Business Context and Reporting Period
This Form 8-K Current Report was filed by Energy Transfer Equity, L.P. (ETE) on December 22, 2009, covering events occurring on December 23, 2009. The filing primarily addresses changes to the Board of Directors of LE GP, LLC (the general partner of ETE) and amendments to its governing agreement.
Key Financial Metrics
The filing does not provide consolidated revenue, profit, cash flow, or debt metrics for ETE. However, it discloses specific transaction volumes and dollar amounts (in thousands) between Energy Transfer Partners, L.P. (ETP) and the "Enterprise Entities" (affiliates of EPE) for the nine months ended September 30, 2009:
| Category | Product | Volume | Dollars ($000s) |
|---|---|---|---|
| Propane Sales to Enterprise | Propane | 20,370 gallons | 14,046 |
| Propane Purchases from Enterprise | Propane | 206,344 gallons | 181,853 |
| NGL Sales to Enterprise | NGLs | 368,652 gallons | 259,417 |
| Natural Gas Sales to Enterprise | Natural Gas | 7,476 MMBtu | 27,165 |
| Natural Gas Purchases from Enterprise | Natural Gas | 7,089 MMBtu | 27,359 |
Derivative activity and fees were also reported but are not detailed in the summary table above.
Material Changes
- Board Appointments: Dan L. Duncan, Ralph S. Cunningham, and Marshall S. (Mackie) McCrea, III were appointed as directors of LE GP, LLC.
- Board Departure: Kenneth A. Hersh requested not to be considered for re-appointment and ceased serving as a director effective December 23, 2009.
- Governance Amendment: The maximum number of directors on the LE GP, LLC board was increased from 10 to 11.
- Affiliate Relationships: The filing details ongoing commercial relationships between ETP and Enterprise Entities, including a long-term propane contract with Titan Energy Partners, L.P. expiring in 2010.
Guidance, Outlook, and Risks
The filing contains no financial guidance, outlook, or management commentary regarding future earnings or operational targets. It notes that Mr. Hersh's departure was due to business-related time constraints and not due to any disagreement with ETE. The document highlights related-party transactions as a standard part of operations, noting that ETP and Enterprise Entities routinely purchase and sell propane, natural gas, and NGLs, and share operating expenses on jointly-owned pipelines.
Investor Verification Checklist
- Verify the extent of related-party transactions between ETP and Enterprise Entities to assess potential conflicts of interest or dependency.
- Confirm the impact of the new board composition (specifically the addition of Enterprise Entities leadership) on future strategic decisions.
- Review the terms of the long-term propane contract with Titan Energy Partners, L.P., which expires in 2010.
- Check subsequent filings for the full financial impact of the nine-month period referenced in the transaction table.