Energy Transfer Partners, L.P.



       Energy Transfer Partners, which changed its name from Heritage Propane Partners on March 1, 2004, is the fourth largest retail marketer of propane in the United States, as measured by retail gallons sold. Since its inception as Heritage Holdings in 1989, Heritage has grown primarily through acquisitions of retail propane operations and, to a lesser extent, through internal growth. From 1989 through August 31, 2003, Heritage completed 97 acquisitions.


Energy Transfer Partners now serves more than 650,000 active residential, commercial, industrial and agricultural customers through nearly 300 customer service locations in 29 states. Its operations extend from coast to coast with concentrations in the western, upper midwestern, northeastern and southeastern regions of the United States. Volumes of propane sold to retail customers increased steadily from 63.2 million gallons for the fiscal year ended August 31, 1992 to 375.9 million gallons for the fiscal year ended August 31, 2002.


         The company has undergone substantial mergers and restructuring over the past few years.  In August 2000, U.S. Propane was formed by through the combination of the operations of TECO, AGL Resources, Piedmont Natural Gas, and Atmos Energy.  U.S. Propane then acquired all the outstanding common stock of Heritage Holdings, Heritage Propane’s general partner and transferred its propane operations to Heritage Propane.  On February 4, 2002, the common unitholders of the partnership approved the substitution of U.S. Propane for Heritage Holdings as the general partner of Heritage Propane.


         On November 6, 2003, Heritage Propane publicly announced the signing of definitive agreements to combine its operations with those of La Grange Energy, L.P., which is engaged in the midstream natural gas business through a subsidiary whose midstream operations are conducted under the name Energy Transfer Company. The combination of Heritage and Energy Transfer Company created a diversified PTP by adding natural gas midstream operations to Heritage's previously existing retail propane operations. As part of the transactions, La Grange Energy has agreed to acquire U.S. Propane, In return for contributing interests in Energy Transfer and certain related assets to Heritage, LaGrange will receive $300 million in cash and 15.9 partnership units.


 Energy Transfer Company brought to the mix a growth-oriented midstream natural gas company with operations primarily located in major natural gas producing regions of Texas and Oklahoma.  The Company's primary assets consist of two large gathering and processing systems in the Gulf Coast area of Texas and western Oklahoma and the Oasis Pipeline, an intrastate natural gas pipeline that runs from the Permian Basin in West Texas to natural gas supply and market areas in southeast Texas. Its operations consist of the gathering, compression, treating, and processing of natural gas from over 1,400 wells; transportation of natural gas on its Oasis Pipeline to industrial end-users, independent power plants, utilities and other pipelines; and the purchase for resale of natural gas from producers connected to its systems and from other third parties.  Energy Transfer Company owns 3,850 miles of natural gas pipelines, three processing plants with a total capacity of 400 MMcf/d and seven treating facilities with a total capacity of 400 MMcf/d.


Energy Transfer Partners’ management believes its competitive strengths include: (i) experience in identifying, evaluating and completing acquisitions, (ii) operations that are focused in areas experiencing higher-than-average population growth, (iii) a low cost administrative infrastructure and (iv) a decentralized operating structure and entrepreneurial workforce.


Energy Transfer Partners’ goal is to increase distributions to its unitholders by being a low-cost, growth oriented retail propane distribution company.   Its strategy for doing so includes 1) following a disciplined acquisition strategy that concentrates on companies (i) in geographic areas experiencing higher-than-average population growth, (ii) with a high percentage of sales to residential customers, (iii) with local reputations for quality service and (iv) with a high percentage of tank ownership; 2) low cost and decentralized operations, and 3) internal growth, obtained by concentrating its operations in areas whose higher-than-average population growth generates new customers.


As part of its acquisition strategy, Energy Transfer Partners maintains the local brand names, billing practices, and employees of retailers it acquires. It believes this practice has maintained the local identification of such companies and has been important to the continued success of these businesses.   Some of the most significant trade names are AGL Propane, Balgas, Bi-State Propane, Blue Flame Gas of Charleston, Blue Flame Gas of Mt. Pleasant, Blue Flame Gas, Carolane Propane Gas, Gas Service Company, EnergyNorth Propane, Gibson Propane, Guilford Gas, Holton's L. P. Gas, Ikard & Newsom, Northern Energy, Sawyer Gas, Peoples Gas Company, Piedmont Propane Company, ProFlame, Rural Bottled Gas and Appliance, ServiGas, V-1 Propane, and TECO Propane.


         Energy Transfer Partners, L.P. trades on the New York Stock Exchange under the symbol ETP.  For more information, contact Peggy J. Harrison, Investor Relations, at 918-492-7272; or visit their website at


Financial Information for Fiscal Year Ending August 31, 2003

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*As of February 28, 2003 and November 5, 2002



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