Energy Transfer Equity Reports Second Quarter Results

  Energy Transfer Equity Reports Second Quarter Results  Business Wire  DALLAS -- August 6, 2014  Energy Transfer Equity, L.P. (NYSE:ETE) (“ETE” or the “Partnership”) today reported financial results for the quarter ended June30, 2014.  Distributable Cash Flow, as adjusted, for the three months ended June30, 2014 was $218 million compared to $180 million for the three months ended June30, 2013, an increase of $38 million. ETE’s net income attributable to partners was $164 million for the three months ended June30, 2014 compared to $127 million for the three months ended June30, 2013, an increase of $37 million.  Distributable Cash Flow, as adjusted, for the six months ended June30, 2014 was $417 million compared to $358 million for the six months ended June30, 2013, an increase of $59 million. ETE’s net income attributable to partners was $332 million for the six months ended June30, 2014 compared to $217 million for the six months ended June30, 2013, an increase of $115 million.  The Partnership’s key accomplishments during or subsequent to the second quarter include the following:    *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.   *From January through May, ETE completed its repurchase of ETE common units     under its $1 billion common unit buyback program.   *In May, ETE issued $700 million aggregate principal amount of its 5.875%     senior notes due 2024 in a private placement.   *In June, a wholly-owned subsidiary of ETE purchased 14.4 million Regency     Energy Partners LP (“Regency”) common units for approximately $400     million. In July, a wholly-owned subsidiary of ETE purchased an additional     16.5 million Regency common units for approximately $400 million.     Subsequent to these purchases, ETE and ETP together own approximately 24%     of the limited partner interest in Regency.   *In July, ETE’s Board of Directors approved its seventh consecutive     increase in its quarterly distribution to $0.38 per unit ($1.52     annualized) on ETE common units for the quarter ended June 30, 2014. Based     on the increased distribution rate, ETE’s distribution coverage ratio was     1.06x for the quarter.  The Partnership has scheduled a conference call for 8:30 a.m. Central Time, Thursday, August 7, 2014 to discuss its second 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 the distributions it receives related to its direct and indirect investments in Energy Transfer Partners, L.P. (“ETP”) and Regency, including 100% of ETP’s and Regency’s general partner interest and incentive distribution rights, ETP common units, Regency common units, ETP Class H Units, and the Partnership’s ownership of Trunkline LNG Company, LLC (“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 57.2 million RGP common units. On a consolidated basis, ETE’s family of companies owns and operates approximately 71,000 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 67.1 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.  Forward-Looking Statements  This press release may include certain statements concerning expectations for the future that are forward-looking statements as defined by federal law. Such forward-looking statements are subject to a variety of known and unknown risks, uncertainties, and other factors that are difficult to predict and many of which are beyond management’s control. An extensive list of factors that can affect future results are discussed in the Partnership’s Annual Reports on Form 10-K and other documents filed from time to time with the Securities and Exchange Commission. The Partnership undertakes no obligation to update or revise any forward-looking statement to reflect new information or events.  The information contained in this press release is available on our web site at www.energytransfer.com.                                                                                                                         ENERGY TRANSFER EQUITY, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) (unaudited)                                                                                                          June 30, 2014     December 31, 2013 ASSETS                                                               CURRENT ASSETS                             $    7,652        $      6,536                                                               PROPERTY, PLANT AND EQUIPMENT, net              35,118              30,682                                                               ADVANCES TO AND INVESTMENTS IN                  3,686               4,014 UNCONSOLIDATED AFFILIATES NON-CURRENT PRICE RISK MANAGEMENT               —                   18 ASSETS GOODWILL                                        6,230               5,894 INTANGIBLE ASSETS, net                          5,072               2,264 OTHER NON-CURRENT ASSETS, net                  857                922 Total assets                               $    58,615       $      50,330                                                                                                                             LIABILITIES AND EQUITY                                                               CURRENT LIABILITIES                        $    8,222        $      6,500                                                               LONG-TERM DEBT, less current                    25,851              22,562 maturities DEFERRED INCOME TAXES                           3,712               3,865 NON-CURRENT PRICE RISK MANAGEMENT               97                  73 LIABILITIES OTHER NON-CURRENT LIABILITIES                   1,018               1,019                                                               COMMITMENTS AND CONTINGENCIES                                                               PREFERRED UNITS OF SUBSIDIARY                   32                  32 REDEEMABLE NONCONTROLLING INTEREST              15                  —                                                               EQUITY: Total partners’ capital                         582                 1,078 Noncontrolling interest                        19,086             15,201 Total equity                                   19,668             16,279 Total liabilities and equity               $    58,615       $      50,330                                                                                                         ENERGY TRANSFER EQUITY, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per unit data) (unaudited)                                                                              Three Months Ended            Six Months Ended                        June 30,                      June 30,                        2014         2013           2014         2013 REVENUES               $ 14,143       $ 12,063       $ 27,223       $ 23,242 COSTS AND EXPENSES: Cost of products         12,351         10,565         23,793         20,372 sold Operating expenses       412            387            819            759 Depreciation, depletion and            450            318            823            630 amortization Selling, general        157          149          305          306     and administrative Total costs and         13,370       11,419       25,740       22,067  expenses OPERATING INCOME         773            644            1,483          1,175 OTHER INCOME (EXPENSE): Interest expense, net of interest          (344   )       (305   )       (659   )       (615   ) capitalized Equity in earnings of unconsolidated        77             54             181            144 affiliates Losses on extinguishments of       —              (7     )       —              (7     ) debt Gains (losses) on interest rate            (46    )       46             (48    )       52 derivatives Gain on sale of AmeriGas common          93             —              163            — units Other, net              (25    )      (14    )      (23    )      (33    ) INCOME FROM CONTINUING               528            418            1,097          716 OPERATIONS BEFORE INCOME TAX EXPENSE Income tax expense (benefit) from          70           89           215          87      continuing operations INCOME FROM CONTINUING               458            329            882            629 OPERATIONS Income from discontinued            42           9            66           31      operations NET INCOME               500            338            948            660 LESS: NET INCOME ATTRIBUTABLE TO         336          211          616          443     NONCONTROLLING INTEREST NET INCOME ATTRIBUTABLE TO          164            127            332            217 PARTNERS GENERAL PARTNER’S INTEREST IN NET          1              —              1              — INCOME CLASS D UNITHOLDER INTEREST IN NET         —            —            1            —       INCOME LIMITED PARTNERS’ INTEREST IN NET        $ 163         $ 127         $ 330         $ 217     INCOME INCOME FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT: Basic                  $ 0.29        $ 0.22        $ 0.59        $ 0.36    Diluted                $ 0.29        $ 0.22        $ 0.59        $ 0.36    NET INCOME PER LIMITED PARTNER UNIT: Basic                  $ 0.30        $ 0.23        $ 0.60        $ 0.39    Diluted                $ 0.30        $ 0.23        $ 0.60        $ 0.39    WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING: Basic                   543.6        560.9        550.6        560.4   Diluted                 544.5        560.9        551.5        560.4                                                                                                                                       ENERGY TRANSFER EQUITY, L.P. DISTRIBUTABLE CASH FLOW (Tabular dollar amounts in millions) (unaudited)                                                                                                              Three Months Ended        Six Months Ended                                June 30,                  June 30,                                2014       2013         2014       2013 “Distributable Cash Flow,” “Distributable Cash Flow, as adjusted,” and “Distribution Coverage Ratio” ^(1): Cash distributions from ETP associated with: Limited partner interest       $ 29         $ 89         $ 58         $ 178 General partner interest         5            5            10           10 Incentive distribution           178          183          346          363 rights IDR relinquishments              (58  )       (55  )       (115 )       (86  ) Class H Units (50.05% general partner interest and incentive distribution       53           —            103          — rights distributions from SXL) Distributions credited to       —          —          —          (68  ) Holdco consideration ^ (2) Total cash distributions         207          222          402          397 from ETP Cash distributions from Regency associated with: Limited partner interest         28           12           41           24 General partner interest         1            1            2            2 Incentive distribution           8            3            15           5 rights IDR relinquishment              —          (1   )      (1   )      (1   ) Total cash distributions         37           15           57           30 from Regency Cash dividends from Holdco      —          —          —          50    Total cash distributions and dividends from ETP,          244          237          459          477 Regency and Holdco                                                                               Distributable cash flow attributable to Trunkline        47           —            95           — LNG ^(3)                                                                               Deduct expenses of the Parent Company on a stand-alone basis: Selling, general and administrative expenses,         (5   )       (24  )       (7   )       (30  ) excluding non-cash compensation expense Management fee to ETP ^(4)       (24  )       —            (48  )       — Interest expense, net of amortization of financing costs, interest income,         (47  )      (48  )      (86  )      (106 ) and realized gains and losses on interest rate swaps Distributable Cash Flow          215          165          413          341 Transaction-related             3          15         4          17    expenses Distributable Cash Flow,       $ 218       $ 180       $ 417       $ 358   as adjusted                                                                               Cash distributions to be paid to the partners of ETE: Distributions to be paid       $ 205        $ 184        $ 400        $ 365 to limited partners Distributions to be paid         1            —            1            1 to general partner Distributions to be paid        —          —          1          —     to Class D unitholder Total cash distributions to be paid to the partners     $ 206       $ 184       $ 402       $ 366   of ETE                                                                               Distribution coverage          1.06   x     0.98   x     1.04   x     0.98   x ratio ^(5)                                                                               Reconciliation of Non-GAAP “Distributable Cash Flow” and “Distributable Cash Flow, as adjusted” to GAAP “Net income” ^(1): Net income attributable to     $ 164        $ 127        $ 332        $ 217 partners Equity in income related to investments in ETP,           (209 )       (198 )       (410 )       (366 ) Regency and Holdco Total cash distributions and dividends from ETP,          244          237          459          477 Regency and Holdco Amortization included in interest expense                 2            4            4            9 (excluding ETP and Regency) Fair value adjustment of         —            —            —            9 ETE Preferred Units Other non-cash (excluding       14         (5   )      28         (5   ) ETP, Regency and Holdco) Distributable Cash Flow          215          165          413          341 Transaction-related             3          15         4          17    expenses Distributable Cash Flow,       $ 218       $ 180       $ 417       $ 358   as adjusted                                                                                         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 ^(1)   directly comparable 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 and          six months ended June 30, 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 and six months ended June 30, 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 and six months          ended June 30, 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 and six months ended June 30,          2014 and 2013 for comparative purposes.                    For the six months ended June 30, 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   Six Months Ended                                        June 30, 2014          June 30, 2014 Revenues                               $     53               $    107 Operating expenses                           (4     )              (8     ) Selling, general and                         (2     )              (3     ) administrative expenses Other, net                                  —                   (1     ) Distributable cash flow                $     47              $    95      attributable to Trunkline LNG                                                                        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)                                                                                                        June 30,                December 31,                                        2014                    2013 ASSETS CURRENT ASSETS                         $   39                  $   13 ADVANCES TO AND INVESTMENTS IN             4,768                   3,841 UNCONSOLIDATED AFFILIATES INTANGIBLE ASSETS, net                     12                      14 GOODWILL                                   9                       9 OTHER NON-CURRENT ASSETS, net             50                    41       Total assets                           $   4,878              $   3,918    LIABILITIES AND PARTNERS’ CAPITAL CURRENT LIABILITIES                    $   155                 $   38 LONG-TERM DEBT, less current               4,140                   2,801 maturities OTHER NON-CURRENT LIABILITIES              1                       1 COMMITMENTS AND CONTINGENCIES PARTNERS’ CAPITAL: General Partner                            (1      )               (3      ) Limited Partners: Common Unitholders                         563                     1,066 Class D Units                              14                      6 Accumulated other                         6                     9        comprehensive income Total partners’ capital                   582                   1,078    Total liabilities and                  $   4,878              $   3,918    partners’ capital                                                                                                                   STATEMENTS OF OPERATIONS (Amounts in millions) (unaudited)                                                                                              Three Months Ended      Six Months Ended                                   June 30,                June 30,                                   2014      2013        2014      2013 SELLING, GENERAL AND              $ (8  )     $ (23 )     $ (15 )     $ (29  ) ADMINISTRATIVE EXPENSES MANAGEMENT FEE TO ETP               (24 )       —           (48 )       — OTHER INCOME (EXPENSE): Interest expense, net of            (50 )       (53 )       (90 )       (117 ) interest capitalized Gains (losses) on interest          —           6           —           6 rate derivatives Equity in earnings of               248         198         487         366 unconsolidated affiliates Other, net                         (2  )      (2  )      (2  )      (10  ) INCOME BEFORE INCOME TAXES          164         126         332         216 Income tax benefit                 —         (1  )      —         (1   ) NET INCOME                          164         127         332         217 GENERAL PARTNER’S INTEREST IN       1           —           1           — NET INCOME CLASS D UNITHOLDER’S INTEREST      —         —         1         —     IN NET INCOME LIMITED PARTNERS’ INTEREST IN     $ 163      $ 127      $ 330      $ 217   NET INCOME  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  
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