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ETE Q3 2014 ER 8-K







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
 
November 5, 2014
Date of Report (Date of earliest event reported)
 
ENERGY TRANSFER EQUITY, L.P.
(Exact name of Registrant as specified in its charter)
 
 
 
 
 
 
Delaware
 
1-32740
 
30-0108820
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification Number)
 
3738 Oak Lawn Avenue
Dallas, TX 75219
(Address of principal executive offices)
 
(214) 981-0700
(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 November 5, 2014, Energy Transfer Equity, L.P. (the “Partnership”) issued a press release announcing its financial and operating results for the third quarter ended September 30, 2014. A copy of this press release is furnished as Exhibit 99.1 to this report and is incorporated herein by reference.
In accordance with General Instruction B.2 of Form 8-K, the information set forth in this Item 2.02 and in the attached exhibit shall be deemed to be “furnished” and not be deemed to be “filed” for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits. In accordance with General Instruction B.2 of Form 8-K, the information set forth in the attached Exhibit 99.1 is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act.

Exhibit Number
 
Description of the Exhibit
Exhibit 99.1
 
Energy Transfer Equity, L.P. Press Release dated November 5, 2014


 
 
 



SIGNATURE

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.


 
ENERGY TRANSFER EQUITY, L.P.
 
By:
LE GP, L.L.C., its General Partner
 
 
 
Date: November 5, 2014
By:
/s/ Jamie Welch
 
 
Jamie Welch
 
 
Chief Financial Officer (duly
authorized to sign on behalf of the registrant)





Exhibit Index



Exhibit Number
 
Description of the Exhibit
Exhibit 99.1
 
Energy Transfer Equity, L.P. Press Release dated November 5, 2014





EX 99.1 ETE Earnings Release Q3 2014


ENERGY TRANSFER EQUITY
REPORTS THIRD QUARTER RESULTS

Dallas - November 5, 2014 - Energy Transfer Equity, L.P. (NYSE:ETE) (“ETE” or the “Partnership”) today reported financial results for the quarter ended September 30, 2014.
Distributable Cash Flow, as adjusted, for the three months ended September 30, 2014 was $234 million compared to $211 million for the three months ended September 30, 2013, an increase of $23 million. ETE’s net income attributable to partners was $188 million for the three months ended September 30, 2014 compared to $151 million for the three months ended September 30, 2013, an increase of $37 million.
Distributable Cash Flow, as adjusted, for the nine months ended September 30, 2014 was $652 million compared to $569 million for the nine months ended September 30, 2013, an increase of $83 million. ETE’s net income attributable to partners was $520 million for the nine months ended September 30, 2014 compared to $368 million for the nine months ended September 30, 2013, an increase of $152 million.
The Partnership’s recent key accomplishments include the following:
•
In October, ETE’s Board of Directors approved its eighth consecutive increase in its quarterly distribution to $0.415 per unit ($1.66 annualized) on ETE common units for the quarter ended September 30, 2014. Based on the increased distribution rate, ETE’s distribution coverage ratio was 1.04x for the quarter.
•
In October 2014, the Partnership, Energy Transfer Partners, L.P. (“ETP”) and Phillips 66 announced that they have formed two joint ventures to develop the previously announced Dakota Access Pipeline (“DAPL”) and Energy Transfer Crude Oil Pipeline (“ETCOP”) projects. ETE and ETP will hold an aggregate interest of 75% in each joint venture and will operate both pipeline systems. Phillips 66 owns the remaining 25% interests and will fund its proportionate share of the construction costs. The DAPL and ETCOP projects are expected to begin commercial operations in the fourth quarter of 2016.
The Partnership has scheduled a conference call for 8:00 a.m. Central Time, Thursday, November 6, 2014 to discuss its third quarter 2014 results. The conference call will be broadcast live via an internet web cast, which can be accessed through www.energytransfer.com and will also be available for replay on the Partnership’s website for a limited time.
The Partnership’s principal sources of cash flow are the distributions it receives related to its direct and indirect investments in ETP and Regency Energy Partners LP (“Regency”), including 100% of ETP’s and Regency’s general partner interest and incentive distribution rights, ETP common units, Regency common units, ETP Class H Units, and the Partnership’s ownership of Lake Charles LNG Company, LLC (previously named Trunkline LNG Company, LLC). The Partnership’s primary cash requirements are for general and administrative expenses, debt service requirements and distributions to its partners.
Energy Transfer Equity, L.P. (NYSE:ETE) is a master limited partnership which owns the general partner and 100% of the incentive distribution rights (IDRs) of Energy Transfer Partners, L.P. (NYSE: ETP), approximately 30.8 million ETP common units, and approximately 50.2 million ETP Class H Units, which track 50% of the underlying economics of the general partner interest and IDRs of Sunoco Logistics Partners L.P. (NYSE: SXL). ETE also owns the general partner and 100% of the IDRs of Regency Energy Partners LP (NYSE: RGP) and approximately 57.2 million RGP common units. On a consolidated basis, ETE’s family of companies owns and operates approximately 71,000 miles of natural gas, natural gas liquids, refined products, and crude oil pipelines. For more information, visit the Energy Transfer Equity, L.P. web site at www.energytransfer.com.

Energy Transfer Partners, L.P. (NYSE:ETP) is a master limited partnership owning and operating one of the largest and most diversified portfolios of energy assets in the United States. ETP currently owns and operates approximately 35,000 miles of natural gas and natural gas liquids pipelines. ETP owns 100% of Panhandle Eastern Pipe Line Company, LP (the successor of Southern

1


Union Company) and a 70% interest in Lone Star NGL LLC, a joint venture that owns and operates natural gas liquids storage, fractionation and transportation assets. ETP also owns the general partner, 100% of the incentive distribution rights, and approximately 67.1 million common units in Sunoco Logistics Partners L.P. (NYSE: SXL), which operates a geographically diverse portfolio of crude oil and refined products pipelines, terminalling and crude oil acquisition and marketing assets. ETP owns 100% of Sunoco, Inc. and 100% of Susser Holdings Corporation. Additionally ETP owns the general partner, 100% of the incentive distribution rights and approximately 44% of the limited partnership interests in Sunoco LP (formerly Susser Petroleum Partners LP) (NYSE: SUN), a wholesale fuel distributor and convenience store operator. ETP’s general partner is owned by ETE. For more information, visit the Energy Transfer Partners, L.P. web site at www.energytransfer.com.

Regency Energy Partners LP (NYSE: RGP) is a growth-oriented, master limited partnership engaged in the gathering and processing, compression, treating and transportation of natural gas; the transportation, fractionation and storage of natural gas liquids; the gathering, transportation and terminaling of oil (crude and/or condensate) received from producers; and the management of coal and natural resource properties in the United States. Regency’s general partner is owned by Energy Transfer Equity, L.P. (NYSE: ETE). For more information, visit the Regency Energy Partners LP web site at www.regencyenergy.com.

Sunoco Logistics Partners L.P. (NYSE:SXL), headquartered in Philadelphia, is a master limited partnership that owns and operates a logistics business consisting of a geographically diverse portfolio of complementary crude oil, refined products, and natural gas liquids pipeline, terminalling and acquisition and marketing assets which are used to facilitate the purchase and sale of crude oil, refined products, and natural gas liquids. SXL’s general partner is owned by Energy Transfer Partners, L.P. (NYSE: ETP). For more information, visit the Sunoco Logistics Partners, L.P. web site at www.sunocologistics.com.
Sunoco LP (NYSE: SUN) is a master limited partnership that primarily distributes motor fuel to convenience stores, independent dealers, commercial customers and distributors. Sunoco LP also operates more than 100 convenience stores and retail fuel sites. Sunoco LP’s general partner is owned by Energy Transfer Partners, L.P. (NYSE:ETP). For more information, visit the Sunoco LP web site at www.sunocolp.com.
Forward-Looking Statements
This press release may include certain statements concerning expectations for the future that are forward-looking statements as defined by federal law. Such forward-looking statements are subject to a variety of known and unknown risks, uncertainties, and other factors that are difficult to predict and many of which are beyond management’s control. An extensive list of factors that can affect future results are discussed in the Partnership’s Annual Reports on Form 10-K and other documents filed from time to time with the Securities and Exchange Commission. The Partnership undertakes no obligation to update or revise any forward-looking statement to reflect new information or events.
The information contained in this press release is available on our web site at www.energytransfer.com.

Contacts
Investor Relations:             Media Relations:
Energy Transfer             Vicki Granado
Brent Ratliff                Granado Communications Group
214-981-0700 (office)            214-599-8785 (office)
214-498-9272 (cell)


2


ENERGY TRANSFER EQUITY, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(unaudited)
 
September 30, 2014
 
December 31, 2013
ASSETS
 
 
 
 
 
 
 
CURRENT ASSETS
$
8,042

 
$
6,536

 
 
 
 
PROPERTY, PLANT AND EQUIPMENT, net
38,737

 
30,682

 
 
 
 
ADVANCES TO AND INVESTMENTS IN UNCONSOLIDATED AFFILIATES
3,633

 
4,014

NON-CURRENT PRICE RISK MANAGEMENT ASSETS
1

 
18

GOODWILL
7,867

 
5,894

INTANGIBLE ASSETS, net
5,504

 
2,264

OTHER NON-CURRENT ASSETS, net
897

 
922

Total assets
$
64,681

 
$
50,330

 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
 
 
CURRENT LIABILITIES
$
8,431

 
$
6,500

 
 
 
 
LONG-TERM DEBT, less current maturities
28,508

 
22,562

DEFERRED INCOME TAXES
4,230

 
3,865

NON-CURRENT PRICE RISK MANAGEMENT LIABILITIES
112

 
73

OTHER NON-CURRENT LIABILITIES
1,060

 
1,019

 
 
 
 
COMMITMENTS AND CONTINGENCIES
 
 
 
 
 
 
 
PREFERRED UNITS OF SUBSIDIARY
32

 
32

REDEEMABLE NONCONTROLLING INTEREST
15

 
—

 
 
 
 
EQUITY:
 
 
 
Total partners’ capital
709

 
1,078

Noncontrolling interest
21,584

 
15,201

Total equity
22,293

 
16,279

Total liabilities and equity
$
64,681

 
$
50,330






3


ENERGY TRANSFER EQUITY, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per unit data)
(unaudited)
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2014
 
2013
 
2014
 
2013
REVENUES
$
14,987

 
$
12,486

 
$
42,210

 
$
35,728

COSTS AND EXPENSES:
 
 
 
 
 
 
 
Cost of products sold
13,015

 
11,064

 
36,808

 
31,436

Operating expenses
540

 
419

 
1,359

 
1,178

Depreciation, depletion and amortization
425

 
332

 
1,248

 
962

Selling, general and administrative
185

 
142

 
490

 
448

Total costs and expenses
14,165

 
11,957

 
39,905

 
34,024

OPERATING INCOME
822

 
529

 
2,305

 
1,704

OTHER INCOME (EXPENSE):
 
 
 
 
 
 
 
Interest expense, net of interest capitalized
(356
)
 
(298
)
 
(1,015
)
 
(913
)
Equity in earnings of unconsolidated affiliates
84

 
38

 
265

 
182

Gains (losses) on extinguishments of debt
2

 
—

 
2

 
(7
)
Gains (losses) on interest rate derivatives
(25
)
 
3

 
(73
)
 
55

Gain on sale of AmeriGas common units
14

 
87

 
177

 
87

Other, net
(15
)
 
33

 
(38
)
 
—

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE
526

 
392

 
1,623

 
1,108

Income tax expense from continuing operations
56

 
49

 
271

 
136

INCOME FROM CONTINUING OPERATIONS
470

 
343

 
1,352

 
972

Income from discontinued operations
—

 
13

 
66

 
44

NET INCOME
470

 
356

 
1,418

 
1,016

LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST
282

 
205

 
898

 
648

NET INCOME ATTRIBUTABLE TO PARTNERS
188

 
151

 
520

 
368

GENERAL PARTNER’S INTEREST IN NET INCOME
—

 
1

 
1

 
1

CLASS D UNITHOLDER INTEREST IN NET INCOME
—

 
—

 
1

 
—

LIMITED PARTNERS’ INTEREST IN NET INCOME
$
188

 
$
150

 
$
518

 
$
367

INCOME FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT:
 
 
 
 
 
 
 
Basic
$
0.35

 
$
0.26

 
$
0.94

 
$
0.62

Diluted
$
0.35

 
$
0.26

 
$
0.93

 
$
0.62

NET INCOME PER LIMITED PARTNER UNIT:
 
 
 
 
 
 
 
Basic
$
0.35

 
$
0.27

 
$
0.95

 
$
0.65

Diluted
$
0.35

 
$
0.27

 
$
0.94

 
$
0.65

WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING:
 
 
 
 
 
 
 
Basic
538.8

 
561.4

 
546.6

 
560.8

Diluted
539.9

 
561.4

 
547.6

 
560.8



4


ENERGY TRANSFER EQUITY, L.P.
DISTRIBUTABLE CASH FLOW
(Tabular dollar amounts in millions)
(unaudited)
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2014
 
2013
 
2014
 
2013
“Distributable Cash Flow,” “Distributable Cash Flow, as adjusted,” and “Distribution Coverage Ratio” (1):
 
 
 
 
 
 
 
Cash distributions from ETP associated with:
 
 
 
 
 
 
 
Limited partner interest
$
30

 
$
45

 
$
88

 
$
223

General partner interest
6

 
5

 
16

 
15

Incentive distribution rights
200

 
165

 
546

 
528

IDR relinquishments
(67
)
 
(21
)
 
(182
)
 
(107
)
Class H Units (50.05% general partner interest and incentive distribution rights distributions from SXL)
56

 
51

 
159

 
51

Distributions credited to Holdco consideration (2)
—

 
—

 
—

 
(68
)
Total cash distributions from ETP
225

 
245

 
627

 
642

Cash distributions from Regency associated with: 
 
 
 
 
 
 
 
Limited partner interest
29

 
12

 
70

 
36

General partner interest
2

 
1

 
4

 
3

Incentive distribution rights
8

 
3

 
23

 
8

IDR relinquishment
(1
)
 
(1
)
 
(2
)
 
(2
)
Total cash distributions from Regency
38

 
15

 
95

 
45

Cash dividends from Holdco
—

 
—

 
—

 
50

Total cash distributions and dividends from ETP, Regency and Holdco
263

 
260

 
722

 
737

 
 
 
 
 
 
 
 
Distributable cash flow attributable to Lake Charles LNG (3)
51

 
—

 
146

 
—

 
 
 
 
 
 
 
 
Deduct expenses of the Parent Company on a stand-alone basis:
 
 
 
 
 
 
 
Selling, general and administrative expenses, excluding non-cash compensation expense
(3
)
 
(3
)
 
(10
)
 
(28
)
Management fee to ETP (4)
(24
)
 
(5
)
 
(71
)
 
(10
)
Interest expense, net of amortization of financing costs, interest income, and realized gains and losses on interest rate swaps
(55
)
 
(43
)
 
(141
)
 
(149
)
Distributable Cash Flow
232

 
209

 
646

 
550

Transaction-related expenses
2

 
2

 
6

 
19

Distributable Cash Flow, as adjusted
$
234

 
$
211

 
$
652

 
$
569

 
 
 
 
 
 
 
 
Cash distributions to be paid to the partners of ETE:
 
 
 
 
 
 
 
Distributions to be paid to limited partners
$
224

 
$
189

 
$
624

 
$
554

Distributions to be paid to general partner
1

 
—

 
2

 
1

Distributions to be paid to Class D unitholder
1

 
—

 
2

 
—

Total cash distributions to be paid to the partners of ETE
$
226

 
$
189

 
$
628

 
$
555

 
 
 
 
 
 
 
 
Distribution coverage ratio (5)
1.04x

 
1.12x

 
1.04x

 
1.03x

 
 
 
 
 
 
 
 
Reconciliation of Non-GAAP “Distributable Cash Flow” and “Distributable Cash Flow, as adjusted” to GAAP “Net income” (1):
 
 
 
 
 
 
 
Net income attributable to partners
$
188

 
$
151

 
$
520

 
$
368

Equity in income related to investments in ETP, Regency and Holdco
(229
)
 
(207
)
 
(639
)
 
(573
)

5


Total cash distributions and dividends from ETP, Regency and Holdco
263

 
260

 
722

 
737

Amortization included in interest expense (excluding ETP and Regency)
2

 
5

 
6

 
14

Fair value adjustment of ETE Preferred Units
—

 
—

 
—

 
9

Other non-cash (excluding ETP, Regency and Holdco)
8

 
—

 
37

 
(5
)
Distributable Cash Flow
232

 
209

 
646

 
550

Transaction-related expenses
2

 
2

 
6

 
19

Distributable Cash Flow, as adjusted
$
234

 
$
211

 
$
652

 
$
569

(1) 
This press release and accompanying schedules include the non-generally accepted accounting principle (“non-GAAP”) financial measure of Distributable Cash Flow. The schedule above provides a reconciliation of this non-GAAP financial measure to its most directly comparable financial measure calculated and presented in accordance with GAAP. The Partnership’s Distributable Cash Flow should not be considered as an alternative to GAAP financial measures such as net income, cash flow from operating activities or any other GAAP measure of liquidity or financial performance.
Distributable Cash Flow. The Partnership defines Distributable Cash Flow for a period as cash distributions expected to be received from ETP and Regency in respect of such period in connection with the Partnership’s investments in limited and general partner interests of ETP (including the ETP Class H units which track the general partner and IDRs in Sunoco Logistic Partners L.P.) and Regency, net of the Partnership’s cash expenditures for general and administrative costs and interest expense. The Partnership’s definition of Distributable Cash Flow also includes distributable cash flow from Lake Charles LNG to the Partnership beginning January 1, 2014. Distributable Cash Flow for the three and nine months ended September 30, 2013 also included Holdco until ETE’s 60% interest in Holdco was contributed to ETP on April 30, 2013.

Distributable Cash Flow is a significant liquidity measure used by the Partnership’s senior management to compare net cash flows generated by the Partnership to the distributions the Partnership expects to pay its unitholders. Using this measure, the Partnership’s management can compute the coverage ratio of estimated cash flows for a period to planned cash distributions for such period.

Distributable Cash Flow is also an important non-GAAP financial measure for our limited partners since it indicates to investors whether the Partnership’s investments are generating cash flows at a level that can sustain or support an increase in quarterly cash distribution levels. Financial measures such as Distributable Cash Flow are quantitative standards used by the investment community with respect to publicly traded partnerships 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 can pay to a unitholder). The GAAP measure most directly comparable to Distributable Cash Flow is net income for ETE on a stand-alone basis (“Parent Company”). The accompanying analysis of Distributable Cash Flow is presented for the three and nine months ended September 30, 2014 and 2013 for comparative purposes.

Distributable Cash Flow, as adjusted. The Partnership defines Distributable Cash Flow, as adjusted, for a period as cash distributions expected to be received from ETP and Regency in respect of such period in connection with the Partnership’s investments in limited and general partner interests of ETP (including the ETP Class H units which track the general partner and IDRs in Sunoco Logistic Partners L.P.) and Regency, plus, beginning in 2014, distributable cash flow from Lake Charles LNG and, for 2013, dividends from Holdco (as described in the definition of Distributable Cash Flow above), net of the Partnership’s cash expenditures for general and administrative costs and interest expense, excluding certain items, such as transaction-related expenses. Due to the cash expenses incurred from time to time in connection with the Partnership’s merger and acquisition activities and other transactions, Distributable Cash Flow, as adjusted, for the three and nine months ended September 30, 2014 and 2013 is a significant liquidity measure used by the Partnership’s senior management to compare net cash flows generated by the Partnership to the distributions the Partnership expects to pay its unitholders. Using this measure, the Partnership’s management can compute the coverage ratio of estimated cash flows for a period to planned cash distributions for such period. The GAAP measure most directly comparable to Distributable Cash Flow, as adjusted, is net income for the Parent Company on a stand-alone basis. The accompanying analysis of Distributable Cash Flow, as adjusted, is presented for the three and nine months ended September 30, 2014 and 2013 for comparative purposes.
(2) 
For the nine months ended September 30, 2013, cash distributions paid by ETP exclude distributions on 49.5 million ETP common units issued to ETE as a portion of the considerations for ETP’s acquisition of ETE’s interest in Holdco on April 30, 2013. These ETP common units received cash distributions on May 15, 2013; however, such distributions were reduced from the total cash portion of the consideration paid to ETE in connection with the April 30, 2013 Holdco transaction pursuant to the contribution agreement.

6


(3) 
Distributable cash flow attributable to Lake Charles LNG was calculated as follows (unaudited):
 
Three Months Ended September 30, 2014
 
Nine Months Ended September 30, 2014
Revenues
$
55

 
$
162

Operating expenses
(5
)
 
(13
)
Selling, general and administrative expenses
(1
)
 
(4
)
Other, net
2

 
1

Distributable cash flow attributable to Lake Charles LNG
$
51

 
$
146

(4) 
In exchange for management services, ETE has agreed to pay to ETP fees totaling $95 million, $95 million and $5 million for the years ending December 31, 2014, 2015 and 2016, respectively.
(5) 
Distribution coverage ratio for a period is calculated as Distributable Cash Flow, as adjusted, divided by total cash distributions expected to be paid to the partners of ETE in respect of such period.




7


SUPPLEMENTAL INFORMATION
FINANCIAL STATEMENTS FOR PARENT COMPANY

Following are condensed balance sheets and statements of operations of the Parent Company on a stand-alone basis.
BALANCE SHEETS
(In millions)
(unaudited)
 
September 30,
2014
 
December 31, 2013
ASSETS
 
 
 
CURRENT ASSETS
$
23

 
$
13

ADVANCES TO AND INVESTMENTS IN UNCONSOLIDATED AFFILIATES
5,303

 
3,841

INTANGIBLE ASSETS, net
11

 
14

GOODWILL
9

 
9

OTHER NON-CURRENT ASSETS, net
49

 
41

Total assets
$
5,395

 
$
3,918

LIABILITIES AND PARTNERS’ CAPITAL
 
 
 
CURRENT LIABILITIES
$
143

 
$
38

LONG-TERM DEBT, less current maturities
4,540

 
2,801

OTHER NON-CURRENT LIABILITIES
3

 
1

COMMITMENTS AND CONTINGENCIES

 

PARTNERS’ CAPITAL:
 
 
 
General Partner
(1
)
 
(3
)
Limited Partners:
 
 
 
Common Unitholders
687

 
1,066

Class D Units
18

 
6

Accumulated other comprehensive income
5

 
9

Total partners’ capital
709

 
1,078

Total liabilities and partners’ capital
$
5,395

 
$
3,918



8


STATEMENTS OF OPERATIONS
(Amounts in millions)
(unaudited)
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2014
 
2013
 
2014
 
2013
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
$
(20
)
 
$
(11
)
 
$
(83
)
 
$
(40
)
OTHER INCOME (EXPENSE):
 
 
 
 
 
 
 
Interest expense, net of interest capitalized
(57
)
 
(47
)
 
(147
)
 
(164
)
Gains on interest rate derivatives
—

 
3

 
—

 
9

Equity in earnings of unconsolidated affiliates
269

 
207

 
756

 
573

Other, net
(2
)
 
(1
)
 
(4
)
 
(11
)
INCOME BEFORE INCOME TAXES
190

 
151

 
522

 
367

Income tax expense (benefit)
2

 
—

 
2

 
(1
)
NET INCOME
188

 
151

 
520

 
368

GENERAL PARTNER’S INTEREST IN NET INCOME
—

 
1

 
1

 
1

CLASS D UNITHOLDER’S INTEREST IN NET INCOME
—

 
—

 
1

 
—

LIMITED PARTNERS’ INTEREST IN NET INCOME
$
188

 
$
150

 
$
518

 
$
367



9