Energy Transfer (ET) 8-K Declares 19% Increase In Distribution to Its Unitholders

May 2006

May 2006

Analyst Conference

Analyst Conference

Energy Transfer Equity, LP

Energy Transfer Equity, LP

Energy Transfer Partners, LP

Energy Transfer Partners, LP

Exhibit 99.2

Exhibit 99.2

99.2

2

The

statements

made

by

representatives

of

Energy

Transfer

Partners

(ETP)

or

Energy

Transfer

Equity

(ETE)

during

the

course

of

this

presentation

that

are

not

historical

facts

are

forward-

looking

statements.

Although

the

assumptions

underlying

these

statements

are

believed

to

be

reasonable,

investors

are

cautioned

that

such

forward-looking

statements

are

inherently

uncertain

and

necessarily

involve

risks

that

may

affect

the

business

prospects

and

performance

of

ETP

and

ETE,

causing

actual

results

to

differ

from

those

discussed

during

this

presentation.

When

considering

forward-looking

statements,

you

should

keep

in

mind

the

risk

factors

and

other

cautionary

statements

included

in

the

prospectus.

Any

forward-looking

statements

made

are

subject

to

all

of

the

risks

and

uncertainties,

many

of

which

are

beyond

management’s

control,

involved

in

transportation,

gathering,

compression,

treating,

processing,

storage

and

marketing

of

natural

gas

and

in

the

propane

business.

These

risks

include

the

risks

described

in

the

prospectus.

Should

one

or

more

of

these

risks

or

uncertainties

occur,

or

should

underlying

assumptions

prove

incorrect,

the

actual

results

and

plans

of

ETP

and

ETE

could

differ

materially

from

those

anticipated,

estimated,

projected

or

expected.

ETP

and

ETE

undertake

no

obligation

to

publicly

update

any

forward-looking

statements,

whether

as

a

result

of

new

information

or

future

events.

Legal Disclaimer

Legal Disclaimer

3

Agenda

Overview

Asset Profile

ETP Corporate Structure

Investment Highlights

Propane Overview

Project Update

Midstream Overview

Financial Review

Energy Transfer Equity, LP

Summary

4

Asset Profile

A

diversified

midstream

and

propane

MLP:

3rd

largest

MLP

in

the

U.S.

Largest

intrastate

pipeline

system

in

U.S.

with

interconnects

to

major

consumption

areas

throughout

U.S.

Significant

strategically

located

natural

gas

storage

capacity

One

of

five

largest

retail

propane

marketers

in

the

United

States

with

concentration

in

highest

population

growth

areas

Annual Revenue (FYE 2005)

$6.2 B

Total Assets (2/28/06)             

$4.4 B

Book Equity (2/28/06)

$1.8 B

Enterprise Value (1)

$6.1 B

Equity Market Cap. (1)

$4.6 B

Units Outstanding (2/28/06)    

110,625,711

EBITDA (Fiscal 2006)

$710 million (2)

ETP

Financial

Summary

Assets:

Midstream

(80%

of

ETP

EBITDA):

Pipelines (active miles)

11,700

Storage (working space)

78 Bcf

Processing

240 MMcf/d

Treating

3,500 gpm

Aggregate Throughput Capacity

7.6 Bcf/d

Propane

(20%

of

ETP

EBITDA):

Propane Customers

> 700,000

Propane Service Locations

321

Geographic Footprint:

Market Hubs

5

Producing Regions

5

Interstate Pipeline Connections

> 10

Propane Operations

34 States

Employees

Midstream Operations

~565

Propane Operations

~2,730

Operational Metrics

(1) Unit price as of  May 5, 2006; excludes

value of GP and ETE.

(2) Public guidance.

5

ETP Corporate Structure

Public Unitholders

Energy Transfer Equity, L.P.

Energy Transfer Partners, L.P.

110,625,711 Units Outstanding

67.1% Limited

Partner Interest

La Grange Acquisition, L.P

Natural Gas

Midstream Operations

Heritage  Operating, L.P.

Propane

Operations

Heritage

Holdings

Inc

50% Incentive

Distribution Rights

32.9% Limited, Partner

Interest

2% General Partner

Interest

6

Investment Highlights

Substantial competitive advantage

High quality portfolio of assets

Strong credit statistics

Compares favorably with BBB+ / BBB peers

Management commitment to credit quality

High common unit coverage

ETP retains cash to fund internal growth and strengthen balance sheet

Low risk, high rate of return growth opportunities

Low construction price to EBITDA multiples

Long-term contracts already in place

Excellent access to public debt and equity markets

Significant liquidity

History of consistent distribution growth

Experienced management with substantial equity ownership

7

Propane Overview

Asset Overview

Keys to Success

Customer Mix

Titan Acquisition

8

Propane Operations

ETP’s propane operations are concentrated in higher than average population growth areas where natural gas

distribution may not be cost effective, and its geographic diversification minimizes the impact of weather patterns in

individual regions.

Fee-based, pass-through business, subject to weather volatility

that impacts volumes

Focus on higher-margin residential customers

Record fiscal 2004 and 2005 operating and financial

performance

Realized 2%-3% internal growth excluding acquisitions

Trend of increasing margins due to higher vehicle fuel costs,

steel costs, benefit, and insurance cost

Own our own assets

Purchase land, buildings and vehicles

We own 90% of customer tanks

Retail Gallons Sold (Millions)

126

147

160

181

330

330

376

398

406

0

50

100

150

200

250

300

350

400

450

9

Keys to Success

Decentralized Operations

Eliminates large scale corporate staff

Pricing determined at regional level

Billing and collection at local level, CSR collecting accounts receivables

from neighbors, likely to be paid first

Internal Growth

Plant Bonus Program to share EBITDA in excess of budget with all

employees

Growth of 1% to 3% at 4.0x multiple

Acquisitions

Disciplined approach with specific criteria

Attractive multiples at base level of deal flow

Low event risk as combining acquired operations with current locations

under seasoned Region Manager

Expense Control

Districts operate as independent profit centers with entrepreneurial attitude

Robust budgetary process with monthly accountability

Compensation based on local wage rates –

no company-wide pay scale

10

Diversified Customer Base

Residential 56.0%

Other 13.0%

Industrial/Commercial/

Agricultural 31.0%

Gallons by Retail Class

11

Titan Acquisition

200 million gallons

146 district locations

325,000 customers

33 states

$.10 -.15 accretive per unit

Closing June 1, 2006

12

Project Update

13

Project Update

42”

Expansion and Loop

New Addition

South Loop

$895 million total capital to

be spent

$320 already incurred

14

Midstream Overview

System Map with Expansions

Competitive Advantages

US Natural Gas Supply/ Demand Discussion

Supply Discussion

Producer Economics

2006 Volume and Margin Review

Energy Transfer System Map

16

Competitive Advantages

Texas Infrastructure

Market Options for Producers

Strong Position in Active Supply Basins

Operating Expertise

Producer Relationships

Backlog of Organic Growth

Positive impact of LNG

Natural Gas Supply -

Texas

*Texas produced 28%

of estimated domestic

production in 2004

*Source: www.eia.doe.gov

US Natural Gas Consumption

17.5%

17.5%

8.3%

8.3%

6%

6%

5%

5%

11%

11%

Source: EIA –

2004 Natural Gas Total Consumption

US Natural Gas Supply/ Demand

20

Natural Gas Supply -

Texas

Factors effecting drilling

Price of gas

Cost of drilling/ completing

Rig availability

Pipeline accessibility

Lease terms

Reserve risk

Magnitude of dollars per well

Availability of capital

Producer infrastructure in area

Royalty terms

21

Volume/Margin

Mar. -

May

June -

Aug.

Sept. -

Nov.

Dec. -

Feb.

Trailing

Q3 2005

Q4 2005

Q1 2006

Q2 2006

12-Month

Consolidated

Sales volume

581,914,952

627,678,954

635,388,103

643,221,361

2,488,203,370

Margin

147,079,476

131,566,320

147,768,428

275,561,668

701,975,892

Avg. rate

0.253

$                  

0.210

$                  

0.233

$                  

0.428

$                  

0.282

$                  

Billed volume/d

6,325,163

6,822,597

6,906,392

6,991,537

6,816,996

ETP Midstream Volume/ Margin Analysis

22

Financial Review

Liquidity

Distributable Cash Flow Forecast

Common Unit Coverage

Potential Distribution @ 1.15 X

Description of Class E Units

Interest Expense Calculation

Distribution Review

23

Liquidity

Long term assets supported by long term fixed rate debt

MLP structure more efficient with fixed rate debt

Floating/Fixed Rate Debt Mix

(exluding Working Capital Facilities)

100.0%

Fixed

Floating/Fixed Rate Mix

(including Working Capital Facilities)

7.7%

92.3%

Fixed

Floating

Balance

Available

Balance

Facility

As Of

Capacity

Fiscal

Fiscal

Fiscal

Fiscal

Fiscal

Size

02/28/06

02/28/06

2006

2007

2008

2009

2010

Energy

Transfer

Partners,

L.P.

$750MM Senior Notes

$750,000

$750,000

$0

$0

$0

$0

$0

$0

$400MM Senior Notes

$400,000

$400,000

$0

$0

$0

$0

$0

$0

$900MM Revolving Credit Facility

$900,000

$100,000

$800,000

$0

$0

$0

$0

$0

Heritage

Operating,

L.P.

Private Placement Notes

$292,971

$292,971

$0

$30,406

$34,806

$41,949

$40,899

$39,785

Seller Notes

$2,460

$2,460

$0

$393

$569

$502

$428

$321

Revolving Credit Facility (1)

$75,000

$21,197

$53,803

$0

$21,197

$0

$0

$0

Other (Non Competes)

$14,492

$14,492

$0

$2,063

$4,251

$3,973

$2,279

$1,040

Total Consolidated Energy Transfer Partners, L.P.$2,434,923

$1,581,120

$853,803

$32,862

$60,823

$46,424

$43,606

$41,146

(1) Heritage Operating is currently negotiating a new Credit Facility to replace the existing Credit Facility which expires December 31, 2006

Required Principal Payments

Energy Transfer Partners, L.P.

Schedule of Required Principal Payments ($ in 000's)

24

Liquidity (cont.)

$350.0

$52.1

$106.0

$132.4

$194.2

$336.4

$0

$50

$100

$150

$200

$250

$300

$350

$400

Jan-

04

Feb-

04

Mar-

04

Apr-

04

May-

04

Jun-

04

Jul-

04

Aug-

04

Sep-

04

Oct-

04

Nov-

04

Dec-

04

Jan-

05

Feb-

05

Mar-

05

Apr-

05

May-

05

Jun-

05

Jul-

05

Aug-

05

Sep-

05

Oct-

05

Nov-

05

Dec-

05

Jan-

06

Feb-

06

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

$40.0

Net Equity Issued

Monthly Average Price per Unit

25

Distributable Cash Flow/ Coverage

ETP Distributable Cash Flow Calculation (in thousands)

(@ $2.55/ LP Unit)

2006E EBITDA

710,000

$        

Less: Maintenance Capital

(37,000)

$         

Less: Interest Expense

(115,000)

$       

Less: Taxes

(20,000)

$         

Distributable Cash Flow

538,000

$        

Less: Distributions to GP (IDRs)

(120,255)

$       

Distributable Cash Flow to LP

417,745

$        

LP Unit Distributions

282,096

$        

Excess Distributable Cash Flow

135,649

$        

Distribution Coverage Ratio

1.48 X

26

Interest Expense

(000's)

$750mm Senior Notes @ 5.95%

44,625

$          

$400mm Senior Notes @ 5.65%

22,600

$300mm Private Placement Notes @ 8.25%

24,000

$17mm Other @ 8.00%

1,360

$360mm Average Working Capital @ 6%

22,415

Total Annual Interest Expense

115,000

$        

27

Potential Distribution @ 1.15X

ETP Common Distribution @ 1.15X

Distributable Cash Flow (000's)

538,000

$        

ETP DCF/ LP Unit

2.99

$               

Less: Distributions to GP (IDRs)

(158,180)

$       

Distributable Cash Flow to LP

379,820

$        

LP Unit Distributions

330,243

$        

Excess Distributable Cash Flow

49,577

$          

Distribution Coverage Ratio

1.15 X

28

Class E Units

Number of Class E Units

Number of Class E Units

8,853,832

8,853,832

Maximum Distribution Rate for Class E Units (per Common Unit)

Maximum Distribution Rate for Class E Units (per Common Unit)

Distribution

Distribution

•Class E Unit

•Class E Unit

$3,120,976

$3,120,976

•General Partner

•General Partner

877,550

877,550

Total

Total

$3,998,526

$3,998,526

Class E Unit distribution treated as Treasury Unit thus distribution is returned to ETP. 

Class E Unit distribution treated as Treasury Unit thus distribution is returned to ETP. 

Net outbound cash related to Class E Units is $877,550 per year based on $2.55 ETP

Net outbound cash related to Class E Units is $877,550 per year based on $2.55 ETP

distribution rate.

distribution rate.

29

Distribution Review

ETP Distribution History

$1.30

$1.40

$1.50

$1.65

$1.75

$1.85

$1.95

$2.00

$2.20

$2.35

$2.55

$1.00

$1.40

$1.80

$2.20

$2.60

$3.00

30

Energy Transfer Equity, LP

ETE Corporate Structure

Statistics

Distributable Cash Flow

ETE DCF @ ETP DCF Increases

31

ETE Corporate Structure

Management

and Affiliates

Public

Unitholders

LE GP, LLC

Energy Transfer Equity, L.P.

137,216,912 Common Units Outstanding

81.8% Limited

Partner Interest

17.7% Limited

Partner Interest

50% Incentive Distribution

Rights

32.9% Limited Partner

Interest

2% General Partner  

Interest

0.5% General

Partner Interest

32

Statistics

ETE Statistics

Market Capitalization

$3.55 billion

Long Term Debt

$377 million

Enterprise Value

$3.93 billion

Outstanding Units

137,216,912

Current DCF/ Unit

$0.80

*as of May 5, 2006

33

Distributable Cash Flow

ETE Distributable Cash Flow

(in thousands)

Cash Flow from ETP

     2% GP Cash Flow

8,297

$         

     IDR Cash Flow

55,979

$       

     LP Unit Distributions

92,855

$       

Total Cash Flow from ETP

157,131

$     

Less: Interest Expense

(23,563)

$      

Less: G&A

(3,000)

$        

Distributable Cash Flow

130,569

$     

Outstanding Units

137,216,912

DCF/ Unit

0.95

$          

34

ETE Distributions @ ETP DCF Increases

ETE DCF Estimates

$0.95

$1.02

$1.09

$1.23

$1.16

$1.29

$1.36

$0.70

$0.90

$1.10

$1.30

$1.50

$2.55

$2.65

$2.75

$2.85

$2.95

$3.05

$3.15

ETP DCF/ Unit

35

Investment Highlights

Substantial competitive advantage

High quality portfolio of assets

Strong credit statistics

Compares favorably with BBB+ / BBB peers

Management commitment to credit quality

High common unit coverage

ETP retains cash to fund internal growth and strengthen balance sheet

Low risk, high rate of return growth opportunities

Low construction price to EBITDA multiples

Long-term contracts already in place

Excellent access to public debt and equity markets

Significant liquidity

History of consistent distribution growth

Experienced management with substantial equity ownership