Energy Transfer Partners, L.P. (NYSE: ETP) (“ETP” or the
“Partnership”) today reported its financial results for the quarter
ended March 31, 2017. Net income for the three months ended
March 31, 2017 was $364 million, a decrease of $12 million
compared to the three months ended March 31, 2016, primarily due to
income tax benefits recognized in the prior period. Adjusted EBITDA
for ETP for the three months ended March 31, 2017 totaled
$1.41 billion, an increase of $2 million compared to the three
months ended March 31, 2016, which reflects significantly higher
results from the midstream and liquids transportation and services
segments, offset by lower operating results from the legacy Sunoco
Logistics crude oil acquisition and marketing activities. The lower
Adjusted EBITDA from the crude oil acquisition and marketing
activities was due to approximately $50 million of unfavorable
impacts from LIFO inventory accounting, which are expected to
reverse in future periods. On a pro forma basis for the ETP/Sunoco
Logistics merger (discussed below), Distributable Cash Flow
attributable to partners, as adjusted, for the three months ended
March 31, 2017 totaled $907 million, a decrease of
$43 million compared to the three months ended March 31, 2016,
primarily due to the unfavorable impact from LIFO inventory
accounting and an increase in net interest expense.
The results reported above reflect the consolidated results of
Energy Transfer Partners, L.P. In April 2017, Energy Transfer
Partners, L.P. merged with a subsidiary of Sunoco Logistics
Partners L.P., with Energy Transfer Partners, L.P. continuing as
the surviving entity and becoming a wholly owned subsidiary of
Sunoco Logistics Partners L.P. At the same time, Energy Transfer
Partners, L.P. changed its name to “Energy Transfer, LP” and Sunoco
Logistics Partners L.P. changed its name to “Energy Transfer
Partners, L.P.” For purposes of maintaining clarity, the following
references are used herein:
- References to “ETP” refer to the entity
named Energy Transfer Partners, L.P. prior to the close of the
merger and Energy Transfer, LP subsequent to the close of the
merger;
- References to “Sunoco Logistics” refer
to the entity named Sunoco Logistics Partners L.P. prior to the
close of the merger; and
- References to “Post-Merger ETP” refer
to the consolidated entity named Energy Transfer Partners, L.P.
subsequent to the merger.
In April 2017, Post-Merger ETP announced a quarterly
distribution of $0.535 per unit ($2.14 annualized) on Post-Merger
ETP Common Units for the quarter ended March 31, 2017; this
quarterly distribution is equivalent to $0.8025 per ETP common unit
on a pre-merger basis.
An analysis of ETP’s segment results and other supplementary
data is provided after the financial tables shown below. ETP has
scheduled a conference call for 8:00 a.m. Central Time, Thursday,
May 4, 2017 to discuss the 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 ETP’s website for a limited time.
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.
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.
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
PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In millions)
(unaudited)
ETP (1) Sunoco Logistics March 31,2017
December 31,2016 March 31,2017 December 31,2016
ASSETS Current assets $ 5,505 $ 5,729 $ 2,931 $ 2,906
Property, plant and equipment, net 52,532 50,917 13,149
12,324 Advances to and investments in unconsolidated
affiliates 4,294 4,280 662 952 Other non-current assets, net 685
672 77 81 Intangible assets, net 5,506 4,696 1,504 977 Goodwill
3,915 3,897 1,613 1,609 Total assets $
72,437 $ 70,191 $ 19,936 $ 18,849
LIABILITIES AND
EQUITY Current liabilities $ 5,476 $ 6,203 $ 2,469 $
2,138 Long-term debt, less current maturities 31,648 31,741
6,760 7,313 Long-term notes payable – related company — 250 — —
Non-current derivative liabilities 72 76 — — Deferred income taxes
4,432 4,394 256 257 Other non-current liabilities 1,053 952 130 133
Commitments and contingencies Series A Preferred Units — 33
— — Redeemable noncontrolling interests 15 15 15 15 Redeemable
Limited Partners’ interests — — 300 300 Equity: Total
partners’ capital 20,106 18,642 8,979 8,660 Noncontrolling interest
9,635 7,885 1,027 33 Total equity
29,741 26,527 10,006 8,693 Total
liabilities and equity $ 72,437 $ 70,191 $ 19,936 $ 18,849
(1)
For the periods presented, Sunoco Logistics is included in
ETP’s consolidated balance sheets.
ENERGY TRANSFER
PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per unit data)
(unaudited)
Actual (1) ETP Sunoco Logistics Pro
Forma for Merger Three Months EndedMarch 31, Three Months
EndedMarch 31, Three Months EndedMarch 31, 2017 2016
2017 2016 2017 2016 REVENUES $ 6,895 $ 4,481 $ 3,702
$ 1,777 $ 6,895 $ 4,481 COSTS AND EXPENSES: Cost of products sold
5,192 2,968 2,891 1,413 5,192 2,968 Operating expenses 379 348 21
23 379 348 Depreciation, depletion and amortization 560 470 125 106
560 470 Selling, general and administrative 110 81 32 26 110 81
Impairment charge and others — —
(2 ) 26 — — Total costs
and expenses 6,241 3,867 3,067
1,594 6,241 3,867
OPERATING INCOME 654 614 635 183 654 614 OTHER INCOME (EXPENSE):
Interest expense, net (339 ) (319 ) (40 ) (39 ) (339 ) (319 )
Equity in earnings of unconsolidated affiliates 73 76 9 8 73 76
Gains (losses) on interest rate derivatives 5 (70 ) — — 5 (70 )
Other, net 26 17 1
(1 ) 26 17 INCOME BEFORE INCOME TAX
EXPENSE (BENEFIT) 419 318 605 151 419 318 Income tax expense
(benefit) 55 (58 ) 10 5
55 (58 ) NET INCOME 364 376 595 146 364
376 Less: Net income attributable to noncontrolling interest
40 65 10 1
36 18 NET INCOME ATTRIBUTABLE TO PARTNERS 324
311 585 145 328 358 General Partner’s interest in net income 206
297 113 90 222 268 Class H Unitholder’s interest in net income 98
79 N/A N/A — — Class I Unitholder’s interest in net income —
2 N/A N/A —
2 Common Unitholders’ interest in net income
(loss) $ 20 $ (67 ) $ 472 $ 55 $ 106 $
88 NET INCOME (LOSS) PER COMMON UNIT: Basic $ 0.02 $ (0.15 )
$ 1.42 $ 0.18 $ 0.09 $ 0.08 Diluted $ 0.02 $ (0.15 ) $ 1.42 $ 0.18
$ 0.09 $ 0.08 WEIGHTED AVERAGE NUMBER OF COMMON UNITS OUTSTANDING:
Basic 548.2 490.2 331.8 282.5 1,087.1 950.8 Diluted 549.6 490.2
332.8 283.1 1,090.2 951.4
(1)
Reflects pre-merger results for ETP and Sunoco Logistics.
For the periods presented, Sunoco Logistics is included in ETP’s
consolidated statements of operations.
SUPPLEMENTAL
INFORMATION
(Dollars and units in millions)
(unaudited)
Actual (1) ETP Sunoco Logistics Pro
Forma for Merger Three Months EndedMarch 31, Three Months
EndedMarch 31, Three Months EndedMarch 31, 2017 2016
2017 2016 2017 2016
Reconciliation of net income
to Adjusted EBITDA and Distributable Cash Flow (a): Net income
$ 364 $ 376 $ 595 $ 146 $ 364 $ 376 Interest expense, net 339 319
40 39 339 319 Income tax expense (benefit) 55 (58 ) 10 5 55 (58 )
Depreciation, depletion and amortization 560 470 125 106 560 470
Non-cash compensation expense 23 19 6 5 23 19 (Gains) losses on
interest rate derivatives (5 ) 70 — — (5 ) 70 Unrealized (gains)
losses on commodity risk management activities (64 ) 63 (24 ) 13
(64 ) 63 Inventory valuation adjustments (2 ) 26 (2 ) 26 (2 ) 26
Equity in earnings of unconsolidated affiliates (73 ) (76 ) (9 ) (8
) (73 ) (76 ) Adjusted EBITDA related to unconsolidated affiliates
239 219 19 16 239 219 Gain on sale of investment in affiliate — —
(483 ) — — — Other, net (22 ) (16 ) 1
1 (22 ) (16 ) Adjusted EBITDA
(consolidated) 1,414 1,412 278 349 1,414 1,412 Adjusted EBITDA
related to unconsolidated affiliates (239 ) (219 ) (19 ) (16 ) (239
) (219 ) Distributable cash flow from unconsolidated affiliates 144
144 11 8 144 144 Interest expense, net (339 ) (319 ) (40 ) (39 )
(339 ) (319 ) Amortization included in interest expense (1 ) (7 ) —
— (1 ) (7 ) Current income tax (expense) benefit (1 ) 1 (11 ) (5 )
(1 ) 1 Maintenance capital expenditures (60 ) (59 ) (13 ) (13 ) (60
) (59 ) Other, net 16 3 (1 )
— 16 3 Distributable Cash
Flow (consolidated) 934 956 205 284 934 956 Distributable Cash Flow
attributable to Sunoco Logistics (100%) (194 ) (283 ) N/A N/A N/A
N/A Distributions from Sunoco Logistics to ETP 139 125 N/A N/A N/A
N/A Distributable Cash Flow attributable to PennTex Midstream
Partners, LP (100%) (19 ) — N/A N/A (19 ) — Distributions from
PennTex Midstream Partners, LP to ETP (b) 8 — N/A N/A 8 —
Distributable cash flow attributable to noncontrolling interest in
other consolidated subsidiaries (12 ) (7 ) (11
) (1 ) (23 ) (8 ) Distributable Cash Flow
attributable to the partners of ETP 856 791 194 283 900 948
Transaction-related expenses 3 2
4 — 7 2
Distributable Cash Flow attributable to the partners of ETP, as
adjusted $ 859 $ 793 $ 198 $ 283 $ 907
$ 950
(1)
Reflects pre-merger results for ETP and Sunoco Logistics.
Pro Forma for Merger Three Months EndedMarch
31, 2017 2016
Distributions to partners (c):
Limited Partners: Common Units held by public $ 567 $ 473 Common
Units held by parent (d) 15 2 General Partner interests 4 3
Incentive Distribution Rights (“IDRs”) held by parent 377 303 IDR
relinquishments (157 ) (34 ) Total distributions to
be paid to partners $ 806 $ 747 Common Units
outstanding – end of period (c)(e) 1,084.6
965.3 Distribution coverage ratio (f) 1.13x 1.27x
(a) Adjusted EBITDA and Distributable Cash Flow are non-GAAP
financial measures used by industry analysts, investors, lenders,
and rating agencies to assess the financial performance and the
operating results of ETP’s fundamental business activities and
should not be considered in isolation or as a substitute for net
income, income from operations, cash flows from operating
activities, or other GAAP measures.
There are material limitations to using measures such as
Adjusted EBITDA and Distributable Cash Flow, including the
difficulty associated with using either as the sole measure to
compare the results of one company to another, and the inability to
analyze certain significant items that directly affect a company’s
net income or loss or cash flows. In addition, our calculations of
Adjusted EBITDA and Distributable Cash Flow may not be consistent
with similarly titled measures of other companies and should be
viewed in conjunction with measurements that are computed in
accordance with GAAP, such as gross margin, operating income, net
income, and cash flow from operating activities.
Definition of Adjusted EBITDA
We define Adjusted EBITDA as total partnership earnings before
interest, taxes, depreciation, depletion, amortization and other
non-cash items, such as non-cash compensation expense, gains and
losses on disposals of assets, the allowance for equity funds used
during construction, unrealized gains and losses on commodity risk
management activities, non-cash impairment charges, losses on
extinguishments of debt and other non-operating income or expense
items. Unrealized gains and losses on commodity risk management
activities include unrealized gains and losses on commodity
derivatives and inventory fair value adjustments (excluding lower
of cost or market adjustments). Adjusted EBITDA reflects amounts
for less than wholly-owned subsidiaries based on 100% of the
subsidiaries’ results of operations and for unconsolidated
affiliates based on our proportionate ownership.
Adjusted EBITDA is used by management to determine our operating
performance and, along with other financial and volumetric data, as
internal measures for setting annual operating budgets, assessing
financial performance of our numerous business locations, as a
measure for evaluating targeted businesses for acquisition and as a
measurement component of incentive compensation.
Definition of Distributable Cash Flow
We define Distributable Cash Flow as net income, adjusted for
certain non-cash items, less maintenance capital expenditures.
Non-cash items include depreciation, depletion and amortization,
non-cash compensation expense, gains and losses on disposals of
assets, the allowance for equity funds used during construction,
unrealized gains and losses on commodity risk management
activities, non-cash impairment charges, losses on extinguishments
of debt and deferred income taxes. Unrealized gains and losses on
commodity risk management activities includes unrealized gains and
losses on commodity derivatives and inventory fair value
adjustments (excluding lower of cost or market adjustments). For
unconsolidated affiliates, Distributable Cash Flow reflects the
Partnership’s proportionate share of the investee’s distributable
cash flow.
Distributable Cash Flow is used by management to evaluate our
overall performance. Our partnership agreement requires us to
distribute all available cash, and Distributable Cash Flow is
calculated to evaluate our ability to fund distributions through
cash generated by our operations.
On a consolidated basis, Distributable Cash Flow includes 100%
of the Distributable Cash Flow of ETP’s consolidated subsidiaries.
However, to the extent that noncontrolling interests exist among
our subsidiaries, the Distributable Cash Flow generated by our
subsidiaries may not be available to be distributed to our
partners. In order to reflect the cash flows available for
distributions to our partners, we have reported Distributable Cash
Flow attributable to partners, which is calculated by adjusting
Distributable Cash Flow (consolidated), as follows:
- For subsidiaries with publicly traded
equity interests, Distributable Cash Flow (consolidated) includes
100% of Distributable Cash Flow attributable to such subsidiary,
and Distributable Cash Flow attributable to our partners includes
distributions to be received by the parent company with respect to
the periods presented.
- For consolidated joint ventures or
similar entities, where the noncontrolling interest is not publicly
traded, Distributable Cash Flow (consolidated) includes 100% of
Distributable Cash Flow attributable to such subsidiary, but
Distributable Cash Flow attributable to partners is net of
distributions to be paid by the subsidiary to the noncontrolling
interests.
For Distributable Cash Flow attributable to partners, as
adjusted, certain transaction-related and non-recurring expenses
that are included in net income are excluded.
(b) Amount reflects distributions for the first quarter of 2017,
to be paid by PennTex on May 12, 2017 with respect to ETP’s
ownership interests of 6.3 million common units and 20 million
subordinated units of PennTex acquired on November 1, 2016.
(c) Distributions on ETP Common Units and the number of ETP
Common Units outstanding at the end of the period, both as
reflected above, exclude amounts related to ETP Common Units held
by subsidiaries of ETP.
(d) For the three months ended March 31, 2016, the “Pro
Forma for Merger” column excludes distributions on Sunoco Logistics
Common Units held by ETP as those units were cancelled in
connection with the closing of the merger.
(e) For the three months ended March 31, 2017 and 2016, the
“Pro Forma for Merger” columns reflect the sum of (i) the ETP
Common Units outstanding at the end of period multiplied by a
factor of 1.5x and (ii) the Sunoco Logistics Common Units
outstanding at end of period minus 67.1 million Sunoco Logistics
Common Units held by ETP, which units were cancelled in connection
with the closing of the merger.
(f) Distribution coverage ratio for a period is calculated as
Distributable Cash Flow attributable to partners, as adjusted,
divided by net distributions expected to be paid to the partners of
ETP in respect of such period.
SUMMARY ANALYSIS
OF QUARTERLY RESULTS BY SEGMENT
(Tabular dollar amounts in millions)
(unaudited)
ETP’s Segments
Three Months EndedMarch 31, 2017 2016
Segment Adjusted EBITDA: Midstream $ 320 $ 263 Liquids
transportation and services 259 227 Interstate transportation and
storage 265 292 Intrastate transportation and storage 169 179
Investment in Sunoco Logistics 278 349 All other 123
102 $ 1,414 $ 1,412
Midstream
Three Months EndedMarch 31, 2017 2016
Gathered volumes (MMBtu/d) 10,231,895 9,851,105 NGLs produced
(Bbls/d) 445,004 430,973 Equity NGLs (Bbls/d) 25,521 29,533
Revenues $ 1,637 $ 1,092 Segment Adjusted EBITDA $ 320 $ 263
Gathered volumes and NGL production increased primarily due to
recent acquisitions, including PennTex, and gains in the Permian
and Northeast regions, partially offset by basin declines in the
South Texas, North Texas, and Mid-Continent/Panhandle regions.
For the three months ended March 31, 2017 compared to the
same period last year, Segment Adjusted EBITDA related to our
midstream segment increased due to the net effects of the
following:
- an increase of $45 million in non-fee
based margin due to higher crude oil and NGL prices;
- an increase of $17 million in
non-fee based margin due to gains in the Permian, partially offset
by declines in the South Texas, North Texas, and
Mid-Continent/Panhandle regions;
- an increase of $13 million in fee
based revenue due to growth in the Permian, Northeast and North
Louisiana, including recent acquisitions, offset by declines in
South Texas, North Texas and the Mid-Continent/Panhandle regions;
and
- an increase of $13 million in fee
based revenue due to the PennTex acquisition; partially offset
by
- a decrease of $5 million
(excluding unrealized gains of $16 million) in non-fee based
margin due to higher benefit from settled derivatives used to hedge
commodity margins;
- an increase of $16 million in
operating expenses primarily due to recent acquisitions, including
PennTex; and
- an increase of $11 million in
general and administrative expenses primarily due to a decrease of
$4 million in capitalized overhead, a $3 million increase
in shared services allocation, a $2 million increase in
insurance allocation, and $2 million additional costs from the
PennTex acquisition.
Liquids Transportation and Services
Three Months EndedMarch 31, 2017 2016
Liquids transportation volumes (Bbls/d) 739,982 537,251 NGL
fractionation volumes (Bbls/d) 433,473 362,906 Revenues $ 1,622 $
919 Segment Adjusted EBITDA $ 259 $ 227
NGL transportation volumes increased in most major producing
regions, including the Permian, North Texas, Louisiana and the
Eagle Ford. Additionally, our Bayou Bridge crude pipeline,
originating in Nederland and delivering into Lake Charles, began
transporting volumes in April 2016.
Average daily fractionated volumes increased for the three
months ended March 31, 2017 compared to the same period last
year primarily due to the commissioning of our fourth fractionator
at Mont Belvieu, Texas, in October 2016, which has a capacity of
120,000 Bbls/d, as well as increased producer volumes as mentioned
above.
For the three months ended March 31, 2017 compared to the
same period last year, Segment Adjusted EBITDA related to our
liquids transportation and services segment increased due to net
impact of the following:
- an increase of $37 million in
transportation fees due to higher NGL and crude transport
volumes;
- an increase of $17 million in
processing and fractionation margin (excluding changes in
unrealized gains of $4 million) primarily due to higher NGL
volumes from most major producing regions, as noted above; and
- an increase of $8 million in storage
margin primarily due to increased volumes from our Mont Belvieu
fractionators; partially offset by
- a decrease of $8 million in other
margin (excluding changes in unrealized gains of $31 million)
primarily due to the timing of the recognition of margin from
optimization activities;
- an increase of $19 million in
operating expenses primarily due to increased costs associated with
our fourth fractionator at Mont Belvieu and new pipelines placed in
service; and
- an increase of $2 million in
general and administrative expenses due to lower capitalized
overhead as a result of reduced capital spending.
Interstate Transportation and Storage
Three Months EndedMarch 31, 2017 2016
Natural gas transported (MMBtu/d) 5,655,558 5,835,046 Natural gas
sold (MMBtu/d) 16,905 17,177 Revenues $ 235 $ 259 Segment Adjusted
EBITDA $ 265 $ 292 Distributions from unconsolidated
affiliates $ 114 $ 73
Transported volumes decreased primarily due to mild weather; in
particular, volumes on the Transwestern pipeline decreased by
64,827 MMBtu/d. In addition, volumes on the Sea Robin pipeline
decreased 37,075 MMBtu/d due to producer maintenance and production
declines.
Segment Adjusted EBITDA. For the three months ended
March 31, 2017 compared to the same period last year, Segment
Adjusted EBITDA related to our interstate transportation and
storage segment decreased due to decreases in revenues of $12
million on the Tiger pipeline due to contract restructuring, $10
million on the Panhandle and Trunkline pipelines due to weak
spreads and mild weather, and $2 million on the Sea Robin pipeline
due to producer maintenance and production declines.
The increase in cash distributions from unconsolidated
affiliates is due to increased distributions from MEP.
Intrastate Transportation and Storage
Three Months EndedMarch 31, 2017 2016
Natural gas transported (MMBtu/d) 7,807,045 8,229,972 Revenues $
816 $ 558 Segment Adjusted EBITDA $ 169 $ 179 Distributions
from unconsolidated affiliates $ 4 $ 15
Transported volumes decreased primarily due to lower production
volumes in the Barnett Shale region, partially offset by increased
volumes related to significant new long-term transportation
contracts, as well as the addition of a new short haul transport
pipeline delivering volumes into our Houston Pipeline system.
Segment Adjusted EBITDA. For the three months ended
March 31, 2017 compared to the same period last year, Segment
Adjusted EBITDA related to our intrastate transportation and
storage segment decreased due to the net impacts of the
following:
- a decrease of $10 million in
transportation fees due to renegotiated contracts resulting in
lower demand volumes beginning in the second quarter of 2016 on our
ET Fuel pipeline, partially offset by an increase of $5 million due
to fees from renegotiated and newly initiated fixed fee contracts
primarily on our Houston Pipeline system;
- a decrease of $8 million in
storage margin (excluding net changes in unrealized amounts of
$18 million related to fair value inventory adjustments and
unrealized gains and losses on derivatives), as discussed below;
and
- an increase of $5 million in
operating expenses primarily due to higher outside services labor
costs and compression fuel expenses; partially offset by
- an increase of $7 million in
natural gas sales and other (excluding changes in unrealized gains
of $4 million) primarily due to higher realized gains from the
buying and selling of gas along our system; and
- an increase of $5 million in
retained fuels (excluding changes in unrealized gains of
$1 million) primarily due to higher market prices. The average
spot price at the Houston Ship Channel location increased 56% for
the quarter ended March 31, 2017 compared to the same period last
year.
Investment in Sunoco Logistics
Three Months EndedMarch 31, 2017 2016
Revenues $ 3,219 $ 1,777 Segment Adjusted EBITDA $ 278 $ 349
Distributions from unconsolidated affiliates $ 8 $ 5
See discussion of Sunoco Logistics’ segments in the following
section.
All Other
Three Months EndedMarch 31, 2017 2016
Revenues $ 770 $ 854 Segment Adjusted EBITDA $ 123 $ 102
Distributions from unconsolidated affiliates $ 38 $ 34
Amounts reflected in our all other segment primarily
include:
- our equity method investment in limited
partnership units of Sunoco LP consisting of 43.5 million
units, representing 43.7% of Sunoco LP’s total outstanding common
units;
- our natural gas marketing and
compression operations;
- a non-controlling interest in PES,
comprising 33% of PES’ outstanding common units; and
- our investment in Coal Handling, an
entity that owns and operates end-user coal handling
facilities.
For the three months ended March 31, 2017 compared to the
same period last year, Segment Adjusted EBITDA related to our all
other segment increased primarily due to an increase of
$22 million in Adjusted EBITDA related to our investment in
PES. The three months ended March 31, 2017 also reflected higher
gross margin of $9 million and lower selling, general and
administrative expenses of $6 million resulting from lower
transaction-related expenses. These increases were partially offset
by a decrease of $19 million related to the termination of the
$75 million annual management fee paid by ETE that ended in
2016.
Sunoco Logistics’
Segments
Crude Oil
Three Months EndedMarch 31, 2017 2016
Pipeline throughput (thousands of barrels per day ("bpd")) (1)
2,706 2,258 Terminal throughput (thousands of bpd) (1) 1,917 1,517
Revenues $ 2,557 $ 1,380 Segment Adjusted EBITDA $ 147 $ 224
(1)
Excludes amounts attributable to equity interests which are
not consolidated.
Segment Adjusted EBITDA. For the three months ended
March 31, 2017 compared to the same period last year, Segment
Adjusted EBITDA related to Sunoco Logistics’ Crude Oil segment
decreased primarily due to the impact of LIFO inventory accounting
on Sunoco Logistics’ contango inventory positions resulting in
approximately $60 million of positive earnings during the
first quarter 2016, compared to approximately $50 million of
negative earnings during the first quarter 2017. The unfavorable
LIFO timing is expected to be reversed in future periods as
commodity prices fall or the inventory positions are liquidated.
Excluding these inventory timing impacts, Adjusted EBITDA for the
crude oil segment increased $33 million compared to the prior
year period. This increase related to improved results from Sunoco
Logistics’ crude oil pipelines and terminalling activities of
$56 million which was largely attributable to expansion
capital projects which commenced operations in 2016, the
acquisition of Vitol Inc.'s crude oil assets in the fourth quarter
2016, and the formation of Permian Express Partners LLC in the
first quarter of 2017. Partially offsetting this improvement was
lower operating results from Sunoco Logistics’ crude oil
acquisition and marketing activities of $23 million, which
includes transportation and storage fees related to Sunoco
Logistics’ crude oil pipelines and terminal facilities.
Natural Gas Liquids
Three Months EndedMarch 31, 2017 2016
Pipeline throughput (thousands of bpd) 280 269 Terminal throughput
(thousands of bpd) 264 220 Revenues $ 385 $ 233 Segment Adjusted
EBITDA $ 82 $ 74
Segment Adjusted EBITDA. For the three months ended
March 31, 2017 compared to the same period last year, Segment
Adjusted EBITDA related to Sunoco Logistics’ Natural Gas Liquids
segment increased primarily due to increased volumes and fees from
Sunoco Logistics’ Mariner NGLs projects of $12 million, which
includes Sunoco Logistics’ NGLs pipelines and terminal facilities
at Marcus Hook and Nederland. These positive factors were partially
offset by lower operating results from Sunoco Logistics’ NGLs
acquisition and marketing activities of $2 million.
Refined Products
Three Months EndedMarch 31, 2017 2016
Pipeline throughput (thousands of bpd) (1) 624 551 Terminal
throughput (thousands of bpd) (1) 542 532 Revenues $ 277 $ 164
Segment Adjusted EBITDA $ 49 $ 51
(1)
Excludes amounts attributable to equity interests which are
not consolidated.
Segment Adjusted EBITDA. For the three months ended
March 31, 2017 compared to the same period last year, Segment
Adjusted EBITDA related to Sunoco Logistics’ Refined Products
segment decreased due to lower results from Sunoco Logistics’
refined products acquisition and marketing activities of
$7 million. This decrease was partially offset by improved
results from Sunoco Logistics’ refined products pipelines of
$4 million and improved contributions from joint venture
interests of $2 million.
SUPPLEMENTAL
INFORMATION ON CAPITAL EXPENDITURES
(In millions)
(unaudited)
The following is a summary of capital expenditures (net of
contributions in aid of construction costs) for the three months
ended March 31, 2017:
Growth Maintenance Total
ETP: Midstream $ 234 $ 16 $ 250 Liquids transportation and
services(1) 105 5 110 Interstate transportation and storage(1) 288
9 297 Intrastate transportation and storage 16 5 21 All other
(including eliminations) 47 12 59 Total
capital expenditures 690 47 737 Sunoco Logistics: Crude oil 51 5 56
Natural gas liquids 445 1 446 Refined products 10 7
17 Total capital expenditures $ 1,196 $ 60 $ 1,256
(1)
Includes capital expenditures related to the Bakken, Rover
and Bayou Bridge pipeline projects, but excludes amounts related to
Sunoco Logistics’ proportionate ownership in the Bakken and Bayou
Bridge pipeline projects.
SUPPLEMENTAL
INFORMATION ON LIQUIDITY
(In millions)
(unaudited)
Facility Size
Funds Available atMarch 31, 2017
Maturity Date Legacy ETP Revolving Credit Facility $ 3,750 $ 3,217
November 18, 2019 Legacy Sunoco Logistics Revolving Credit Facility
2,500 1,760 March 20, 2020 Legacy Sunoco Logistics 364-Day Credit
Facility 1,000 370 May 26, 2017 $ 7,250 $ 5,347
SUPPLEMENTAL
INFORMATION ON UNCONSOLIDATED AFFILIATES
(In millions)
(unaudited)
Three Months EndedMarch 31, 2017 2016
Equity in earnings (losses) of unconsolidated affiliates:
Citrus $ 21 $ 21 FEP 12 14 PES 14 (6 ) MEP 10 11 HPC 7 8 AmeriGas 9
(2 ) Sunoco LP (14 ) 15 Other 14 15
Total equity in earnings of unconsolidated affiliates $ 73 $
76
Adjusted EBITDA related to unconsolidated
affiliates: Citrus $ 75 $ 74 FEP 18 19 PES 26 4 MEP 22 24 HPC
15 15 Sunoco LP 54 57 Other 29 26 Total
Adjusted EBITDA related to unconsolidated affiliates $ 239 $
219
Distributions received from unconsolidated
affiliates: Citrus $ 41 $ 35 FEP — 17 AmeriGas 3 3 MEP 73 21
HPC — 12 Sunoco LP 35 30 Other 20 17
Total distributions received from unconsolidated affiliates $ 172
$ 135
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170503006671/en/
Energy TransferInvestor Relations:Lyndsay Hannah, Brent
Ratliff, Helen Ryoo, 214-981-0795orMedia Relations:Vicki
Granado, 214-981-0761
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