Energy Transfer Equity, L.P. (NYSE:ETE) (“ETE” or the
“Partnership”) today reported financial results for the quarter
ended March 31, 2017.
ETE’s net income attributable to partners was $239 million for
the three months ended March 31, 2017 compared to $312 million
for the three months ended March 31, 2016. Distributable Cash
Flow, as adjusted, for the three months ended March 31, 2017
was $215 million compared to $349 million for the three months
ended March 31, 2016. The decreases in net income attributable
to partners and Distributable Cash Flow, as adjusted, were
primarily driven by a $105 million reduction in incentive
distributions from ETP. As previously reported, ETE has agreed to a
reduction in incentive distributions from ETP in the aggregate
amount of $720 million over a period of seven quarters, beginning
the quarter ended June 30, 2016.
The Partnership’s recent key accomplishments and other
developments include the following:
- In April 2017, ETE announced a $0.285
distribution per ETE common unit for the quarter ended
March 31, 2017, or $1.14 per unit on an annualized basis.
- In March 2017, ETE invested $300
million in Sunoco LP through a preferred equity private placement,
and Sunoco LP used the proceeds to repay borrowings under its
revolving credit facility.
- In February 2017, the Partnership
entered into an equity distribution agreement with an aggregate
offering price up to $1 billion. There was no activity under the
distribution agreements for the three months ended March 31,
2017.
- In January 2017, ETE issued 32.2
million common units representing limited partner interests in the
Partnership to certain institutional investors in a private
transaction for gross proceeds of approximately $580 million, which
ETE used to purchase 15.8 million newly issued Energy Transfer, LP
(“ETP”) common units.
- As of March 31, 2017, ETE’s $1.5
billion revolving credit facility had $1.15 billion of outstanding
borrowings and its leverage ratio, as defined by the credit
agreement, was 3.88x.
The Partnership has scheduled a conference call for 8:00 a.m.
Central Time, Thursday, May 4, 2017 to discuss its first quarter
2017 results. The conference call will be broadcast live via an
internet webcast, which can be accessed through www.energytransfer.com and will also be available
for replay on the Partnership’s website for a limited time.
The Partnership’s principal sources of cash flow are derived
from distributions related to its direct and indirect investments
in the limited and general partner interests in Energy Transfer
Partners, L.P. (“Post-Merger ETP”), including 100% of ETP’s
incentive distribution rights, ETP Common Units and ETP Class I
Units, limited and general partner interest in Sunoco LP, including
Sunoco LP Common Units, as well as the Partnership’s ownership of
Lake Charles LNG. In connection with the merger of ETP and Sunoco
Logistics Partners L.P. (“Sunoco Logistics”), the ETP Class H units
were cancelled, and ETE now owns 27.5 million Post-Merger ETP
Common Units (representing 2.5% of the total outstanding
Post-Merger ETP common units) and 100 Post-Merger ETP Class I
units. The Partnership’s primary cash requirements are for general
and administrative expenses, debt service requirements and
distributions to its partners.
Energy Transfer Equity, L.P. (NYSE:ETE) is a master
limited partnership that owns the general partner and 100% of the
incentive distribution rights (IDRs) of Energy Transfer
Partners, L.P. (NYSE: ETP) and Sunoco LP (NYSE: SUN). ETE also
owns Lake Charles LNG Company. On a consolidated basis, ETE’s
family of companies owns and operates a diverse portfolio of
natural gas, natural gas liquids, crude oil and refined products
assets, as well as retail and wholesale motor fuel operations and
LNG terminalling. For more information, visit the Energy Transfer
Equity, L.P. website at www.energytransfer.com.
Energy Transfer Partners, L.P. (NYSE: ETP) is a
master limited partnership that owns and operates one of the
largest and most diversified portfolios of energy assets in the
United States. Strategically positioned in all of the major U.S.
production basins, ETP owns and operates a geographically diverse
portfolio of complementary natural gas midstream, intrastate and
interstate transportation and storage assets; crude oil, natural
gas liquids (NGL) and refined product transportation and
terminalling assets; NGL fractionation; and various acquisition and
marketing assets. ETP’s general partner is owned by Energy Transfer
Equity, L.P. (NYSE: ETE). For more information, visit the Energy
Transfer Partners, L.P. website at www.energytransfer.com.
Sunoco LP (NYSE: SUN) is a master limited partnership
that operates 1,355 convenience stores and retail fuel sites and
distributes motor fuel to 7,845 convenience stores, independent
dealers, commercial customers and distributors located in 30
states. Our parent — Energy Transfer Equity, L.P. (NYSE: ETE) —
owns SUN’s general partner and incentive distribution rights. For
more information, visit the Sunoco LP website at www.sunocolp.com.
PennTex Midstream Partners, LP (NASDAQ: PTXP) is a
growth-oriented master limited partnership focused on owning,
operating, acquiring and developing midstream energy infrastructure
assets in North America. PTXP provides natural gas gathering and
processing and residue gas and natural gas liquids transportation
services to producers in the Terryville Complex in northern
Louisiana. PennTex Midstream Partners, LP’s general partner is a
consolidated subsidiary of Energy Transfer Partners, L.P. (NYSE:
ETP). For more information, visit the PennTex Midstream Partners,
LP website at www.penntex.com.
Forward-Looking Statements
This news release may include certain statements concerning
expectations for the future that are forward-looking statements as
defined by federal law. Such forward-looking statements are subject
to a variety of known and unknown risks, uncertainties, and other
factors that are difficult to predict and many of which are beyond
management’s control. An extensive list of factors that can affect
future results are discussed in the Partnership’s Annual Report on
Form 10-K and other documents filed from time to time with the
Securities and Exchange Commission. The Partnership undertakes no
obligation to update or revise any forward-looking statement to
reflect new information or events.
The information contained in this press release is available on
our website at www.energytransfer.com.
ENERGY TRANSFER
EQUITY, L.P. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In millions)
(unaudited)
March 31, 2017 December 31, 2016
ASSETS
Current assets $ 6,514 $ 6,985 Property, plant and
equipment, net 56,967 55,438 Advances to and investments in
unconsolidated affiliates 3,103 3,040 Other non-current assets, net
826 818 Intangible assets, net 6,837 5,992 Goodwill 6,750
6,738 Total assets $ 80,997 $ 79,011
LIABILITIES AND
EQUITY
Current liabilities $ 6,218 $ 7,277 Long-term debt,
less current maturities 42,583 42,608 Long-term notes payable –
related companies — 250 Non-current derivative liabilities 72 76
Deferred income taxes 5,130 5,112 Other non-current liabilities
1,237 1,123 Commitments and contingencies Preferred
units of subsidiary — 33 Redeemable noncontrolling interests 15 15
Equity: Total partners’ deficit (1,147 ) (1,694 )
Noncontrolling interest 26,889 24,211
Total equity 25,742 22,517 Total
liabilities and equity $ 80,997 $ 79,011
ENERGY TRANSFER
EQUITY, L.P. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per unit data)
(unaudited)
Three Months Ended March 31, 2017
2016 REVENUES $ 11,247 $ 7,695
COSTS AND EXPENSES: Cost of products sold 8,991 5,623 Operating
expenses 673 641 Depreciation, depletion and amortization 661 562
Selling, general and administrative 197 168
Total costs and expenses 10,522 6,994
OPERATING INCOME 725 701 OTHER INCOME (EXPENSE): Interest
expense, net of interest capitalized (486 ) (427 ) Equity in
earnings of unconsolidated affiliates 87 61 Losses on
extinguishments of debt (25 ) — Gains (losses) on interest rate
derivatives 5 (70 ) Other, net 19 16
INCOME BEFORE INCOME TAX EXPENSE (BENEFIT) 325 281 Income tax
expense (benefit) 35 (55 ) NET INCOME 290 336
Less: Net income attributable to noncontrolling interest 51
24 NET INCOME ATTRIBUTABLE TO PARTNERS 239 312
General Partner’s interest in net income 1 1 Convertible
Unitholders’ interest in income 6 —
Limited Partners’ interest in net income $ 232 $ 311
NET INCOME PER LIMITED PARTNER UNIT: Basic $ 0.22 $ 0.30
Diluted $ 0.21 $ 0.30 WEIGHTED AVERAGE NUMBER
OF UNITS OUTSTANDING: Basic 1,075.2 1,044.8
Diluted 1,139.0 1,044.8
ENERGY TRANSFER
EQUITY, L.P.
SUPPLEMENTAL
INFORMATION
(In millions)
(unaudited)
Three Months Ended March 31, 2017
2016 Cash distributions from ETP
associated with: (1) Limited partner interest $ 15 $ 3 Class H
Units — 83 General partner interest 4 8 Incentive distribution
rights 377 331 IDR relinquishments, net of distributions on Class I
Units (2) (157 ) (34 ) Total cash distributions from
ETP 239 391 Cash distributions from Sunoco LP 23
21 Total cash distributions from investments in
subsidiaries $ 262 $ 412 Distributable cash flow
attributable to Lake Charles LNG: Revenues $ 49 $ 49 Operating
expenses (5 ) (4 ) Selling, general and administrative expenses
— (1 ) Distributable cash flow attributable to
Lake Charles LNG $ 44 $ 44 Expenses of the Parent Company on
a cash basis: Selling, general and administrative expenses,
excluding certain non-cash expenses $ 8 $ 31 Management fee to ETP
(3) 5 24 Interest expense, net of amortization of financing costs,
interest income, and realized gains and losses on interest rate
swaps 81 78 Total Parent Company
expenses $ 94 $ 133 Cash distributions to be paid to the
partners of ETE: Distributions to be paid to limited partners (4) $
250 $ 240 Distributions to be paid to general partner 1
1 Total cash distributions to be paid to the
partners of ETE $ 251 $ 241 Common units
outstanding — end of period 1,079.1 1,044.8
_________________
(1)
Following the merger of ETP and Sunoco Logistics in April
2017, the Post-Merger ETP partnership agreement contains
distribution requirements consistent with those of Sunoco Logistics
prior to the merger.
(2)
IDR relinquishments for the three months ended March 31, 2017
include the impact of incentive distribution reductions agreed to
between ETE and ETP in addition to incentive distribution
reductions previously agreed to between ETP and Sunoco Logistics.
(3)
In exchange for management services, ETE agreed to pay ETP certain
fees during the periods presented. These agreements have expired as
of March 31, 2017.
(4)
Includes distributions of $0.11 per common
unit for the three months ended March 31, 2017 to unitholders who
elected to participate in a plan to forgo a portion of their future
potential cash distributions on common units for a period of up to
nine fiscal quarters, commencing with the distributions for the
quarter ended March 31, 2016, and reinvest those distributions in
the Convertible Units representing limited partner interest in the
Partnership.
SUPPLEMENTAL
INFORMATION
RECONCILIATION OF
DISTRIBUTABLE CASH FLOW
(Dollars in millions)
(unaudited)
Three Months Ended March 31, 2017
2016 Net income attributable to
partners $ 239 $ 312 Equity in earnings related to investments in
ETP and Sunoco LP (325 ) (398 ) Total cash distributions from
investments in subsidiaries 262 412 Amortization included in
interest expense (excluding ETP and Sunoco LP) 2 3 Other non-cash
(excluding ETP and Sunoco LP) 34 (6 )
Distributable Cash Flow 212 323 Transaction-related expenses
3 26 Distributable Cash Flow, as adjusted $
215 $ 349 Distribution coverage ratio(1) 0.86x
1.45x
(1)
This press release and accompanying schedules include the
non-generally accepted accounting principle (“non-GAAP”) financial
measures of Distributable Cash Flow, and Distributable Cash Flow,
as adjusted. The Partnership’s non-GAAP financial measures should
not be considered as alternatives to GAAP financial measures such
as net income, cash flow from operating activities or any other
GAAP measure of liquidity or financial performance.
Distributable Cash
Flow and Distributable Cash Flow, as adjusted. The
Partnership defines Distributable Cash Flow and Distributable Cash
Flow, as adjusted, for a period as cash distributions expected to
be received in respect of such period in connection with the
Partnership’s investments in limited and general partner interests,
net of the Partnership’s cash expenditures for general and
administrative costs and interest expense. The Partnership’s
definitions of Distributable Cash Flow and Distributable Cash Flow,
as adjusted, also include distributable cash flow from Lake Charles
LNG to the Partnership. For Distributable Cash Flow, as adjusted,
certain transaction-related expenses that are included in net
income are excluded.
Distributable Cash Flow is a significant liquidity measure
used by the Partnership’s senior management to compare net cash
flows generated by the Partnership to the distributions the
Partnership expects to pay its unitholders. Due to cash expenses
incurred from time to time in connection with the Partnership’s
merger and acquisition activities and other transactions,
Distributable Cash Flow, as adjusted, is also a significant
liquidity measure used by the Partnership’s senior management to
compare net cash flows generated by the Partnership to the
distributions the Partnership expects to pay its unitholders. Using
these measures, the Partnership’s management can compute the
coverage ratio of estimated cash flows for a period to planned cash
distributions for such period. Distributable Cash Flow and
Distributable Cash Flow, as adjusted, are also important non-GAAP
financial measures for our limited partners since these indicate to
investors whether the Partnership’s investments are generating cash
flows at a level that can sustain or support an increase in
quarterly cash distribution levels. Financial measures such as
Distributable Cash Flow and Distributable Cash Flow, as adjusted,
are quantitative standards used by the investment community with
respect to publicly traded partnerships because the value of a
partnership unit is in part measured by its yield (which in turn is
based on the amount of cash distributions a partnership can pay to
a unitholder). The GAAP measure most directly comparable to
Distributable Cash Flow, and Distributable Cash Flow, as adjusted,
is net income for ETE on a stand-alone basis (the “Parent
Company”).
Distribution
Coverage Ratio. The Partnership defines Distribution
Coverage Ratio for a period as Distributable Cash Flow, as
adjusted, divided by total cash distributions expected to be paid
to the partners of ETE in respect of such period.
SUPPLEMENTAL
INFORMATION
FINANCIAL
STATEMENTS FOR PARENT COMPANY
Following are condensed balance sheets and statements of
operations of the Parent Company on a stand-alone basis.
BALANCE
SHEETS
(In millions)
(unaudited)
March 31, December 31,
2017 2016
ASSETS Current assets $ 62 $
57 Property, plant and equipment, net 35 36 Advances to and
investments in unconsolidated affiliates 5,940 5,088 Intangible
assets, net — 1 Goodwill 9 9 Other non-current assets, net
19 10 Total assets $ 6,065 $ 5,201
LIABILITIES AND PARTNERS’ CAPITAL Current liabilities
$ 86 $ 92 Long-term debt, less current maturities 6,639 6,358
Long-term notes payable – related companies 485 443 Other
non-current liabilities 2 2 Commitments and contingencies Total
partners’ deficit (1,147 ) (1,694 ) Total liabilities
and partners’ deficit $ 6,065 $ 5,201
STATEMENTS OF
OPERATIONS
(In millions)
(unaudited)
Three Months Ended March 31, 2017
2016 SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES $ (13 ) $ (37 ) OTHER INCOME (EXPENSE):
Interest expense, net of interest capitalized (83 ) (81 ) Equity in
earnings of unconsolidated affiliates 361 430 Losses on
extinguishments of debt (25 ) — Other, net (1 ) —
NET INCOME 239 312 General Partner’s interest in net income
1 1 Convertible Unitholders' interest in income 6
— Limited Partners’ interest in net income $ 232
$ 311
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version on businesswire.com: http://www.businesswire.com/news/home/20170503006668/en/
Energy TransferInvestor Relations:Lyndsay Hannah, Brent
Ratliff, Helen Ryoo, 214-981-0795orMedia Relations:Vicki
Granado, 214-981-0761
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