epeform8k_051208.htm
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): May 12, 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 (see General Instruction A.2. below):
¨ 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 May
12, 2008, Enterprise GP Holdings L.P. issued a press release regarding its
consolidated and parent-only financial results for the three months ended March
31, 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 limited partnership, the registered
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.” References to “EPGP” refer to Enterprise Products GP, LLC,
which is the general partner of Enterprise Products
Partners. Enterprise Products Partners has no business activities
outside those conducted by its operating subsidiary, Enterprise Products
Operating LLC (“EPO”). 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 “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. TEPPCO GP is owned by the Parent
Company.
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.
References
to “EPCO” mean EPCO, Inc. and its private company affiliates, which are related
party affiliates 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. We account for our investments in Energy Transfer
Equity and LE GP using the equity method of accounting since we do not control
such entities.
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
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,
|
§
|
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
|
|
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99.1
|
Enterprise
GP Holdings L.P. press release dated May 12,
2008.
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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.
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ENTERPRISE
GP HOLDINGS L.P.
|
|
By: EPE
Holdings, LLC,
|
|
as general
partner
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|
|
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Date:
May 12, 2008
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By:
/s/ Michael J. Knesek
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Name: Michael
J. Knesek
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Title: Senior
Vice President, Controller
|
|
and Principal Accounting
Officer
|
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of the general
partner
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Exhibit
Index
Exhibit
No.
|
Description
|
|
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99.1
|
Enterprise
GP Holdings L.P. press release dated May 12,
2008.
|