10-KPeriod: FY2011

Energy Transfer LP Annual Report, Year Ended Dec 31, 2011

Filed February 22, 2012For Securities:ETET-PI

Summary

Energy Transfer Equity, L.P. (ETE) filed its 2011 10-K report on February 22, 2012, detailing its operations and financial performance. The company's primary assets are its investments in Energy Transfer Partners, L.P. (ETP) and Regency Energy Partners LP (Regency), both master limited partnerships involved in energy midstream services. A significant development highlighted is the pending acquisition of Southern Union Company (SUG) for approximately $9.4 billion, a strategic move expected to enhance ETE's infrastructure and geographic diversity. This acquisition was subject to regulatory approvals and expected to close in the first quarter of 2012. Financially, ETE's performance is largely tied to the distributions received from ETP and Regency. In 2011, ETP's gross margin saw an increase driven by its interstate and midstream operations, particularly from the Tiger pipeline and growth in the Eagle Ford Shale. Regency also experienced revenue and gross margin growth. The company's overall financial health is supported by its credit facilities and ongoing growth capital expenditures planned for 2012 across its subsidiaries.

Financial Statements
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Key Highlights

  • 1Pending acquisition of Southern Union Company (SUG) for $9.4 billion, expected to close in Q1 2012, aiming to expand ETE's midstream and interstate platform.
  • 2ETP's 2011 performance showed strength in interstate and midstream operations, with significant revenue growth from the Tiger pipeline and Eagle Ford Shale assets.
  • 3Regency reported increased revenues and gross margins in 2011, benefiting from its midstream services in prolific natural gas producing regions.
  • 4ETP contributed its propane operations to AmeriGas in January 2012, receiving $1.46 billion in cash and AmeriGas common units, improving ETP's liquidity and focus.
  • 5Significant growth capital expenditures are planned for 2012 by ETP, Regency, and Lone Star, totaling $2.6 billion to $2.9 billion, focusing on NGL assets and shale plays.
  • 6ETE's financial results are primarily driven by distributions from its investments in ETP and Regency, which form its core cash flow sources.
  • 7The company maintained compliance with its debt covenants as of December 31, 2011, and had significant availability under its credit facilities.

Frequently Asked Questions

ETE's primary business objective is to increase cash available for distributions to its unitholders. This is achieved by supporting the growth strategies of its subsidiaries, ETP and Regency, through strategic acquisitions and internal growth opportunities. A major ongoing initiative is the significant pending acquisition of Southern Union Company (SUG).

In 2011, ETP saw increased gross margins driven by its interstate transportation (especially the Tiger pipeline) and midstream operations, benefiting from growth in areas like the Eagle Ford Shale. Regency also experienced growth in revenue and gross margin from its midstream services. ETE's overall financial results are largely dependent on the distributions received from these two entities.

The most significant development was the pending acquisition of Southern Union Company (SUG), valued at $9.4 billion, with an expected closing in Q1 2012. Additionally, ETP contributed its propane operations to AmeriGas in January 2012, receiving significant cash and units. ETP also completed a substantial senior notes offering and tender offer for its debt during this period. Planned capital expenditures for 2012 by ETP, Regency, and Lone Star were also highlighted as substantial, indicating continued investment in growth.