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
May
11, 2009
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 May 11, 2009, Energy Transfer Equity, L.P. (the “Partnership”) issued a press release announcing its financial and operating results for the first quarter ended March 31, 2009. 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 |
Description of the Exhibit |
| Exhibit 99.1 | Energy Transfer Equity, L.P. Press Release, dated May 11, 2009. |
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.
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Energy Transfer Equity, L.P. |
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By: |
LE GP, LLC, |
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its general partner |
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Date: |
May 11, 2009 |
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/s/ John W. McReynolds |
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John W. McReynolds |
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President and Chief Financial Officer |
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Exhibit
Index
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Exhibit |
Description of the Exhibit |
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Exhibit 99.1 |
Energy Transfer Equity, L.P. Press Release, dated May 11, 2009. |
Exhibit 99.1
Energy Transfer Equity Reports Quarterly Results for the Period Ended March 31st
DALLAS--(BUSINESS WIRE)--May 11, 2009--Energy Transfer Equity, L.P. (NYSE:ETE) today reported net income of $279.8 million and Distributable Cash of $119.1 million for the three months ended March 31, 2009. Distributable Cash is a “non-GAAP measure,” as explained below.
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. ETE’s principal uses of cash are for expenses, debt service and distributions to its general and limited partners.
ETE’s net income attributable to its partners increased $24.8 million for the three months ended March 31, 2009 to $151.5 million as compared to $126.7 million for the three months ended March 31, 2008. The increase is due primarily to net unrealized losses on non-hedged interest rate derivatives recorded during the three months ended March 31, 2008.
ETE also announced that it will file its quarterly report on Form 10-Q for the three months ended March 31, 2009 with the Securities and Exchange Commission later today. ETE will post 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 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 three-month periods ended March 31, 2009 and 2008 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 gathering and transportation pipelines, treating and processing assets, and three storage facilities located in Texas. ETP currently has more than 17,500 miles of pipeline in service with another 500 miles 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.
| ENERGY TRANSFER EQUITY, L.P. AND SUBSIDIARIES | ||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
| (in thousands, except unit data) | ||||||
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| March 31, | December 31 | |||||
| 2009 | 2008 | |||||
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ASSETS |
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| CURRENT ASSETS: | ||||||
| Cash and cash equivalents | $ | 106,438 | $ | 92,023 | ||
| Marketable securities | 5,949 | 5,915 | ||||
| Accounts receivable, net of allowance for doubtful accounts | 489,063 | 591,257 | ||||
| Accounts receivable from related companies | 29,089 | 15,142 | ||||
| Inventories | 144,607 | 272,348 | ||||
| Deposits paid to vendors | 38,468 | 78,237 | ||||
| Exchanges receivable | 23,900 | 45,209 | ||||
| Price risk management assets | 3,170 | 5,423 | ||||
| Prepaid expenses and other | 57,304 | 75,441 | ||||
| Total current assets | 897,988 | 1,180,995 | ||||
| PROPERTY, PLANT AND EQUIPMENT, net | 8,836,373 | 8,702,534 | ||||
| ADVANCES TO AND INVESTMENTS IN AFFILIATES | 129,840 | 10,110 | ||||
| GOODWILL | 764,538 | 773,283 | ||||
| INTANGIBLES AND OTHER LONG-TERM ASSETS, net | 408,548 | 402,980 | ||||
| Total assets | $ | 11,037,287 | $ | 11,069,902 | ||
| ENERGY TRANSFER EQUITY, L.P. AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (in thousands, except unit data) | ||||||||
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| March 31, | December 31, | |||||||
| 2009 | 2008 | |||||||
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LIABILITIES AND EQUITY |
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| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 310,318 | $ | 381,933 | ||||
| Accounts payable to related companies | 18,224 | 34,495 | ||||||
| Exchanges payable | 28,152 | 54,636 | ||||||
| Customer advances and deposits | 55,699 | 106,679 | ||||||
| Accrued wages and benefits | 59,922 | 65,754 | ||||||
| Accrued capital expenditures | 84,908 | 153,230 | ||||||
| Accrued and other current liabilities | 113,792 | 108,454 | ||||||
| Price risk management liabilities | 100,389 | 142,432 | ||||||
| Interest payable | 90,006 | 115,487 | ||||||
| Deferred income taxes | 258 | 589 | ||||||
| Current maturities of long-term debt | 44,530 | 45,232 | ||||||
| Total current liabilities | 906,198 | 1,208,921 | ||||||
| LONG-TERM DEBT, less current maturities | 7,159,581 | 7,190,357 | ||||||
| LONG-TERM PRICE RISK MANAGEMENT LIABILITIES | 117,076 | 121,710 | ||||||
| DEFERRED INCOME TAXES | 202,072 | 194,871 | ||||||
| OTHER NON-CURRENT LIABILITIES | 14,540 | 14,727 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| 8,399,467 | 8,730,586 | |||||||
| EQUITY: | ||||||||
| Partners' Capital (Deficit): | ||||||||
| General Partner | 319 | 155 | ||||||
| Limited Partners: | ||||||||
| Common Unitholders (222,898,248 and 222,829,956 units authorized, issued | ||||||||
| and outstanding at March 31, 2009 and December 31, 2008, respectively) | 37,291 | (15,762 | ) | |||||
| Accumulated other comprehensive loss | (72,988 | ) | (67,825 | ) | ||||
| Total partners’ deficit | (35,378 | ) | (83,432 | ) | ||||
| Noncontrolling interest | 2,673,198 | 2,422,748 | ||||||
| Total equity | 2,637,820 | 2,339,316 | ||||||
| Total liabilities and equity | $ | 11,037,287 | $ | 11,069,902 | ||||
| ENERGY TRANSFER EQUITY, L.P. AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (in thousands, except per unit and unit data) | ||||||||
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Three Months Ended March 31, | |||||||
| 2009 | 2008 | |||||||
| REVENUES: | ||||||||
| Natural gas operations | $ | 1,111,955 | $ | 2,007,847 | ||||
| Retail propane | 487,907 | 598,138 | ||||||
| Other | 30,112 | 33,260 | ||||||
| Total revenues | 1,629,974 | 2,639,245 | ||||||
| COSTS AND EXPENSES: | ||||||||
| Cost of products sold, natural gas operations | 732,113 | 1,577,268 | ||||||
| Cost of products sold, retail propane | 220,222 | 392,555 | ||||||
| Cost of products sold, other | 6,804 | 9,895 | ||||||
| Operating expenses | 181,773 | 178,970 | ||||||
| Depreciation and amortization | 75,659 | 61,883 | ||||||
| Selling, general and administrative | 57,305 | 50,745 | ||||||
| Total costs and expenses | 1,273,876 | 2,271,316 | ||||||
| OPERATING INCOME | 356,098 | 367,929 | ||||||
| OTHER INCOME (EXPENSE): | ||||||||
| Interest expense, net of interest capitalized | (101,391 | ) | (80,454 | ) | ||||
| Equity in earnings of affiliates | 497 | 74 | ||||||
| Loss on disposal of assets | (426 | ) | (1,451 | ) | ||||
| Gains (losses) on non-hedged interest rate derivatives | 10,051 | (31,636 | ) | |||||
| Allowance for equity funds used during construction | 20,427 | 9,888 | ||||||
| Other, net | 701 | 7,952 | ||||||
| INCOME BEFORE INCOME TAX EXPENSE | 285,957 | 272,302 | ||||||
| Income tax expense | 6,207 | 5,144 | ||||||
| NET INCOME | 279,750 | 267,158 | ||||||
| LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | 128,214 | 140,453 | ||||||
| NET INCOME ATTRIBUTABLE TO PARTNERS | 151,536 | 126,705 | ||||||
| GENERAL PARTNER'S INTEREST IN NET INCOME | 469 | 392 | ||||||
| LIMITED PARTNERS' INTEREST IN NET INCOME | $ | 151,067 | $ | 126,313 | ||||
| BASIC NET INCOME PER LIMITED PARTNER UNIT | $ | 0.68 | $ | 0.57 | ||||
| BASIC AVERAGE NUMBER OF UNITS OUTSTANDING | 222,898,065 | 222,829,956 | ||||||
| DILUTED NET INCOME PER LIMITED PARTNER UNIT | $ | 0.68 | $ | 0.57 | ||||
| DILUTED AVERAGE NUMBER OF UNITS OUTSTANDING | 222,898,065 | 222,829,956 | ||||||
| Three Months Ended March 31, | ||||
| VOLUMES SOLD THROUGH | 2009 | 2008 | ||
| ENERGY TRANSFER PARTNERS, L.P.: | ||||
| Intrastate transportation and storage | ||||
| Natural gas MMBtu/d – transported | 13,623,212 | 9,521,181 | ||
| Natural gas MMBtu/d – sold | 1,351,600 | 1,696,912 | ||
| Interstate transportation | ||||
| Natural gas MMBtu/d – transported | 1,747,560 | 1,619,358 | ||
| Natural gas MMBtu/d – sold | 20,600 | 11,084 | ||
| Midstream | ||||
| Natural gas MMBtu/d – sold | 1,091,391 | 1,236,396 | ||
| NGLs Bbls/d – sold | 40,218 | 32,124 | ||
| Retail propane gallons (in thousands) | 218,480 | 234,414 | ||
| ENERGY TRANSFER EQUITY, L.P. - PARENT COMPANY | ||||||||
| DISTRIBUTABLE CASH | ||||||||
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(Dollars in thousands, except per unit) |
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(unaudited) |
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The following table presents the calculation and reconciliation of Distributable Cash of the Parent Company with respect to the following periods: |
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| Three Months Ended March 31, | ||||||||
| 2009 | 2008 | |||||||
| Distributable Cash: | ||||||||
| Cash distributions expected from Energy Transfer Partners, L.P. associated with: | ||||||||
| General partner interest (1): | ||||||||
| Standard distribution rights | $ | 4,860 | $ | 3,979 | ||||
| Incentive distribution rights | 84,146 | 67,797 | ||||||
| Less: Expected General Partner contribution to ETP to maintain its 2% interest | (3,354 | ) | - | |||||
| Limited partner interest (1): | ||||||||
| 62,500,797 Common units | 55,860 | 54,298 | ||||||
| Total cash expected from Energy Transfer Partners, L.P. (1) | 141,512 | 126,074 | ||||||
| Deduct expenses of the Parent Company on a stand-alone basis: | ||||||||
| General and administrative expenses | (1,902 | ) | (2,849 | ) | ||||
| Interest expense, net of amortization of financing costs, interest income, and realized | ||||||||
| gains and losses on interest rate derivatives | (20,462 | ) | (23,902 | ) | ||||
| Distributable Cash | $ | 119,148 | $ | 99,323 | ||||
| Cash distributions to be paid to the partners of Energy Transfer Equity, L.P. (2): | ||||||||
| Distribution per limited partner unit as of the end of the period | $ | 0.5250 | $ | 0.4400 | ||||
| Distributions to be paid to public unitholders | 49,869 | 41,765 | ||||||
| Distributions to be paid to affiliates | 67,152 | 56,280 | ||||||
| Distributions to be paid to general partner | 363 | 305 | ||||||
| Total cash distributions to be paid by Energy Transfer Equity, L.P. to its limited | ||||||||
| and general partners (2) | $ | 117,384 | $ | 98,350 | ||||
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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: |
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| Net income | $ | 151,536 | $ | 126,705 | ||||
| Adjustments to derive Distributable Cash: | ||||||||
| Equity in income of unconsolidated affiliates | (176,593 | ) | (185,472 | ) | ||||
| Quarterly distribution expected to be received from Energy Transfer Partners, L.P. | 141,512 | 126,074 | ||||||
| Amortization included in interest expense | 2,742 | 752 | ||||||
| Other non-cash | 139 | 13 | ||||||
| Unrealized gains and losses on non-hedged interest rate swaps | (188 | ) | 31,251 | |||||
| Distributable Cash | 119,148 | 99,323 | ||||||
| Adjustments to Distributable Cash to derive Net Cash Provided by Operating Activities: | ||||||||
| Quarterly distribution expected from Energy Transfer Partners, L.P. | (141,512 | ) | (126,074 | ) | ||||
| Cash distribution received from Energy Transfer Partners, L.P. (3) | 139,720 | 150,384 | ||||||
| Net changes in operating assets and liabilities | (2,752 | ) | 8,768 | |||||
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Net cash provided by operating activities for Parent Company on a stand-alone basis |
$ | 114,604 | $ | 132,401 | ||||
(1) For the three months ended March 31, 2009, cash distributions expected to be received from Energy Transfer Partners, L.P. consists of cash distributions in respect of the three months ended March 31, 2009 payable on May 15, 2009 to holders of record on the close of business on May 8, 2009. For the three months ended March 31, 2008, cash distributions received from Energy Transfer Partners, L.P. consists of cash distributions paid on May 15, 2008 for the three months ended March 31, 2008.
(2) For the three months ended March 31, 2009, cash distributions expected to be paid from Energy Transfer Equity, L.P. consists of cash distributions in respect of the three months ended March 31, 2009 payable on May 19, 2009 to holders of record on May 8, 2009. For the three months ended March 31, 2008, cash distributions paid from Energy Transfer Equity, L.P. consists of cash distributions paid on May 19, 2008 for the three months ended March 31, 2008.
(3) Cash distributions received from Energy Transfer Partners, L.P. for the three months ended March 31, 2008 reflect a one-time distribution for the four-month transition period related to Energy Transfer Partners, L.P.’s change of its fiscal year from August 31 to December 31 during 2007.
CONTACT:
Investor Relations:
Energy Transfer
Brent
Ratliff, 214-981-0700
or
Media Relations:
Granado
Communications Group
Vicki Granado, 214-504-2260
214-498-9272
(cell)