Energy Transfer LP · NYSE:ET
Energy Transfer LP — MLP Investor Conference (May 2010)
41 slides from Energy Transfer LP's conference presentation, May 12, 2010
Slide 1: MLP Investor Conference
Energy Transfer 2009 Analyst Presentation MLP Investor Conference November 18, 2009 May 12, 2010
Slide 2: Legal Disclaimer
Legal Disclaimer This presentation may contain statements about future events, outlook and expectations of Energy Transfer Partners, L.P. (ETP) and Energy Transfer Equity, L.P. (ETE) (collectively, the “Partnerships”), all of which are forward-looking statements. Any statement in this presentation t
Slide 3: ETP Overview
ETP Overview • ETP is one of the largest publicly traded MLPs – $1.5 billion of EBITDA for the year ended December 31, 2009 – $454.4 million of EBITDA for the quarter ended March 31, 2010 • Broadly diversified asset base – Owns and operates more than 17,500 miles of intrastate and interstate pipelin
Slide 4: Business Overview
Business Overview y Four business segments: y Intrastate Transportation and Storage y Interstate Transportation Uinta Basin Piceance Basin y Midstream San Juan Basin y Retail Propane Anadarko Basin y More than 17,500 miles of Woodford natural gas gathering and Fayetteville transportation pipelines F
Slide 5: Corporate Structure
Corporate Structure Energy Transfer Equity, L.P. ~ 1.8% General Partner Interest Management $7.0 billion equity market value(1) Ownership 100% ETP IDRs ~ 33% ETP Common Units ~ 49% ETE Common Units (62.5 Million Units) $8.7 billion equity market value(1) Energy Transfer Partners, L.P. Public Unithol
Slide 6: First Quarter 2010 Highlights
First Quarter 2010 Highlights y Volumes transported increased over 600 million cubic feet per day as compared to the fourth quarter of 2009. y Our Godley facility had a record month in March 2010, processing over 12.7 Bcf, extracting approximately 1,058,540 barrels of liquids y Signed ten year agree
Slide 7: Segment/Asset Overview
Segment /Asset Overview ENERGY TRANSFER
Slide 8: Interstate Operations
Interstate Operations Uinta Basin: — WAGS 5 Piceance Basin eo Legend |— Interstate Assets
Slide 9: Interstate Pipelines – In Operation
Interstate Pipelines – In Operation Transwestern Pipeline (“TW”) Midcontinent Express Pipeline (“MEP”) • Approximately 2,700 miles with a capacity of 2.1 Bcf/d • 50/50 joint venture with KMP • KMP managed construction and operates • Provides access to Permian, San Juan and Anadarko production basins
Slide 10: Interstate Pipeline Projects – Under Development
Interstate Pipeline Projects – Under Development Fayetteville Express Pipeline (“FEP”) Tiger Pipeline • 50/50 joint venture with KMP • 100% owned and operated by ETP • ETP managing construction and will operate • 175 mile 42-inch interstate pipeline originating near Carthage, • 185 mile 42-inch inte
Slide 11: Interstate Pipeline Projects
Interstate Pipeline Projects • We have completed (or participated in the completion of) approximately 790 miles of interstate pipeline subsequent to our acquisition of the Transwestern Pipeline in 2006 and have an additional 365 miles of interstate pipeline under development. Completion Project Cost
Slide 12: Intrastate Asset/Basin Overview
Intrastate Asset/Basin Overview 12
Slide 13: Intrastate Transportation and Storage
Intrastate Transportation and Storage y Largest intrastate pipeline system in the United States with nearly 8,000 miles of transportation pipelines and 3 natural gas storage facilities y Objective of the pipeline system is to move natural gas from major producing basins such as: y Barnett Shale y Bo
Slide 14: Intrastate Transportation and Storage - cont'd
Intrastate Transportation and Storage - cont’d y Bi-directional flow capabilities across the state y Integrated with our gathering and processing assets providing full midstream services to our customers in addition to commercial and operational flexibility: y Provides blending opportunities for shi
Slide 15: Major Intrastate Projects
Major Intrastate Projects • Since the beginning of 2008, we have completed more than 600 miles of large-diameter pipeline projects with an aggregate capacity of more than 6.45 Bcf/d. Completion Project Cost Project Capacity Miles Date ($millions) 42” Southeast Bossier 1.25 Bcf/d 157 2Q 2008 $470 36”
Slide 16: Midstream Operations
Midstream Operations y Approximately 7,000 miles of natural gas gathering pipelines, 3 natural gas processing plants, 11 natural gas treating facilities and 10 natural gas conditioning facilities y Operations are concentrated in the Austin Chalk, the Barnett Shale, the Bossier Sands, the Permian Bas
Slide 17: Retail Propane
Retail Propane Segment Overview • 3rd largest marketer in the United States • Presence in 41 States • 440 locations • 1.2 million customers • 4,500 employees • National in scope – local in character – retain local brand name marketing • Operations focused in above average population growth areas • G
Slide 18: Financial and Liquidity Overview
Financial and Liquidity Overview 18
Slide 19: Financial Objectives
Financial Objectives y Continue growth in distributable cash flow y Target projects/assets that provide for appropriate rate of return and that integrate with our asset base y Transactions structured to meet appropriate credit metrics y Maintain attractive cash flow profile y Generate stable cash fl
Slide 20: Historical EBITDA and DCF
Historical EBITDA and DCF ($ million) $1,600 $1,507 $1,521 $1,403 $1,400 $1,200 $1,159 $1,050 $1,023 $1,000 $962 $897 $864 $765 $785 $800 $587 $600 $413 $400 $263 $200 $- FY 2005 FY 2006 FY 2007 LTM 12/2007 2008 2009 LTM 3/2010 EBITDA, As Adjusted Distributable Cash Flow (DCF) 20
Slide 21: Operating Income By Segment
Operating Income By Segment(1) • Fee-based nature of operating income from our intrastate and interstate segments provides cash flow stability – As the Tiger Pipeline is placed in service in 2011, we expect operating income derived from long-term contracted revenues in our interstate transportation
Slide 22: Commodity Hedging Activities
Commodity Hedging Activities • For 2010, we hedged substantially all of our estimated volumes(1) at an average NYMEX price of around $5.80/MMBtu – an increase of $2.26/MMBtu from our 2009 average price. • Currently 86% of our anticipated natural gas volumes in 2011 are hedged primarily with collars
Slide 23: ETP Liquidity and Capital Raising
ETP Liquidity and Capital Raising • ETP has significant liquidity and has a strong track record in accessing the equity and debt markets • Strong balance sheet and ample liquidity • Management is committed to maintaining investment grade credit metrics • $1.94 billion availability under ETP’s $2.0 b
Slide 24: ETP's Distribution Per Unit
ETP’s Distribution Per Unit $4.00 $3.575 $3.575 $3.575 $3.575 $3.575 $3.575 $3.575 $3.575 $3.475 $3.375 $3.150 $3.230 $3.300 $3.000 $3.080 Annualized Distribution per Unit $3.00 $2.550 $2.350 $2.200 $2.000 $2.00 $1.00 $0.00 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q F2005 F2006 F2006 F
Slide 25: ETP Debt Capitalization
ETP Debt Capitalization ($ million) 3/31/2010 ETP Revolving Credit Facility $ - ETP Senior Notes (Principal Amount): 5.65% due 2012 400 6.00% due 2013 350 8.50% due 2014 350 5.95% due 2015 750 6.13% due 2017 400 6.70% due 2018 600 9.70% due 2019 600 9.00% due 2019 650 6.63% due 2036 400 7.50% due 20
Slide 26: ETP Investment Considerations
ETP Investment Considerations • Large, diversified asset base that is well positioned in markets – ETP is one of the largest MLPs with a market cap of $8.8 billion Large – 17,500 miles of intrastate and interstate pipeline with an additional 175 miles of Diversified interstate pipeline to be complet
Slide 27: Supplemental Information
Supplemental Information 27
Slide 28: EBITDA Reconciliation
EBITDA Reconciliation Twelve Months Fiscal Year Fiscal Year Fiscal Year Ended Year Ended Year Ended Twelve Months Ended August Ended August Ended August December 31, December 31, December 31, Ended March EBITDA, As Adjusted 31, 2005 31, 2006 31, 2007 2007 2008 2009 31, 2010 Net income $ 349,350 $ 51
Slide 29: Distributable Cash Flow Reconciliation
Distributable Cash Flow Reconciliation Twelve Months Fiscal Year Fiscal Year Fiscal Year Ended Year Ended Year Ended Twelve Months Ended August Ended August Ended August December 31, December 31, December 31, Ended March Distributable Cash Flow 31, 2005 31, 2006 31, 2007 2007 2008 2009 31, 2010 Net
Slide 30: Energy Transfer Equity Acquisition of Regency Energy Partners' General Partner
Energy Transfer Equity Acquisition of Regency Energy Partners’ General Partner Investor Presentation May 11, 2010
Slide 31: Legal Disclaimer
Legal Disclaimer This presentation may contain statements about future events, outlook and expectations of Energy Transfer Partners, L.P. (“ETP”), Energy Transfer Equity, L.P. (“ETE”) and Regency Energy Partners LP (“RGNC”) (collectively, the “Partnerships”), all of which are forward-looking stateme
Slide 32: Transaction Overview
Transaction Overview ETE and GE Energy Financial Services (“GE”) announced today a series of transactions whereby ETE will acquire 100% of Regency Energy Partners’ (“RGNC”) general partner (“RGNC GP”) from GE. Concurrently, RGNC will acquire a 49.9% interest in Midcontinent Express Pipeline (“MEP”)
Slide 33: ETE Pro Forma Consolidated Asset Map
ETE Pro Forma Consolidated Asset Map 33
Slide 34: Transaction Rationale for ETE
Transaction Rationale for ETE • Attractive, complementary assets aligned with ETE’s growth strategy – Improves ETE’s position in major shale plays (Haynesville, Eagle Ford, Marcellus, Barnett and Fayetteville) – Diversifies operations and provides additional sources of fee-based margin – Enhances pl
Slide 35: Transaction Structure
Transaction Structure Step 1 – ETP / ETE MEP Exchange • ETE acquires 100% of the equity interests of the entity that owns a 49.9% (1) interest in MEP from ETP in exchange for the redemption of ETP units owned by ETE • Valuation of approximately $600 million and assumption of 2010E capital contributi
Slide 36: Governance Matters
Governance Matters • ETE will own and control the general partner of RGNC – As a result, ETE will have the right to appoint all of the members of the Board of Directors of RGNC, except that GE will have the right to appoint two directors until it owns less than 15% of the outstanding RGNC common uni
Slide 37: Organization Summary
Organization Summary Current Corporate Structure Pro Forma Corporate Structure Energy Transfer Equity, L.P. $300 million 1.8% ETP GP Interest preferred interest 100% ETP IDRs Energy Transfer Equity, L.P. 28.1% ETP Common Units(1) ~1.8% General Partner Interest 2.0% RGNC GP Interest Management / 100%
Slide 38: Pro Forma ETE Overview
Pro Forma ETE Overview • ETE’s cash flows will be generated through its ownership interests in ETP and RGNC, which will include: ($ and units in millions, except per unit data) Pro Forma GP IDR LP LP Units Unit Market Ownership Ownership Ownership Owned Price Value ETP 1.8% 100% 28.1% 50.2 $47.10 $2
Slide 39: Transaction Rationale for ETP
Transaction Rationale for ETP • Receiving an attractive multiple for its interest in MEP • Attractive capital re-deployment opportunities available to replace MEP • ETP will continue to deliver volumes to MEP through its Intrastate system • Future growth projects more accretive due to reduced number
Slide 40: ETE Transaction Considerations & Benefits
ETE Transaction Considerations & Benefits • No external capital requirements for ETE related to these transactions • ETE will receive stable, growing distributions through its Limited Partner Interests (estimated 28.1% of ETP’s common units outstanding, 22.0% of RGNC’s common units outstanding), Gen
Slide 41: ETE Transaction Considerations & Benefits
ETE Transaction Considerations & Benefits • ETE is expected to continue to deliver strong distribution rate growth – ETP has a strong track record of distribution growth having grown LP distributions per unit by a 13.1% CAGR since calendar Q1 2005 (1) – RGNC has shown consistent distribution growth