Energy Transfer (ET) 8-K Lehman Brothers Energy Conference

September 2006

September 2006

Lehman Brothers Energy Conference

Lehman Brothers Energy Conference

Lehman Brothers Energy Conference

Energy Transfer Equity, L.P.

Energy Transfer Equity, L.P.

Energy

Energy Transfer

Partners, L.P.

Partners, L.P.

Exhibit 99.1

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

the

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

ETP/ETE Corporate Structure

Asset Profile

Investment Highlights

Asset Overview

Midstream Overview

Propane Overview

Project Update

Energy Transfer Equity, L.P.

ETP/ETE Unitholder

Returns

Summary

4

ETP Corporate Structure

Public Unitholders

Energy Transfer Equity, L.P.

Energy Transfer Partners, L.P.

110,726,999 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

Titan

Propane,

L.P.

5

ETE Corporate Structure

Management

and Affiliates

Public

Unitholders

LE GP, LLC

Energy Transfer Equity, L.P.

124,360,520 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

6

Asset Profile

A diversified midstream and propane MLP:

3rd largest MLP in the U.S. (based on market cap)

Largest

intrastate

pipeline

system

in

U.S.

with

interconnects

to

major

consumption

areas throughout U.S.

Significant strategically located natural gas storage capacity

Third largest retail propane marketer in the United States with concentration in

highest population growth areas

Annual Revenue (LTM 5/31/06)

$8.1 B

Total Assets (5/31/06)             

$4.6 B

Enterprise Value (1)

$7.1 B

Equity Market Cap. (1)

$5.3 B

Units Outstanding (8/31/06)    

110,726,999

EBITDA (Fiscal 2006)

$730 million (2)

ETP Financial Summary

(1)

Unit

price

as

of

August

30,

2006

&total

debt

as

of

5/31/06;

excludes

value

of

GP

and

ETE.

(2) Public guidance.

(3) Based on ETP annual  distribution of $2.55/ unit

ETE Financial Summary

Annual EBITDA (3)

$157 million

Enterprise Value (1)

$3.72 B

Equity Market Cap. (1)

$3.35 B

Units Outstanding (8/31/06)

124,360,520

Current Annual DCF/ Unit

$.95

7

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

Attractive construction price to EBITDA multiples

Long-term contracts in place prior to construction

Excellent access to public debt and equity markets

Significant liquidity

History of consistent distribution growth

Experienced management with substantial equity ownership

8

Energy Transfer Midstream System

9

Competitive Advantages

Texas Infrastructure

Multiple Market Options for Producers

Strong Position in Active Supply Basins

Operating Expertise

Producer Relationships

Substantial Organic Growth Opportunities

Bypass Capability at Processing Plants

10

Project Update

11

Project Update

Provides 2.3 Bcf/d

additional outlet

capacity to Fort Worth Basin and

East Texas producers

Links high growth production with

major market hubs and multiple

interstate interconnects across Texas

Provides accretive returns on

significant capital spending

Backed by long-term contracts

with investment grade

counterparties

12

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 1%-3% internal growth excluding acquisitions

Trend of increasing margins due to higher vehicle fuel costs,

steel costs, benefit, and insurance cost

Assets owned

Purchase land, buildings and vehicles

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

13

Updated Propane Operations Map

14

Financial Review

ETP/ETE Credit Statistics

Distributable Cash Flow Forecast

Common Unit Coverage

Potential Distribution @ 1.15 X

Historical Returns (ETP/ETE)

Distribution Review

15

ETP/ETE Credit Statistics (5/31/2006)

Outstanding Debt (5/31/2006)

$1.5 billion

(excluding working capital)

2006E EBITDA

$730 mllion

2006E Interest Exp.

$110 million

Debt/ EBITDA

2.06 X

EBITDA/ Interest

6.64 X

ETP

ETP

Outstanding Debt (5/31/2006)

$377 million

2006E EBITDA

$157 million*

2006E Interest Exp.

$24 million

Debt/ EBITDA

2.40 X

EBITDA/ Interest

6.54 X

ETE

ETE

* Based on current ETP distribution annualized

* Based on current ETP distribution annualized

16

ETP Distributable Cash Flow/ Coverage

ETP Distributable Cash Flow Calculation (in thousands)

(@ $2.55/ LP Unit)

2006E EBITDA

     Midstream

595,000

$          

     Propane

135,000

$          

Total

730,000

$          

Less: Maintenance Capital

(50,000)

$           

Less: Interest Expense

(110,000)

$         

Less: Taxes

(28,000)

$           

Distributable Cash Flow

542,000

$          

Less: Distributions to GP (IDRs)

(120,365)

$         

Distributable Cash Flow to LP

421,635

$          

LP Unit Distributions

282,096

$          

Excess Distributable Cash Flow

139,540

$          

Distribution Coverage Ratio

1.50 X

17

Potential Distribution @ 1.15X

•

Based on EBITDA guidance of $730 million

•

Excludes impact of previously announced internal growth projects

ETP Common Distribution @ 1.15X

Distributable Cash Flow (000's)

542,000

$          

ETP DCF/ LP Unit

3.00

$                 

Less: Distributions to GP (IDRs)

(160,004)

$         

Distributable Cash Flow to LP

381,996

$          

LP Unit Distributions

331,991

$          

Excess Distributable Cash Flow

50,005

$            

Distribution Coverage Ratio

1.15 X

18

Historical Returns vs. Peers

5-Year Average Annual Total Return

8/29/01 - 8/29/06

Source:    FactSet

Note:

1   BWP, BPL, EEP, ETP, EPD, KMP, MMP, OKS, PPX, PAA, SXL, TPP, and VLI

28.1%

14.5%

(9.0%)

2.6%

(20.0%)

(10.0%)

0.0%

10.0%

20.0%

30.0%

40.0%

ETP

Large Cap MLP

Average¹

Dow Jones

S&P 500

19

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

20

Distribution History vs. Peers

2-Year Average Annual Distribution Growth

8/29/01 - 8/29/06

30%

15%

14%

12%

10%

9%

8%

7%

7%

5%

1%

0%

0%

5%

10%

15%

20%

25%

30%

35%

ETP

SXL

MMP

PAA

EPD

OKS

PPX

BPL

KMP

VLI

TPP

EEP

21

Distribution History vs. Peers

Average Annual Distribution Growth

Note:

1   Includes BWP, BPL, EEP, ETP, EPD, KMP, MMP, OKS, PPX, PAA, SXL, TPP, and VLI

26.0%

30.4%

30.8%

6.5%

7.3%

7.6%

0%

5%

10%

15%

20%

25%

30%

35%

3 Yr CAGR (8/29/03-8/29/06)

2 Yr CAGR (8/29/04-8/29/06)

1 Yr CAGR (8/29/05-8/29/06)

ETP

Large Cap MLP Average¹

22

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

Attractive construction price to EBITDA multiples

Long-term contracts in place prior to construction

Excellent access to public debt and equity markets

Significant liquidity

History of consistent distribution growth

Experienced management with substantial equity ownership