on April 16, 2007 for the three months ended February 28, 2007 and cash distributions paid on July 19, 2007 for the three months ended May 31, 2007.