Exhibit 99.1
FOR IMMEDIATE RELEASE
ENERGY TRANSFER PARTNERS REPORTS
QUARTERLY RESULTS FOR THE PERIOD ENDED SEPTEMBER 30th
Dallas – November 10, 2008–Energy Transfer Partners, L.P. (NYSE:ETP)today reported EBITDA, as adjusted, and net income for the quarter ended September 30, 2008. EBITDA, as adjusted, for the three months ended September 30, 2008 totaled $332.7 million, an increase of $108.8 million over the three months ended August 31, 2007. Net income for the three months ended September 30, 2008 totaled $221.0 million, an increase of $84.5 million over the three months ended August 31, 2007.
For the nine months ended September 30, 2008, EBITDA, as adjusted, totaled $1.1 billion, an increase of $191.3 million over the nine months ended August 31, 2007. Net income for the nine months ended September 30, 2008 totaled $715.1 million, an increase of $110.0 million over the nine months ended August 31, 2007.
“Our assets provided for another solid quarter of operating results and cash flow,” said Martin Salinas, Energy Transfer Partners’ Chief Financial Officer. “We continue to experience strong demand for our natural gas pipeline capacity across our system and have benefited from the incremental fee-based cash flow generated from our pipeline expansion projects completed over the last eighteen months.”
ETP also announced that it has filed its quarterly report on Form 10-Q for the period ended September 30, 2008 with the Securities and Exchange Commission. ETP has posted a copy of this Form 10-Q on its website atwww.energytransfer.com.
The Partnership has scheduled a conference call for 8:00 a.m. Central Time, Tuesday, November 11, 2008 to discuss the third quarter results. The dial-in number is 1-800-230-1092, participant code: Energy Transfer. The call will be available for replay on the Partnership’s website for a limited time.
EBITDA, as adjusted, is a non-GAAP financial measure used by industry analysts, investors, lenders, and rating agencies to assess the financial performance and the operating results of the Partnership’s fundamental business activities and should not be considered in isolation or as a substitute for net income, income from operations, or other measures of cash flow. A table reconciling EBITDA, as adjusted, with appropriate GAAP financial measures is included in the summarized financial information included in this release.
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 intrastate natural gas gathering and transportation pipelines, natural gas treating and processing assets and three natural gas storage facilities located in Texas. These assets include approximately 14,500 miles of intrastate pipeline in service, with approximately 300 miles of intrastate pipeline under construction. In addition, ETP owns 2,450 miles of interstate pipeline in service, with approximately 250 miles of interstate pipeline 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.
Energy Transfer Equity, L.P. (NYSE:ETE)is a publicly traded partnership, which owns the general partner of Energy Transfer Partners and approximately 62.5 million ETP limited partner units.
The information contained in this press release is available on the Partnership’s website atwww.energytransfer.com.
Contacts
Investor Relations:
Energy Transfer
Brent Ratliff
214-981-0700 (Office)
Media Relations:
Vicki Granado
Granado Communications Group
214-504-2260 (office)
214-498-9272 (cell)
ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(unaudited)
| | | | | | | | |
| | September 30, | | | December 31, | |
| | 2008 | | | 2007 | |
ASSETS | | | | | | | | |
CURRENT ASSETS: | | | | | | | | |
Cash and cash equivalents | | $ | 526,074 | | | $ | 56,467 | |
Marketable securities | | | 11,038 | | | | 3,002 | |
Accounts receivable, net of allowance for doubtful accounts | | | 598,812 | | | | 822,027 | |
Accounts receivable from related companies | | | 27,808 | | | | 24,438 | |
Inventories | | | 306,901 | | | | 361,954 | |
Deposits paid to vendors | | | 80,601 | | | | 42,273 | |
Prepaid expenses and other current assets | | | 130,765 | | | | 99,798 | |
| | | | | | |
Total current assets | | | 1,681,999 | | | | 1,409,959 | |
| | | | | | | | |
PROPERTY, PLANT AND EQUIPMENT, net | | | 7,903,927 | | | | 6,433,788 | |
ADVANCES TO AND INVESTMENT IN AFFILIATES | | | 1,590 | | | | 86,167 | |
GOODWILL | | | 746,607 | | | | 728,109 | |
INTANGIBLES AND OTHER LONG-TERM ASSETS, net | | | 387,185 | | | | 350,138 | |
| | | | | | |
| | | | | | | | |
Total assets | | $ | 10,721,308 | | | $ | 9,008,161 | |
| | | | | | |
ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(unaudited)
| | | | | | | | |
| | September 30, | | | December 31, | |
| | 2008 | | | 2007 | |
LIABILITIES AND PARTNERS’ CAPITAL | | | | | | | | |
CURRENT LIABILITIES: | | | | | | | | |
Accounts payable | | $ | 549,813 | | | $ | 672,388 | |
Accounts payable to related companies | | | 37,535 | | | | 48,483 | |
Customer advances and deposits | | | 139,656 | | | | 75,831 | |
Accrued and other current liabilities | | | 246,630 | | | | 220,847 | |
Accrued capital expenditures | | | 195,350 | | | | 87,622 | |
Interest payable | | | 70,992 | | | | 63,254 | |
Current maturities of long-term debt | | | 45,660 | | | | 47,036 | |
| | | | | | |
Total current liabilities | | | 1,285,636 | | | | 1,215,461 | |
| | | | | | | | |
LONG-TERM DEBT, less current maturities | | | 5,509,484 | | | | 4,297,264 | |
DEFERRED INCOME TAXES | | | 101,700 | | | | 102,762 | |
OTHER LONG-TERM LIABILITIES | | | 14,381 | | | | 13,483 | |
| | | | | | | | |
COMMITMENTS AND CONTINGENCIES | | | | | | | | |
| | | | | | |
| | | 6,911,201 | | | | 5,628,970 | |
| | | | | | | | |
PARTNERS’ CAPITAL: | | | | | | | | |
General Partner | | | 159,044 | | | | 160,193 | |
Limited Partners: | | | | | | | | |
Common Unitholders (151,799,685 and 142,069,957 units authorized, issued and outstanding at September 30, 2008 and December 31, 2007, respectively) | | | 3,641,184 | | | | 3,192,092 | |
Class E Unitholders (8,853,832 units authorized, issued and outstanding - held by subsidiary and reported as treasury units) | | | — | | | | — | |
| | | | | | | | |
Accumulated other comprehensive income | | | 9,879 | | | | 26,906 | |
| | | | | | |
Total partners’ capital | | | 3,810,107 | | | | 3,379,191 | |
| | | | | | |
| | | | | | | | |
Total liabilities and partners’ capital | | $ | 10,721,308 | | | $ | 9,008,161 | |
| | | | | | |
ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit and unit data)
(unaudited)
| | | | | | | | | | | | | | | | |
| | Three Months Ended | | | Nine Months Ended | |
| | September 30, | | | August 31, | | | September 30, | | | August 31, | |
| | 2008 | | | 2007 | | | 2008 | | | 2007 | |
REVENUES: | | | | | | | | | | | | | | | | |
Natural gas operations | | $ | 1,938,586 | | | $ | 1,424,012 | | | $ | 6,322,070 | | | $ | 4,323,448 | |
Retail propane | | | 238,830 | | | | 161,147 | | | | 1,086,417 | | | | 912,983 | |
Other | | | 28,799 | | | | 41,167 | | | | 90,575 | | | | 167,161 | |
| | | | | | | | | | | | |
Total revenues | | | 2,206,215 | | | | 1,626,326 | | | | 7,499,062 | | | | 5,403,592 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
COSTS AND EXPENSES: | | | | | | | | | | | | | | | | |
Cost of products sold — natural gas operations | | | 1,435,308 | | | | 1,089,968 | | | | 4,965,145 | | | | 3,323,717 | |
Cost of products sold — retail propane | | | 187,799 | | | | 103,784 | | | | 744,316 | | | | 566,585 | |
Cost of products sold — other | | | 10,347 | | | | 23,908 | | | | 27,783 | | | | 100,561 | |
Operating expenses | | | 197,493 | | | | 144,507 | | | | 573,606 | | | | 427,219 | |
Depreciation and amortization | | | 70,508 | | | | 52,591 | | | | 191,757 | | | | 145,353 | |
Selling, general and administrative | | | 44,252 | | | | 39,428 | | | | 136,632 | | | | 118,347 | |
| | | | | | | | | | | | |
Total costs and expenses | | | 1,945,707 | | | | 1,454,186 | | | | 6,639,239 | | | | 4,681,782 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
OPERATING INCOME | | | 260,508 | | | | 172,140 | | | | 859,823 | | | | 721,810 | |
| | | | | | | | | | | | | | | | |
OTHER INCOME (EXPENSE): | | | | | | | | | | | | | | | | |
Interest expense, net of interest capitalized | | | (67,792 | ) | | | (47,180 | ) | | | (191,757 | ) | | | (134,101 | ) |
Equity in earnings (losses) of affiliates | | | (654 | ) | | | (51 | ) | | | (749 | ) | | | 274 | |
Gain (loss) on disposal of assets | | | 2,520 | | | | (2,525 | ) | | | 1,584 | | | | (8,254 | ) |
Other, net | | | 19,316 | | | | 17,154 | | | | 54,910 | | | | 36,328 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS | | | 213,898 | | | | 139,538 | | | | 723,811 | | | | 616,057 | |
Income tax expense (benefit) | | | (7,150 | ) | | | 3,202 | | | | 8,754 | | | | 10,062 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
INCOME BEFORE MINORITY INTERESTS | | | 221,048 | | | | 136,336 | | | | 715,057 | | | | 605,995 | |
Minority interests | | | — | | | | 191 | | | | — | | | | (888 | ) |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
NET INCOME | | | 221,048 | | | | 136,527 | | | | 715,057 | | | | 605,107 | |
| | | | | | | | | | | | | | | | |
GENERAL PARTNER’S INTEREST IN NET INCOME | | | 80,252 | | | | 62,046 | | | | 233,599 | | | | 182,575 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
LIMITED PARTNERS’ INTEREST IN NET INCOME | | $ | 140,796 | | | $ | 74,481 | | | $ | 481,458 | | | $ | 422,532 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
BASIC NET INCOME PER LIMITED PARTNER UNIT | | $ | 0.93 | | | $ | 0.54 | | | $ | 3.06 | | | $ | 2.79 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
BASIC AVERAGE NUMBER OF UNITS OUTSTANDING | | | 149,839,499 | | | | 136,980,931 | | | | 145,160,079 | | | | 136,978,832 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
DILUTED NET INCOME PER LIMITED PARTNER UNIT | | $ | 0.93 | | | $ | 0.54 | | | $ | 3.05 | | | $ | 2.79 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
DILUTED AVERAGE NUMBER OF UNITS OUTSTANDING | | | 150,248,194 | | | | 137,235,809 | | | | 145,615,088 | | | | 137,231,656 | |
| | | | | | | | | | | | |
The Partnership previously announced a change in its year end from August 31 to December 31. The unaudited consolidated financial statements contained in this press release cover the three and nine-month periods ended September 30, 2008 and the three and nine-month periods ended August 31, 2007 (the three and nine-month periods of the previous fiscal year most nearly comparable to the three and nine-month periods ended September 30, 2008). The Partnership did not recast the financial data for the prior fiscal periods because the financial reporting processes in place at that time included certain procedures that were completed only on a fiscal quarterly basis. The Partnership believes the information, data and indicated trends for the three and nine-month periods ended August 31, 2007 are comparable to what would have been reported for the three and nine-month periods ended September 30, 2007 if we had recast the prior period information. Such comparability is impacted primarily by weather, fluctuations in commodity prices, volumes of natural gas sold and transported, our hedging strategies and the use of financial instruments, trading activities, basis differences between market hubs and interest rates.
| | | | | | | | | | | | | | | | |
| | Three Months Ended | | | Nine Months Ended | |
| | September 30, | | | August 31, | | | September 30, | | | August 31, | |
SUPPLEMENTAL INFORMATION: | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
(unaudited) | |
Net income reconciliation: | | | | | | | | | | | | | | | | |
Net income | | $ | 221,048 | | | $ | 136,527 | | | $ | 715,057 | | | $ | 605,107 | |
Interest expense, net of interest capitalized | | | 67,792 | | | | 47,180 | | | | 191,757 | | | | 134,101 | |
Income tax expense (benefit) | | | (7,150 | ) | | | 3,202 | | | | 8,754 | | | | 10,062 | |
Depreciation and amortization | | | 70,508 | | | | 52,591 | | | | 191,757 | | | | 145,353 | |
Non-cash compensation expense | | | 2,378 | | | | (924 | ) | | | 14,338 | | | | 7,307 | |
Other, net | | | (19,316 | ) | | | (17,154 | ) | | | (54,910 | ) | | | (36,328 | ) |
(Gain) loss on disposal of assets | | | (2,520 | ) | | | 2,525 | | | | (1,584 | ) | | | 8,254 | |
| | | | | | | | | | | | |
EBITDA, as adjusted (a) | | $ | 332,740 | | | $ | 223,947 | | | $ | 1,065,169 | | | $ | 873,856 | |
| | | | | | | | | | | | |
|
| | Three Months Ended | | Nine Months Ended |
| | September 30, | | August 31, | | September 30, | | August 31, |
VOLUMES: | | 2008 | | 2007 | | 2008 | | 2007 |
(unaudited) | |
Midstream | | | | | | | | | | | | | | | | |
Natural gas MMBtu/d — sold | | | 1,344,033 | | | | 926,511 | | | | 1,361,295 | | | | 930,401 | |
NGLs bbls/d — sold | | | 24,019 | | | | 22,417 | | | | 27,618 | | | | 19,986 | |
Intrastate Transportation and storage | | | | | | | | | | | | | | | | |
Natural gas MMBtu/d — transported | | | 11,613,933 | | | | 7,787,906 | | | | 10,515,132 | | | | 9,288,808 | |
Natural gas MMBtu/d — sold | | | 1,409,348 | | | | 1,437,598 | | | | 1,556,524 | | | | 1,430,869 | |
Interstate transportation | | | | | | | | | | | | | | | | |
Natural gas MMBtu/d — transported | | | 1,862,781 | | | | 1,874,179 | | | | 1,750,592 | | | | 1,802,109 | |
Retail propane gallons sold (in thousands) | | | 90,386 | | | | 82,311 | | | | 422,109 | | | | 463,638 | |
| | |
(a) | | The Partnership has disclosed in this press release EBITDA, as adjusted, which is a non-GAAP financial measure. Management believes EBITDA, as adjusted, provides useful information to investors as a measure of comparison with peer companies, including companies that may have different financing and capital structures. The presentation of EBITDA, as adjusted, also allows investors to view our performance in a manner similar to the methods used by management and provides additional insight to our operating results. |
The Partnership defines EBITDA, as adjusted, as total partnership earnings before interest, taxes, depreciation, amortization and other non-cash items, such as non-cash compensation charges for unit issuances to employees and other expenses. Non-cash compensation expense represents charges for the value of the grants awarded under the Partnership’s compensation plans over the vesting terms of those plans and are charges which do not, or will not, require cash settlement. Non-cash income or loss such as the gain or loss arising from disposal of assets is not included when determining EBITDA, as adjusted.
EBITDA, as adjusted, is used by management to determine our operating performance and, along with other data, as an internal measure for setting annual operating budgets, assessing financial performance of our numerous business locations, as a measure for evaluating targeted businesses for acquisition and as a measurement component for incentive compensation.
There are material limitations to using a measure such as EBITDA, as adjusted, including the difficulty associated with using it as the sole measure to compare the results of one company to another, and the inability to analyze certain significant items that directly affect a company’s net income or loss. In addition, our calculation of EBITDA, as adjusted, may not be consistent with similarly titled measures of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP, such as gross margin, operating income, net income, and cash flow from operating activities.