Energy Transfer Equity Reports First Quarter Results

  Energy Transfer Equity Reports First Quarter Results  Business Wire  DALLAS -- May 6, 2014  Energy Transfer Equity, L.P. (NYSE:ETE) today reported financial results for the quarter ended March31, 2014.  Distributable Cash Flow, as adjusted, for the three months ended March31, 2014 was $199 million compared to $178 million for the three months ended March31, 2013, an increase of $21 million. ETE’s net income attributable to partners was $168 million for the three months ended March31, 2014 compared to $90 million for the three months ended March31, 2013, an increase of $78 million.  The Partnership’s key accomplishments during or subsequent to the quarter include the following:    *In January, ETE completed a two-for-one split of its outstanding common     units. All unit and per-unit amounts reported herein have been adjusted to     give effect to the split.   *Effective January 1, 2014, ETE closed on its acquisition of Trunkline LNG     Company, LLC (“Trunkline LNG”) from Energy Transfer Partners, L.P. (“ETP”)     in exchange for the redemption by ETP of 18.7 million ETP units held by     ETE.   *ETE increased the capacity on its revolving credit facility to $1.2     billion through two steps, in February and May, in order to support its     previously announced unit buyback program and to fund the purchase of $400     million of Regency common units in connection with Regency Energy Partners     LP’s (“Regency”) pending Eagle Rock acquisition.   *In April, ETE amended its Senior Secured Term Loan Agreement to increase     the aggregate principal amount to $1.4 billion and used the proceeds from     this $400 million increase to repay borrowings under our revolving credit     facility and for general partnership purposes.   *In April, ETE’s Board of Directors approved its sixth consecutive increase     in its quarterly distribution to $0.35875 per unit ($1.435 annualized) on     ETE Common Units for the quarter ended March 31, 2014.   *From January through April, ETE repurchased approximately $750 million of     ETE common units under its buyback program.   *Trunkline LNG Export, LLC and Trunkline LNG filed an application with the     Federal Energy Regulatory Commission (the “FERC”), seeking authorization     for its proposed new liquefaction facilities and modifications to     Trunkline LNG’s existing terminal to facilitate the storage and subsequent     export of LNG (the “Liquefaction Project”). In addition, Trunkline LNG     filed an application with the FERC to convert Trunkline LNG’s existing     regasification facilities from Section 7 (open access) to Section 3 status     in conjunction with the Liquefaction Project. The FERC filings represent     the culmination of significant front-end engineering design efforts for     the Liquefaction Project and pre-filing consultations with the FERC and     other federal, state and local agencies that have been underway since     mid-2012. Approval of these applications is requested from the FERC by     April 1, 2015.  The Partnership has scheduled a conference call for 8:30 a.m. Central Time, Wednesday, May 7, 2014 to discuss its first quarter 2014 results. The conference call will be broadcast live via an internet web cast, which can be accessed through www.energytransfer.com and will also be available for replay on the Partnership’s website for a limited time.  The Partnership’s principal sources of cash flow are derived from distributions related to its direct and indirect investments in the limited and general partner interests in ETP and Regency, including 100% of ETP’s and Regency’s incentive distribution rights, ETP common units, Regency common units, ETP Class H Units, and the Partnership’s ownership of Trunkline LNG. The Partnership’s primary cash requirements are for general and administrative expenses, debt service requirements and distributions to its partners.  Energy Transfer Equity, L.P. (NYSE:ETE) is a master limited partnership which owns the general partner and 100% of the incentive distribution rights (IDRs) of Energy Transfer Partners, L.P. (NYSE: ETP), approximately 30.8 million ETP common units, and approximately 50.2 million ETP Class H Units, which track 50% of the underlying economics of the general partner interest and IDRs of Sunoco Logistics Partners L.P. (NYSE: SXL). ETE also owns the general partner and 100% of the IDRs of Regency Energy Partners LP (NYSE: RGP) and approximately 26.3 million RGP common units. The Energy Transfer family of companies owns more than 61,000 miles of natural gas, natural gas liquids, refined products, and crude oil pipelines. For more information, visit the Energy Transfer Equity, L.P. web site at www.energytransfer.com.  Energy Transfer Partners, L.P. (NYSE:ETP) is a master limited partnership owning and operating one of the largest and most diversified portfolios of energy assets in the United States. ETP currently owns and operates approximately 35,000 miles of natural gas and natural gas liquids pipelines. ETP owns 100% of Panhandle Eastern Pipe Line Company, LP (the successor of Southern Union Company) and Sunoco, Inc., and a 70% interest in Lone Star NGL LLC, a joint venture that owns and operates natural gas liquids storage, fractionation and transportation assets. ETP also owns the general partner, 100% of the incentive distribution rights, and approximately 33.5 million common units in Sunoco Logistics Partners L.P. (NYSE: SXL), which operates a geographically diverse portfolio of crude oil and refined products pipelines, terminalling and crude oil acquisition and marketing assets. ETP’s general partner is owned by ETE. For more information, visit the Energy Transfer Partners, L.P. web site at www.energytransfer.com.  Regency Energy Partners LP (NYSE: RGP) is a growth-oriented, midstream energy partnership engaged in the gathering and processing, contract compression, treating and transportation of natural gas and the transportation, fractionation and storage of natural gas liquids. RGP also holds a 30% interest in Lone Star NGL LLC, a joint venture that owns and operates natural gas liquids storage, fractionation, and transportation assets in Texas, Louisiana and Mississippi. Regency’s general partner is owned by Energy Transfer Equity, L.P. (NYSE: ETE). For more information, visit the Regency Energy Partners LP web site at www.regencyenergy.com.  Sunoco Logistics Partners L.P. (NYSE:SXL), headquartered in Philadelphia, is a master limited partnership that owns and operates a logistics business consisting of a geographically diverse portfolio of complementary crude oil and refined product pipeline, terminalling, and acquisition and marketing assets. SXL’s general partner is owned by Energy Transfer Partners, L.P. (NYSE: ETP). For more information, visit the Sunoco Logistics Partners, L.P. web site at www.sunocologistics.com.                                                                                                                                    ENERGY TRANSFER EQUITY, L.P. AND SUBSIDIARIES  CONDENSED CONSOLIDATED BALANCE SHEETS  (In millions)  (unaudited)                                                                                                                         March 31,    December 31,                                                      2014         2013 ASSETS                                                                    CURRENT ASSETS                                       $ 7,516      $   6,536                                                                    PROPERTY, PLANT AND EQUIPMENT, net                     34,115         30,682                                                                    ADVANCES TO AND INVESTMENTS IN UNCONSOLIDATED          3,818          4,014 AFFILIATES NON-CURRENT PRICE RISK MANAGEMENT ASSETS               1              18 GOODWILL                                               6,216          5,894 INTANGIBLE ASSETS, net                                 5,132          2,264 OTHER NON-CURRENT ASSETS, net                         971          922 Total assets                                         $ 57,769    $   50,330                                                                                                                                       LIABILITIES AND EQUITY                                                                    CURRENT LIABILITIES                                  $ 8,091      $   6,500                                                                    LONG-TERM DEBT, less current maturities                24,905         22,562 DEFERRED INCOME TAXES                                  3,700          3,865 NON-CURRENT PRICE RISK MANAGEMENT LIABILITIES          59             73 OTHER NON-CURRENT LIABILITIES                          1,024          1,019                                                                    COMMITMENTS AND CONTINGENCIES                                                                    PREFERRED UNITS OF SUBSIDIARY                          32             32                                                                    EQUITY: Total partners’ capital                                1,286          1,078 Noncontrolling interest                               18,672       15,201 Total equity                                          19,958       16,279 Total liabilities and equity                         $ 57,769    $   50,330                                                                                                     ENERGY TRANSFER EQUITY, L.P. AND SUBSIDIARIES  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  (In millions, except per unit data)  (unaudited)                                                                                                      Three Months Ended March 31,                                                   2014            2013 REVENUES                                          $  13,080        $  11,179 COSTS AND EXPENSES: Cost of products sold                                11,442           9,807 Operating expenses                                   407              372 Depreciation and amortization                        373              312 Selling, general and administrative                 148            157     Total costs and expenses                            12,370         10,648  OPERATING INCOME                                     710              531 OTHER INCOME (EXPENSE): Interest expense, net of interest capitalized        (315    )        (310   ) Equity in earnings of unconsolidated                 104              90 affiliates Gains (losses) on interest rate derivatives          (2      )        6 Gain on sale of AmeriGas common units                70               — Other, net                                          2              (19    ) INCOME FROM CONTINUING OPERATIONS BEFORE             569              298 INCOME TAX EXPENSE Income tax expense (benefit) from continuing        145            (2     ) operations INCOME FROM CONTINUING OPERATIONS                    424              300 Income from discontinued operations                 24             22      NET INCOME                                           448              322 LESS: NET INCOME ATTRIBUTABLE TO                    280            232     NONCONTROLLING INTEREST NET INCOME ATTRIBUTABLE TO PARTNERS                  168              90 GENERAL PARTNER’S INTEREST IN NET INCOME             —                — CLASS D UNITHOLDER INTEREST IN NET INCOME           1              —       LIMITED PARTNERS’ INTEREST IN NET INCOME          $  167          $  90      INCOME FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT: Basic                                             $  0.30         $  0.14    Diluted                                           $  0.30         $  0.14    NET INCOME PER LIMITED PARTNER UNIT: Basic                                             $  0.30         $  0.16    Diluted                                           $  0.30         $  0.16    WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING: Basic                                               557.7          559.9   Diluted                                             558.4          559.9                                                                                                                                 ENERGY TRANSFER EQUITY, L.P.  DISTRIBUTABLE CASH FLOW  (Tabular dollar amounts in millions)  (unaudited)                                                                                                                                Three Months Ended March 31,                                                   2014            2013 “Distributable Cash Flow,” “Distributable Cash Flow, as adjusted,” and “Distribution Coverage Ratio” ^(1): Cash distributions from ETP associated with: ^(2) Limited partner interest                          $   29           $  45 General partner interest                              5               5 Incentive distribution rights                         168             156 IDR relinquishments                                   (57    )        (31   ) Class H Units (50.05% general partner interest and incentive distribution rights           50            —      distributions from SXL) Total cash distributions from ETP                     195             175 Cash distributions from Regency associated with: Limited partner interest                              13              12 General partner interest                              1               1 Incentive distribution rights                         7               2 IDR relinquishment                                   (1     )       —      Total cash distributions from Regency                 20              15 Cash dividends from Holdco                           —             50     Total cash distributions and dividends from           215             240 ETP, Regency and Holdco                                                                              Distributable cash flow attributable to               48              — Trunkline LNG ^(3)                                                                              Deduct expenses of the Parent Company on a stand-alone basis: Selling, general and administrative expenses,         (2     )        (6    ) excluding non-cash compensation expense Management fee to ETP ^(4)                            (24    )        — Interest expense, net of amortization of financing costs, interest income, and                (39    )       (58   ) realized gains and losses on interest rate swaps Distributable Cash Flow                               198             176 Transaction-related expenses                         1             2      Distributable Cash Flow, as adjusted              $   199         $  178                                                                                 Cash distributions to be paid to the partners of ETE: Distributions to be paid to limited partners      $   195          $  181 Distributions to be paid to Class D                  1             —      unitholder Total cash distributions to be paid to the        $   196         $  181    partners of ETE                                                                              Distribution coverage ratio ^(5)                  1.02       x     0.98     x                                                                              Reconciliation of Non-GAAP “Distributable Cash Flow” and “Distributable Cash Flow, as adjusted” to GAAP “Net income” ^(1): Net income attributable to partners               $   168          $  90 Equity in income related to investments in            (201   )        (168  ) ETP, Regency and Holdco Total cash distributions and dividends from           215             240 ETP, Regency and Holdco Amortization included in interest expense             2               5 (excluding ETP and Regency) Fair value adjustment of ETE Preferred Units          —               9 Other non-cash (excluding ETP, Regency and           14            —      Holdco) Distributable Cash Flow                               198             176 Transaction-related expenses                         1             2      Distributable Cash Flow, as adjusted              $   199         $  178                  This press release and accompanying schedules include the non-generally        accepted accounting principle (“non-GAAP”) financial measure of        Distributable Cash Flow. The schedule above provides a reconciliation        of this non-GAAP financial measure to its most directly comparable ^(1)   financial measure calculated and presented in accordance with GAAP. The        Partnership’s Distributable Cash Flow 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 Flow. The Partnership defines Distributable Cash        Flow for a period as cash distributions expected to be received from        ETP and Regency in respect of such period in connection with the        Partnership’s investments in limited and general partner interests of        ETP and Regency, net of the Partnership’s cash expenditures for general        and administrative costs and interest expense. The Partnership’s        definition of Distributable Cash Flow also includes distributable cash        flow from Trunkline LNG to the Partnership beginning January 1, 2014.        Distributable Cash Flow for the three months ended March 31, 2013 also        included Holdco until ETE’s 60% interest in Holdco was contributed to        ETP on April 30, 2013.                Distributable Cash Flow is a significant liquidity measure used by the        Partnership’s senior management to compare net cash flows generated by        the Partnership 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 for a period to        planned cash distributions for such period.                Distributable Cash Flow is also an important non-GAAP financial measure        for our limited partners since it indicates to investors whether 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 Flow 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 measure        most directly comparable to Distributable Cash Flow is net income for        ETE on a stand-alone basis (“Parent Company”). The accompanying        analysis of Distributable Cash Flow is presented for the three months        ended March 31, 2014 and 2013 for comparative purposes.                Distributable Cash Flow, as adjusted. The Partnership defines        Distributable Cash Flow, as adjusted, for a period as cash        distributions expected to be received from ETP and Regency in respect        of such period in connection with the Partnership’s investments in        limited and general partner interests of ETP and Regency, plus        distributable cash flow from Trunkline LNG and dividends from Holdco        (as described in the definition of Distributable Cash Flow above), net        of the Partnership’s cash expenditures for general and administrative        costs and interest expense, excluding certain items, such as        transaction-related expenses. Due to the cash expenses incurred from        time to time in connection with the Partnership’s merger and        acquisition activities and other transactions, Distributable Cash Flow,        as adjusted, for the three months ended March 31, 2014 and 2013 is a        significant liquidity measure used by the Partnership’s senior        management to compare net cash flows generated by the Partnership 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 for a period to planned cash        distributions for such period. The GAAP measure most directly        comparable to Distributable Cash Flow, as adjusted, is net income for        the Parent Company on a stand-alone basis. The accompanying analysis of        Distributable Cash Flow, as adjusted, is presented for the three months        ended March 31, 2014 and 2013 for comparative purposes.                For the three months ended March 31, 2013, cash distributions paid by        ETP exclude distributions on 49.5 million ETP common units issued to        ETE as a portion of the considerations for ETP’s acquisition of ETE’s ^(2)   interest in Holdco on April 30, 2013. These ETP common units received        cash distributions on May 15, 2013; however, such distributions were        reduced from the total cash portion of the consideration paid to ETE in        connection with the April 30, 2013 Holdco transaction pursuant to the        contribution agreement.         ^(3)   Distributable cash flow attributable to Trunkline LNG was calculated as        follows (unaudited):                                                          Three Months Ended                                                           March 31, 2014 Revenues                                                  $     54 Operating expenses                                              (4     ) Selling, general and administrative expenses                    (1     ) Other, net                                                     (1     ) Distributable cash flow attributable to Trunkline LNG     $     48                                                                         In exchange for management services, ETE has agreed to pay to ETP fees ^(4)  totaling $95 million, $95 million and $5 million for the years ending        December 31, 2014, 2015 and 2016, respectively.                Distribution coverage ratio for a period is calculated as Distributable ^(5)   Cash Flow, as adjusted, divided by total cash distributions expected to        be paid to the partners of ETE in respect of such period.                                                                                                                            SUPPLEMENTAL INFORMATION  FINANCIAL STATEMENTS FOR PARENT COMPANY                                                                 Following are condensed balance sheets and statements of operations of the Parent Company on a stand-alone basis.                                                                 BALANCE SHEETS  (In millions)  (unaudited)                                                                                                          March 31,             December 31,                                          2014                  2013 ASSETS CURRENT ASSETS: Cash and cash equivalents                $    16               $   8 Accounts receivable from                      6                    5 related companies Other current assets                         1                  —        Total current assets                          23                   13 ADVANCES TO AND INVESTMENTS IN                4,448                3,841 UNCONSOLIDATED AFFILIATES INTANGIBLE ASSETS, net                        13                   14 GOODWILL                                      9                    9 OTHER NON-CURRENT ASSETS, net                41                 41       Total assets                             $    4,534           $   3,918    LIABILITIES AND PARTNERS’ CAPITAL CURRENT LIABILITIES: Accounts payable to related              $    42               $   11 companies Interest payable                              53                   24 Accrued and other current                    2                  3        liabilities Total current liabilities                     97                   38 LONG-TERM DEBT, less current                  3,150                2,801 maturities OTHER NON-CURRENT LIABILITIES                 1                    1 COMMITMENTS AND CONTINGENCIES PARTNERS’ CAPITAL: General Partner                               (1       )           (3      ) Limited Partners: Common Unitholders                            1,271                1,066 Class D Units                                 10                   6 Accumulated other                            6                  9        comprehensive income Total partners’ capital                      1,286              1,078    Total liabilities and                    $    4,534           $   3,918    partners’ capital                                                                                                     STATEMENTS OF OPERATIONS  (Amounts in millions)  (unaudited)                                                                                                      Three Months Ended March 31,                                                   2014             2013 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES      $   (7    )       $  (6   ) MANAGEMENT FEE TO ETP                                 (24   )          — OTHER INCOME (EXPENSE): Interest expense, net of interest capitalized         (40   )          (64  ) Equity in earnings of unconsolidated                  239              168 affiliates Other, net                                           —              (8   ) INCOME BEFORE INCOME TAXES                            168              90 Income tax expense                                   —              —     NET INCOME                                            168              90 GENERAL PARTNER’S INTEREST IN NET INCOME              —                — CLASS D UNITHOLDER’S INTEREST IN NET INCOME          1              —     LIMITED PARTNERS’ INTEREST IN NET INCOME          $   167          $  90     Contact:  Investor Relations: Energy Transfer Brent Ratliff, 214-981-0700 or Media Relations: Granado Communications Group Vicki Granado, 214-599-8785 Cell: 214-498-9272