DALLAS, Nov 09, 2009 (BUSINESS WIRE) -- Energy Transfer Equity, L.P. (NYSE:ETE) today reported Distributable Cash of $123.2 million and net income of $34.3 million for the three months ended September 30, 2009. Distributable Cash is a "non-GAAP measure" as explained below.
For the three months ended September 30, 2009, ETE's Distributable Cash was $123.2 million, an increase of $14.4 million over the three months ended September 30, 2008. For the nine months ended September 30, 2009, ETE's Distributable Cash was $362.1 million, an increase of $56.9 million over the nine months ended September 30, 2008. 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 operating activities apart from those conducted by ETP and its operating subsidiaries. ETE's principal uses of cash are for distributions to its general and limited partners, expenses, debt service and, at ETE's election, capital contributions to ETP in respect of ETE's general partner interest in ETP.
ETE's net income attributable to its partners decreased $58.4 million for the three months ended September 30, 2009 to $47.0 million as compared to $105.4 million for the three months ended September 30, 2008. Net income attributable to its partners decreased $49.6 million for the nine months ended September 30, 2009 to $302.9 million as compared to $352.5 million for the nine months ended September 30, 2008.
ETE also announced that it has filed its quarterly report on Form 10-Q for the three months ended September 30, 2009 with the Securities and Exchange Commission. ETE has posted a copy of this Form 10-Q on its website at www.energytransfer.com. The Partnership has scheduled a conference call for 9:00 a.m. Central Time, Tuesday, November 10, 2009 to discuss the third quarter results. The conference call will be broadcast live via an internet web cast, which can be accessed through www.energytransfer.com. The call will be available for replay on the Partnership's website for a limited time.
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 for a period as cash distributions expected to be received from ETP in respect of such period 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 and nine months ended September 30, 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 and has a 50% interest in joint ventures that have approximately 500 miles of interstate pipeline in service. 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)
(unaudited)
September 30, December 31,
2009 2008
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 50,192 $ 92,023
Marketable securities 12,682 5,915
Accounts receivable, net of allowance for doubtful accounts 352,838 591,257
Accounts receivable from related companies 30,807 15,142
Inventories 221,148 272,348
Deposits paid to vendors 99,317 78,237
Exchanges receivable 15,434 45,209
Price risk management assets 6,841 5,423
Prepaid expenses and other current assets 69,152 75,441
Total current assets 858,411 1,180,995
PROPERTY, PLANT AND EQUIPMENT 10,051,273 9,464,548
ACCUMULATED DEPRECIATION (943,305 ) (762,014 )
9,107,968 8,702,534
ADVANCES TO AND INVESTMENTS IN AFFILIATES 550,950 10,110
GOODWILL 765,935 773,283
INTANGIBLES AND OTHER ASSETS, net 401,244 402,980
Total assets $ 11,684,508 $ 11,069,902
ENERGY TRANSFER EQUITY, L.P. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands, except unit data)
(unaudited)
September 30, December 31,
2009 2008
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable $ 254,044 $ 381,933
Accounts payable to related companies 7,265 34,495
Exchanges payable 22,400 54,636
Customer advances and deposits 101,258 106,679
Accrued and other current liabilities 247,919 313,140
Price risk management liabilities 82,697 142,432
Interest payable 115,455 115,487
Income taxes payable 5,234 14,298
Deferred income taxes - 589
Current maturities of long-term debt 46,115 45,232
Total current liabilities 882,387 1,208,921
LONG-TERM DEBT, less current maturities 7,740,135 7,190,357
LONG-TERM PRICE RISK MANAGEMENT LIABILITIES 89,990 121,710
DEFERRED INCOME TAXES 197,257 194,871
OTHER NON-CURRENT LIABILITIES 21,076 14,727
COMMITMENTS AND CONTINGENCIES
8,930,845 8,730,586
EQUITY:
Partners' Capital (Deficit):
General Partner 149 155
Limited Partners:
Common Unitholders (222,898,248 and 222,829,956 units authorized, (17,399) (15,762)
issued and outstanding at September 30, 2009 and December 31,
2008, respectively)
Accumulated other comprehensive loss (67,257) (67,825)
Total partners' deficit (84,507) (83,432)
Noncontrolling interest 2,838,170 2,422,748
Total equity 2,753,663 2,339,316
Total liabilities and equity $ 11,684,508 $11,069,902
ENERGY TRANSFER EQUITY, L.P. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per unit and unit data)
(unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
2009 2008 2009 2008
REVENUES:
Natural gas operations $ 943,975 $ 1,938,586 $ 3,004,163 $ 6,322,070
Retail propane 162,224 238,830 829,901 1,086,417
Other 23,650 28,674 77,449 90,199
Total revenues 1,129,849 2,206,090 3,911,513 7,498,686
COSTS AND EXPENSES:
Cost of products sold - natural gas operations 591,797 1,435,308 1,865,914 4,965,145
Cost of products sold - retail propane 80,232 187,799 378,524 744,316
Cost of products sold - other 6,119 10,347 18,842 27,783
Operating expenses 158,883 197,493 517,337 573,606
Depreciation and amortization 84,738 73,563 239,626 200,922
Selling, general and administrative 34,579 45,316 146,640 140,781
Total costs and expenses 956,348 1,949,826 3,166,883 6,652,553
OPERATING INCOME 173,501 256,264 744,630 846,133
OTHER INCOME (EXPENSE):
Interest expense, net of interest capitalized (120,100 ) (90,300 ) (341,050 ) (261,297 )
Equity in earnings (losses) of affiliates 9,581 (654 ) 11,751 (749 )
Gains (losses) on disposal of assets (1,088 ) 2,520 (1,333 ) 1,584
Gains (losses) on non-hedged interest rate derivatives (35,589 ) (9,152 ) 24,373 (13,610 )
Allowance for equity funds used during construction 30 19,727 18,618 45,275
Other, net 4,235 (1,163 ) 4,559 8,356
INCOME BEFORE INCOME TAX EXPENSE (BENEFIT) 30,570 177,242 461,548 625,692
Income tax expense (benefit) (3,697 ) (7,874 ) 5,773 6,600
NET INCOME 34,267 185,116 455,775 619,092
LESS: NET INCOME (LOSS) ATTRIBUTABLE TO
NONCONTROLLING INTEREST (12,704 ) 79,737 152,893 266,614
NET INCOME ATTRIBUTABLE TO PARTNERS 46,971 105,379 302,882 352,478
GENERAL PARTNER'S INTEREST IN NET INCOME 147 326 938 1,091
LIMITED PARTNERS' INTEREST IN NET INCOME $ 46,824 $ 105,053 $ 301,944 $ 351,387
BASIC NET INCOME PER LIMITED PARTNER UNIT $ 0.21 $ 0.47 $ 1.35 $ 1.58
BASIC AVERAGE NUMBER OF UNITS OUTSTANDING 222,898,248 222,829,956 222,898,188 222,829,956
DILUTED NET INCOME PER LIMITED PARTNER UNIT $ 0.21 $ 0.47 $ 1.35 $ 1.57
DILUTED AVERAGE NUMBER OF UNITS OUTSTANDING 222,898,248 222,829,956 222,898,188 222,829,956
ENERGY TRANSFER EQUITY, L.P.
DISTRIBUTABLE CASH
(Dollars in thousands, except per unit)
(unaudited)
The following table presents the calculation and reconciliation
of Distributable Cash of Energy Transfer Equity, L.P. with respect
to the following periods:
Three Months Ended September 30, Nine Months Ended September 30,
2009 2008 2009 2008
Distributable Cash:
Cash distributions expected from Energy Transfer Partners, L.P.
associated with:
General partner interest (1):
Standard distribution rights $ 4,867 $ 4,384 $ 14,588 $ 12,740
Incentive distribution rights 87,498 75,804 255,808 219,298
Less: Expected General Partner contribution to ETP to maintain its - - (3,354 ) (13,098 )
2% interest
Limited partner interest (1):
62,500,797 Common units 55,860 55,860 167,580 166,018
Total cash expected from Energy Transfer Partners, L.P. (1) 148,225 136,048 434,622 384,958
Deduct expenses of the Parent Company on a stand-alone basis:
Parent Company-related expenses 398 (1,544 ) (2,205 ) (5,600 )
Interest expense, net of amortization of financing costs, interest (25,454 ) (25,762 ) (70,342 ) (74,218 )
income, and realized gains and losses on interest rate derivatives
Distributable Cash $ 123,169 $ 108,742 $ 362,075 $ 305,140
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 $ 0.5350 $ 0.4800 $ 0.5350 $ 0.4800
Distributions to be paid to limited partners 119,250 106,958 355,523 311,961
Distributions to be paid to general partner 370 332 1,104 969
Total cash distributions to be paid by Energy Transfer Equity, $ 119,620 $ 107,290 $ 356,627 $ 312,930
L.P. to its limited and general partners (2)
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 attributable to partners $ 46,971 $ 105,379 $ 302,882 $ 352,478
Adjustments to derive Distributable Cash:
Equity in income of unconsolidated affiliates (82,661 ) (138,955 ) (370,195 ) (441,299 )
Quarterly distribution expected to be received from Energy Transfer 148,225 136,048 434,622 384,958
Partners, L.P.
Amortization included in interest expense 1,074 751 5,236 2,255
Other non-cash 138 4 415 14
Unrealized gains and losses on non-hedged interest rate swaps 9,422 5,515 (10,885 ) 6,734
Distributable Cash 123,169 108,742 362,075 305,140
Adjustments to Distributable Cash to derive Net Cash Provided by
Operating Activities:
Quarterly distribution expected from Energy Transfer Partners, L.P. (148,225 ) (136,048 ) (434,622 ) (384,958 )
Cash distribution received from Energy Transfer Partners, L.P. (3) 144,733 122,831 425,938 399,295
Deferred income taxes (76 ) - (649 ) -
Net changes in operating assets and liabilities (846 ) 1,141 (3,348 ) 9,673
Net cash provided by operating activities for Parent Company on a $ 118,755 $ 96,666 $ 349,394 $ 329,150
stand-alone basis
(1) For the three months ended September 30, 2009, cash distributions expected to be received from Energy Transfer Partners, L.P. consists of cash distributions in respect of the three months ended September 30, 2009 payable on November 16, 2009 to holders of record on the close of business on November 9, 2009. For the three months ended September 30, 2008, cash distributions received from Energy Transfer Partners, L.P. consists of cash distributions paid on November 14, 2008 for the three months ended September 30, 2008.
For the nine months ended September 30, 2009, cash distributions received or expected to be received from Energy Transfer Partners, L.P. consists of cash distributions paid on May 15, 2009 in respect of the quarter ended March 31, 2009, cash distributions paid on August 14, 2009 in respect of the quarter ended June 30, 2009 and cash distributions in respect of the three months ended September 30, 2009 payable on November 16, 2009 to holders of record on the close of business on November 9, 2009. For the nine months ended September 30, 2008, cash distributions received from Energy Transfer Partners, L.P. consists of cash distributions paid on May 15, 2008 in respect of the quarter ended March 31, 2008, cash distributions paid on August 14, 2008 in respect of the quarter ended June 30, 2008 and cash distributions in respect of the three months ended September 30, 2008 paid on November 14, 2008.
(2) For the three months ended September 30, 2009, cash distributions expected to be paid from Energy Transfer Equity, L.P. consists of cash distributions in respect of the three months ended September 30, 2009 payable on November 19, 2009 to holders of record on November 9, 2009. For the three months ended September 30, 2008, cash distributions paid or expected to be paid from Energy Transfer Equity, L.P. consists of cash distributions paid on November 19, 2008 for the three months ended September 30, 2008.
For the nine months ended September 30, 2009, cash distributions paid or expected to be paid by Energy Transfer Equity, L.P. consist of cash distributions paid on May 19, 2009 in respect of the quarter ended March 31, 2009, cash distributions paid on August 19, 2009 in respect of the quarter ended June 30, 2009 and cash distributions in respect of the three months ended September 30, 2009 payable on November 19, 2009 to holders of record on the close of business on November 9, 2009. For the nine months ended September 30, 2008, cash distributions by Energy Transfer Equity, L.P. consist of cash distributions paid on May 15, 2008 in respect of the quarter ended March 31, 2008, cash distributions paid on August 14, 2008 in respect of the quarter ended June 30, 2008 and cash distributions in respect of the three months ended September 30, 2008 paid on November 19, 2008.
(3) Cash distributions received from Energy Transfer Partners, L.P. for the nine months ended September 30, 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.
SOURCE: Energy Transfer Equity, L.P.
Investor Relations: Energy Transfer Brent Ratliff, 214-981-0700 or Media Relations: Granado Communications Group Vicki Granado, 214-504-2260 214-498-9272 (cell)
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