Re: | Energy Transfer Equity, L.P. Form 10-K for the Fiscal Year Ended December 31, 2008 Filed March 2, 2009 Form 10-Q for the Quarter Ended March 31, 2009 Filed May 11, 2009 File No. 1-32740 Energy Transfer Partners, L.P. Form 10-K for the Fiscal Year Ended December 31, 2008 Filed March 2, 2009 Form 10-Q for the Quarter Ended March 31, 2009 Filed May 11, 2009 File No. 1-11727 |
1. | In order to facilitate this review, we have not repeated comments for issues that may be applicable to Energy Transfer Partners, L.P. To the extent any comment applies to more than one registrant, please address the comment individually for each separate registrant. Unless stated otherwise, when we reference a page number it is a reference to a page in the Form 10-K of Energy Transfer Equity, L.P. | |
Response: We acknowledge the Staffs comment and have addressed the comments individually for each of ETE and ETP as necessary. |
2. | Please present summarized market risk information for the preceding fiscal year. In addition, please discuss the reasons for any material quantitative changes in market risk exposure, if any, between the current and preceding fiscal years. Refer to Item 305(a)(3) of Regulation S-K. Also, with respect to your Form 10-Q for the quarter ended March 31, 2009, please discuss the sources and effects of material changes, if any, in your market risks between December 31, 2009 and March 31, 2009. Please see Item 305(c) of Regulation S-K. | |
Response: Item 7A of our Annual Reports includes information about commodity price risk and interest rate risk; this information is presented in a manner that is substantially similar to our prior periodic reports. In addition, the sensitivity analysis included in Item 7A of our Annual Reports utilizes assumptions, methodologies, and hypothetical changes that are also consistent with our prior periodic reports. As such, the quantitative information as of August 31, 2007 (our prior fiscal year-end) and as of December 31, 2007 (the end of our four-month transition period), if presented in our Annual Reports, would be substantially similar to the information included in our periodic reports for each of the respective periods. As all required information is available in our periodic reports, we respectfully request to provide the additional information in future filings. In order to fully comply with the requirements of Item 305(a)(3) of Regulation S-K, we will present summarized market risk information for the preceding fiscal year in our future filings, beginning with the Form 10-K that will be filed for the year ending December 31, 2009. |
3. | Please indicate if Energy Transfer Equity has any independent directors based on the independence standards applicable to you under paragraph (a)(1) of Item 407 of Regulation S-K. | |
Response: We acknowledge the Staffs comment and will augment Item 10 of future ETE annual reports by including disclosure similar to the following: |
| At all times during our 2008 year, our Board of Directors was comprised of nine persons, six of whom qualify as independent under the NYSEs corporate governance standards. We have determined that Messrs. Albin, Byrne, Glaske, Harkey, Hersh and Turner are all independent under the NYSEs corporate governance standards. |
4. | We note your disclosure on page 189 that [i]n October 2008, the Compensation Committee determined that, of the unit awards subject to the achievement of performance objectives, 25% of the ETP Common Units subject to such awards eligible to vest on September 1, 2007, became vested and 75% of the awards were forfeited based on ETPs performance for the twelve-month period ended August 31, 2008. In October 2008, the Compensation Committee approved a special grant of new unit awards that entitled each holder to receive a number of ETP Common Units equal to the number of ETP Common Units forfeited as of September 1, 2007, which new unit awards became fully vested on October 15, 2008. Please discuss the factors that your Compensation Committee considered in making the special grant and for the unit awards to immediately become vested. | |
Response: In making the special grant of unit awards, the Compensation Committee considered the strong financial performance for the 12-month period ended August 31, 2008 and the success of ETP with respect to the development and completion of new pipeline construction projects during this period. The Compensation Committee also took into account the structure of the forfeited unit awards that provided for vesting based in large part upon the increase or decrease in ETPs common unit price during such period in relation to the unit price increases or decreases of a group of selected companies during such period. In this regard, the Compensation Committee viewed the relative unit price performance of ETPs common units as not fully reflective of ETPs relative financial performance and new project development over this period, as compared to the selected peer group of companies. The Compensation Committee also took into account the information provided by Mercer Consulting Services to the effect that other companies with which ETP competes to attract and retain key employees generally do not require that the vesting of unit awards be subject to the satisfaction of performance objectives in addition to continued employment. As a result, the Compensation Committee determined that, in light of the contributions of the key employees of ETP towards ETPs financial performance and in order to be competitive with its peer companies, the grant of these new unit awards, and their immediate vesting, were important to retain the employees of ETP that received these new unit awards. | ||
To the extent necessary, we will present information similar to the foregoing in future filings for both ETE and ETP. |
5. | Please describe your policies and procedures for the review, approval and ratification procedures of related party transactions of any transaction required to be reported under paragraph (a) of Item 404 of Regulation S-K. Refer to Item 404(b) of Regulation S-K. | |
Response: In order to fully comply with Item 404(b) of Regulation S-K, we will revise the Item 13 disclosure in future filings for both ETE and ETP to include the following additional information: |
| As a policy matter, the Conflicts Committee generally reviews any proposed related-party transaction that may be material to the Partnership to determine whether the transaction is fair and reasonable to the Partnership. The partnership agreement of the Partnership provides that any matter approved by the Conflicts Committee will be conclusively deemed to be fair and reasonable to the Partnership, approved by all partners of the Partnership and not a breach by the General Partner or its Board of Directors of any duties they may owe the Partnership or the Unitholders. |
6. | Please file complete copies of material agreements, including all exhibits, schedules and attachments. See Item 601(b)(10) of Regulation S-K. For example, we note that you have not provided the schedules and exhibits to the following agreements: |
a. | First Supplemental Note Purchase Agreement dated as of May 24, 2001 to the August 10, 2000 Note Purchase Agreement; | ||
b. | Redemption Agreement, dated as of September 14, 2006, between Energy Transfer Partners, L.P. and CCE Holdings, LLC |
7. | We note your statement in the third bullet point on page 45 that you expect to contribute between $345 million and $365 million during the last nine months of 2009 to Midcontinent |
| ETP and ETE are responsible for the adequacy and accuracy of the disclosure in the filings; | ||
| staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filings; and | ||
| ETP and ETE may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. |
Sincerely, |
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/s/ John W. McReynolds | ||||
John W. McReynolds | ||||
President and Chief Financial Officer -- ETE (214) 981-0724 |
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/s/ Martin Salinas, Jr. | ||||
Martin Salinas, Jr. | ||||
Chief Financial Officer -- ETP (214) 981-0720 or (210) 403-7455 |
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Cc: | John Meinders Grant Thornton LLP |