ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 30-0108820 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | ý | Accelerated filer | ¨ | |
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
/d | per day | |
AmeriGas | AmeriGas Partners, L.P. | |
AOCI | accumulated other comprehensive income (loss) | |
Bbls | barrels | |
Bcf | billion cubic feet | |
Btu | British thermal unit, an energy measurement used by gas companies to convert the volume of gas used to its heat equivalent, and thus calculate the actual energy content | |
Citrus | Citrus Corp., which owns 100% of FGT | |
CrossCountry | CrossCountry Energy LLC, which owns an indirect 50% interest in Citrus | |
Eagle Rock | Eagle Rock Energy Partners, L.P. | |
ETC OLP | La Grange Acquisition, L.P., which conducts business under the assumed name of Energy Transfer Company | |
ETP | Energy Transfer Partners, L.P. | |
ETP Credit Facility | ETP’s $2.5 billion revolving credit facility | |
Exchange Act | Securities Exchange Act of 1934 | |
FEP | Fayetteville Express Pipeline LLC | |
FERC | Federal Energy Regulatory Commission | |
FGT | Florida Gas Transmission Company, LLC | |
GAAP | accounting principles generally accepted in the United States of America | |
HPC | RIGS Haynesville Partnership Co. | |
Holdco | ETP Holdco Corporation | |
Hoover | Hoover Energy Partners, LP | |
IDRs | incentive distribution rights | |
LIBOR | London Interbank Offered Rate | |
LNG | liquefied natural gas | |
Lone Star | Lone Star NGL LLC |
MACS | Mid-Atlantic Convenience Stores, LLC | |
MEP | Midcontinent Express Pipeline LLC | |
MMBtu | million British thermal units | |
MTBE | methyl tertiary butyl ether | |
NGL | natural gas liquid, such as propane, butane and natural gasoline | |
NYMEX | New York Mercantile Exchange | |
OSHA | Federal Occupational Safety and Health Act | |
OTC | over-the-counter | |
Panhandle | Panhandle Eastern Pipe Line Company, LP | |
PCBs | polychlorinated biphenyl | |
PEPL Holdings | PEPL Holdings, LLC, a wholly-owned subsidiary of ETP | |
PES | Philadelphia Energy Solutions | |
PHMSA | Pipeline Hazardous Materials Safety Administration | |
PVR | PVR Partners, L.P. | |
Regency | Regency Energy Partners LP | |
Regency Credit Facility | Regency’s $1.5 billion revolving credit facility | |
Regency Preferred Units | Regency’s Series A Convertible Preferred Units, the Preferred Units of a Subsidiary | |
SEC | Securities and Exchange Commission | |
Southern Union | Southern Union Company | |
SUGS | Southern Union Gas Services | |
Sunoco | Sunoco, Inc. | |
Sunoco Logistics | Sunoco Logistics Partners L.P. | |
Transwestern | Transwestern Pipeline Company, LLC | |
Trunkline LNG | Trunkline LNG Company, LLC | |
WTI | West Texas Intermediate Crude |
June 30, 2014 | December 31, 2013 | ||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 1,234 | $ | 590 | |||
Accounts receivable, net | 4,439 | 3,658 | |||||
Accounts receivable from related companies | 46 | 63 | |||||
Inventories | 1,560 | 1,807 | |||||
Exchanges receivable | 88 | 67 | |||||
Price risk management assets | 13 | 39 | |||||
Other current assets | 272 | 312 | |||||
Total current assets | 7,652 | 6,536 | |||||
PROPERTY, PLANT AND EQUIPMENT | 39,048 | 33,917 | |||||
ACCUMULATED DEPRECIATION | (3,930 | ) | (3,235 | ) | |||
35,118 | 30,682 | ||||||
ADVANCES TO AND INVESTMENTS IN UNCONSOLIDATED AFFILIATES | 3,686 | 4,014 | |||||
NON-CURRENT PRICE RISK MANAGEMENT ASSETS | — | 18 | |||||
GOODWILL | 6,230 | 5,894 | |||||
INTANGIBLE ASSETS, net | 5,072 | 2,264 | |||||
OTHER NON-CURRENT ASSETS, net | 857 | 922 | |||||
Total assets | $ | 58,615 | $ | 50,330 |
June 30, 2014 | December 31, 2013 | ||||||
LIABILITIES AND EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable | $ | 4,317 | $ | 3,834 | |||
Accounts payable to related companies | 23 | 14 | |||||
Exchanges payable | 272 | 284 | |||||
Price risk management liabilities | 68 | 53 | |||||
Accrued and other current liabilities | 2,196 | 1,678 | |||||
Current maturities of long-term debt | 1,346 | 637 | |||||
Total current liabilities | 8,222 | 6,500 | |||||
LONG-TERM DEBT, less current maturities | 25,851 | 22,562 | |||||
DEFERRED INCOME TAXES | 3,712 | 3,865 | |||||
NON-CURRENT PRICE RISK MANAGEMENT LIABILITIES | 97 | 73 | |||||
OTHER NON-CURRENT LIABILITIES | 1,018 | 1,019 | |||||
COMMITMENTS AND CONTINGENCIES (Note 13) | |||||||
PREFERRED UNITS OF SUBSIDIARY | 32 | 32 | |||||
REDEEMABLE NONCONTROLLING INTEREST | 15 | — | |||||
EQUITY: | |||||||
General Partner | (1 | ) | (3 | ) | |||
Limited Partners: | |||||||
Common Unitholders | 563 | 1,066 | |||||
Class D Units | 14 | 6 | |||||
Accumulated other comprehensive income | 6 | 9 | |||||
Total partners’ capital | 582 | 1,078 | |||||
Noncontrolling interest | 19,086 | 15,201 | |||||
Total equity | 19,668 | 16,279 | |||||
Total liabilities and equity | $ | 58,615 | $ | 50,330 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
REVENUES: | |||||||||||||||
Natural gas sales | $ | 1,362 | $ | 864 | $ | 2,792 | $ | 1,837 | |||||||
NGL sales | 1,400 | 787 | 2,654 | 1,500 | |||||||||||
Crude sales | 4,432 | 3,992 | 8,525 | 7,193 | |||||||||||
Gathering, transportation and other fees | 878 | 815 | 1,750 | 1,555 | |||||||||||
Refined product sales | 4,938 | 4,650 | 9,416 | 9,312 | |||||||||||
Other | 1,133 | 955 | 2,086 | 1,845 | |||||||||||
Total revenues | 14,143 | 12,063 | 27,223 | 23,242 | |||||||||||
COSTS AND EXPENSES: | |||||||||||||||
Cost of products sold | 12,351 | 10,565 | 23,793 | 20,372 | |||||||||||
Operating expenses | 412 | 387 | 819 | 759 | |||||||||||
Depreciation, depletion and amortization | 450 | 318 | 823 | 630 | |||||||||||
Selling, general and administrative | 157 | 149 | 305 | 306 | |||||||||||
Total costs and expenses | 13,370 | 11,419 | 25,740 | 22,067 | |||||||||||
OPERATING INCOME | 773 | 644 | 1,483 | 1,175 | |||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Interest expense, net of interest capitalized | (344 | ) | (305 | ) | (659 | ) | (615 | ) | |||||||
Equity in earnings of unconsolidated affiliates | 77 | 54 | 181 | 144 | |||||||||||
Losses on extinguishment of debt | — | (7 | ) | — | (7 | ) | |||||||||
Gains (losses) on interest rate derivatives | (46 | ) | 46 | (48 | ) | 52 | |||||||||
Gain on sale of AmeriGas common units | 93 | — | 163 | — | |||||||||||
Other, net | (25 | ) | (14 | ) | (23 | ) | (33 | ) | |||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE | 528 | 418 | 1,097 | 716 | |||||||||||
Income tax expense from continuing operations | 70 | 89 | 215 | 87 | |||||||||||
INCOME FROM CONTINUING OPERATIONS | 458 | 329 | 882 | 629 | |||||||||||
Income from discontinued operations | 42 | 9 | 66 | 31 | |||||||||||
NET INCOME | 500 | 338 | 948 | 660 | |||||||||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | 336 | 211 | 616 | 443 | |||||||||||
NET INCOME ATTRIBUTABLE TO PARTNERS | 164 | 127 | 332 | 217 | |||||||||||
GENERAL PARTNER’S INTEREST IN NET INCOME | 1 | — | 1 | — | |||||||||||
CLASS D UNITHOLDER’S INTEREST IN NET INCOME | — | — | 1 | — | |||||||||||
LIMITED PARTNERS’ INTEREST IN NET INCOME | $ | 163 | $ | 127 | $ | 330 | $ | 217 | |||||||
INCOME FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT: | |||||||||||||||
Basic | $ | 0.29 | $ | 0.22 | $ | 0.59 | $ | 0.36 | |||||||
Diluted | $ | 0.29 | $ | 0.22 | $ | 0.59 | $ | 0.36 | |||||||
NET INCOME PER LIMITED PARTNER UNIT: | |||||||||||||||
Basic | $ | 0.30 | $ | 0.23 | $ | 0.60 | $ | 0.39 | |||||||
Diluted | $ | 0.30 | $ | 0.23 | $ | 0.60 | $ | 0.39 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Net income | $ | 500 | $ | 338 | $ | 948 | $ | 660 | |||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Reclassification to earnings of gains and losses on derivative instruments accounted for as cash flow hedges | 2 | (1 | ) | 6 | (2 | ) | |||||||||
Change in value of derivative instruments accounted for as cash flow hedges | (2 | ) | 6 | (6 | ) | 8 | |||||||||
Change in value of available-for-sale securities | — | (1 | ) | — | — | ||||||||||
Actuarial gain (loss) relating to pension and other postretirement benefits | — | 2 | (1 | ) | 1 | ||||||||||
Foreign currency translation adjustment | 1 | — | (2 | ) | (1 | ) | |||||||||
Change in other comprehensive income from unconsolidated affiliates | 1 | (3 | ) | (6 | ) | 4 | |||||||||
2 | 3 | (9 | ) | 10 | |||||||||||
Comprehensive income | 502 | 341 | 939 | 670 | |||||||||||
Less: Comprehensive income attributable to noncontrolling interest | 338 | 209 | 610 | 447 | |||||||||||
Comprehensive income attributable to partners | $ | 164 | $ | 132 | $ | 329 | $ | 223 |
General Partner | Common Unitholders | Class D Units | Accumulated Other Comprehensive Income | Non- controlling Interest | Total | ||||||||||||||||||
Balance, December 31, 2013 | $ | (3 | ) | $ | 1,066 | $ | 6 | $ | 9 | $ | 15,201 | $ | 16,279 | ||||||||||
Distributions to partners | (1 | ) | (389 | ) | (1 | ) | — | — | (391 | ) | |||||||||||||
Distributions to noncontrolling interest | — | — | — | — | (863 | ) | (863 | ) | |||||||||||||||
Subsidiary units issued for cash | — | 51 | 1 | — | 598 | 650 | |||||||||||||||||
Subsidiary units issued in certain acquisitions | — | 104 | — | — | 3,911 | 4,015 | |||||||||||||||||
Subsidiary units redeemed in Trunkline LNG Transaction | 2 | 480 | — | — | (482 | ) | — | ||||||||||||||||
Purchase of additional Regency Units | — | (78 | ) | — | — | 78 | — | ||||||||||||||||
Non-cash compensation expense, net of units tendered by employees for tax withholdings | — | — | 7 | — | 29 | 36 | |||||||||||||||||
Capital contributions received from noncontrolling interest | — | — | — | — | 6 | 6 | |||||||||||||||||
Other, net | — | (1 | ) | — | — | (2 | ) | (3 | ) | ||||||||||||||
Units repurchased under buyback program | — | (1,000 | ) | — | — | — | (1,000 | ) | |||||||||||||||
Other comprehensive loss, net of tax | — | — | — | (3 | ) | (6 | ) | (9 | ) | ||||||||||||||
Net income | 1 | 330 | 1 | — | 616 | 948 | |||||||||||||||||
Balance, June 30, 2014 | $ | (1 | ) | $ | 563 | $ | 14 | $ | 6 | $ | 19,086 | $ | 19,668 |
Six Months Ended June 30, | |||||||
2014 | 2013 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 948 | $ | 660 | |||
Reconciliation of net income to net cash provided by operating activities: | |||||||
Depreciation, depletion and amortization | 823 | 630 | |||||
Deferred income taxes | (114 | ) | 68 | ||||
Amortization included in interest expense | (28 | ) | (33 | ) | |||
Non-cash compensation expense | 40 | 27 | |||||
Gain on sale of AmeriGas common units | (163 | ) | — | ||||
(Gains) losses on disposal of assets | (2 | ) | 5 | ||||
Losses on extinguishment of debt | — | 7 | |||||
LIFO valuation adjustments | (34 | ) | (16 | ) | |||
Equity in earnings of unconsolidated affiliates | (181 | ) | (144 | ) | |||
Distributions from unconsolidated affiliates | 143 | 191 | |||||
Other non-cash | (38 | ) | 25 | ||||
Net change in operating assets and liabilities, net of effects of acquisitions and deconsolidation | 501 | (293 | ) | ||||
Net cash provided by operating activities | 1,895 | 1,127 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Cash paid for acquisitions, net of cash received | (407 | ) | (5 | ) | |||
Cash proceeds from the sale of AmeriGas common units | 759 | — | |||||
Capital expenditures (excluding allowance for equity funds used during construction) | (2,137 | ) | (1,504 | ) | |||
Contributions in aid of construction costs | 25 | 11 | |||||
Contributions to unconsolidated affiliates | (70 | ) | (2 | ) | |||
Distributions from unconsolidated affiliates in excess of cumulative earnings | 58 | 59 | |||||
Proceeds from sale of discontinued operations | 79 | — | |||||
Proceeds from the sale of assets | 18 | 53 | |||||
Other | 7 | (46 | ) | ||||
Net cash used in investing activities | (1,668 | ) | (1,434 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Proceeds from borrowings | 8,023 | 6,063 | |||||
Repayments of long-term debt | (5,964 | ) | (5,305 | ) | |||
Subsidiary equity offerings, net of issue costs | 650 | 1,218 | |||||
Distributions to partners | (391 | ) | (360 | ) | |||
Debt issuance costs | (44 | ) | (37 | ) | |||
Distributions to noncontrolling interest | (863 | ) | (684 | ) | |||
Capital contributions received from noncontrolling interest | 6 | 12 | |||||
Redemption of Preferred Units | — | (340 | ) | ||||
Units repurchased under buyback program | (1,000 | ) | — | ||||
Other, net | — | (11 | ) | ||||
Net cash provided by financing activities | 417 | 556 | |||||
INCREASE IN CASH AND CASH EQUIVALENTS | 644 | 249 | |||||
CASH AND CASH EQUIVALENTS, beginning of period | 590 | 372 | |||||
CASH AND CASH EQUIVALENTS, end of period | $ | 1,234 | $ | 621 |
1. | OPERATIONS AND ORGANIZATION: |
• | the Parent Company; |
• | our controlled subsidiaries, ETP and Regency (see description of their respective operations below under “Business Operations”); |
• | ETP’s and Regency’s consolidated subsidiaries and our wholly-owned subsidiaries that own the general partner and IDRs in ETP and Regency; and |
• | our wholly-owned subsidiary, Trunkline LNG, which was acquired from ETP in February 2014. |
• | ETP is a publicly traded partnership whose operations are conducted through the following subsidiaries: |
• | ETC OLP, a Texas limited partnership engaged in midstream and intrastate transportation and storage natural gas operations. ETC OLP owns and operates, through its wholly and majority-owned subsidiaries, natural gas gathering systems, intrastate natural gas pipeline systems and gas processing plants and is engaged in the business of purchasing, gathering, transporting, processing, and marketing natural gas and NGLs in the states of Texas, Louisiana, New Mexico and West Virginia. ETC OLP’s intrastate transportation and storage operations primarily focus on transporting natural gas in Texas through our Oasis pipeline, ET Fuel System, East Texas pipeline and HPL System. ETC OLP’s midstream operations focus on the gathering, compression, treating, conditioning and processing of natural gas, primarily on or through our Southeast Texas System, Eagle Ford System, North Texas System and Northern Louisiana assets. ETC OLP also owns a 70% interest in Lone Star. |
• | ET Interstate, a Delaware limited liability company with revenues consisting primarily of fees earned from natural gas transportation services and operational gas sales. ET Interstate is the parent company of: |
• | Transwestern, a Delaware limited liability company engaged in interstate transportation of natural gas. Transwestern’s revenues consist primarily of fees earned from natural gas transportation services and operational gas sales. |
• | ETC Fayetteville Express Pipeline, LLC, a Delaware limited liability company that directly owns a 50% interest in FEP, which owns 100% of the Fayetteville Express interstate natural gas pipeline. |
• | ETC Tiger Pipeline, LLC, a Delaware limited liability company engaged in interstate transportation of natural gas. |
• | CrossCountry, a Delaware limited liability company that indirectly owns a 50% interest in Citrus, which owns 100% of the FGT interstate natural gas pipeline. |
• | ETC Compression, LLC, a Delaware limited liability company engaged in natural gas compression services and related equipment sales. |
• | Holdco, a Delaware limited liability company that indirectly owns Panhandle and Sunoco. Panhandle and Sunoco operations are described as follows: |
• | Panhandle owns and operates assets in the regulated and unregulated natural gas industry and is primarily engaged in the transportation and storage of natural gas in the United States. As discussed in Note 2, in January 2014, Panhandle consummated a merger with Southern Union, the indirect parent of Panhandle, and PEPL Holdings, the sole limited partner of Panhandle, pursuant to which each of Southern Union and PEPL Holdings were merged with and into Panhandle, with Panhandle surviving the merger. |
• | Sunoco owns and operates retail marketing assets, which sell gasoline and middle distillates at retail locations and operates convenience stores primarily on the east coast and in the midwest region of the United States. Effective June 1, 2014, ETP combined certain Sunoco retail assets with another wholly-owned subsidiary of ETP to form a limited liability company owned by ETP and its wholly-owned subsidiary, Sunoco. |
• | Sunoco Logistics, a publicly traded Delaware limited partnership that owns and operates a logistics business, consisting of refined products, crude oil and NGL pipelines, terminalling and storage assets, refined products, crude oil and NGL acquisition and marketing assets. |
• | Regency is a publicly traded partnership engaged in the gathering and processing, compression, treating and transportation of natural gas; the transportation, fractionation and storage of NGLs; the gathering, transportation and terminaling of oil (crude, and/or condensate, a lighter oil) received from producers; and the management of coal and natural resource properties in the United States. Regency focuses on providing midstream services in some of the most prolific natural gas producing regions in the United States, including the Eagle Ford, Haynesville, Barnett, Fayetteville, Marcellus, Utica, Bone Spring, Avalon and Granite Wash shales. Its assets are primarily located in Texas, Louisiana, Arkansas, Pennsylvania, California, Mississippi, Alabama, New Mexico and the mid-continent region of the United States, which includes Kansas, Colorado and Oklahoma. Regency also holds a 30% interest in Lone Star. |
• | Trunkline LNG operates a LNG import terminal, which has approximately 9.0 Bcf of above ground LNG storage capacity and re-gasification facilities on Louisiana’s Gulf Coast near Lake Charles, Louisiana. Trunkline LNG is engaged in interstate commerce and is subject to the rules, regulations and accounting requirements of the FERC. |
• | Investment in ETP, including the consolidated operations of ETP. |
• | Investment in Regency, including the consolidated operations of Regency. |
• | Investment in Trunkline LNG, including the operations of Trunkline LNG. |
• | Corporate and Other, including the following: |
• | activities of the Parent Company; and |
• | the goodwill and property, plant and equipment fair value adjustments recorded as a result of the 2004 reverse acquisition of Heritage Propane Partners, L.P. |
2. | ACQUISITIONS, DIVESTITURES AND RELATED TRANSACTIONS: |
Assets | At March 21, 2014 | ||
Current assets | $ | 140 | |
Gathering and transmission systems | 1,396 | ||
Compression equipment | 342 | ||
Gas plants and buildings | 110 | ||
Natural resources | 454 | ||
Other property, plant and equipment | 229 | ||
Construction in process | 172 | ||
Investment in unconsolidated subsidiaries | 62 | ||
Intangible assets (average useful lives of 30 years) | 2,717 | ||
Goodwill | 353 | ||
Other long-term assets | 18 | ||
Total assets acquired | $ | 5,993 | |
Liabilities | |||
Current liabilities | 161 | ||
Long-term debt | 1,788 | ||
Premium related to senior notes | 99 | ||
Long-term liabilities | 42 | ||
Total liabilities assumed | $ | 2,090 | |
Net assets acquired | $ | 3,903 |
Assets | At February 3, 2014 | ||
Accounts receivable, net | $ | 5 | |
Gathering and transmission systems | 72 | ||
Compression equipment | 15 | ||
Other property, plant and equipment | 22 | ||
Construction in process | 6 | ||
Intangible assets (average useful lives of 30 years) | 148 | ||
Goodwill | 30 | ||
Total assets acquired | $ | 298 | |
Liabilities | |||
Current liabilities | 5 | ||
Asset retirement obligations | 2 | ||
Total liabilities assumed | 7 | ||
Net assets acquired | $ | 291 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Revenues | $ | 14,143 | $ | 12,347 | $ | 27,505 | $ | 23,794 | |||||||
Net income attributable to partners | 164 | 121 | 325 | 205 | |||||||||||
Basic net income per Limited Partner unit | $ | 0.30 | $ | 0.22 | $ | 0.59 | $ | 0.37 | |||||||
Diluted net income per Limited Partner unit | $ | 0.30 | $ | 0.22 | $ | 0.59 | $ | 0.37 |
3. | INVESTMENTS IN UNCONSOLIDATED AFFILIATES: |
• | AmeriGas. In January 2014, June 2014 and August 2014, ETP sold 9.2 million, 8.5 million and 1.2 million AmeriGas units, respectively, for net proceeds of $381 million, $377 million and $55 million, respectively. Net proceeds from these sales were used to repay borrowings under the ETP Credit Facility and for general partnership purposes. Subsequent to the August 2014 sale, ETP’s remaining interest in AmeriGas common units consisted of 3.1 million units held by a wholly-owned captive insurance company. |
• | Citrus. ETP owns a 50% interest in Citrus, which owns 100% of FGT, a natural gas pipeline system that originates in Texas and delivers natural gas to the Florida peninsula. |
• | FEP. ETP owns a 50% interest in the FEP, which owns a natural gas pipeline that originates in Conway County, Arkansas, continues eastward through White County, Arkansas and terminates at an interconnect with Trunkline Gas Company, LLC in Panola County, Mississippi. |
• | HPC. Regency owns a 49.99% interest in HPC, which, through its ownership of the Regency Intrastate Gas System, delivers natural gas from Northwest Louisiana to downstream pipelines and markets through an intrastate pipeline system. |
• | MEP. Regency owns a 50% interest in MEP, which owns natural gas pipelines that extend from Southeast Oklahoma, across Northeast Texas, Northern Louisiana and Central Mississippi to an interconnect with the Transcontinental natural gas pipeline system in Butler, Alabama. In June 2014, Regency agreed to guarantee the prompt payment by Regency Midcontinent Express LLC of its proportionate $175 million capital contributions to MEP. Regency’s obligation is not expected to exceed $176 million. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Revenue | $ | 965 | $ | 930 | $ | 2,784 | $ | 2,441 | |||||||
Operating income | 211 | 206 | 675 | 643 | |||||||||||
Net income | 79 | 78 | 423 | 396 |
4. | CASH AND CASH EQUIVALENTS: |
Six Months Ended June 30, | |||||||
2014 | 2013 | ||||||
NON-CASH INVESTING ACTIVITIES: | |||||||
Accrued capital expenditures | $ | 339 | $ | 538 | |||
Accrued advances to unconsolidated affiliates | $ | 175 | $ | — | |||
Net gains (losses) from subsidiary common unit transactions | $ | 560 | $ | (364 | ) | ||
NON-CASH FINANCING ACTIVITIES: | |||||||
Subsidiary issuances of common units in connection with PVR and Hoover acquisitions | $ | 4,015 | $ | — | |||
Long-term debt assumed in PVR acquisition | $ | 1,887 | $ | — |
5. | INVENTORIES: |
June 30, 2014 | December 31, 2013 | ||||||
Natural gas and NGLs | $ | 274 | $ | 523 | |||
Crude oil | 478 | 488 | |||||
Refined products | 583 | 597 | |||||
Appliances, parts and fittings and other | 225 | 199 | |||||
Total inventories | $ | 1,560 | $ | 1,807 |
6. | FAIR VALUE MEASUREMENTS: |
Fair Value Measurements at June 30, 2014 | |||||||||||||||
Fair Value Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Assets: | |||||||||||||||
Interest rate derivatives | $ | 3 | $ | — | $ | 3 | $ | — | |||||||
Commodity derivatives: | |||||||||||||||
Natural Gas: | |||||||||||||||
Basis Swaps IFERC/NYMEX | 7 | 7 | — | — | |||||||||||
Swing Swaps IFERC | 2 | 2 | — | — | |||||||||||
Fixed Swaps/Futures | 37 | 35 | 2 | — | |||||||||||
Natural Gas Liquids — Forwards/Swaps | 8 | 7 | 1 | — | |||||||||||
Power: | |||||||||||||||
Forwards | 8 | — | 8 | — | |||||||||||
Futures | 4 | 4 | — | ||||||||||||
Refined Products — Futures | 5 | 5 | — | — | |||||||||||
Total commodity derivatives | 71 | 60 | 11 | — | |||||||||||
Total assets | $ | 74 | $ | 60 | $ | 14 | $ | — | |||||||
Liabilities: | |||||||||||||||
Interest rate derivatives | $ | (121 | ) | $ | — | $ | (121 | ) | $ | — | |||||
Embedded derivatives in the Regency Preferred Units | (29 | ) | — | — | (29 | ) | |||||||||
Commodity derivatives: | |||||||||||||||
Condensate — Forward Swaps | (4 | ) | — | (4 | ) | — | |||||||||
Natural Gas: | |||||||||||||||
Basis Swaps IFERC/NYMEX | (7 | ) | (7 | ) | — | — | |||||||||
Swing Swaps IFERC | (2 | ) | (2 | ) | — | — | |||||||||
Fixed Swaps/Futures | (47 | ) | (42 | ) | (5 | ) | — | ||||||||
Natural Gas Liquids — Forwards/Swaps | (16 | ) | (14 | ) | (2 | ) | — | ||||||||
Power: | |||||||||||||||
Forwards | (6 | ) | — | (6 | ) | — | |||||||||
Futures | (4 | ) | (4 | ) | — | — | |||||||||
Refined Products — Futures | (7 | ) | (7 | ) | — | — | |||||||||
Total commodity derivatives | (93 | ) | (76 | ) | (17 | ) | — | ||||||||
Total liabilities | $ | (243 | ) | $ | (76 | ) | $ | (138 | ) | $ | (29 | ) |
Fair Value Measurements at December 31, 2013 | |||||||||||||||
Fair Value Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Assets: | |||||||||||||||
Interest rate derivatives | $ | 47 | $ | — | $ | 47 | $ | — | |||||||
Commodity derivatives: | |||||||||||||||
Natural Gas: | |||||||||||||||
Basis Swaps IFERC/NYMEX | 5 | 5 | — | — | |||||||||||
Swing Swaps IFERC | 8 | 1 | 7 | — | |||||||||||
Fixed Swaps/Futures | 203 | 201 | 2 | — | |||||||||||
NGLs — Swaps | 7 | 5 | 2 | — | |||||||||||
Power — Forwards | 3 | — | 3 | — | |||||||||||
Refined Products — Futures | 5 | 5 | — | — | |||||||||||
Total commodity derivatives | 231 | 217 | 14 | — | |||||||||||
Total Assets | $ | 278 | $ | 217 | $ | 61 | $ | — | |||||||
Liabilities: | |||||||||||||||
Interest rate derivatives | $ | (95 | ) | $ | — | $ | (95 | ) | $ | — | |||||
Embedded derivatives in the Regency Preferred Units | (19 | ) | — | — | (19 | ) | |||||||||
Commodity derivatives: | |||||||||||||||
Condensate — Forward Swaps | (1 | ) | — | (1 | ) | — | |||||||||
Natural Gas: | |||||||||||||||
Basis Swaps IFERC/NYMEX | (4 | ) | (4 | ) | — | — | |||||||||
Swing Swaps IFERC | (6 | ) | — | (6 | ) | — | |||||||||
Fixed Swaps/Futures | (206 | ) | (201 | ) | (5 | ) | — | ||||||||
Forward Physical Contracts | (1 | ) | — | (1 | ) | — | |||||||||
NGLs — Swaps | (9 | ) | (5 | ) | (4 | ) | — | ||||||||
Power — Forwards | (1 | ) | — | (1 | ) | — | |||||||||
Refined Products — Futures | (5 | ) | (5 | ) | — | — | |||||||||
Total commodity derivatives | (233 | ) | (215 | ) | (18 | ) | — | ||||||||
Total Liabilities | $ | (347 | ) | $ | (215 | ) | $ | (113 | ) | $ | (19 | ) |
Balance, December 31, 2013 | $ | (19 | ) |
Net unrealized loss included in other income (expense) | (10 | ) | |
Balance, June 30, 2014 | $ | (29 | ) |
7. | NET INCOME PER LIMITED PARTNER UNIT: |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Income from continuing operations | $ | 458 | $ | 329 | $ | 882 | $ | 629 | |||||||
Less: Income from continuing operations attributable to noncontrolling interest | 298 | 206 | 557 | 428 | |||||||||||
Income from continuing operations, net of noncontrolling interest | 160 | 123 | 325 | 201 | |||||||||||
Less: General Partner’s interest in income from continuing operations | 1 | — | 1 | — | |||||||||||
Less: Class D Unitholder’s interest in income from continuing operations | — | — | 1 | — | |||||||||||
Income from continuing operations available to Limited Partners | $ | 159 | $ | 123 | $ | 323 | $ | 201 | |||||||
Basic Income from Continuing Operations per Limited Partner Unit: | |||||||||||||||
Weighted average limited partner units | 543.6 | 560.9 | 550.6 | 560.4 | |||||||||||
Basic income from continuing operations per Limited Partner unit | $ | 0.29 | $ | 0.22 | $ | 0.59 | $ | 0.36 | |||||||
Basic income from discontinued operations per Limited Partner unit | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.03 | |||||||
Diluted Income from Continuing Operations per Limited Partner Unit: | |||||||||||||||
Income from continuing operations available to Limited Partners | $ | 159 | $ | 123 | $ | 323 | $ | 201 | |||||||
Dilutive effect of equity-based compensation of subsidiaries and distributions to Class D Unitholder | — | — | (1 | ) | — | ||||||||||
Diluted income from continuing operations available to Limited Partners | $ | 159 | $ | 123 | $ | 322 | $ | 201 | |||||||
Weighted average limited partner units | 543.6 | 560.9 | 550.6 | 560.4 | |||||||||||
Dilutive effect of unconverted unit awards | 0.9 | — | 0.9 | — | |||||||||||
Weighted average limited partner units, assuming dilutive effect of unvested unit awards | 544.5 | 560.9 | 551.5 | 560.4 | |||||||||||
Diluted income from continuing operations per Limited Partner unit | $ | 0.29 | $ | 0.22 | $ | 0.59 | $ | 0.36 | |||||||
Diluted income from discontinued operations per Limited Partner unit | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.03 |
8. | DEBT OBLIGATIONS: |
June 30, 2014 | December 31, 2013 | ||||||
Parent Company Indebtedness: | |||||||
ETE Senior Notes due October 15, 2020 | $ | 1,187 | $ | 1,187 | |||
ETE Senior Notes due January 15, 2024 | 1,150 | 450 | |||||
ETE Senior Secured Term Loan due December 2, 2019 | 1,400 | 1,000 | |||||
ETE Senior Secured Revolving Credit Facility due December 2, 2018 | 400 | 171 | |||||
Subsidiary Indebtedness: | |||||||
ETP Senior Notes | 10,890 | 11,182 | |||||
Regency Senior Notes | 3,700 | 2,800 | |||||
PVR Senior Notes | 872 | — | |||||
Transwestern Senior Notes | 870 | 870 | |||||
Panhandle Senior Notes | 1,085 | 1,085 | |||||
Sunoco Senior Notes | 965 | 965 | |||||
Sunoco Logistics Senior Notes | 2,975 | 2,150 | |||||
Revolving Credit Facilities: | |||||||
ETP $2.5 billion Revolving Credit Facility due October 27, 2017 | — | 65 | |||||
Regency $1.5 billion Revolving Credit Facility due May 21, 2018 | 850 | 510 | |||||
Sunoco Logistics $35 million Revolving Credit Facility due April 30, 2015 | 35 | 35 | |||||
Sunoco Logistics $1.5 billion Revolving Credit Facility due November 19, 2018 | 250 | 200 | |||||
Other Long-Term Debt | 228 | 228 | |||||
Unamortized discounts, premiums and fair value adjustments, net | 340 | 301 | |||||
Total | 27,197 | 23,199 | |||||
Less: Current maturities of long-term debt | 1,346 | 637 | |||||
Long-term debt and notes payable, less current maturities | $ | 25,851 | $ | 22,562 |
9. | REDEEMABLE NONCONTROLLING INTERESTS: |
10. | EQUITY: |
Number of Units | ||
Outstanding at December 31, 2013 | 559.9 | |
Repurchase of units under buyback program | (21.1 | ) |
Outstanding at June 30, 2014 | 538.8 |
Quarter Ended | Record Date | Payment Date | Rate | |||||
December 31, 2013 | February 7, 2014 | February 19, 2014 | $ | 0.34625 | ||||
March 31, 2014 | May 5, 2014 | May 19, 2014 | 0.35875 | |||||
June 30, 2014 | August 4, 2014 | August 19, 2014 | 0.38000 |
Quarter Ended | Record Date | Payment Date | Rate | |||||
December 31, 2013 | February 7, 2014 | February 14, 2014 | $ | 0.9200 | ||||
March 31, 2014 | May 5, 2014 | May 15, 2014 | 0.9350 | |||||
June 30, 2014 | August 4, 2014 | August 14, 2014 | 0.9550 |
Total Year | ||||
2014 (remainder) | $ | 53 | ||
2015 | 51 | |||
2016 | 72 | |||
2017 | 50 | |||
2018 | 45 | |||
2019 | 35 |
Quarter Ended | Record Date | Payment Date | Rate | |||||
December 31, 2013 | February 7, 2014 | February 14, 2014 | $ | 0.4750 | ||||
March 31, 2014 | May 8, 2014 | May 15, 2014 | 0.4800 | |||||
June 30, 2014 | August 7, 2014 | August 14, 2014 | 0.4900 |
Quarter Ended | Record Date | Payment Date | Rate | |||||
December 31, 2013 | February 10, 2014 | February 14, 2014 | $ | 0.3313 | ||||
March 31, 2014 | May 9, 2014 | May 15, 2014 | 0.3475 | |||||
June 30, 2014 | August 8, 2014 | August 14, 2014 | 0.3650 |
June 30, 2014 | December 31, 2013 | ||||||
Available-for-sale securities | $ | 2 | $ | 2 | |||
Foreign currency translation adjustment | (3 | ) | (1 | ) | |||
Net loss on commodity related hedges | (4 | ) | (4 | ) | |||
Actuarial gain related to pensions and other postretirement benefits | 55 | 56 | |||||
Investments in unconsolidated affiliates, net | 2 | 8 | |||||
Subtotal | 52 | 61 | |||||
Amounts attributable to noncontrolling interest | (46 | ) | (52 | ) | |||
Total AOCI, net of tax | $ | 6 | $ | 9 |
11. | INCOME TAXES: |
12. | RETIREMENT BENEFITS: |
Three Months Ended June 30, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Pension Benefits | Other Postretirement Benefits | Pension Benefits | Other Postretirement Benefits | ||||||||||||
Net periodic benefit cost: | |||||||||||||||
Service cost | $ | 1 | $ | — | $ | 3 | $ | 1 | |||||||
Interest cost | 7 | 2 | 9 | 1 | |||||||||||
Expected return on plan assets | (9 | ) | (2 | ) | (15 | ) | (1 | ) | |||||||
Settlement credits | (1 | ) | — | — | — | ||||||||||
(2 | ) | — | (3 | ) | 1 | ||||||||||
Regulatory adjustment | — | — | 2 | — | |||||||||||
Net periodic benefit cost | $ | (2 | ) | $ | — | $ | (1 | ) | $ | 1 |
Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Pension Benefits | Other Postretirement Benefits | Pension Benefits | Other Postretirement Benefits | ||||||||||||
Net periodic benefit cost: | |||||||||||||||
Service cost | $ | 1 | $ | — | $ | 5 | $ | 1 | |||||||
Interest cost | 15 | 3 | 18 | 3 | |||||||||||
Expected return on plan assets | (20 | ) | (4 | ) | (30 | ) | (4 | ) | |||||||
Actuarial gain (loss) amortization | (1 | ) | — | 1 | — | ||||||||||
Settlement credits | (2 | ) | — | (2 | ) | — | |||||||||
(7 | ) | (1 | ) | (8 | ) | — | |||||||||
Regulatory adjustment | — | — | 4 | — | |||||||||||
Net periodic benefit cost | $ | (7 | ) | $ | (1 | ) | $ | (4 | ) | $ | — |
13. | REGULATORY MATTERS, COMMITMENTS, CONTINGENCIES AND ENVIRONMENTAL LIABILITIES: |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Rental expense(1) | $ | 27 | $ | 32 | $ | 59 | $ | 65 | |||||||
Less: Sublease rental income | (10 | ) | (5 | ) | (18 | ) | (10 | ) | |||||||
Rental expense, net | $ | 17 | $ | 27 | $ | 41 | $ | 55 |
(1) | Includes contingent rentals totaling $6 million for the three months ended June 30, 2014 and 2013 and $9 million and $10 million for the six months ended June 30, 2014 and 2013, respectively. |
• | Certain of our interstate pipelines conduct soil and groundwater remediation related to contamination from past uses of PCBs. PCB assessments are ongoing and, in some cases, our subsidiaries could potentially be held responsible for contamination caused by other parties. |
• | Certain gathering and processing systems are responsible for soil and groundwater remediation related to releases of hydrocarbons. |
• | Currently operating Sunoco retail sites. |
• | Legacy sites related to Sunoco, that are subject to environmental assessments include formerly owned terminals and other logistics assets, retail sites that Sunoco no longer operates, closed and/or sold refineries and other formerly owned sites. |
• | Sunoco is potentially subject to joint and several liability for the costs of remediation at sites at which it has been identified as a potentially responsible party (“PRP”). As of June 30, 2014, Sunoco had been named as a PRP at approximately 40 identified or potentially identifiable “Superfund” sites under federal and/or comparable state law. Sunoco is usually one of a number of companies identified as a PRP at a site. Sunoco has reviewed the nature and extent of its involvement at each site and other relevant circumstances and, based upon Sunoco’s purported nexus to the sites, believes that its potential liability associated with such sites will not be significant. |
June 30, 2014 | December 31, 2013 | ||||||
Current | $ | 73 | $ | 47 | |||
Non-current | 327 | 356 | |||||
Total environmental liabilities | $ | 400 | $ | 403 |
14. | PRICE RISK MANAGEMENT ASSETS AND LIABILITIES: |
June 30, 2014 | December 31, 2013 | ||||||||
Notional Volume | Maturity | Notional Volume | Maturity | ||||||
Mark-to-Market Derivatives | |||||||||
(Trading) | |||||||||
Natural Gas (MMBtu): | |||||||||
Fixed Swaps/Futures | — | — | 9,457,500 | 2014-2019 | |||||
Basis Swaps IFERC/NYMEX (1) | 16,632,500 | 2014-2015 | (487,500 | ) | 2014-2017 | ||||
Swing Swaps | — | — | 1,937,500 | 2014-2016 | |||||
Power (Megawatt): | |||||||||
Forwards | 270,150 | 2014 | 351,050 | 2014 | |||||
Futures | 10,670 | 2014 | (772,476 | ) | 2014 | ||||
Options — Puts | (54,400 | ) | 2014 | (52,800 | ) | 2014 | |||
Options — Calls | 54,400 | 2014 | 103,200 | 2014 | |||||
Crude (Bbls) — Futures | (40,000 | ) | 2014 | 103,000 | 2014 | ||||
(Non-Trading) | |||||||||
Natural Gas (MMBtu): | |||||||||
Basis Swaps IFERC/NYMEX | (2,537,500 | ) | 2014-2015 | 570,000 | 2014 | ||||
Swing Swaps IFERC | 26,147,500 | 2014-2015 | (9,690,000 | ) | 2014-2016 | ||||
Fixed Swaps/Futures | (4,445,000 | ) | 2014-2019 | (8,195,000 | ) | 2014-2015 | |||
Forward Physical Contracts | (5,908,374 | ) | 2014-2015 | 5,668,559 | 2014-2015 | ||||
Natural Gas Liquid (Bbls) — Forwards/Swaps | (1,823,200 | ) | 2014-2015 | (1,133,600 | ) | 2014 | |||
Refined Products (Bbls) — Futures | (1,605,000 | ) | 2014-2015 | (280,000 | ) | 2014 | |||
Fair Value Hedging Derivatives | |||||||||
(Non-Trading) | |||||||||
Natural Gas (MMBtu): | |||||||||
Basis Swaps IFERC/NYMEX | — | — | (7,352,500 | ) | 2014 | ||||
Fixed Swaps/Futures | (1,757,500 | ) | 2014 | (50,530,000 | ) | 2014 | |||
Hedged Item — Inventory | 1,757,500 | 2014 | 50,530,000 | 2014 | |||||
Cash Flow Hedging Derivatives | |||||||||
(Non-Trading) | |||||||||
Natural Gas (MMBtu): | |||||||||
Basis Swaps IFERC/NYMEX | (920,000 | ) | 2014 | (1,825,000 | ) | 2014 | |||
Fixed Swaps/Futures | (6,440,000 | ) | 2014 | (12,775,000 | ) | 2014 | |||
Natural Gas Liquid (Bbls) — Forwards/Swaps | (510,000 | ) | 2014 | (780,000 | ) | 2014 | |||
Crude (Bbls) — Futures | — | — | (30,000 | ) | 2014 |
(1) | Includes aggregate amounts for open positions related to Houston Ship Channel, Waha Hub, NGPL TexOk, West Louisiana Zone and Henry Hub locations. |
June 30, 2014 | December 31, 2013 | ||||||||
Notional Volume | Maturity | Notional Volume | Maturity | ||||||
Mark-to-Market Derivatives | |||||||||
(Non-Trading) | |||||||||
Natural Gas (MMBtu) — Fixed Swaps/Futures | (20,553,000 | ) | 2014-2015 | (24,455,000 | ) | 2014-2015 | |||
Propane (Gallons) — Forwards/Swaps | (33,180,000 | ) | 2014-2015 | (52,122,000 | ) | 2014-2015 | |||
NGLs (Barrels) — Forwards/Swaps | (294,000 | ) | 2014 | (438,000 | ) | 2014 | |||
WTI Crude Oil (Barrels) — Forwards/Swaps | (665,000 | ) | 2014-2015 | (521,000 | ) | 2014 |
Notional Amount Outstanding | ||||||||||||
Entity | Term | Type(1) | June 30, 2014 | December 31, 2013 | ||||||||
ETP | July 2014(2) | Forward-starting to pay a fixed rate of 4.15% and receive a floating rate | $ | 300 | $ | 400 | ||||||
ETP | July 2015(2) | Forward-starting to pay a fixed rate of 3.38% and receive a floating rate | 200 | — | ||||||||
ETP | July 2016(3) | Forward-starting to pay a fixed rate of 3.80% and receive a floating rate | 200 | — | ||||||||
ETP | July 2017(4) | Forward-starting to pay a fixed rate of 4.18% and receive a floating rate | 200 | — | ||||||||
ETP | July 2018(4) | Forward-starting to pay a fixed rate of 4.00% and receive a floating rate | 200 | — | ||||||||
ETP | July 2018 | Pay a floating rate plus a spread of 4.17% and receive a fixed rate of 6.70% | — | 600 | ||||||||
ETP | June 2021 | Pay a floating rate plus a spread of 2.17% and receive a fixed rate of 4.65% | — | 400 | ||||||||
ETP | February 2023 | Pay a floating rate plus a spread of 1.73% and receive a fixed rate of 3.60% | 200 | 400 | ||||||||
Panhandle | November 2021 | Pay a fixed rate of 3.80% and receive a floating rate | 275 | 275 |
(1) | Floating rates are based on 3-month LIBOR. |
(2) | Represents the effective date. These forward starting swaps have a term of 10 years with a mandatory termination date the same as the effective date. |
(3) | Represents the effective date. These forward-starting swaps have terms of 10 and 30 years with a mandatory termination date the same as the effective date. |
(4) | Represents the effective date. These forward-starting swaps have a term of 30 years with a mandatory termination date the same as the effective date. |
Fair Value of Derivative Instruments | |||||||||||||||
Asset Derivatives | Liability Derivatives | ||||||||||||||
June 30, 2014 | December 31, 2013 | June 30, 2014 | December 31, 2013 | ||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||
Commodity derivatives (margin deposits) | $ | 1 | $ | 3 | $ | (4 | ) | $ | (18 | ) | |||||
1 | 3 | (4 | ) | (18 | ) | ||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||
Commodity derivatives (margin deposits) | $ | 59 | $ | 227 | $ | (73 | ) | $ | (209 | ) | |||||
Commodity derivatives | 50 | 43 | (55 | ) | (48 | ) | |||||||||
Interest rate derivatives | 3 | 47 | (121 | ) | (95 | ) | |||||||||
Embedded derivatives in Regency Preferred Units | — | — | (29 | ) | (19 | ) | |||||||||
112 | 317 | (278 | ) | (371 | ) | ||||||||||
Total derivatives | $ | 113 | $ | 320 | $ | (282 | ) | $ | (389 | ) |
Asset Derivatives | Liability Derivatives | |||||||||||||||||
Balance Sheet Location | June 30, 2014 | December 31, 2013 | June 30, 2014 | December 31, 2013 | ||||||||||||||
Derivatives in offsetting agreements: | ||||||||||||||||||
OTC contracts | Price risk management asset (liability) | $ | 47 | $ | 42 | $ | (44 | ) | $ | (38 | ) | |||||||
Broker cleared derivative contracts | Other current assets | 106 | 264 | (150 | ) | (318 | ) | |||||||||||
153 | 306 | (194 | ) | (356 | ) | |||||||||||||
Offsetting agreements: | ||||||||||||||||||
Counterparty netting | Price risk management asset (liability) | (38 | ) | (36 | ) | 38 | 36 | |||||||||||
Payments on margin deposit | Other current assets | (8 | ) | (1 | ) | 35 | 55 | |||||||||||
(46 | ) | (37 | ) | 73 | 91 | |||||||||||||
Net derivatives with offsetting agreements | 107 | 269 | (121 | ) | (265 | ) | ||||||||||||
Derivatives without offsetting agreements | 6 | 51 | (161 | ) | (124 | ) | ||||||||||||
Total derivatives | $ | 113 | $ | 320 | $ | (282 | ) | $ | (389 | ) |
Change in Value Recognized in OCI on Derivatives (Effective Portion) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Derivatives in cash flow hedging relationships: | |||||||||||||||
Commodity derivatives | $ | (2 | ) | $ | 6 | $ | (6 | ) | $ | 8 | |||||
Total | $ | (2 | ) | $ | 6 | $ | (6 | ) | $ | 8 |
Location of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion) | Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion) | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Derivatives in cash flow hedging relationships: | |||||||||||||||||
Commodity derivatives | Cost of products sold | $ | (2 | ) | $ | 1 | $ | (6 | ) | $ | 2 | ||||||
Total | $ | (2 | ) | $ | 1 | $ | (6 | ) | $ | 2 |
Location of Gain/(Loss) Recognized in Income on Derivatives | Amount of Gain/(Loss) Recognized in Income Representing Hedge Ineffectiveness and Amount Excluded from the Assessment of Effectiveness | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Derivatives in fair value hedging relationships (including hedged item): | |||||||||||||||||
Commodity derivatives | Cost of products sold | $ | — | $ | (1 | ) | $ | (6 | ) | $ | 4 | ||||||
Total | $ | — | $ | (1 | ) | $ | (6 | ) | $ | 4 |
Location of Gain/(Loss) Recognized in Income on Derivatives | Amount of Gain/(Loss) Recognized in Income on Derivatives | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||
Commodity derivatives – Trading | Cost of products sold | $ | (5 | ) | $ | 3 | $ | 2 | $ | (1 | ) | ||||||
Commodity derivatives – Non-trading | Cost of products sold | (37 | ) | 35 | (43 | ) | 14 | ||||||||||
Commodity derivatives – Non-trading | Deferred gas purchases | — | 2 | — | (3 | ) | |||||||||||
Interest rate derivatives | Gains (losses) on interest rate derivatives | (46 | ) | 46 | (48 | ) | 52 | ||||||||||
Embedded derivatives | Other income | (9 | ) | (8 | ) | (10 | ) | (22 | ) | ||||||||
Total | $ | (97 | ) | $ | 78 | $ | (99 | ) | $ | 40 |
15. | RELATED PARTY TRANSACTIONS: |
16. | OTHER INFORMATION: |
June 30, 2014 | December 31, 2013 | ||||||
Deposits paid to vendors | $ | 40 | $ | 49 | |||
Prepaid expenses and other | 232 | 263 | |||||
Total other current assets | $ | 272 | $ | 312 |
June 30, 2014 | December 31, 2013 | ||||||
Interest payable | $ | 427 | $ | 357 | |||
Customer advances and deposits | 103 | 142 | |||||
Accrued capital expenditures | 364 | 260 | |||||
Accrued wages and benefits | 128 | 173 | |||||
Accrued advances to affiliates | 175 | — | |||||
Taxes payable other than income taxes | 318 | 211 | |||||
Income taxes payable | 220 | 4 | |||||
Deferred income taxes | 152 | 119 | |||||
Other | 309 | 412 | |||||
Total accrued and other current liabilities | $ | 2,196 | $ | 1,678 |
17. | REPORTABLE SEGMENTS: |
• | Investment in Regency, including the consolidated operations of Regency; |
• | Investment in Trunkline LNG, including the operations of Trunkline LNG; and |
• | Corporate and Other, including the following: |
• | activities of the Parent Company; and |
• | the goodwill and property, plant and equipment fair value adjustments recorded as a result of the 2004 reverse acquisition of Heritage Propane Partners, L.P. |
• | ETP’s Segment Adjusted EBITDA reflected 100% of Lone Star, which is a consolidated subsidiary of ETP. Regency’s Segment Adjusted EBITDA included its 30% investment in Lone Star. Therefore, 30% of the results of Lone Star were included in eliminations. |
• | ETP’s Segment Adjusted EBITDA reflected the results of SUGS from March 26, 2012 to April 30, 2013. Since the SUGS Contribution was a transaction between entities under common control, Regency’s results have been recast to retrospectively consolidate SUGS beginning March 26, 2012. Therefore, the eliminations also included the results of SUGS from March 26, 2012 to April 30, 2013. |
• | ETP’s Segment Adjusted EBITDA reflected the results of Trunkline LNG prior to the Trunkline LNG Transaction, which was effective January 1, 2014. The Investment in Trunkline LNG segment reflected the results of operations of Trunkline LNG for all periods presented. Consequently, the results of operations of Trunkline LNG were reflected in two segments for the three and six months ended June 30, 2013. Therefore, the results of Trunkline LNG were included in eliminations for 2013. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Segment Adjusted EBITDA: | |||||||||||||||
Investment in ETP | $ | 1,169 | $ | 1,069 | $ | 2,375 | $ | 2,025 | |||||||
Investment in Regency | 307 | 154 | 512 | 274 | |||||||||||
Investment in Trunkline LNG | 47 | 47 | 95 | 92 | |||||||||||
Corporate and Other | (29 | ) | (23 | ) | (55 | ) | (29 | ) | |||||||
Adjustments and Eliminations | (54 | ) | (84 | ) | (112 | ) | (147 | ) | |||||||
Total | 1,440 | 1,163 | 2,815 | 2,215 | |||||||||||
Depreciation, depletion and amortization | (450 | ) | (318 | ) | (823 | ) | (630 | ) | |||||||
Interest expense, net of interest capitalized | (344 | ) | (305 | ) | (659 | ) | (615 | ) | |||||||
Gain on sale of AmeriGas common units | 93 | — | 163 | — | |||||||||||
Gains (losses) on interest rate derivatives | (46 | ) | 46 | (48 | ) | 52 | |||||||||
Non-cash unit-based compensation expense | (20 | ) | (11 | ) | (40 | ) | (27 | ) | |||||||
Unrealized gains (losses) on commodity risk management activities | (10 | ) | 22 | (43 | ) | 23 | |||||||||
Losses on extinguishment of debt | — | (7 | ) | — | (7 | ) | |||||||||
LIFO valuation adjustments | 20 | (22 | ) | 34 | 16 | ||||||||||
Equity in earnings of unconsolidated affiliates | 77 | 54 | 181 | 144 | |||||||||||
Adjusted EBITDA related to unconsolidated affiliates | (190 | ) | (184 | ) | (400 | ) | (388 | ) | |||||||
Adjusted EBITDA related to discontinued operations | — | (23 | ) | (27 | ) | (63 | ) | ||||||||
Other, net | (42 | ) | 3 | (56 | ) | (4 | ) | ||||||||
Income from continuing operations before income tax expense | $ | 528 | $ | 418 | $ | 1,097 | $ | 716 |
June 30, 2014 | December 31, 2013 | ||||||
Total assets: | |||||||
Investment in ETP | $ | 44,223 | $ | 43,702 | |||
Investment in Regency | 15,459 | 8,782 | |||||
Investment in Trunkline LNG | 1,193 | 1,338 | |||||
Corporate and Other | 749 | 720 | |||||
Adjustments and Eliminations | (3,009 | ) | (4,212 | ) | |||
Total | $ | 58,615 | $ | 50,330 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Revenues: | |||||||||||||||
Investment in ETP: | |||||||||||||||
Revenues from external customers | $ | 12,993 | $ | 11,529 | $ | 25,205 | $ | 22,366 | |||||||
Intersegment revenues | 36 | 22 | 56 | 39 | |||||||||||
13,029 | 11,551 | 25,261 | 22,405 | ||||||||||||
Investment in Regency: | |||||||||||||||
Revenues from external customers | 1,095 | 628 | 1,901 | 1,163 | |||||||||||
Intersegment revenues | 83 | 11 | 140 | 16 | |||||||||||
1,178 | 639 | 2,041 | 1,179 | ||||||||||||
Investment in Trunkline LNG: | |||||||||||||||
Revenues from external customers | 53 | 54 | 107 | 107 | |||||||||||
Adjustments and Eliminations | (117 | ) | (181 | ) | (186 | ) | (449 | ) | |||||||
Total revenues | $ | 14,143 | $ | 12,063 | $ | 27,223 | $ | 23,242 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Intrastate Transportation and Storage | $ | 669 | $ | 558 | $ | 1,516 | $ | 1,203 | |||||||
Interstate Transportation and Storage | 245 | 354 | 540 | 677 | |||||||||||
Midstream | 302 | 308 | 604 | 639 | |||||||||||
NGL Transportation and Services | 878 | 420 | 1,679 | 766 | |||||||||||
Investment in Sunoco Logistics | 4,766 | 4,256 | 9,218 | 7,713 | |||||||||||
Retail Marketing | 5,568 | 5,291 | 10,576 | 10,508 | |||||||||||
All Other | 601 | 364 | 1,128 | 899 | |||||||||||
Total revenues | 13,029 | 11,551 | 25,261 | 22,405 | |||||||||||
Less: Intersegment revenues | 36 | 22 | 56 | 39 | |||||||||||
Revenues from external customers | $ | 12,993 | $ | 11,529 | $ | 25,205 | $ | 22,366 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Gathering and Processing | $ | 1,074 | $ | 583 | $ | 1,867 | $ | 1,069 | |||||||
Contract Services | 78 | 52 | 141 | 101 | |||||||||||
Natural Resources | 20 | — | 22 | — | |||||||||||
Corporate and Other | 6 | 4 | 11 | 9 | |||||||||||
Total revenues | 1,178 | 639 | 2,041 | 1,179 | |||||||||||
Less: Intersegment revenues | 83 | 11 | 140 | 16 | |||||||||||
Revenues from external customers | $ | 1,095 | $ | 628 | $ | 1,901 | $ | 1,163 |
18. | SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION: |
June 30, 2014 | December 31, 2013 | ||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 31 | $ | 8 | |||
Accounts receivable from related companies | 7 | 5 | |||||
Other current assets | 1 | — | |||||
Total current assets | 39 | 13 | |||||
ADVANCES TO AND INVESTMENTS IN UNCONSOLIDATED AFFILIATES | 4,768 | 3,841 | |||||
INTANGIBLE ASSETS, net | 12 | 14 | |||||
GOODWILL | 9 | 9 | |||||
OTHER NON-CURRENT ASSETS, net | 50 | 41 | |||||
Total assets | $ | 4,878 | $ | 3,918 | |||
LIABILITIES AND PARTNERS’ CAPITAL | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable to related companies | $ | 87 | $ | 11 | |||
Interest payable | 66 | 24 | |||||
Accrued and other current liabilities | 2 | 3 | |||||
Total current liabilities | 155 | 38 | |||||
LONG-TERM DEBT, less current maturities | 4,140 | 2,801 | |||||
OTHER NON-CURRENT LIABILITIES | 1 | 1 | |||||
COMMITMENTS AND CONTINGENCIES | |||||||
PARTNERS’ CAPITAL: | |||||||
General Partner | (1 | ) | (3 | ) | |||
Limited Partners: | |||||||
Common Unitholders | 563 | 1,066 | |||||
Class D Units | 14 | 6 | |||||
Accumulated other comprehensive income | 6 | 9 | |||||
Total partners’ capital | 582 | 1,078 | |||||
Total liabilities and partners’ capital | $ | 4,878 | $ | 3,918 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | $ | (32 | ) | $ | (23 | ) | $ | (63 | ) | $ | (29 | ) | |||
OTHER INCOME (EXPENSE): | |||||||||||||||
Interest expense, net of interest capitalized | (50 | ) | (53 | ) | (90 | ) | (117 | ) | |||||||
Gains on interest rate derivatives | — | 6 | — | 6 | |||||||||||
Equity in earnings of unconsolidated affiliates | 248 | 198 | 487 | 366 | |||||||||||
Other, net | (2 | ) | (2 | ) | (2 | ) | (10 | ) | |||||||
INCOME BEFORE INCOME TAXES | 164 | 126 | 332 | 216 | |||||||||||
Income tax benefit | — | (1 | ) | — | (1 | ) | |||||||||
NET INCOME | 164 | 127 | 332 | 217 | |||||||||||
GENERAL PARTNER’S INTEREST IN NET INCOME | 1 | — | 1 | — | |||||||||||
CLASS D UNITHOLDER’S INTEREST IN NET INCOME | — | — | 1 | — | |||||||||||
LIMITED PARTNERS’ INTEREST IN NET INCOME | $ | 163 | $ | 127 | $ | 330 | $ | 217 |
Six Months Ended June 30, | |||||||
2014 | 2013 | ||||||
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES | $ | 497 | $ | 427 | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Proceeds received in acquisitions and other transactions, net | — | 1,332 | |||||
Contributions to unconsolidated affiliate | (8 | ) | — | ||||
Purchase of additional interest in Regency | (400 | ) | — | ||||
Payments received on note receivable from affiliate | — | 166 | |||||
Net cash used in investing activities | (408 | ) | 1,498 | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Proceeds from borrowings | 2,390 | 440 | |||||
Principal payments on debt | (1,051 | ) | (1,602 | ) | |||
Distributions to partners | (391 | ) | (360 | ) | |||
Redemption of Preferred Units | — | (340 | ) | ||||
Units repurchased under buyback program | (1,000 | ) | — | ||||
Debt issuance costs | (14 | ) | — | ||||
Net cash used in financing activities | (66 | ) | (1,862 | ) | |||
INCREASE IN CASH AND CASH EQUIVALENTS | 23 | 63 | |||||
CASH AND CASH EQUIVALENTS, beginning of period | 8 | 9 | |||||
CASH AND CASH EQUIVALENTS, end of period | $ | 31 | $ | 72 |
ETP | Regency | |||
Units held by wholly-owned subsidiaries: | ||||
Common units | 30.8 | 40.7 | (1) | |
ETP Class H units | 50.2 | — | ||
Units held by less than wholly-owned subsidiaries: | ||||
Common units | — | 31.4 | ||
Regency Class F units | — | 6.3 |
• | Investment in ETP, including the consolidated operations of ETP; |
• | Investment in Regency, including the consolidated operations of Regency; |
• | Investment in Trunkline LNG, including the operations of Trunkline LNG, and; |
• | Corporate and Other, including the following: |
• | activities of the Parent Company; and |
• | the goodwill and property, plant and equipment fair value adjustments recorded as a result of the 2004 reverse acquisition of Heritage Propane Partners, L.P. |
• | ETP’s Segment Adjusted EBITDA reflected 100% of Lone Star, which is a consolidated subsidiary of ETP. Regency’s Segment Adjusted EBITDA included its 30% investment in Lone Star. Therefore, 30% of the results of Lone Star were included in eliminations. |
• | ETP’s Segment Adjusted EBITDA reflected the results of SUGS from March 26, 2012 to April 30, 2013. Since the SUGS Contribution was a transaction between entities under common control, Regency’s results have been recast to retrospectively consolidate SUGS beginning March 26, 2012. Therefore, the eliminations also included the results of SUGS from March 26, 2012 to April 30, 2013. |
• | ETP’s Segment Adjusted EBITDA reflected the results of Trunkline LNG prior to the Trunkline LNG Transaction, which was effective January 1, 2014. The Investment in Trunkline LNG segment reflected the results of operations of Trunkline LNG for all periods presented. Consequently, the results of operations of Trunkline LNG were reflected in two segments for the three and six months ended June 30, 2013. Therefore, the results of Trunkline LNG were included in eliminations for 2013. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2014 | 2013 | Change | 2014 | 2013 | Change | ||||||||||||||||||
Segment Adjusted EBITDA: | |||||||||||||||||||||||
Investment in ETP | $ | 1,169 | $ | 1,069 | $ | 100 | $ | 2,375 | $ | 2,025 | $ | 350 | |||||||||||
Investment in Regency | 307 | 154 | 153 | 512 | 274 | 238 | |||||||||||||||||
Investment in Trunkline LNG | 47 | 47 | — | 95 | 92 | 3 | |||||||||||||||||
Corporate and Other | (29 | ) | (23 | ) | (6 | ) | (55 | ) | (29 | ) | (26 | ) | |||||||||||
Adjustments and Eliminations | (54 | ) | (84 | ) | 30 | (112 | ) | (147 | ) | 35 | |||||||||||||
Total | 1,440 | 1,163 | 277 | 2,815 | 2,215 | 600 | |||||||||||||||||
Depreciation, depletion and amortization | (450 | ) | (318 | ) | (132 | ) | (823 | ) | (630 | ) | (193 | ) | |||||||||||
Interest expense, net of interest capitalized | (344 | ) | (305 | ) | (39 | ) | (659 | ) | (615 | ) | (44 | ) | |||||||||||
Gain on sale of AmeriGas common units | 93 | — | 93 | 163 | — | 163 | |||||||||||||||||
Gains (losses) on interest rate derivatives | (46 | ) | 46 | (92 | ) | (48 | ) | 52 | (100 | ) | |||||||||||||
Non-cash unit-based compensation expense | (20 | ) | (11 | ) | (9 | ) | (40 | ) | (27 | ) | (13 | ) | |||||||||||
Unrealized gains (losses) on commodity risk management activities | (10 | ) | 22 | (32 | ) | (43 | ) | 23 | (66 | ) | |||||||||||||
Losses on extinguishment of debt | — | (7 | ) | 7 | — | (7 | ) | 7 | |||||||||||||||
LIFO valuation adjustments | 20 | (22 | ) | 42 | 34 | 16 | 18 | ||||||||||||||||
Equity in earnings of unconsolidated affiliates | 77 | 54 | 23 | 181 | 144 | 37 | |||||||||||||||||
Adjusted EBITDA related to unconsolidated affiliates | (190 | ) | (184 | ) | (6 | ) | (400 | ) | (388 | ) | (12 | ) | |||||||||||
Adjusted EBITDA related to discontinued operations | — | (23 | ) | 23 | (27 | ) | (63 | ) | 36 | ||||||||||||||
Other, net | (42 | ) | 3 | (45 | ) | (56 | ) | (4 | ) | (52 | ) | ||||||||||||
Income from continuing operations before income tax expense | 528 | 418 | 110 | 1,097 | 716 | 381 | |||||||||||||||||
Income tax expense from continuing operations | 70 | 89 | (19 | ) | 215 | 87 | 128 | ||||||||||||||||
Income from continuing operations | 458 | 329 | 129 | 882 | 629 | 253 | |||||||||||||||||
Income from discontinued operations | 42 | 9 | 33 | 66 | 31 | 35 | |||||||||||||||||
Net income | $ | 500 | $ | 338 | $ | 162 | $ | 948 | $ | 660 | $ | 288 |
• | an increase of $37 million and $56 million, respectively, of expense recognized by Regency primarily due to recent issuances of senior notes, as well as the assumption of $1.2 billion of senior notes in the PVR acquisition; and |
• | an increase of $6 million and $14 million, respectively, of expense recognized by ETP primarily due to recent issuances of senior notes; partially offset by |
• | a decrease of $3 million and $27 million, respectively, of expense recognized by the Parent Company primarily related to the repayment of $1.1 billion of borrowings under the Parent Company’s term loan in April 2013, net of interest related to incremental debt. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2014 | 2013 | Change | 2014 | 2013 | Change | ||||||||||||||||||
Revenues | $ | 13,029 | $ | 11,551 | $ | 1,478 | $ | 25,261 | $ | 22,405 | $ | 2,856 | |||||||||||
Cost of products sold | 11,636 | 10,229 | 1,407 | 22,502 | 19,823 | 2,679 | |||||||||||||||||
Gross margin | 1,393 | 1,322 | 71 | 2,759 | 2,582 | 177 | |||||||||||||||||
Unrealized losses (gains) on commodity risk management activities | 1 | (18 | ) | 19 | 30 | (37 | ) | 67 | |||||||||||||||
Operating expenses, excluding non-cash compensation expense | (310 | ) | (327 | ) | 17 | (630 | ) | (652 | ) | 22 | |||||||||||||
Selling, general and administrative, excluding non-cash compensation expense | (84 | ) | (104 | ) | 20 | (181 | ) | (231 | ) | 50 | |||||||||||||
LIFO valuation adjustments | (20 | ) | 22 | (42 | ) | (34 | ) | (16 | ) | (18 | ) | ||||||||||||
Adjusted EBITDA related to unconsolidated affiliates | 170 | 158 | 12 | 366 | 323 | 43 | |||||||||||||||||
Adjusted EBITDA related to discontinued operations | — | 23 | (23 | ) | 27 | 63 | (36 | ) | |||||||||||||||
Other | 19 | (7 | ) | 26 | 38 | (7 | ) | 45 | |||||||||||||||
Segment Adjusted EBITDA | $ | 1,169 | $ | 1,069 | $ | 100 | $ | 2,375 | $ | 2,025 | $ | 350 |
• | an increase in retail marketing gross margin of $104 million and $173 million, respectively, primarily due to recent acquisitions, as well as favorable impacts of $42 million and $18 million, respectively, from non-cash LIFO valuation adjustments; |
• | an increase in NGL transportation and services gross margin of $63 million and $114 million, respectively, primarily as a result of an increase in transportation margin from higher volumes transported on Lone Star’s Gateway pipeline and from the startup of Lone Star’s second fractionator at Mont Belvieu, Texas in October 2013; partially offset by |
• | a decrease in interstate transportation and storage revenues of $108 million and $134 million, respectively, primarily due to ETP’s deconsolidation of Trunkline LNG as of January 1, 2014. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2014 | 2013 | Change | 2014 | 2013 | Change | ||||||||||||||||||
AmeriGas | $ | 5 | $ | 16 | $ | (11 | ) | $ | 56 | $ | 113 | $ | (57 | ) | |||||||||
Citrus | 81 | 79 | 2 | 149 | 141 | 8 | |||||||||||||||||
FEP | 18 | 19 | (1 | ) | 37 | 37 | — | ||||||||||||||||
Regency | 25 | 16 | 9 | 52 | 16 | 36 | |||||||||||||||||
PES | 25 | 18 | 7 | 48 | (3 | ) | 51 | ||||||||||||||||
Other | 16 | 10 | 6 | 24 | 19 | 5 | |||||||||||||||||
Total Adjusted EBITDA related to unconsolidated affiliates | $ | 170 | $ | 158 | $ | 12 | $ | 366 | $ | 323 | $ | 43 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2014 | 2013 | Change | 2014 | 2013 | Change | ||||||||||||||||||
Revenues | $ | 1,178 | $ | 639 | $ | 539 | $ | 2,041 | $ | 1,179 | $ | 862 | |||||||||||
Cost of products sold | 828 | 445 | 383 | 1,466 | 832 | 634 | |||||||||||||||||
Gross margin | 350 | 194 | 156 | 575 | 347 | 228 | |||||||||||||||||
Unrealized losses (gains) on commodity risk management activities | 9 | (4 | ) | 13 | 13 | 14 | (1 | ) | |||||||||||||||
Operating expenses, excluding non-cash compensation expense | (100 | ) | (78 | ) | (22 | ) | (176 | ) | (145 | ) | (31 | ) | |||||||||||
Selling, general and administrative, excluding non-cash compensation expense | (59 | ) | (21 | ) | (38 | ) | (92 | ) | (54 | ) | (38 | ) | |||||||||||
Adjusted EBITDA related to unconsolidated affiliates | 79 | 60 | 19 | 154 | 123 | 31 | |||||||||||||||||
Other | 28 | 3 | 25 | 38 | (11 | ) | 49 | ||||||||||||||||
Segment Adjusted EBITDA | $ | 307 | $ | 154 | $ | 153 | $ | 512 | $ | 274 | $ | 238 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2014 | 2013 | Change | 2014 | 2013 | Change | ||||||||||||||||||
Revenues | $ | 53 | $ | 54 | $ | (1 | ) | $ | 107 | $ | 107 | $ | — | ||||||||||
Operating expenses, excluding non-cash compensation expense | (4 | ) | (5 | ) | 1 | (8 | ) | (10 | ) | 2 | |||||||||||||
Selling, general and administrative, excluding non-cash compensation expense | (1 | ) | (1 | ) | — | (3 | ) | (5 | ) | 2 | |||||||||||||
Other | (1 | ) | (1 | ) | — | (1 | ) | — | (1 | ) | |||||||||||||
Segment Adjusted EBITDA | $ | 47 | $ | 47 | $ | — | $ | 95 | $ | 92 | $ | 3 |
Growth | Maintenance | ||||||||||||||
Low | High | Low | High | ||||||||||||
Intrastate transportation and storage | $ | 150 | $ | 160 | $ | 25 | $ | 30 | |||||||
Interstate transportation and storage | 80 | 100 | 100 | 110 | |||||||||||
Midstream | 600 | 650 | 10 | 15 | |||||||||||
NGL transportation and services(1) | 360 | 380 | 20 | 25 | |||||||||||
Investment in Sunoco Logistics | 1,900 | 2,100 | 65 | 75 | |||||||||||
Retail marketing | 130 | 150 | 50 | 60 | |||||||||||
All other (including eliminations) | 110 | 120 | 10 | 20 | |||||||||||
Total projected capital expenditures | $ | 3,330 | $ | 3,660 | $ | 280 | $ | 335 |
(1) | Includes 100% of Lone Star’s capital expenditures. ETP expects to receive capital contributions from Regency related to Regency’s 30% interest in Lone Star of between $85 million and $110 million. |
June 30, 2014 | December 31, 2013 | ||||||
Parent Company Indebtedness: | |||||||
ETE Senior Notes due October 15, 2020 | $ | 1,187 | $ | 1,187 | |||
ETE Senior Notes due January 15, 2024 | 1,150 | 450 | |||||
ETE Senior Secured Term Loan, due December 2, 2019 | 1,400 | 1,000 | |||||
ETE Senior Secured Revolving Credit Facility due December 2, 2018 | 400 | 171 | |||||
Subsidiary Indebtedness: | |||||||
ETP Senior Notes | 10,890 | 11,182 | |||||
Regency Senior Notes | 3,700 | 2,800 | |||||
PVR Senior Notes | 872 | — | |||||
Transwestern Senior Notes | 870 | 870 | |||||
Panhandle Senior Notes | 1,085 | 1,085 | |||||
Sunoco Senior Notes | 965 | 965 | |||||
Sunoco Logistics Senior Notes | 2,975 | 2,150 | |||||
Revolving Credit Facilities: | |||||||
ETP $2.5 billion Revolving Credit Facility due October 27, 2017 | — | 65 | |||||
Regency $1.5 billion Revolving Credit Facility due May 21, 2018 | 850 | 510 | |||||
Sunoco Logistics $35 million Revolving Credit Facility due April 30, 2015 | 35 | 35 | |||||
Sunoco Logistics $1.5 billion Revolving Credit Facility due November 19, 2018 | 250 | 200 | |||||
Other Long-Term Debt | 228 | 228 | |||||
Unamortized premiums and fair value adjustments, net | 340 | 301 | |||||
Total | 27,197 | 23,199 | |||||
Less: Current maturities of long-term debt | 1,346 | 637 | |||||
Long-term debt and notes payable, less current maturities | $ | 25,851 | $ | 22,562 |
• | $300 million notional amount of 8.25% senior notes due April 15, 2018. In April 2014, Regency redeemed all of the $300 million 8.25% senior notes due April 15, 2018 for $313 million. |
• | $400 million notional amount of 6.5% senior notes due May 15, 2021; and |
• | $473 million notional amount of 8.375% senior notes due June 1, 2020. In July, Regency redeemed $83 million of the $473 million 8.375% senior notes due June 1, 2020 for $91 million. |
Quarter Ended | Record Date | Payment Date | Rate | |||||
December 31, 2013 | February 7, 2014 | February 19, 2014 | $ | 0.34625 | ||||
March 31, 2014 | May 5, 2014 | May 19, 2014 | 0.35875 | |||||
June 30, 2014 | August 4, 2014 | August 19, 2014 | 0.38000 |
Six Months Ended June 30, | |||||||
2014 | 2013 | ||||||
Limited Partners | $ | 400 | $ | 365 | |||
General Partner interest | 1 | 1 | |||||
Class D units | 1 | — | |||||
Total Parent Company distributions | $ | 402 | $ | 366 |
ETP | Regency | |||||
Units held by wholly-owned subsidiaries: | ||||||
Common units | 30.8 | 40.7 | (1) | |||
ETP Class H units | 50.2 | — | ||||
Units held by less than wholly-owned subsidiaries: | ||||||
Common units | — | 31.4 | ||||
Regency Class F units | — | 6.3 |
Percentage of Total Distributions to IDRs | Quarterly Distribution Rate Target Amounts | ||||
ETP | Regency | ||||
Minimum quarterly distribution | —% | $0.25 | $0.35 | ||
First target distribution | —% | $0.25 to $0.275 | $0.35 to $0.4025 | ||
Second target distribution | 13% | $0.275 to $0.3175 | $0.4025 to $0.4375 | ||
Third target distribution | 23% | $0.3175 to $0.4125 | $0.4375 to $0.5250 | ||
Fourth target distribution | 48% | Above $0.4125 | Above $0.5250 |
Six Months Ended June 30, | |||||||
2014 | 2013 | ||||||
Distributions from ETP: | |||||||
Limited Partner interests | $ | 58 | $ | 178 | |||
Class H Units held by ETE Holdings | 103 | — | |||||
General Partner interest | 10 | 10 | |||||
IDRs | 346 | 363 | |||||
IDR relinquishments related to previous transactions | (115 | ) | (86 | ) | |||
Total distributions from ETP | 402 | 465 | |||||
Distributions from Regency: | |||||||
Limited Partner interests | 41 | 24 | |||||
General Partner interest | 2 | 2 | |||||
IDRs | 15 | 5 | |||||
IDR relinquishment related to previous transaction | (1 | ) | (1 | ) | |||
Total distributions from Regency | 57 | 30 | |||||
Total distributions received from subsidiaries | $ | 459 | $ | 495 |
Total Year | ||||
2014 (remainder) | $ | 53 | ||
2015 | 51 | |||
2016 | 72 | |||
2017 | 50 | |||
2018 | 45 | |||
2019 | 35 |
Quarter Ended | Record Date | Payment Date | Rate | |||||
December 31, 2013 | February 7, 2014 | February 14, 2014 | $ | 0.9200 | ||||
March 31, 2014 | May 5, 2014 | May 15, 2014 | 0.9350 | |||||
June 30, 2014 | August 4, 2014 | August 14, 2014 | 0.9550 |
Six Months Ended June 30, | |||||||
2014 | 2013 | ||||||
Limited Partners: | |||||||
Common Units | $ | 608 | $ | 665 | |||
Class H Units | 103 | — | |||||
General Partner interest | 10 | 10 | |||||
IDRs | 346 | 363 | |||||
IDR relinquishments related to previous transactions | (115 | ) | (86 | ) | |||
Total ETP distributions | $ | 952 | $ | 952 |
Quarter Ended | Record Date | Payment Date | Rate | |||||
December 31, 2013 | February 7, 2014 | February 14, 2014 | $ | 0.4750 | ||||
March 31, 2014 | May 8, 2014 | May 15, 2014 | 0.4800 | |||||
June 30, 2014 | August 7, 2014 | August 14, 2014 | 0.4900 |
Six Months Ended June 30, | |||||||
2014 | 2013 | ||||||
Limited Partners | $ | 365 | $ | 174 | |||
General Partner interest | 2 | 2 | |||||
IDRs | 15 | 5 | |||||
IDR relinquishment related to previous transaction | (1 | ) | (1 | ) | |||
Total Regency distributions | $ | 381 | $ | 180 |
Quarter Ended | Record Date | Payment Date | Rate | |||||
December 31, 2013 | February 10, 2014 | February 14, 2014 | $ | 0.3313 | ||||
March 31, 2014 | May 9, 2014 | May 15, 2014 | 0.3475 | |||||
June 30, 2014 | August 8, 2014 | August 14, 2014 | 0.3650 |
Six Months Ended June 30, | |||||||
2014 | 2013 | ||||||
Limited Partners: | |||||||
Common units held by public | $ | 101 | $ | 82 | |||
Common units held by ETP | 48 | 39 | |||||
General Partner interest held by ETP | 3 | 2 | |||||
Incentive distribution rights held by ETP | 79 | 53 | |||||
Total distributions declared | $ | 231 | $ | 176 |
June 30, 2014 | December 31, 2013 | ||||||||||||||||||||
Notional Volume | Fair Value Asset (Liability) | Effect of Hypothetical 10% Change | Notional Volume | Fair Value Asset (Liability) | Effect of Hypothetical 10% Change | ||||||||||||||||
Mark-to-Market Derivatives | |||||||||||||||||||||
(Trading) | |||||||||||||||||||||
Natural Gas (MMBtu): | |||||||||||||||||||||
Fixed Swaps/Futures | — | $ | — | $ | — | 9,457,500 | $ | 3 | $ | 5 | |||||||||||
Basis Swaps IFERC/NYMEX (1) | 16,632,500 | — | — | (487,500 | ) | 1 | — | ||||||||||||||
Swings Swaps IFERC | — | — | — | 1,937,500 | 1 | — | |||||||||||||||
Power (Megawatt): | |||||||||||||||||||||
Forwards | 270,150 | 2 | 1 | 351,050 | 1 | 1 | |||||||||||||||
Futures | 10,670 | — | 1 | (772,476 | ) | — | 2 | ||||||||||||||
Options — Puts | (54,400 | ) | — | — | (52,800 | ) | — | — | |||||||||||||
Options — Calls | 54,400 | — | — | 103,200 | — | — | |||||||||||||||
Crude (Bbls) — Futures | (40,000 | ) | — | — | 103,000 | — | 1 | ||||||||||||||
(Non-Trading) | |||||||||||||||||||||
Natural Gas (MMBtu): | |||||||||||||||||||||
Basis Swaps IFERC/NYMEX | (2,537,500 | ) | — | — | 570,000 | — | — | ||||||||||||||
Swing Swaps IFERC | 26,147,500 | 1 | 1 | (9,690,000 | ) | 1 | — | ||||||||||||||
Fixed Swaps/Futures | (4,445,000 | ) | (4 | ) | 3 | (8,195,000 | ) | 13 | 3 | ||||||||||||
Forward Physical Contracts | (5,908,374 | ) | — | 2 | 5,668,559 | (1 | ) | 2 | |||||||||||||
Natural Gas Liquid (Bbls) — Forwards/Swaps | (1,823,200 | ) | (7 | ) | 9 | (1,133,600 | ) | — | 17 | ||||||||||||
Refined Products (Bbls) — Futures | (1,605,000 | ) | (3 | ) | 29 | (280,000 | ) | — | 3 | ||||||||||||
Fair Value Hedging Derivatives | |||||||||||||||||||||
(Non-Trading) | |||||||||||||||||||||
Natural Gas (MMBtu): | |||||||||||||||||||||
Basis Swaps IFERC/NYMEX | — | — | — | (7,352,500 | ) | — | — | ||||||||||||||
Fixed Swaps/Futures | (1,757,500 | ) | — | — | (50,530,000 | ) | (11 | ) | 23 | ||||||||||||
Cash Flow Hedging Derivatives | |||||||||||||||||||||
(Non-Trading) | |||||||||||||||||||||
Natural Gas (MMBtu): | |||||||||||||||||||||
Basis Swaps IFERC/NYMEX | (920,000 | ) | — | — | (1,825,000 | ) | — | — | |||||||||||||
Fixed Swaps/Futures | (6,440,000 | ) | (3 | ) | 3 | (12,775,000 | ) | (3 | ) | 6 | |||||||||||
Natural Gas Liquid (Bbls) — Forwards/Swaps | (510,000 | ) | — | 3 | (780,000 | ) | (1 | ) | 4 | ||||||||||||
Crude (Bbls) — Futures | — | — | — | (30,000 | ) | — | — |
June 30, 2014 | December 31, 2013 | ||||||||||||||||||||
Notional Volume | Fair Value Asset (Liability) | Effect of Hypothetical 10% Change | Notional Volume | Fair Value Asset (Liability) | Effect of Hypothetical 10% Change | ||||||||||||||||
Mark-to-Market Derivatives | |||||||||||||||||||||
(Non-Trading) | |||||||||||||||||||||
Natural Gas (MMBtu) — Fixed Swaps/Futures | (20,553,000 | ) | $ | (5 | ) | $ | 9 | (24,455,000 | ) | $ | (2 | ) | $ | 10 | |||||||
Propane (Gallons) — Forwards/Swaps | (33,180,000 | ) | (1 | ) | 4 | (52,122,000 | ) | (3 | ) | 6 | |||||||||||
NGLs (Barrels) — Forwards/Swaps | (294,000 | ) | 1 | 2 | (438,000 | ) | 1 | 2 | |||||||||||||
WTI Crude Oil (Barrels) — Forwards/Swaps | (665,000 | ) | (4 | ) | 7 | (521,000 | ) | (1 | ) | 5 |
Entity | Term | Type (1) | Notional Amount Outstanding | |||||||||
June 30, 2014 | December 31, 2013 | |||||||||||
ETP | July 2014(2) | Forward-starting to pay a fixed rate of 4.15% and receive a floating rate | $ | 300 | $ | 400 | ||||||
ETP | July 2015(2) | Forward-starting to pay a fixed rate of 3.38% and receive a floating rate | 200 | — | ||||||||
ETP | July 2016(3) | Forward-starting to pay a fixed rate of 3.80% and receive a floating rate | 200 | — | ||||||||
ETP | July 2017(4) | Forward-starting to pay a fixed rate of 4.18% and receive a floating rate | 200 | — | ||||||||
ETP | July 2018(4) | Forward-starting to pay a fixed rate of 4.00% and receive a floating rate | 200 | — | ||||||||
ETP | July 2018 | Pay a floating rate plus a spread of 4.17% and receive a fixed rate of 6.70% | — | 600 | ||||||||
ETP | June 2021 | Pay a floating rate plus a spread of 2.17% and receive a fixed rate of 4.65% | — | 400 | ||||||||
ETP | February 2023 | Pay a floating rate plus a spread of 1.73% and receive a fixed rate of 3.60% | 200 | 400 | ||||||||
Panhandle | November 2021 | Pay a fixed rate of 3.80% and receive a floating rate | 275 | 275 |
(1) | Floating rates are based on 3-month LIBOR. |
(2) | Represents the effective date. These forward starting swaps have a term of 10 years with a mandatory termination date the same as the effective date. |
(3) | Represents the effective date. These forward-starting swaps have terms of 10 and 30 years with a mandatory termination date the same as the effective date. |
(4) | Represents the effective date. These forward-starting swaps have a term of 30 years with a mandatory termination date the same as the effective date. |
Period | Total Number of Units Purchased | Average Price Paid per Unit | Total Number of Units Purchased as Part of Publicly Announced Plans or Programs (1) | Maximum Number (or Approximate Dollar Value) of Units that May Yet Be Purchased Under the Plans or Programs | ||||||||||
April 2014 | 8,072,350 | $ | 47.53 | 8,072,350 | $ | 247,542,467 | ||||||||
May 2014 | 4,937,371 | 50.19 | 4,937,371 | — | ||||||||||
June 2014 | — | — | — | — | ||||||||||
Total | 13,009,721 | 13,009,721 |
(1) | The ETE $1 billion common unit buyback program was announced in December 2013 and was completed in May 2014. |
Exhibit Number | Description | |
4.1 | Fifth Supplemental Indenture Dated May 28, 2014 (incorporated by reference to Exhibit 4.2 of Energy Transfer Equity, L.P. Current Report on Form 8-K filed on May 28, 2014) | |
4.2 | Sixth Supplemental Indenture Dated May 28, 2014 (incorporated by reference to Exhibit 4.3 of Energy Transfer Equity, L.P. Current Report on Form 8-K filed on May 28, 2014) | |
10.1 | Third Amendment, dated February 19, 2014, to the Shared Services Agreement dated as of August 26, 2005, as amended May 26, 2010 and April 30, 2013 by and between Energy Transfer Equity, L.P. and Energy Transfer Partners, L.P. (incorporated by reference to Exhibit 10.1 of Energy Transfer Equity, L.P. Current Report on Form 8-K filed on February 19, 2014) | |
10.2 | Common Unit Purchase Agreement, Dated June 4, 2014 (incorporated by reference to Exhibit 10.1 of Energy Transfer Equity, L.P. Current Report on Form 8-K filed on June 5, 2014) | |
10.3 | Registration Rights Agreement, Dated June 4, 2014 (incorporated by reference to Exhibit 10.2 of Energy Transfer Equity, L.P. Current Report on Form 8-K filed on June 5, 2014) | |
10.4 | Energy Transfer Partners, L.L.C. Annual Bonus Plan effective January 1, 2014 (incorporated by reference to Exhibit 10.2 of Energy Transfer Partners, L.P. Quarterly Report on Form 10-Q filed on August 7, 2014) | |
10.5* | Energy Transfer Equity, L.P. Incremental Loan Agreement No. 1, Dated April 16, 2014 | |
10.6* | Energy Transfer Equity, L.P. Amendment and Incremental Commitment Agreement No. 2, Dated May 6, 2014 | |
31.1* | Certification of President pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2* | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1** | Certification of President pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2** | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS* | XBRL Instance Document | |
101.SCH* | XBRL Taxonomy Extension Schema Document | |
101.CAL* | XBRL Taxonomy Calculation Linkbase Document | |
101.DEF* | XBRL Taxonomy Extension Definitions Document | |
101.LAB* | XBRL Taxonomy Label Linkbase Document | |
101.PRE* | XBRL Taxonomy Presentation Linkbase Document |
* | Filed herewith. | |
** | Furnished herewith. |
ENERGY TRANSFER EQUITY, L.P. | ||||
By: | LE GP, LLC, its General Partner | |||
Date: | August 7, 2014 | By: | /s/ Jamie Welch | |
Jamie Welch | ||||
Group Chief Financial Officer (duly authorized to sign on behalf of the registrant) |
Incremental Commitment Lender | Incremental Commitment | Address for Notices |
Credit Suisse AG, Cayman Islands Branch | $400,000,000.00 | Credit Suisse AG Loan Operations - Agency Manager Eleven Madison Avenue New York, NY 10010 Attention: Sean Portrait Facsimile: (212) 322-2291 Email: agency.loanops@credit-suisse.com |
TOTAL | $400,000,000.00 |
Lender | Existing Commitment | Amount of Commitment Increase | New Commitment | Percentage |
Credit Suisse AG, Cayman Islands Branch | $48,422,131.15 | $13,015,368.85 | $61,437,500.00 | 5.12% |
Royal Bank of Canada | $48,422,131.15 | $13,015,368.85 | $61,437,500.00 | 5.12% |
The Royal Bank of Scotland PLC | $48,422,131.15 | $13,015,368.85 | $61,437,500.00 | 5.12% |
The Bank of Tokyo Mitsubishi UFJ, Ltd. | $48,422,131.15 | $13,015,368.85 | $61,437,500.00 | 5.12% |
Mizuho Bank, Ltd. | $48,422,131.15 | $13,015,368.85 | $61,437,500.00 | 5.12% |
Bank of America, N.A. | $48,422,131.15 | $13,015,368.85 | $61,437,500.00 | 5.12% |
Barclays Bank PLC | $48,422,131.15 | $13,015,368.85 | $61,437,500.00 | 5.12% |
Citibank, N.A. | $48,422,131.15 | $13,015,368.85 | $61,437,500.00 | 5.12% |
Deutsche Bank AG New York Branch | $48,422,131.15 | $13,015,368.85 | $61,437,500.00 | 5.12% |
Goldman Sachs Bank USA | $48,422,131.15 | $13,015,368.85 | $61,437,500.00 | 5.12% |
Morgan Stanley Senior Funding, Inc. | $48,422,131.15 | $13,015,368.85 | $61,437,500.00 | 5.12% |
UBS AG, Stamford Branch | $48,422,131.15 | $13,015,368.85 | $61,437,500.00 | 5.12% |
Compass Bank | $48,422,131.15 | $13,015,368.85 | $61,437,500.00 | 5.12% |
DNB Bank ASA, Grand Cayman Branch | $37,028,688.49 | $24,408,811.51 | $61,437,500.00 | 5.12% |
Sumitomo Mitsui Banking Corporation | $30,000,000.00 | $30,000,000.00 | $60,000,000.00 | 5.00% |
BNP Paribas | $28,483,606.56 | $32,953,893.44 | $61,437,500.00 | 5.12% |
JPMorgan Chase Bank, N.A. | $25,000,000.00 | $12,500,000.00 | $37,500,000.00 | 3.13% |
Wells Fargo Bank, N.A. | $25,000,000.00 | $7,000,000.00 | $32,000,000.00 | 2.67% |
SunTrust Bank | $25,000,000.00 | $12,500,000.00 | $37,500,000.00 | 3.13% |
Credit Agricole Corporate and Investment Bank | --- | $61,437,500.00 | $61,437,500.00 | 5.12% |
ING Capital LLC | --- | $50,000,000.00 | $50,000,000.00 | 4.17% |
TOTAL | $800,000,000.00 | $400,000,000.00 | $1,200,000,000.00 | 100.00% |
Credit Agricole Corporate and Investment Bank | Front Office: Credit Agricole Corporate and Investment Bank 1100 Louisiana St. Suite 4750 Houston, TX 77002 Attention: Nimisha Srivastav E-mail: nimisha.srivastav@ca-cib.com Phone: (713) 890-8606 Dixon Schultz E-mail: Dixon.schultz@ca-cib.com Phone: (713) 890-8607 Mike Willis E-mail: michael.willis@ca-cib.com Phone: (713) 890-8608 Syndication: Credit Agricole Corporate and Investment Bank 1301 Avenue of the Americas New York, NY 10019 Attention: Lucie Campos Phone: (212) 261-7879 E-mail: lucie.campos-caresmel@ca-cib.com |
ING Capital LLC | Credit: ING Capital LLC 1325 Avenue of the Americas New York, NY 10019 Attention: Subhba Pasumarti Phone: (646) 424-7769 Fax: (646) 424-7484 E-mail: subha.pasumarti@ing.com David Paulzak Tel: 646-424-6746 Fax: 646-424-7484 E-mail: david.paulzak@ing.com Operations: Loan Services ING Financial Services LLC 1325 Avenue of the Americas New York, NY 10019 Attention: Richard Coley Tel: 646-424-8220 Fax: 646-424-8251 E-mail: richard.coley@ing.com |
1. | I have reviewed this quarterly report on Form 10-Q of Energy Transfer Equity, L.P.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ John W. McReynolds |
John W. McReynolds President |
1. | I have reviewed this quarterly report on Form 10-Q of Energy Transfer Equity, L.P.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Jamie Welch |
Jamie Welch Group Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership. |
/s/ John W. McReynolds |
John W. McReynolds President |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership. |
/s/ Jamie Welch |
Jamie Welch Group Chief Financial Officer |
Supplemental Financial Statement Information (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2014
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Schedule Of Balance Sheets | BALANCE SHEETS (unaudited)
|
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Schedule Of Statements Of Operations | STATEMENTS OF OPERATIONS (unaudited)
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Parent Company [Member]
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Schedule Of Statements Of Cash Flows | STATEMENTS OF CASH FLOWS (unaudited)
|
Equity Table - Change In ETE Common Units (Details)
In Millions, unless otherwise specified |
6 Months Ended |
---|---|
Jun. 30, 2014
|
|
Partners' Capital Notes [Abstract] | |
Outstanding at December 31, 2013 | 559.9 |
Stock Repurchased During Period, Shares | (21.1) |
Outstanding at June 30, 2014 | 538.8 |
Fair Value Measurements Table - Fair Value of Financial Assets and Liabilities (Details) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2014
|
Dec. 31, 2013
|
---|---|---|
Liabilities, Fair Value Disclosure, Recurring | $ 243 | $ (347) |
Fair Value, Inputs, Level 1 [Member]
|
||
Liabilities, Fair Value Disclosure, Recurring | 76 | (215) |
Fair Value, Inputs, Level 2 [Member]
|
||
Liabilities, Fair Value Disclosure, Recurring | 138 | (113) |
Level 3 [Member]
|
||
Liabilities, Fair Value Disclosure, Recurring | 29 | (19) |
Fair Value, Measurements, Recurring [Member]
|
||
Interest Rate Derivative Assets, at Fair Value | 3 | 47 |
Price Risk Derivative Assets, at Fair Value | 71 | 231 |
Assets, Fair Value Disclosure | 74 | 278 |
Interest Rate Derivative Liabilities, at Fair Value | (121) | (95) |
Embedded Derivative, Fair Value of Embedded Derivative Liability | (29) | (19) |
Price Risk Derivative Liabilities, at Fair Value | (93) | (233) |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
|
||
Interest Rate Derivative Assets, at Fair Value | 0 | 0 |
Price Risk Derivative Assets, at Fair Value | 60 | 217 |
Assets, Fair Value Disclosure | 60 | 217 |
Interest Rate Derivative Liabilities, at Fair Value | 0 | 0 |
Embedded Derivative, Fair Value of Embedded Derivative Liability | 0 | 0 |
Price Risk Derivative Liabilities, at Fair Value | (76) | (215) |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
|
||
Interest Rate Derivative Assets, at Fair Value | 3 | 47 |
Price Risk Derivative Assets, at Fair Value | 11 | 14 |
Assets, Fair Value Disclosure | 14 | 61 |
Interest Rate Derivative Liabilities, at Fair Value | (121) | (95) |
Embedded Derivative, Fair Value of Embedded Derivative Liability | 0 | 0 |
Price Risk Derivative Liabilities, at Fair Value | (17) | (18) |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member]
|
||
Interest Rate Derivative Assets, at Fair Value | 0 | 0 |
Price Risk Derivative Assets, at Fair Value | 0 | 0 |
Assets, Fair Value Disclosure | 0 | 0 |
Interest Rate Derivative Liabilities, at Fair Value | 0 | 0 |
Embedded Derivative, Fair Value of Embedded Derivative Liability | (29) | (19) |
Price Risk Derivative Liabilities, at Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Condensate [Member] | Forward Swaps [Member]
|
||
Price Risk Derivative Liabilities, at Fair Value | (4) | (1) |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Condensate [Member] | Fair Value, Inputs, Level 1 [Member] | Forward Swaps [Member]
|
||
Price Risk Derivative Liabilities, at Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Condensate [Member] | Fair Value, Inputs, Level 2 [Member] | Forward Swaps [Member]
|
||
Price Risk Derivative Liabilities, at Fair Value | (4) | (1) |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Condensate [Member] | Level 3 [Member] | Forward Swaps [Member]
|
||
Price Risk Derivative Liabilities, at Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Natural Gas [Member] | Basis Swaps IFERC/NYMEX [Member]
|
||
Price Risk Derivative Assets, at Fair Value | 7 | 5 |
Price Risk Derivative Liabilities, at Fair Value | (7) | (4) |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Natural Gas [Member] | Swing Swaps IFERC [Member]
|
||
Price Risk Derivative Assets, at Fair Value | 2 | 8 |
Price Risk Derivative Liabilities, at Fair Value | (2) | (6) |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Natural Gas [Member] | Fixed Swaps/Futures [Member]
|
||
Price Risk Derivative Assets, at Fair Value | 37 | 203 |
Price Risk Derivative Liabilities, at Fair Value | (47) | (206) |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Natural Gas [Member] | Forward Physical Swaps [Member]
|
||
Price Risk Derivative Liabilities, at Fair Value | (1) | |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Natural Gas [Member] | Fair Value, Inputs, Level 1 [Member] | Basis Swaps IFERC/NYMEX [Member]
|
||
Price Risk Derivative Assets, at Fair Value | 7 | 5 |
Price Risk Derivative Liabilities, at Fair Value | (7) | (4) |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Natural Gas [Member] | Fair Value, Inputs, Level 1 [Member] | Swing Swaps IFERC [Member]
|
||
Price Risk Derivative Assets, at Fair Value | 2 | 1 |
Price Risk Derivative Liabilities, at Fair Value | (2) | 0 |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Natural Gas [Member] | Fair Value, Inputs, Level 1 [Member] | Fixed Swaps/Futures [Member]
|
||
Price Risk Derivative Assets, at Fair Value | 35 | 201 |
Price Risk Derivative Liabilities, at Fair Value | (42) | (201) |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Natural Gas [Member] | Fair Value, Inputs, Level 1 [Member] | Forward Physical Swaps [Member]
|
||
Price Risk Derivative Liabilities, at Fair Value | 0 | |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Natural Gas [Member] | Fair Value, Inputs, Level 2 [Member] | Basis Swaps IFERC/NYMEX [Member]
|
||
Price Risk Derivative Assets, at Fair Value | 0 | 0 |
Price Risk Derivative Liabilities, at Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Natural Gas [Member] | Fair Value, Inputs, Level 2 [Member] | Swing Swaps IFERC [Member]
|
||
Price Risk Derivative Assets, at Fair Value | 0 | 7 |
Price Risk Derivative Liabilities, at Fair Value | 0 | (6) |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Natural Gas [Member] | Fair Value, Inputs, Level 2 [Member] | Fixed Swaps/Futures [Member]
|
||
Price Risk Derivative Assets, at Fair Value | 2 | 2 |
Price Risk Derivative Liabilities, at Fair Value | (5) | (5) |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Natural Gas [Member] | Fair Value, Inputs, Level 2 [Member] | Forward Physical Swaps [Member]
|
||
Price Risk Derivative Liabilities, at Fair Value | (1) | |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Natural Gas [Member] | Level 3 [Member] | Basis Swaps IFERC/NYMEX [Member]
|
||
Price Risk Derivative Assets, at Fair Value | 0 | 0 |
Price Risk Derivative Liabilities, at Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Natural Gas [Member] | Level 3 [Member] | Swing Swaps IFERC [Member]
|
||
Price Risk Derivative Assets, at Fair Value | 0 | 0 |
Price Risk Derivative Liabilities, at Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Natural Gas [Member] | Level 3 [Member] | Fixed Swaps/Futures [Member]
|
||
Price Risk Derivative Assets, at Fair Value | 0 | 0 |
Price Risk Derivative Liabilities, at Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Natural Gas [Member] | Level 3 [Member] | Forward Physical Swaps [Member]
|
||
Price Risk Derivative Liabilities, at Fair Value | 0 | |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Refined Products [Member] | Forward Swaps [Member]
|
||
Price Risk Derivative Liabilities, at Fair Value | (7) | (5) |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Refined Products [Member] | Future [Member]
|
||
Price Risk Derivative Assets, at Fair Value | 5 | 5 |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Refined Products [Member] | Fair Value, Inputs, Level 1 [Member] | Forward Swaps [Member]
|
||
Price Risk Derivative Liabilities, at Fair Value | (7) | (5) |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Refined Products [Member] | Fair Value, Inputs, Level 1 [Member] | Future [Member]
|
||
Price Risk Derivative Assets, at Fair Value | 5 | 5 |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Refined Products [Member] | Fair Value, Inputs, Level 2 [Member] | Forward Swaps [Member]
|
||
Price Risk Derivative Liabilities, at Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Refined Products [Member] | Fair Value, Inputs, Level 2 [Member] | Future [Member]
|
||
Price Risk Derivative Assets, at Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Refined Products [Member] | Level 3 [Member] | Forward Swaps [Member]
|
||
Price Risk Derivative Liabilities, at Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Refined Products [Member] | Level 3 [Member] | Future [Member]
|
||
Price Risk Derivative Assets, at Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Power [Member] | Forward Swaps [Member]
|
||
Price Risk Derivative Assets, at Fair Value | 8 | 3 |
Price Risk Derivative Liabilities, at Fair Value | (6) | (1) |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Power [Member] | Fixed Swaps/Futures [Member]
|
||
Trading Securities | 4 | |
Trading Liabilities, Fair Value Disclosure | (4) | |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Power [Member] | Fair Value, Inputs, Level 1 [Member] | Forward Swaps [Member]
|
||
Price Risk Derivative Assets, at Fair Value | 0 | 0 |
Price Risk Derivative Liabilities, at Fair Value | 0 | |
Trading Liabilities, Fair Value Disclosure | 0 | |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Power [Member] | Fair Value, Inputs, Level 1 [Member] | Fixed Swaps/Futures [Member]
|
||
Trading Securities | 4 | |
Trading Liabilities, Fair Value Disclosure | (4) | |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Power [Member] | Fair Value, Inputs, Level 2 [Member] | Forward Swaps [Member]
|
||
Price Risk Derivative Assets, at Fair Value | 8 | 3 |
Price Risk Derivative Liabilities, at Fair Value | (1) | |
Trading Liabilities, Fair Value Disclosure | (6) | |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Power [Member] | Fair Value, Inputs, Level 2 [Member] | Fixed Swaps/Futures [Member]
|
||
Trading Securities | 0 | |
Trading Liabilities, Fair Value Disclosure | 0 | |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Power [Member] | Level 3 [Member] | Forward Swaps [Member]
|
||
Price Risk Derivative Assets, at Fair Value | 0 | 0 |
Price Risk Derivative Liabilities, at Fair Value | 0 | |
Trading Liabilities, Fair Value Disclosure | 0 | |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - Power [Member] | Level 3 [Member] | Fixed Swaps/Futures [Member]
|
||
Trading Securities | ||
Trading Liabilities, Fair Value Disclosure | 0 | |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - NGLs [Member] | Forward Swaps [Member]
|
||
Price Risk Derivative Assets, at Fair Value | 8 | 7 |
Price Risk Derivative Liabilities, at Fair Value | (16) | (9) |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - NGLs [Member] | Fair Value, Inputs, Level 1 [Member] | Forward Swaps [Member]
|
||
Price Risk Derivative Assets, at Fair Value | 7 | 5 |
Price Risk Derivative Liabilities, at Fair Value | (14) | (5) |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - NGLs [Member] | Fair Value, Inputs, Level 2 [Member] | Forward Swaps [Member]
|
||
Price Risk Derivative Assets, at Fair Value | 1 | 2 |
Price Risk Derivative Liabilities, at Fair Value | (2) | (4) |
Fair Value, Measurements, Recurring [Member] | Commodity Derivatives - NGLs [Member] | Level 3 [Member] | Forward Swaps [Member]
|
||
Price Risk Derivative Assets, at Fair Value | 0 | 0 |
Price Risk Derivative Liabilities, at Fair Value | $ 0 | $ 0 |
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