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): February 11, 2008

 

 

ENERGY TRANSFER EQUITY, L.P.

(Exact name of registrant as specified in its charter)

 

Delaware		001-32740		30-0108820
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS. Employer Identification No.)

3738 Oak Lawn Avenue

Dallas, Texas 75219

(Address of principal executive offices, including zip code)

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 11, 2008, Energy Transfer Equity, L.P. (the “Partnership”), issued a press release announcing the Partnership’s earnings for the four months ended December 31, 2007. A copy of this press release is furnished as Exhibit 99.1 to this report.

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

 

Exhibit No.		Description
99.1		Press release dated February 11, 2008.

---

SIGNATURES

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

 

 

Dated: February 12, 2008

---

EXHIBIT INDEX

 

Exhibit No.		Description
99.1		Press release dated February 11, 2008.

Exhibit 99.1

ENERGY TRANSFER EQUITY REPORTS RECORD

RESULTS FOR THE FOUR MONTHS ENDED DECEMBER 31^ST

Dallas, Texas – February 11, 2008 – Energy Transfer Equity, L.P. (NYSE:ETE) today reported record net income of $92.7 million and Distributable Cash of $115.2 million for the four months ended December 31, 2007. ETE’s net income increased $16.0 million for the four months ended December 31, 2007 to $92.7 million as compared to $76.7 million for the four months ended December 31, 2006. Distributable Cash is a “non-GAAP measure”, as explained below.

With the previously announced change in year-end reporting to December 31, ETE has filed a transition report on Form 10-Q covering the four-month transition period that began September 1, 2007 and ended December 31, 2007. For comparison purposes, the Partnership has also presented the data for the four-month period ended December 31, 2006.

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’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 other operating activities apart from those conducted by the operating subsidiaries within ETP. 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 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 four-month periods ended December 31, 2007 and 2006 for comparative purposes.

Energy Transfer Equity, L.P. (NYSE:ETE) owns the general partner of Energy Transfer Partners and approximately 62.5 million ETP limited partner units. Together ETP and ETE have a combined enterprise value approaching $20 billion.

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 14,000 miles of intrastate pipeline in service, with approximately 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 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:

Renee Lorenz

Energy Transfer

214-981-0700

Media Relations:

Vicki Granado

Gittins & Granado

214-361-0400

 

---

ENERGY TRANSFER EQUITY, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except unit data)

 

		December 31, 2007			August 31, 2007
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	56,557		$	77,350
Marketable securities			3,002			3,099
Accounts receivable, net of allowance for doubtful accounts			822,027			637,676
Accounts receivable from related companies			18,070			5,979
Inventories			361,954			192,276
Deposits paid to vendors			42,273			45,490
Prepaid expenses and other current assets			99,913			88,708
Total current assets			1,403,796			1,050,578
PROPERTY, PLANT AND EQUIPMENT, net			6,852,458			5,971,127
ADVANCES TO AND INVESTMENT IN AFFILIATES			86,167			56,564
GOODWILL			757,698			748,018
INTANGIBLES AND OTHER LONG-TERM ASSETS, net			361,975			356,802
Total assets		$	9,462,094		$	8,183,089

 

		December 31, 2007				August 31, 2007
LIABILITIES AND PARTNERS’ CAPITAL (DEFICIT)
CURRENT LIABILITIES:
Accounts payable		$	673,116			$	487,834
Accounts payable to related companies			48,012				19,136
Exchanges payable			40,382				34,252
Customer advances and deposits			75,831				81,919
Accrued and other current liabilities			357,024				262,611
Current maturities of long-term debt			47,068				47,063
Total current liabilities			1,241,433				932,815
LONG-TERM DEBT, less current maturities			5,870,106				5,198,676
LONG-TERM PRICE RISK MANAGEMENT LIABILITIES			46,479				3,685
DEFERRED INCOME TAXES			199,934				198,947
OTHER NON-CURRENT LIABILITIES			12,986				13,666
MINORITY INTERESTS			2,106,819				1,882,432
COMMITMENTS AND CONTINGENCIES
Total liabilities			9,477,757				8,230,221
PARTNERS’ CAPITAL (DEFICIT):
General Partner			192				24
Limited Partners—Common Unitholders (222,829,956 and 222,828,332 units authorized, issued and outstanding at December 31, 2007 and August 31, 2007, respectively)			(4,628	)			(58,918	)
			(4,436	)			(58,894	)
Accumulated other comprehensive income (loss), per accompanying statements			(11,227	)			11,762
Total partners’ deficit			(15,663	)			(47,132	)
Total liabilities and partners’ capital (deficit)		$	9,462,094			$	8,183,089

---

ENERGY TRANSFER EQUITY, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per unit and unit data)

 

		Four Months Ended December 31,
		2007				2006
REVENUES:
Natural gas operations		$	1,832,192			$	1,668,667
Retail propane			471,494				409,821
Other			45,656				83,978
Total revenues			2,349,342				2,162,466
COSTS AND EXPENSES:
Cost of products sold, natural gas operations			1,343,237				1,382,473
Cost of products sold, retail propane			315,698				256,994
Cost of products sold, other			14,719				50,376
Operating expenses			221,757				173,365
Depreciation and amortization			75,406				52,840
Selling, general and administrative			61,874				43,602
Total costs and expenses			2,032,691				1,959,650
OPERATING INCOME			316,651				202,816
OTHER INCOME (EXPENSE):
Interest expense, net of interest capitalized			(103,375	)			(82,979	)
Equity in earnings (losses) of affiliates			(94	)			4,743
Gain on disposal of assets			14,310				2,212
Other income (expense), net			(34,734	)			2,248
INCOME BEFORE INCOME TAX EXPENSE AND MINORITY INTERESTS			192,758				129,040
Income tax expense			9,949				2,155
INCOME BEFORE MINORITY INTERESTS			182,809				126,885
Minority interests			(90,132	)			(50,204	)
NET INCOME			92,677				76,681
GENERAL PARTNER’S INTEREST IN NET INCOME			287				290
LIMITED PARTNERS’ INTEREST IN NET INCOME		$	92,390			$	76,391
BASIC NET INCOME PER LIMITED PARTNER UNIT		$	0.41			$	0.45
BASIC AVERAGE NUMBER OF UNITS OUTSTANDING			222,829,916				170,691,287
DILUTED NET INCOME PER LIMITED PARTNER UNIT		$	0.41			$	0.45
DILUTED AVERAGE NUMBER OF UNITS OUTSTANDING			222,829,916				170,691,287

 

---

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 four months ended December 31, 2007 and 2006:

 

		Four Months Ended December 31, 2007				Four Months Ended December 31, 2006
Distributable Cash:
Cash distributions expected from Energy Transfer Partners, L.P. associated with:
General partner interest:
Standard distribution rights		$	5,110			$	4,396
Incentive distribution rights			85,775				69,995
Limited partner interest:
62,500,797 common units			70,313				64,454
Total cash expected from Energy Transfer Partners, L.P.			161,198				138,845
Deduct expenses of the Parent Company on a stand-alone basis:
General and administrative expenses			(11,288	)			(3,182	)
Interest expense, net of amortization of financing costs, interest income, and realized gains on interest rate derivatives			(34,748	)			(27,095	)
Distributable Cash		$	115,162			$	108,568
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		$	0.5500			$	0.4587
Distributions to be paid to public unitholders			52,206				41,834
Distributions to be paid to affiliates			70,350				58,668
Distributions to be paid to general partner			381				317
Total cash distributions to be paid by Energy Transfer Equity, L.P. to its limited and general partners		$	122,937			$	100,819
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		$	92,677			$	76,681
Adjustments to derive Distributable Cash:
Equity in income of unconsolidated affiliates			(168,547	)			(107,586	)
Quarterly distribution expected to be received from Energy Transfer Partners, L.P.			161,198				138,845
Amortization of financing costs			1,006				628
Other non-cash			23				—
Change in value of unrealized losses on interest rate derivatives that are not cash flow hedges			28,805				—
Distributable Cash			115,162				108,568
Adjustments to Distributable Cash to derive Net Cash Provided by Operating Activities:
Quarterly distribution expected to be received from Energy Transfer Partners, L.P.			(161,198	)			(138,845	)
Cash distribution received from Energy Transfer Partners, L.P. during the periods presented			110,878				49,906
Net changes in other operating assets and liabilities			12,518				(20,325	)
Net cash provided by (used in) operating activities for Parent Company on stand-alone basis		$	77,360			$	(696	)

 

---

(1) For the four months ended December 31, 2007, cash distributions expected to be received from Energy Transfer Partners, L.P. consists of cash distributions in respect of the four months ended December 31, 2007 payable on February 14, 2008 to holders of record on the close of business on February 1, 2008. For the four months ended December 31, 2006, cash distributions expected to be received from Energy Transfer Partners, L.P. consists of cash distributions paid on January 15, 2007 for the three months ended November 30, 2006 plus a pro rata amount of the cash distributions paid on April 13, 2007 for the three months ended February 28, 2007 allocated to the one-month period ended December 31, 2006.

(2) For the four months ended December 31, 2007, cash distributions expected to be paid from Energy Transfer Equity, L.P. consists of cash distributions in respect of the four months ended December 31, 2007 payable on February 19, 2008 to holders of record on February 1, 2008. For the four months ended December 31, 2006, cash distributions expected to be paid from Energy Transfer Equity, L.P. consists of cash distributions paid on January 19, 2007 for the three months ended November 30, 2006 plus a pro rata amount of the cash distributions paid on April 16, 2007 for the three months ended February 28, 2007 allocated to the one-month period ended December 31, 2006.