UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT PURSUANT
TO
SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): August 11,
2008
ENTERPRISE
GP HOLDINGS L.P.
(Exact
name of registrant as specified in its charter)
| Delaware | 1-32610 | 13-4297064 |
| (State or Other Jurisdiction of | (Commission File Number) | (I.R.S. Employer |
|
Incorporation
or Organization)
|
Identification
No.)
|
|
1100
Louisiana, 10th Floor
Houston,
Texas 77002
(Address
of Principal Executive Offices, including Zip Code)
|
|
(713)
381-6500
(Registrant’s
Telephone Number, including Area
Code)
|
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
¨ Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
2.02. Results of Operations and Financial Condition.
On August
11, 2008, Enterprise GP Holdings L.P. issued a press release regarding its
consolidated and parent-only financial results for the three and six months
ended June 30, 2008 and 2007. A copy of the earnings press release is
furnished as Exhibit 99.1 to this Current Report on Form 8-K, which is
incorporated by reference into this Item 2.02.
Significant
Relationships
Enterprise GP Holdings L.P. is a
publicly traded Delaware limited partnership, the registered limited partnership
interests (the “Units”) of which are listed on the New York Stock Exchange
(“NYSE”) under the ticker symbol “EPE.” The current business of
Enterprise GP Holdings L.P. is the ownership of general and limited partner
interests of publicly traded partnerships engaged in the midstream energy
industry and related businesses. Unless the context requires
otherwise, references to “we,” “us,” “our” or “the Partnership” are intended to
mean the business and operations of Enterprise GP Holdings L.P. and its
consolidated subsidiaries.
References to “Parent Company” mean
Enterprise GP Holdings L.P., individually as the parent company, and not on a
consolidated basis. The Parent Company is owned 99.99% by its limited
partners and 0.01% by its general partner, EPE Holdings, LLC (“EPE
Holdings”). EPE Holdings is a wholly owned subsidiary of Dan Duncan,
LLC, the membership interests of which are owned by Dan L. Duncan.
References to “Enterprise Products
Partners” mean Enterprise Products Partners L.P., the common units of which are
listed on the NYSE under the ticker symbol “EPD.” Enterprise Products
Partners has no business activities outside those conducted by its operating
subsidiary, Enterprise Products Operating LLC (“EPO”). References to
“EPGP” refer to Enterprise Products GP, LLC, which is the general partner of
Enterprise Products Partners. The Parent Company owns
EPGP.
References to “Duncan Energy Partners”
mean Duncan Energy Partners L.P., which is a consolidated subsidiary of
EPO. Duncan Energy Partners is a publicly traded Delaware limited
partnership, the common units of which are listed on the NYSE under the ticker
symbol “DEP.” References to “DEP GP” mean DEP Holdings, LLC, which is
the general partner of Duncan Energy Partners.
References to “TEPPCO” mean TEPPCO
Partners, L.P., the common units of which are listed on the NYSE under the
ticker symbol “TPP.” References to “TEPPCO GP” refer to Texas Eastern
Products Pipeline Company, LLC, which is the general partner of
TEPPCO. The Parent Company owns TEPPCO GP.
References to “Energy Transfer Equity”
mean the business and operations of Energy Transfer Equity, L.P. and its
consolidated subsidiaries, which includes Energy Transfer Partners, L.P.
(“ETP”). Energy Transfer Equity is a publicly traded Delaware limited
partnership, the common units of which are listed on the NYSE under the ticker
symbol “ETE.” The general partner of Energy Transfer Equity is LE GP, LLC (“LE
GP”). The Parent Company has non-controlling interests in both Energy
Transfer Equity and LE GP that it accounts for using the equity method of
accounting.
References to “EPCO” mean EPCO, Inc.
and its private company affiliates, which are related parties to all of the
foregoing named entities. Mr. Duncan is the Group Co-Chairman and
controlling shareholder of EPCO.
The
Parent Company, Enterprise Products Partners, EPGP, TEPPCO, TEPPCO GP and EPCO
are affiliates under common control of Mr. Duncan. Enterprise Products Partners
and TEPPCO and their respective general partners have been under Mr. Duncan’s
indirect control for all periods presented in the press release and this Current
Report on Form 8-K.
Basis
of Financial Statement Presentation
General Purpose Consolidated and
Parent Company-Only Information
In
accordance with rules and regulations of the U.S. Securities and Exchange
Commission (“SEC”) and various other accounting standard-setting organizations,
our general purpose consolidated financial statements reflect the consolidation
of the financial statements of businesses that we control through the ownership
of general partner interests (e.g., Enterprise Products Partners and
TEPPCO). Our general purpose consolidated financial
statements
1
present
those investments in which we do not have a controlling interest as
unconsolidated affiliates (e.g., Energy Transfer Equity and LE
GP). To the extent that Enterprise Products Partners and TEPPCO
reflect investments in unconsolidated affiliates in their respective
consolidated financial statements, such investments will also be reflected as
such in our general purpose consolidated financial statements unless
subsequently consolidated by us due to common control considerations (e.g.,
Jonah Gas Gathering Company). Also, minority interest presented in
our financial statements reflects third-party and related party ownership of our
consolidated subsidiaries, which include the third-party and related party
unitholders of Enterprise Products Partners, TEPPCO and Duncan Energy
Partners. Unless noted otherwise, our discussions and analysis in
this Current Report and press release are presented from the perspective of our
consolidated businesses and operations.
In order
for the unitholders of Enterprise GP Holdings L.P. and others to more fully
understand the Parent Company’s business activities and financial statements on
a standalone basis, our press release includes information devoted exclusively
to the Parent Company apart from that of our consolidated
Partnership. A key difference between the non-consolidated Parent
Company financial information and those of our consolidated Partnership is that
the Parent Company views each of its investments (e.g., Enterprise Products
Partners, TEPPCO and Energy Transfer Equity) as unconsolidated affiliates and
records its share of the net income of each as equity earnings. In
accordance with U.S. generally accepted accounting principles (“GAAP”), we
eliminate such equity earnings in the preparation of our consolidated
Partnership financial statements.
Presentation
of Investments
Enterprise
Products Partners and EPGP. The Parent Company owns 13,454,498
common units of Enterprise Products Partners and 100% of the membership
interests of EPGP, which is entitled to 2% of the cash distributions paid by
Enterprise Products Partners as well as the associated incentive distribution
rights (“IDRs”) of Enterprise Products Partners.
TEPPCO
and TEPPCO GP. Private company affiliates of EPCO contributed
equity interests in TEPPCO and TEPPCO GP to the Parent Company in May
2007. As a result of such contributions, the Parent Company owns
4,400,000 common units of TEPPCO and 100% of the membership interests of TEPPCO
GP, which is entitled to 2% of the cash distributions of TEPPCO as well as the
IDRs of TEPPCO. The contributions of ownership interests in TEPPCO
and TEPPCO GP were accounted for at historical costs as a reorganization of
entities under common control in a manner similar to a pooling of
interests. The inclusion of TEPPCO and TEPPCO GP in our financial
statements was effective January 1, 2005 because an affiliate of EPCO under
common control with the Parent Company originally acquired the ownership
interests of TEPPCO GP in February 2005.
All earnings derived from TEPPCO IDRs
and TEPPCO common units in excess of those allocated to the Parent Company are
presented as a component of minority interest in our consolidated financial
statements. In addition, the former owners of the TEPPCO and TEPPCO
GP interests and rights were allocated all cash receipts from these investments
during the periods they owned such interests prior to May 2007.
Energy
Transfer Equity and LE GP. In May 2007, the Parent Company
acquired 38,976,090 common units of Energy Transfer Equity and approximately
34.9% of the membership interests of its general partner, LE GP, for $1.65
billion in cash. Energy Transfer Equity owns limited partner
interests and the general partner interest of ETP. We account for our
investments in Energy Transfer Equity and LE GP using the equity method of
accounting.
Use
of Non-GAAP Financial Measures
The press release and accompanying
schedules include the non-generally accepted accounting principle (“non-GAAP”)
financial measure of distributable cash flow. Exhibit C provides a
reconciliation of this non-GAAP financial measure to its most directly
comparable financial measure calculated in accordance with
GAAP. Distributable cash flow should not be considered an alternative
to GAAP financial measures such as net income, net cash flow provided by
operating activities or any other GAAP measure of liquidity or financial
performance. We define distributable cash flow as
follows:
|
§
|
Cash
distributions expected to be received from the Parent Company’s
investments in limited and general partner interests (including related
IDRs, if any, held by these general partners); less the sum
of,
|
2
|
§
|
Parent
Company general and administrative costs on a standalone basis;
and
|
|
§
|
EPGP
and TEPPCO GP general and administrative costs on a standalone
basis.
|
Distributable
cash flow is a significant liquidity metric used by senior management to compare
net cash flow generated by the Parent Company’s investments to the cash
distributions the Parent Company is expected to pay its
partners. Using this metric, senior management can quickly compute
the coverage ratio of estimated cash flow to planned cash
distributions.
Distributable cash flow is an important
non-GAAP financial measure for the Parent Company’s unitholders since it
indicates to investors whether or not the Parent Company’s investments are
generating cash flow at a level that can sustain or support an increase in
quarterly cash distribution levels. Financial metrics such as
distributable cash flow are quantitative standards used by the investment
community because the value of a partnership unit is in part measured by its
yield (which, in turn, is based on the amount of cash distributions a
partnership pays to a unitholder).
Item
9.01. Financial Statements and Exhibits.
(d) Exhibits.
|
Exhibit
No.
|
Description
|
|
99.1
|
Enterprise
GP Holdings L.P. press release dated August 11,
2008.
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this Report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
ENTERPRISE
GP HOLDINGS L.P.
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||||
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||||
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By:
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EPE
Holdings, LLC,
|
|||
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as general partner
|
||||
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Date: August 11, 2008
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By:
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/s/ Michael J.
Knesek
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||
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Name:
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Michael
J. Knesek
|
|||
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Title:
|
Senior
Vice President, Controller
and
Principal Accounting
Officer
of the
general partner
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|||
3
Exhibit
Index
|
Exhibit
No.
|
Description
|
|
99.1
|
Enterprise
GP Holdings L.P. press release dated August 11,
2008.
|
4
Exhibit
99.1
Enterprise
GP Holdings L.P.
P.O. Box
4323
Houston,
TX 77210
(713)
381-6812
Enterprise
GP Holdings Reports Second Quarter 2008 Results
Houston,
Texas (Monday, August 11, 2008) – Enterprise GP Holdings L.P., (NYSE: EPE) today
announced its consolidated and parent-only financial results for the three and
six months ended June 30, 2008. Enterprise GP Holdings, the Parent
Company, reported record distributable cash flow of $61.3 million for the second
quarter of 2008. Distributable cash flow for the second quarter of
2008 provided 1.1 times coverage of the $0.44 per unit distribution with respect
to the second quarter of 2008 which was paid on August 8, 2008. This
distribution rate represents a 16 percent increase from the $0.38 per unit paid
with respect to the second quarter of 2007. Distributable cash flow is a
non-generally accepted accounting principle (“non-GAAP”) financial measure that
is defined and reconciled later in this press release to its most directly
comparable generally accepted accounting principle (“GAAP”) measure, which is
net cash flow provided by operating activities.
Enterprise
GP Holdings will receive $79.1 million of total cash distributions from its
investments with respect to the second quarter of 2008. This
represents a 17 percent increase from the $67.9 million in distributions the
Parent Company received with respect to the second quarter of
2007. This increase in cash distributions is primarily due to higher
cash distribution rates from Enterprise Products Partners, TEPPCO and Energy
Transfer Equity with respect to the second quarter of 2008 relative to the same
period in 2007. The distributions with respect to the second quarter
of 2008 are comprised of $43.6 million from Enterprise Products Partners L.P.
and its general partner, which represents a 14 percent increase compared to the
distributions received from Enterprise Products Partners with respect to the
second quarter of last year; $16.7 million from TEPPCO Partners, L.P. and its
general partner, which represents an 11 percent increase compared to the
distributions received from TEPPCO with respect to the second quarter of 2007;
and $18.8 million from Energy Transfer Equity, L.P. and its general partner,
which is a 29 percent increase compared to the distributions received from
Energy Transfer Equity with respect to the second quarter of last
year. The distributions from Enterprise and TEPPCO were received on
August 7 while the cash distribution from Energy Transfer Equity is scheduled to
be received on August 19.
Consolidated net income for Enterprise
GP Holdings increased by 130 percent to $49.4 million, or $0.40 per unit on a
fully diluted basis, for the second quarter of 2008 compared to $21.5 million,
or $0.21 per unit on a fully diluted basis, for the second quarter of
2007. This increase in consolidated net income is attributable to the
continued strong financial and operating results of Enterprise Products Partners
and TEPPCO, and equity earnings from Energy Transfer Equity reflecting results
for three months in the second quarter of 2008 compared to two months of
earnings reported in the second quarter of 2007.
“We
benefited from our investment in each of the underlying MLPs this quarter as
they posted exceptional results that led to another quarter of record
distributable cash flow for our partnership,” said Dr. Ralph S. Cunningham,
president and chief executive officer of Enterprise GP Holdings. “We
have a diversified base of cash flows originating from three investment grade
partnerships with solid franchises in natural gas, NGLs and refined
products. We are excited about the multiple growth opportunities at
Enterprise Products Partners, TEPPCO and Energy Transfer Partners. As
these partnerships execute on their growth plans the multiplier effect of our
general partner interests will enhance our prospects for long-term distribution
growth. This will allow us to continue our impressive track record of
increasing our cash distribution rate, as we have done every quarter since our
initial public offering in August 2005. During this time, we have
increased our distribution rate by 76 percent.”
Basis of
Presentation of Financial Information
Our
Investment in Enterprise Products Partners business segment reflects the
consolidated operations of Enterprise Products Partners and its general
partner. Our Investment in TEPPCO business segment reflects the
consolidated operations of TEPPCO and its general partner. The
Investment in TEPPCO segment represents the historical operations of TEPPCO and
its general partner that were under common control with the Parent Company prior
to its acquisition of these interests on May 7, 2007. We control
Enterprise Products Partners and TEPPCO through our ownership of their
respective general partners. Our Investment in Energy Transfer Equity
business segment
reflects
our non-controlling interests in Energy Transfer Equity and its general partner
accounted for under the equity method of accounting. We evaluate
segment performance based on operating income.
In
accordance with rules and regulations of the U.S. Securities and Exchange
Commission (“SEC”) and various other accounting standard-setting organizations,
our general purpose financial statements reflect the consolidation of the
financial statements of businesses that we control through the ownership of
general partner interests (e.g., Enterprise Products Partners and
TEPPCO). Our general purpose consolidated financial statements
present those investments in which we do not have a controlling interest as
unconsolidated affiliates (e.g., Energy Transfer Equity and its general
partner). To the extent that Enterprise Products Partners and
TEPPCO reflect investments in unconsolidated affiliates in their respective
consolidated financial statements, such investments will also be reflected as
such in our general purpose financial statements unless subsequently
consolidated by us due to common control considerations (e.g., Jonah Gas
Gathering Company). Also, minority interest presented in our
financial statements reflects third-party and related party ownership of our
consolidated subsidiaries, which include the third-party and related party
unitholders of Enterprise Products Partners, TEPPCO and Duncan Energy
Partners. Unless noted otherwise, our discussions and analysis in
this press release are presented from the perspective of our consolidated
businesses and operations.
In order
for the unitholders of Enterprise GP Holdings and others to more fully
understand the Parent Company’s business activities and financial statements on
a standalone basis, our press release includes information devoted exclusively
to the Parent Company apart from that of our consolidated
Partnership. A key difference between the non-consolidated Parent
Company financial information and those of our consolidated Partnership is that
the Parent Company views each of its investments (i.e., Enterprise Products
Partners, TEPPCO and Energy Transfer Equity) as unconsolidated affiliates and
records its share of the net income of each as equity earnings. In
accordance with GAAP, we eliminate such equity earnings in the preparation of
our consolidated Partnership financial statements.
Use of Non-GAAP Financial
Measures
The press
release and accompanying schedules include the non-GAAP financial measure of
distributable cash flow. Exhibit C provides a reconciliation of this
non-GAAP financial measure to its most directly comparable financial measure
calculated in accordance with GAAP. Distributable cash flow should
not be considered an alternative to GAAP financial measures such as net income,
net cash flow provided by operating activities or any other GAAP measure of
liquidity or financial performance. We define distributable cash flow
as follows:
|
§
|
Cash
distributions expected to be received from the Parent Company’s
investments in limited and general partner interests (including related
incentive distribution rights, if any, held by these general partners);
less the sum of,
|
|
§
|
Parent
Company general and administrative costs on a standalone basis;
and
|
|
§
|
the
general and administrative costs, on a standalone basis, of the general
partners of Enterprise Products Partners and
TEPPCO.
|
Distributable
cash flow is a significant liquidity metric used by senior management to compare
net cash flow generated by the Parent Company’s investments to the cash
distributions the Parent Company is expected to pay its
partners. Using this metric, senior management can quickly compute
the coverage ratio of estimated cash flow to planned cash
distributions.
Distributable cash flow is an important
non-GAAP financial measure for the Parent Company’s unitholders since it
indicates to investors whether or not the Parent Company’s investments are
generating cash flow at a level that can sustain or support an increase in
quarterly cash distribution levels. Financial metrics such as
distributable cash flow are quantitative standards used by the investment
community because the value of a partnership unit is in part measured by its
yield (which, in turn, is based on the amount of cash distributions a
partnership pays to a unitholder).
Company Information and
Forward-Looking Statements
Enterprise
GP Holdings L.P. is one of the largest publicly traded GP partnerships with an
enterprise value of approximately $5 billion. It owns the general
partner and certain limited partner interests in Enterprise Products Partners
L.P. and TEPPCO Partners, L.P. as well as certain non-controlling general
partner and limited partner interests
This
press release contains various forward-looking statements and information that
are based on Enterprise GP Holdings’ beliefs and those of its general partner,
as well as assumptions made by and information currently available to Enterprise
GP Holdings. When used in this press release, words such as
“anticipate,” “project,” “expect,” “plan,” “goal,” “forecast,” “intend,”
“could,” “believe,” “may,” and similar expressions and statements regarding the
plans and objectives of Enterprise GP Holdings, Enterprise Products Partners,
TEPPCO, Energy Transfer Equity or Energy Transfer Partners (the “Related
Companies”) for future operations, are intended to identify forward-looking
statements. Although Enterprise GP Holdings and its general partner
believe that such expectations reflected in such forward-looking statements are
reasonable, neither Enterprise GP Holdings nor its general partner can give
assurances that such expectations will prove to be correct. Such statements are
subject to a variety of risks, uncertainties and assumptions. If one
or more of these risks or uncertainties materialize, or if underlying
assumptions prove incorrect, Enterprise GP Holdings’ actual results may vary
materially from those it anticipated, estimated, projected or
expected. Among the key risk factors that may have a direct bearing
on the Related Companies, and in turn, Enterprise GP Holdings’ results of
operations and financial condition are:
|
§
|
fluctuations
in oil, natural gas and natural gas liquid prices and production due to
weather and other natural and economic
forces;
|
|
§
|
the
effects of the Related Companies debt level on its future financial and
operating flexibility;
|
|
§
|
a
reduction in demand for the Related Companies products by the
petrochemical, refining, heating or other
industries;
|
|
§
|
a
decline in the volumes delivered by the Related Companies’
facilities;
|
|
§
|
the
failure of any of the Related Companies’ credit risk management efforts to
adequately protect it against customer
non-payment;
|
|
§
|
terrorist
attacks aimed at the Related Companies’ facilities;
and
|
|
§
|
the
failure to successfully integrate the Related Companies’ operations with
companies, if any, that they may acquire in the
future.
|
Enterprise
GP Holdings has no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise.
Contacts:
Randy Burkhalter, Investor Relations (713) 381-6812/Toll-Free (866)
230-0745
Rick
Rainey, Media Relations (713) 381-3635
###
Exhibit
A
Enterprise
GP Holdings L.P. – Parent Company
Distributable
Cash Flow, Summary Income Statements and Selected Balance Sheet Data–
UNAUDITED
For
the Three and Six Months Ended June 30, 2008 and 2007
(Amounts
in thousands)
The following table presents
distributable cash flow, summarized income statement data and selected balance
sheet information for the Parent Company with respect to the periods shown and
at the dates indicated.
|
For
the Three Months
|
For
the Six Months
|
|||||||||||||||
|
Ended
June 30,
|
Ended
June 30,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Cash distributions from
investees: (1)
|
||||||||||||||||
|
Enterprise
Products Partners and EPGP:
|
||||||||||||||||
|
From
13,454,498 common units of
|
||||||||||||||||
|
Enterprise
Products Partners
|
$ | 6,929 | $ | 6,492 | $ | 13,757 | $ | 12,883 | ||||||||
|
From
2% general partner interest
|
4,595 | 4,274 | 9,109 | 8,471 | ||||||||||||
|
From
general partner IDRs
|
32,035 | 27,394 | 62,951 | 53,704 | ||||||||||||
|
TEPPCO and TEPPCO
GP:
|
||||||||||||||||
|
From
4,400,000 common units of TEPPCO
|
3,124 | 3,014 | 6,248 | 6,028 | ||||||||||||
|
From
2% general partner interest
|
1,377 | 1,256 | 2,751 | 2,511 | ||||||||||||
|
From
general partner IDRs
|
12,186 | 10,822 | 24,349 | 21,637 | ||||||||||||
|
Energy Transfer Equity and LE
GP:
|
||||||||||||||||
|
From
38,976,090 common units of
|
||||||||||||||||
|
Energy
Transfer Equity
|
18,709 | 14,519 | 35,858 | 14,519 | ||||||||||||
|
From
34.9% member interest in LE GP
|
116 | 90 | 222 | 90 | ||||||||||||
|
Total
cash distributions from investees
|
79,071 | 67,861 | 155,245 | 119,843 | ||||||||||||
|
Expenses:
|
||||||||||||||||
|
Parent
company expenses, excluding
|
||||||||||||||||
|
non-cash
amortization and other costs
|
(17,638 | ) | (21,833 | ) | (38,064 | ) | (25,177 | ) | ||||||||
|
EPGP
expenses
|
(78 | ) | (112 | ) | (82 | ) | (199 | ) | ||||||||
|
TEPPCO
GP expenses
|
(10 | ) | (32 | ) | (42 | ) | (138 | ) | ||||||||
|
Total
expenses
|
(17,726 | ) | (21,977 | ) | (38,188 | ) | (25,514 | ) | ||||||||
|
Distributable
cash flow
|
$ | 61,345 | $ | 45,884 | $ | 117,057 | $ | 94,329 | ||||||||
|
Distributions
by parent company:
|
||||||||||||||||
|
To
limited partners:
|
||||||||||||||||
|
EPCO
and affiliates
|
$ | 40,558 | $ | 34,683 | $ | 79,575 | $ | 62,825 | ||||||||
|
Public
|
13,646 | 12,128 | 26,986 | 16,428 | ||||||||||||
|
To
general partner
|
5 | 5 | 10 | 8 | ||||||||||||
|
To
former owners of TEPPCO GP
|
-- | -- | -- | 15,084 | ||||||||||||
|
Total
cash distributions
|
$ | 54,209 | $ | 46,816 | $ | 106,571 | $ | 94,345 | ||||||||
|
Summary
income statement data:
|
||||||||||||||||
|
Equity
earnings in investees (2)
|
$ | 67,505 | $ | 44,263 | $ | 134,174 | $ | 101,151 | ||||||||
|
General
and administrative costs
|
1,597 | 630 | 3,778 | 1,529 | ||||||||||||
|
Operating
income
|
65,908 | 43,633 | 130,396 | 99,622 | ||||||||||||
|
Interest
expense, net (3)
|
(16,541 | ) | (22,129 | ) | (34,480 | ) | (24,665 | ) | ||||||||
|
Net
income
|
$ | 49,367 | $ | 21,504 | $ | 95,916 | $ | 74,957 | ||||||||
|
Selected
balance sheet data:
|
||||||||||||||||
|
Debt
principal outstanding at end of period
|
$ | 1,083,000 | $ | 1,817,194 | $ | 1,083,000 | $ | 1,817,194 | ||||||||
|
(1)
Represents
cash distributions received or, in the case of the most recent quarter,
declared and expected to be received with respect to such
quarter. With respect to cash distributions from investees for the
second quarter of 2008, we received the distributions shown for Enterprise
Products Partners, TEPPCO and their respective general partners on August
7, 2008. We expect to receive the declared distribution from Energy
Transfer Equity and its general partner on August 19, 2008.
(2)
Represents
the Parent Company’s share of net income of Enterprise Products Partners,
TEPPCO, Energy Transfer Equity and their respective general
partners.
(3)
Parent
company interest expense decreased during the second quarter of 2008
relative to the second quarter of 2007 primarily due to lower interest
rates. The weighted-average interest rate paid by the Parent Company
during the second quarter of 2008 was 4.90% compared to 7.05% for the
second quarter of 2007.
|
||||||||||||||||
Exhibit
B
Enterprise
GP Holdings L.P.
Condensed
Statements of Consolidated Operations – UNAUDITED
For
the Three and Six Months Ended June 30, 2008 and 2007
(Amounts
in thousands, except per unit amounts)
Since the Parent Company owns the
general partner of Enterprise Products Partners and TEPPCO, our general purpose
condensed consolidated financial statements include the financial results of
Enterprise Products Partners, EPGP, TEPPCO and TEPPCO GP. The
earnings of Enterprise Products Partners, EPGP, TEPPCO and TEPPCO GP that are
allocated to limited partner interests not owned by the Parent Company are
reflected as minority interest expense in our condensed statements of
consolidated operations. On a consolidated basis, we have classified
our operations into three business segments: Investment in Enterprise
Products Partners, Investment in TEPPCO and Investment in Energy Transfer
Equity. The following table summarizes our financial information by
business segment:
|
For
the Three Months
|
For
the Six Months
|
|||||||||||||||
|
Ended
June 30,
|
Ended
June 30,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Revenues:
|
||||||||||||||||
|
Investment
in Enterprise Products Partners
|
$ | 6,339,615 | $ | 4,212,806 | $ | 12,024,150 | $ | 7,535,660 | ||||||||
|
Investment
in TEPPCO
|
4,240,654 | 2,095,999 | 7,107,408 | 4,131,151 | ||||||||||||
|
Eliminations
|
(41,663 | ) | (14,535 | ) | (86,594 | ) | (32,266 | ) | ||||||||
|
Total
revenues
|
10,538,606 | 6,294,270 | 19,044,964 | 11,634,545 | ||||||||||||
|
Costs
and expenses:
|
||||||||||||||||
|
Investment
in Enterprise Products Partners
|
5,983,991 | 3,992,146 | 11,316,390 | 7,133,341 | ||||||||||||
|
Investment
in TEPPCO
|
4,153,792 | 2,021,599 | 6,907,713 | 3,953,204 | ||||||||||||
|
Other,
non-segment including Parent Company
|
(38,927 | ) | (12,488 | ) | (78,674 | ) | (21,345 | ) | ||||||||
|
Total costs and
expenses
|
10,098,856 | 6,001,257 | 18,145,429 | 11,065,200 | ||||||||||||
|
Equity
in earnings of unconsolidated affiliates:
|
||||||||||||||||
|
Investment
in Enterprise Products Partners (1)
|
13,338 | (7,311 | ) | 22,261 | (2,087 | ) | ||||||||||
|
Investment
in TEPPCO (1)
|
592 | (2,429 | ) | (540 | ) | (2,130 | ) | |||||||||
|
Investment
in Energy Transfer Equity (2)
|
15,122 | 2,774 | 27,155 | 2,774 | ||||||||||||
|
Total equity
earnings
|
29,052 | (6,966 | ) | 48,876 | (1,443 | ) | ||||||||||
|
Operating
income:
|
||||||||||||||||
|
Investment
in Enterprise Products Partners
|
368,962 | 213,349 | 730,021 | 400,232 | ||||||||||||
|
Investment
in TEPPCO
|
87,454 | 71,971 | 199,155 | 175,817 | ||||||||||||
|
Investment
in Energy Transfer Equity
|
15,122 | 2,774 | 27,155 | 2,774 | ||||||||||||
|
Other,
non-segment including Parent Company
|
(2,736 | ) | (2,047 | ) | (7,920 | ) | (10,921 | ) | ||||||||
|
Total operating
income
|
468,802 | 286,047 | 948,411 | 567,902 | ||||||||||||
|
Interest
expense
|
(145,395 | ) | (116,222 | ) | (293,920 | ) | (204,347 | ) | ||||||||
|
Provision
for income taxes
|
(7,944 | ) | 1,652 | (12,420 | ) | (7,152 | ) | |||||||||
|
Other
income, net
|
1,390 | 3,879 | 2,875 | 66,296 | ||||||||||||
|
Income
before minority interest
|
316,853 | 175,356 | 644,946 | 422,699 | ||||||||||||
|
Minority
interest (3)
|
(267,486 | ) | (153,852 | ) | (549,030 | ) | (347,742 | ) | ||||||||
|
Net
income
|
$ | 49,367 | $ | 21,504 | $ | 95,916 | $ | 74,957 | ||||||||
|
Allocation
of net income to:
|
||||||||||||||||
|
Limited
partners
|
$ | 49,362 | $ | 21,502 | $ | 95,906 | $ | 74,950 | ||||||||
|
General
partner
|
$ | 5 | $ | 2 | $ | 10 | $ | 7 | ||||||||
|
Earnings
per Unit, basic and fully diluted:
|
||||||||||||||||
|
Net
income per Unit
|
$ | 0.40 | $ | 0.21 | $ | 0.78 | $ | 0.73 | ||||||||
|
Average
LP Units outstanding (4)
|
123,192 | 103,057 | 123,192 | 103,057 | ||||||||||||
|
(1) Represents
equity earnings from third-party unconsolidated affiliates as recorded by
Enterprise Products Partners and TEPPCO.
(2) Represents
the Parent Company’s share of the net income of Energy Transfer Equity and
its general partner. The Parent Company’s investment in Energy
Transfer Equity and its general partner, which were acquired in May 2007,
is accounted for using the equity method.
(3) Primarily
represents earnings of Enterprise Products Partners, Duncan Energy
Partners and TEPPCO that are allocated to their respective limited partner
interests not owned by the Parent Company.
(4) The
Parent Company’s 16,000,000 Class C units are non-participating
securities; thus, they are excluded from our earnings per Unit
computations.
|
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Exhibit
C
Enterprise
GP Holdings L.P. – Parent Company
Non-GAAP
Reconciliations – UNAUDITED
For
the Three and Six Months Ended June 30, 2008 and 2007
(Amounts
in thousands)
The following table presents the
reconciliation of the Parent Company’s non-GAAP distributable cash flow to GAAP
net cash flow provided by operating activities.
|
For
the Three Months
|
For
the Six Months
|
|||||||||||||||
|
Ended
June 30,
|
Ended
June 30,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Distributable
Cash Flow (Exhibit A)
|
$ | 61,345 | $ | 45,884 | $ | 117,057 | $ | 94,329 | ||||||||
|
Adjustments
to derive net cash flow provided by
|
||||||||||||||||
|
operating
activities (add or subtract as indicated
|
||||||||||||||||
|
by
sign of number):
|
||||||||||||||||
|
Distributions
to be received from investees
|
||||||||||||||||
|
with
respect to period indicated (Exhibit A) (1)
|
(79,071 | ) | (67,861 | ) | (155,245 | ) | (119,843 | ) | ||||||||
|
Distributions
received from investees
|
||||||||||||||||
|
during
period
|
76,142 | 51,968 | 152,153 | 100,317 | ||||||||||||
|
Expenses
of EPGP and TEPPCO GP
|
88 | 144 | 124 | 337 | ||||||||||||
|
Net
effect of changes in operating accounts
|
(11 | ) | 9,074 | (4,456 | ) | 10,857 | ||||||||||
|
Net
cash flow provided by operating activities
|
$ | 58,493 | $ | 39,209 | $ | 109,633 | $ | 85,997 | ||||||||
|
(1) Represents
cash distributions collected subsequent to the end of each reporting
period.
|
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