Energy Transfer LP (NYSE:ET) (“ET” or the “Partnership”)
today reported financial results for the quarter ended March 31,
2020.
ET reported an earnings net loss attributable to partners for
the three months ended March 31, 2020 of $855 million, which
included non-cash goodwill impairments of $1.3 billion recorded
during the period as a result of decreases in commodity prices and
market demand.
Adjusted EBITDA for the three months ended March 31, 2020 was
$2.64 billion, a decrease of $100 million compared to the three
months ended March 31, 2019, primarily due to crude oil, NGL and
refined products inventory valuation adjustments totaling $213
million in the first quarter of 2020. Without the inventory
adjustments, Adjusted EBITDA would have been $2.85 billion for the
first quarter of 2020.
Distributable Cash Flow attributable to partners, as adjusted,
for the three months ended March 31, 2020 was $1.42 billion, a
decrease of $177 million compared to the three months ended March
31, 2019, primarily due to the decrease in Adjusted EBITDA.
Distribution coverage ratio for the three months ended March 31,
2020 was 1.72x, yielding excess coverage of $594 million of
Distributable Cash Flow attributable to partners in excess of
distributions.
ET has a fully-integrated midstream franchise which includes
natural gas, crude oil, and NGL infrastructure assets serving
customers in all of the major producing basins and markets across
the U.S. During the first quarter of 2020, the Partnership’s
operations performed well, with intrastate natural gas, crude oil
and NGL transportation volumes higher compared to the same period
in 2019.
Based on the outlook for the current market, ET is reducing its
2020 growth capital outlook by at least $400 million, to $3.6
billion, with another $300 million to $400 million of capital under
evaluation for potential further reductions during the year. In the
first quarter, ET spent approximately $1.0 billion on growth
capital projects. ET expects that approximately 70 percent of the
growth capital in 2020 will be spent on projects that are already
60 percent or more complete and will be in-service in 2020 or early
2021. ET also continues to review the broader market with lower
commodity prices and producer activity and is updating its 2020
outlook for Adjusted EBITDA to range from $10.6 billion to $10.8
billion. ET maintains strong liquidity of approximately $4 billion
as of March 31, 2020 and has significant asset strength and
financial flexibility to manage through the current market
cycle.
Key accomplishments and current developments:
Operational
- In the first quarter of 2020, the COVID-19 pandemic prompted
several states and municipalities in which we operate to take
various actions to contain and combat the outbreak and spread of
the virus. To date, our field operations have continued largely
uninterrupted, and remote work and other COVID-19 related
conditions have not significantly impacted our ability to maintain
operations or caused us to incur significant additional
expenses.
- In April 2020, ET was a successful bidder to lease crude oil
storage capacity in the Department of Energy’s Strategic Petroleum
Reserve.
- In February 2020, Frac VII was placed in service, bringing the
total fractionation capacity at Mont Belvieu to over 900,000
barrels per day.
- In January 2020, the 200 MMcf/d Panther II processing plant in
the Permian Basin was placed into full commissioned service.
Strategic
- During this first quarter, we completed the integration of the
recently acquired SemGroup business and we began to realize
financial savings from those actions.
Financial
- In January 2020, Energy Transfer Operating, L.P. (“ETO”)
completed a registered offering of $4.5 billion of its senior notes
and $1.6 billion of perpetual preferred units.
- In March 2020, ET announced a quarterly distribution of $0.305
per unit ($1.220 annualized) on ET common units for the quarter
ended March 31, 2020. The distribution coverage ratio for the first
quarter of 2020 was 1.72x.
- As of March 31, 2020, ETO’s $6.00 billion revolving credit
facilities had an aggregate $3.97 billion of available capacity,
and ETO’s leverage ratio, as defined by its credit agreement, was
4.12x.
ET benefits from a portfolio of assets with exceptional product
and geographic diversity. The Partnership’s multiple segments
generate high-quality, balanced earnings with no single segment
contributing more than 30 percent of the Partnership’s consolidated
Adjusted EBITDA for the three months ended March 31, 2020. The vast
majority of the Partnership’s segment margins are fee-based and
therefore have limited commodity price sensitivity.
Conference Call information:
The Partnership has scheduled a conference call for 4:00 p.m.
Central Time, Monday, May 11, 2020 to discuss its first quarter
2020 results and provide a partnership update. The conference call
will be broadcast live via an internet webcast, which can be
accessed through www.energytransfer.com or ir.energytransfer.com and will also be available
for replay on the Partnership’s website for a limited time.
Energy Transfer LP (NYSE: ET) owns and operates one of
the largest and most diversified portfolios of energy assets in the
United States, with a strategic footprint in all of the major
domestic production basins. ET is a publicly traded limited
partnership with core operations that include complementary natural
gas midstream, intrastate and interstate transportation and storage
assets; crude oil, NGL and refined product transportation and
terminalling assets; NGL fractionation; and various acquisition and
marketing assets. ET, through its ownership of Energy Transfer
Operating, L.P., also owns Lake Charles LNG Company, as well as the
general partner interests, the incentive distribution rights and
28.5 million common units of Sunoco LP (NYSE: SUN), and the general
partner interests and 46.1 million common units of USA Compression
Partners, LP (NYSE: USAC). For more information, visit the Energy
Transfer LP website at www.energytransfer.com.
Sunoco LP (NYSE: SUN) is a master limited partnership
with core operations that include the distribution of motor fuel to
approximately 10,000 convenience stores, independent dealers,
commercial customers and distributors located in more than 30
states, as well as refined product transportation and terminalling
assets. SUN’s general partner is owned by Energy Transfer
Operating, L.P., a subsidiary of Energy Transfer LP (NYSE: ET). For
more information, visit the Sunoco LP website at www.sunocolp.com.
USA Compression Partners, LP (NYSE: USAC) is a
growth-oriented Delaware limited partnership that is one of the
nation’s largest independent providers of compression services in
terms of total compression fleet horsepower. USAC partners with a
broad customer base composed of producers, processors, gatherers
and transporters of natural gas and crude oil. USAC focuses on
providing compression services to infrastructure applications
primarily in high-volume gathering systems, processing facilities
and transportation applications. For more information, visit the
USAC website at www.usacompression.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, including the Partnership’s
Quarterly Report on Form 10-Q to be filed for the current period.
In addition to the risks and uncertainties previously disclosed,
the Partnership has also been, or may in the future be, impacted by
new or heightened risks related to the COVID-19 pandemic and the
recent sharp decline in commodity prices, and we cannot predict the
length and ultimate impact of those risks. 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 LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(unaudited)
March 31, 2020
December 31, 2019
ASSETS
Current assets (1)
$
5,119
$
7,464
Property, plant and equipment, net
74,586
74,193
Advances to and investments in
unconsolidated affiliates
3,337
3,460
Lease right-of-use assets, net
1,033
964
Other non-current assets, net (1)
1,515
1,571
Intangible assets, net
6,116
6,154
Goodwill
3,835
5,167
Total assets
$
95,541
$
98,973
LIABILITIES AND EQUITY
Current liabilities
$
6,166
$
7,724
Long-term debt, less current
maturities
50,299
51,028
Non-current derivative liabilities
573
273
Non-current operating lease
liabilities
821
901
Deferred income taxes
3,214
3,208
Other non-current liabilities
1,193
1,162
Commitments and contingencies
Redeemable noncontrolling interests
745
739
Equity:
Total partners’ capital
19,447
21,920
Noncontrolling interests
13,083
12,018
Total equity
32,530
33,938
Total liabilities and equity
$
95,541
$
98,973
(1)
Effective January 1, 2020, the
Partnership elected to change its accounting policy related to
certain barrels of crude oil that were previously accounted for as
inventory. Under the revised accounting policy, certain amounts of
crude oil that are not available for sale have been reclassified
from inventory to non-current assets. The balances as of December
31, 2019 have been adjusted to reflect this change in accounting
policy.
ENERGY
TRANSFER LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(In millions, except per unit
data)
(unaudited)
Three Months Ended March 31,
2020
2019(1)
REVENUES
$
11,627
$
13,121
COSTS AND EXPENSES:
Cost of products sold
8,291
9,477
Operating expenses
879
808
Depreciation, depletion and
amortization
867
774
Selling, general and administrative
204
147
Impairment losses (2)
1,325
50
Total costs and expenses
11,566
11,256
OPERATING INCOME
61
1,865
OTHER INCOME (EXPENSE):
Interest expense, net of interest
capitalized
(602
)
(590
)
Equity in earnings (losses) of
unconsolidated affiliates
(7
)
65
Losses on extinguishments of debt
(62
)
(18
)
Losses on interest rate derivatives
(329
)
(74
)
Other, net
3
(4
)
INCOME (LOSS) BEFORE INCOME TAX
EXPENSE
(936
)
1,244
Income tax expense from continuing
operations
28
126
NET INCOME (LOSS)
(964
)
1,118
Less: Net income attributable to
noncontrolling interests
(121
)
297
Less: Net income attributable to
redeemable noncontrolling interests
12
13
NET INCOME (LOSS) ATTRIBUTABLE TO
PARTNERS
(855
)
808
General Partner’s interest in net income
(loss)
(1
)
1
Limited Partners’ interest in net income
(loss)
$
(854
)
$
807
NET INCOME (LOSS) PER LIMITED PARTNER
UNIT:
Basic
$
(0.32
)
$
0.31
Diluted
$
(0.32
)
$
0.31
WEIGHTED AVERAGE NUMBER OF UNITS
OUTSTANDING:
Basic
2,691.7
2,619.5
Diluted
2,691.7
2,627.9
(1)
Effective January 1, 2020, the
Partnership elected to change its accounting policy related to
certain barrels of crude oil that were previously accounted for as
inventory. Under the revised accounting policy, certain amounts of
crude oil that are not available for sale have been reclassified
from inventory to non-current assets. The condensed consolidated
statement of operations for the three months ended March 31, 2019
has been adjusted to reflect this change in accounting policy.
(2)
As a result of interim impairment
tests performed during the first quarter of 2020, the Partnership
recognized a goodwill impairment of $483 million related to our
Arklatex and South Texas operations within the midstream segment, a
goodwill impairment of $183 million related to our Lake Charles LNG
regasification operations within the interstate transportation and
storage segment due to a contractual reduction in payments for the
remainder of the contract term, and a goodwill impairment of $40
million related to our all other operations primarily due to
decreases in projected future revenues and cash flows as a result
of the overall market demand decline. In addition, USAC recognized
a goodwill impairment of $619 million during the three months ended
March 31, 2020, which is included in the Partnership's consolidated
results of operations.
ENERGY
TRANSFER LP AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
(Dollars and units in
millions)
(unaudited)
Three Months Ended March 31,
2020
2019(a)
Reconciliation of net income (loss) to
Adjusted EBITDA and Distributable Cash Flow(b):
Net income (loss)
$
(964
)
$
1,118
Interest expense, net of interest
capitalized
602
590
Impairment losses
1,325
50
Income tax expense from continuing
operations
28
126
Depreciation, depletion and
amortization
867
774
Non-cash compensation expense
22
29
Losses on interest rate derivatives
329
74
Unrealized gains on commodity risk
management activities
(51
)
(49
)
Losses on extinguishments of debt
62
18
Inventory valuation adjustments
227
(93
)
Equity in (earnings) losses of
unconsolidated affiliates
7
(65
)
Adjusted EBITDA related to unconsolidated
affiliates
154
146
Other, net
27
17
Adjusted EBITDA (consolidated)
2,635
2,735
Adjusted EBITDA related to unconsolidated
affiliates
(154
)
(146
)
Distributable cash flow from
unconsolidated affiliates
113
93
Interest expense, net of interest
capitalized
(602
)
(590
)
Preferred unitholders’ distributions
(89
)
(53
)
Current income tax (expense) benefit
14
(28
)
Maintenance capital expenditures
(103
)
(92
)
Other, net
22
18
Distributable Cash Flow (consolidated)
1,836
1,937
Distributable Cash Flow attributable to
Sunoco LP (100%)
(159
)
(97
)
Distributions from Sunoco LP
41
41
Distributable Cash Flow attributable to
USAC (100%)
(55
)
(55
)
Distributions from USAC
24
21
Distributable Cash Flow attributable to
noncontrolling interests in other non-wholly-owned consolidated
subsidiaries
(290
)
(251
)
Distributable Cash Flow attributable to
the partners of ET
1,397
1,596
Transaction-related adjustments
20
(2
)
Distributable Cash Flow attributable to
the partners of ET, as adjusted
$
1,417
$
1,594
Distributions to partners:
Limited Partners
$
822
$
799
General Partner
1
1
Total distributions to be paid to
partners
$
823
$
800
Common Units outstanding – end of
period
2,694.2
2,619.6
Distribution coverage ratio
1.72x
1.99x
(a)
Effective January 1, 2020, the
Partnership elected to change its accounting policy related to
certain barrels of crude oil that were previously accounted for as
inventory. Under the revised accounting policy, certain amounts of
crude oil that are not available for sale have been reclassified
from inventory to non-current assets. The results for the three
months ended March 31, 2019 have been adjusted to reflect this
change in accounting policy.
(b)
Adjusted EBITDA, Distributable
Cash Flow and distribution coverage ratio are non-GAAP financial
measures used by industry analysts, investors, lenders and rating
agencies to assess the financial performance and the operating
results of ET’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, Distributable Cash Flow and
distribution coverage ratio, including the difficulty associated
with using any such measure 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, Distributable Cash Flow and distribution coverage
ratio 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 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, inventory
valuation adjustments, non-cash impairment charges, losses on
extinguishments of debt and other non-operating income or expense
items. Adjusted EBITDA reflects amounts for unconsolidated
affiliates based on the same recognition and measurement methods
used to record equity in earnings of unconsolidated affiliates.
Adjusted EBITDA related to unconsolidated affiliates excludes the
same items with respect to the unconsolidated affiliate as those
excluded from the calculation of Adjusted EBITDA, such as interest,
taxes, depreciation, depletion, amortization and other non-cash
items. Although these amounts are excluded from Adjusted EBITDA
related to unconsolidated affiliates, such exclusion should not be
understood to imply that we have control over the operations and
resulting revenues and expenses of such affiliates. We do not
control our unconsolidated affiliates; therefore, we do not control
the earnings or cash flows of such affiliates.
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.
The introductory section of this press
release refers to the Partnership’s Adjusted EBITDA without
inventory adjustments for the three months ended March 31, 2020.
This measure was calculated consistently with Adjusted EBITDA
(which is reconciled to the Partnership’s net income (loss) above),
except that inventory valuation adjustments of $213 million were
excluded in the calculation of $2.85 billion.
Definition of Distributable Cash Flow
We define Distributable Cash Flow as net
income, adjusted for certain non-cash items, less distributions to
preferred unitholders and maintenance capital expenditures.
Non-cash items include depreciation, depletion and amortization,
non-cash compensation expense, amortization included in interest
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, inventory valuation
adjustments, non-cash impairment charges, losses on extinguishments
of debt and deferred income taxes. 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 ET’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, other
than ETO, 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 subsidiaries, but Distributable Cash Flow
attributable to partners reflects only the amount of Distributable
Cash Flow of such subsidiaries that is attributable to our
ownership interest.
For Distributable Cash Flow attributable
to partners, as adjusted, certain transaction-related adjustments
and non-recurring expenses that are included in net income are
excluded.
Definition of Distribution Coverage
Ratio
Distribution coverage ratio for a period
is calculated as Distributable Cash Flow attributable to partners,
as adjusted, divided by distributions expected to be paid to the
partners of ET in respect of such period.
ENERGY
TRANSFER LP AND SUBSIDIARIES
SUMMARY
ANALYSIS OF QUARTERLY RESULTS BY SEGMENT
(Tabular dollar amounts in
millions)
(unaudited)
Three Months Ended March 31,
2020
2019
Segment Adjusted EBITDA:
Intrastate transportation and storage
$
240
$
252
Interstate transportation and storage
404
456
Midstream
383
382
NGL and refined products transportation
and services
663
612
Crude oil transportation and services
591
744
Investment in Sunoco LP
209
153
Investment in USAC
106
101
All other
39
35
Total Segment Adjusted EBITDA
$
2,635
$
2,735
In the following analysis of segment operating results, a
measure of segment margin is reported for segments with sales
revenues. Segment margin is a non-GAAP financial measure and is
presented herein to assist in the analysis of segment operating
results and particularly to facilitate an understanding of the
impacts that changes in sales revenues have on the segment
performance measure of Segment Adjusted EBITDA. Segment margin is
similar to the GAAP measure of gross margin, except that segment
margin excludes charges for depreciation, depletion and
amortization. Among the GAAP measures reported by the Partnership,
the most directly comparable measure to segment margin is Segment
Adjusted EBITDA; a reconciliation of segment margin to Segment
Adjusted EBITDA is included in the following tables for each
segment where segment margin is presented.
In addition, for certain segments, the sections below include
information on the components of segment margin by sales type,
which components are included in order to provide additional
disaggregated information to facilitate the analysis of segment
margin and Segment Adjusted EBITDA. For example, these components
include transportation margin, storage margin, and other margin.
These components of segment margin are calculated consistent with
the calculation of segment margin; therefore, these components also
exclude charges for depreciation, depletion and amortization.
Intrastate Transportation and Storage
Three Months Ended March 31,
2020
2019
Natural gas transported (BBtu/d)
13,135
11,982
Withdrawals from storage natural gas
inventory (BBtu)
6,975
—
Revenues
$
593
$
856
Cost of products sold
303
572
Segment margin
290
284
Unrealized (gains) losses on commodity
risk management activities
(6
)
10
Operating expenses, excluding non-cash
compensation expense
(41
)
(42
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(9
)
(6
)
Adjusted EBITDA related to unconsolidated
affiliates
6
6
Segment Adjusted EBITDA
$
240
$
252
Transported volumes increased primarily due to increased
utilization of our Texas pipelines.
Segment Adjusted EBITDA. For the three months ended March 31,
2020 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 $32 million in realized natural gas sales and
other primarily due to lower realized gains from pipeline
optimization activity;
- a decrease of $4 million in retention revenue due to lower
natural gas prices; and
- an increase of $3 million in selling, general and
administrative expenses primarily due to higher allocated corporate
costs; partially offset by
- an increase of $17 million in realized storage margin primarily
due to higher storage optimization;
- an increase of $7 million in transportation fees primarily due
to volume ramp-ups on the Red Bluff Express pipeline and new
contracts; and
- a decrease of $1 million in operating expenses primarily
related to lower cost of fuel consumption resulting from lower
natural gas prices.
Interstate Transportation and Storage
Three Months Ended March 31,
2020
2019
Natural gas transported (BBtu/d)
10,630
11,532
Natural gas sold (BBtu/d)
15
19
Revenues
$
464
$
498
Operating expenses, excluding non-cash
compensation, amortization and accretion expenses
(143
)
(146
)
Selling, general and administrative
expenses, excluding non-cash compensation, amortization and
accretion expenses
(21
)
(14
)
Adjusted EBITDA related to unconsolidated
affiliates
106
119
Other
(2
)
(1
)
Segment Adjusted EBITDA
$
404
$
456
Transported volumes decreased primarily due to lower utilization
of contracted capacity on our Panhandle and Trunkline
pipelines.
Segment Adjusted EBITDA. For the three months ended March 31,
2020 compared to the same period last year, Segment Adjusted EBITDA
related to our interstate transportation and storage segment
decreased due to the net impacts of the following:
- a decrease of $34 million in revenues primarily due to a $16
million decrease resulting from a contractual rate adjustment on
commitments at our Lake Charles LNG facility and a $20 million
decrease primarily due to lower rates and volumes as a result of
less favorable market conditions on our Rover, Panhandle,
Transwestern and Trunkline pipelines;
- an increase of $7 million in selling, general and
administrative expenses primarily due to higher overhead costs;
and
- a decrease of $13 million in Adjusted EBITDA related to
unconsolidated affiliates primarily due to an $11 million net
decrease from our Midcontinent Express Pipeline joint venture as a
result of less capacity sold and lower rates received following the
expiration of certain contracts and a $2 million net decrease from
our Citrus joint venture resulting from higher allocated expenses;
partially offset by
- a decrease of $3 million in operating expenses primarily due to
lower ad valorem taxes.
Midstream
Three Months Ended March 31,
2020
2019
Gathered volumes (BBtu/d)
13,346
12,718
NGLs produced (MBbls/d)
610
563
Equity NGLs (MBbls/d)
36
35
Revenues
$
1,170
$
1,718
Cost of products sold
575
1,141
Segment margin
595
577
Operating expenses, excluding
non-cash compensation expense
(193
)
(183
)
Selling, general and
administrative expenses, excluding non-cash compensation
expense
(26
)
(19
)
Adjusted EBITDA related to
unconsolidated affiliates
7
6
Other
—
1
Segment Adjusted EBITDA
$
383
$
382
Gathered volumes increased compared to the same period last year
primarily due to increases in the Mid-Continent/Panhandle,
Ark-La-Tex, Permian, South Texas and Northeast regions. NGL
production increased due to increases in the Permian and
Mid-Continent/Panhandle region, partially offset by ethane
rejection in the South Texas region.
Segment Adjusted EBITDA. For the three months ended March 31,
2020 compared to the same period last year, Segment Adjusted EBITDA
related to our midstream segment increased slightly due to the net
impacts of the following:
- an increase of $28 million in fee-based margin due to volume
growth in the Permian, Mid-Continent/Panhandle and Northeast
regions; and
- an increase of $13 million in non fee-based margin due to
increased throughput volume in the Permian region; partially offset
by
- a decrease of $22 million in non fee-based margin due to lower
NGL prices of $17 million and lower natural gas prices of $5
million;
- an increase of $10 million in operating expenses due to an
increase of $6 million in maintenance project costs and $4 million
in employee costs; and
- an increase of $7 million in selling, general and
administrative expenses due to an increase in overhead costs
allocated to the segment.
NGL and Refined Products Transportation and Services
Three Months Ended March 31,
2020
2019
NGL transportation volumes (MBbls/d)
1,398
1,178
Refined products transportation volumes
(MBbls/d)
533
617
NGL and refined products terminal volumes
(MBbls/d)
847
777
NGL fractionation volumes (MBbls/d)
804
678
Revenues
$
2,715
$
3,031
Cost of products sold
1,836
2,326
Segment margin
879
705
Unrealized (gains) losses on commodity
risk management activities
(55
)
57
Operating expenses, excluding non-cash
compensation expense
(159
)
(149
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(25
)
(19
)
Adjusted EBITDA related to unconsolidated
affiliates
23
18
Segment Adjusted EBITDA
$
663
$
612
NGL transportation volumes increased as throughput barrels on
our Texas NGL pipeline system increased due to higher receipt of
liquids production from both wholly-owned and third-party gas
plants primarily in the Permian and North Texas regions. In
addition, NGL transportation volumes increased on our Mariner East
pipeline system.
Refined products transportation volumes decreased due to the
closure of a third-party refinery during the third quarter of 2019
and various turnarounds performed at third party refineries, which
negatively impacted supply to our refined products transportation
system. These decreases in volumes were partially offset by the
initiation of service on our JC Nolan diesel fuel pipeline in the
third quarter of 2019.
NGL and refined products terminal volumes increased primarily
due to higher volumes from our Mariner East system, the initiation
of service on our JC Nolan diesel fuel pipeline in the third
quarter of 2019, additional cargoes shipped out of our Nederland
terminal, and the initiation of natural gasoline exports in July of
2019. These increases were partially offset by the closure of a
third-party refinery during the third quarter of 2019 and various
turnarounds performed at third-party refineries. For the three
months ended March 31, 2019, NGL and refined products terminal
volumes have been adjusted from amounts previously reported to be
consistent with the current period presentation; specifically,
those volumes were adjusted to exclude terminal volumes for which
fees are attributable to storage capacity rather than terminal
throughput.
Average fractionated volumes at our Mont Belvieu, Texas
fractionation facility increased 19% primarily due to the
commissioning of our sixth and seventh fractionators in February
2019 and February 2020, respectively.
Segment Adjusted EBITDA. For the three months ended March 31,
2020 compared to the same period last year, Segment Adjusted EBITDA
related to our NGL and refined products transportation and services
segment increased due to net impacts of the following:
- an increase of $113 million in transportation margin primarily
due to a $74 million increase from higher throughput volumes on our
Mariner East pipeline system, a $35 million increase from higher
throughput volumes received from the Permian region on our Texas
NGL pipelines, a $7 million increase due to the initiation of
service on our JC Nolan diesel fuel pipeline in the third quarter
of 2019, and a $5 million increase due to higher throughput volumes
from the Barnett region. These increases were partially offset by a
$6 million decrease resulting from the closure of a third-party
refinery during the third quarter of 2019;
- an increase of $16 million in terminal services margin
primarily due to an $18 million increase from higher throughput on
our Mariner East system partially offset by a $2 million decrease
due to the closure of a third-party refinery;
- an increase of $11 million in fractionators and refinery
services margin primarily due to a $10 million increase from the
commissioning of our sixth and seventh fractionators in February
2019 and February 2020, respectively, and higher NGL volumes from
the Permian region feeding our Mont Belvieu fractionation facility;
and
- an increase of $7 million in storage margin primarily due to a
$3 million increase in fees generated from exported volumes and a
$3 million increase from higher throughput; partially offset
by
- a decrease of $85 million in marketing margin primarily due to
a $50 million decrease from inventory valuation adjustments and a
$34 million decrease from capacity lease fees incurred by our
marketing affiliate on our Mariner East pipeline system;
- an increase of $10 million in operating expenses primarily due
to increases totaling $16 million for costs associated with
operating additional assets as well as an increase in throughput
volumes, partially offset by a $6 million decrease in power costs;
and
- an increase of $6 million in selling, general and
administrative expenses primarily due to a $6 million increase in
overhead costs allocated to the segment.
Crude Oil Transportation and Services
Three Months Ended March 31,
2020
2019
Crude transportation volumes (MBbls/d)
4,454
4,048
Crude terminals volumes (MBbls/d)
2,996
2,560
Revenues
$
4,213
$
4,186
Cost of products sold
3,458
3,162
Segment margin
755
1,024
Unrealized (gains) losses on commodity
risk management activities
10
(109
)
Operating expenses, excluding non-cash
compensation expense
(158
)
(150
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(28
)
(20
)
Adjusted EBITDA related to unconsolidated
affiliates
12
(2
)
Other
—
1
Segment Adjusted EBITDA
$
591
$
744
Crude transportation and terminal volumes benefited from an
increase in barrels through our existing Texas pipelines, our
Bakken pipeline, the initiation of service on phase 2 of our Bayou
Bridge pipeline in the second quarter of 2019, as well as the
acquisition of pipeline assets during the fourth quarter of 2019.
For the three months ended March 31, 2019, certain volumes have
been reclassified from crude transportation volumes to crude
terminal volumes to be consistent with the current period
presentation.
Segment Adjusted EBITDA. For the three months ended March 31,
2020 compared to the same period last year, Segment Adjusted EBITDA
related to our crude oil transportation and services segment
decreased due to the net impacts of the following:
- a decrease of $150 million in segment margin (excluding
unrealized gains and losses on commodity risk management
activities) primarily due to a $206 million decrease (excluding a
net change of $119 million in unrealized gains and losses on
commodity risk management activities) from our crude oil
acquisition and marketing business that was primarily from
inventory valuation adjustments (a loss of $154 million for the
current period compared to a gain of $36 million for the prior
period) and a $58 million decrease on our Texas crude pipeline
system due to lower average rates realized, partially offset by a
$73 million increase in margin from terminal operations primarily
due to assets acquired in 2019, a $20 million increase due to
higher volumes on our Bakken Pipeline, and an $18 million increase
due to higher volumes on our Bayou Bridge Pipeline;
- an increase of $8 million in operating expenses primarily due
to costs related to assets acquired in 2019, partly offset by lower
crude trucking expenses; and
- an increase of $8 million in selling, general and
administrative expenses primarily due to a $3 million increase in
allocated overhead, a $4 million increase in costs related to
assets acquired in 2019, and a $1 million increase in legal
expenses; partially offset by
- an increase of $14 million in Adjusted EBITDA related to
unconsolidated affiliates due to assets acquired in 2019 and
improved jet fuels sales by our joint ventures.
Investment in Sunoco LP
Three Months Ended March 31,
2020
2019
Revenues
$
3,272
$
3,692
Cost of products sold
3,164
3,322
Segment margin
108
370
Unrealized (gains) losses on commodity
risk management activities
6
(6
)
Operating expenses, excluding non-cash
compensation expense
(109
)
(98
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(30
)
(24
)
Adjusted EBITDA related to unconsolidated
affiliates
2
—
Inventory valuation adjustments
227
(93
)
Other
5
4
Segment Adjusted EBITDA
$
209
$
153
The Investment in Sunoco LP segment reflects the consolidated
results of Sunoco LP.
Segment Adjusted EBITDA. For the three months ended March 31,
2020 compared to the same period last year, Segment Adjusted EBITDA
related to our investment in Sunoco LP segment increased due to the
net impacts of the following:
- an increase of $70 million in gross profit on motor fuel sales,
primarily due to a 32.6% increase in gross profit per gallon sold
and the receipt of a $13 million make-up payment under a fuel
supply agreement; partially offset by a 2.2% decrease in gallons
sold;
- an increase in non-motor fuel sales gross profit of $2 million;
and
- an increase in unconsolidated affiliate adjusted EBITDA of $2
million; partially offset by
- an increase of $17 million in operating expenses and selling,
general and administrative expenses, excluding non-cash
compensation, primarily attributable to a $16 million charge for
current expected credit losses of Sunoco LP’s accounts receivable
in connection with the financial impact from COVID-19.
Investment in USAC
Three Months Ended March 31,
2020
2019
Revenues
$
179
$
171
Cost of products sold
24
22
Segment margin
155
149
Operating expenses, excluding non-cash
compensation expense
(35
)
(35
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(14
)
(13
)
Segment Adjusted EBITDA
$
106
$
101
The Investment in USAC segment reflects the consolidated results
of USAC.
Segment Adjusted EBITDA. For the three months ended March 31,
2020 compared to the same period last year, Segment Adjusted EBITDA
related to our investment in USAC segment increased due to the net
impacts of the following:
- an increase of $6 million in segment margin primarily due to an
increase revenues as a result of the increase in average revenue
generating horsepower; partially offset by
- an increase of $1 million in selling, general and
administrative expenses primarily due to an increase in the
provision for expected credit losses.
All Other
Three Months Ended March 31,
2020
2019
Revenues
$
513
$
497
Cost of products sold
415
455
Segment margin
98
42
Unrealized gains on commodity risk
management activities
(5
)
(1
)
Operating expenses, excluding non-cash
compensation expense
(38
)
(7
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(35
)
(11
)
Adjusted EBITDA related to unconsolidated
affiliates
—
(1
)
Other and eliminations
19
13
Segment Adjusted EBITDA
$
39
$
35
Segment Adjusted EBITDA. For the three months ended March 31,
2020 compared to the same period last year, Segment Adjusted EBITDA
related to our all other segment increased due to the net impacts
of the following:
- an increase of $25 million from the acquisition of
SemCAMS;
- an increase of $16 million from settlement payments received
from our ownership of PES; and
- an increase of $5 million due to storage gains; partially
offset by
- a decrease of $2 million due to lower sales of residue
gas;
- a decrease of $3 million due to lower gas prices and increased
power costs at our compression services business;
- a decrease of $4 million due to lower revenues from our
compression equipment business;
- a decrease of $3 million due to higher expenses in our
compression business resulting from lower cost recoveries and
higher allocated costs;
- a decrease of $2 million due to power trading activities;
- a decrease of $10 million due to changes in eliminations of
intersegment amounts, the net impacts of which are reflected in the
all other segment; and
- a decrease of $20 million due to higher merger and acquisition
expense.
ENERGY TRANSFER LP AND
SUBSIDIARIES SUPPLEMENTAL
INFORMATION ON LIQUIDITY (In millions) (unaudited)
The following table is a summary of ETO’s revolving credit
facilities. We also have other consolidated subsidiaries with
revolving credit facilities which are not included in this
table.
Facility Size
Funds Available at March 31,
2020
Maturity Date
ETO Five-Year Revolving Credit
Facility
$
5,000
$
2,973
December 1, 2023
ETO 364-Day Revolving Credit Facility
1,000
1,000
November 27, 2020
$
6,000
$
3,973
ENERGY TRANSFER LP AND
SUBSIDIARIES SUPPLEMENTAL
INFORMATION ON UNCONSOLIDATED AFFILIATES (In millions)
(unaudited)
The table below provides information on an aggregated basis for
our unconsolidated affiliates, which are accounted for as equity
method investments in the Partnership’s financial statements for
the periods presented.
Three Months Ended March 31,
2020
2019
Equity in earnings (losses) of
unconsolidated affiliates:
Citrus
$
35
$
32
FEP
(70
)
14
MEP
—
7
White Cliffs
8
—
Other
20
12
Total equity in earnings (losses) of
unconsolidated affiliates
$
(7
)
$
65
Adjusted EBITDA related to
unconsolidated affiliates:
Citrus
$
79
$
81
FEP
19
19
MEP
8
19
White Cliffs
14
—
Other
34
27
Total Adjusted EBITDA related to
unconsolidated affiliates
$
154
$
146
Distributions received from
unconsolidated affiliates:
Citrus
$
49
$
35
FEP
18
17
MEP
11
11
White Cliffs
13
—
Other
19
16
Total distributions received from
unconsolidated affiliates
$
110
$
79
ENERGY TRANSFER LP AND
SUBSIDIARIES SUPPLEMENTAL
INFORMATION ON NON-WHOLLY-OWNED JOINT VENTURE
SUBSIDIARIES (Dollars in millions) (unaudited)
The table below provides information on an aggregated basis for
our non-wholly-owned joint venture subsidiaries, which are
reflected on a consolidated basis in our financial statements. The
table below excludes Sunoco LP and USAC, our non-wholly-owned
subsidiaries that are publicly traded.
Three Months Ended March 31,
2020
2019
Adjusted EBITDA of non-wholly-owned
subsidiaries (100%) (a)
$
646
$
617
Our proportionate share of Adjusted EBITDA
of non-wholly-owned subsidiaries (b)
335
342
Distributable Cash Flow of
non-wholly-owned subsidiaries (100%) (c)
$
608
$
579
Our proportionate share of Distributable
Cash Flow of non-wholly-owned subsidiaries (d)
318
328
Below is our current ownership percentage of certain
non-wholly-owned subsidiaries:
Non-wholly-owned subsidiary:
ET Percentage Ownership (e)
Bakken Pipeline
36.4%
Bayou Bridge
60.0%
Maurepas
51.0%
Ohio River System
75.0%
Permian Express Partners
87.7%
Red Bluff Express
70.0%
Rover
32.6%
SemCAMS
51.0%
Others
various
(a)
Adjusted EBITDA of
non-wholly-owned subsidiaries reflects the total Adjusted EBITDA of
our non-wholly-owned subsidiaries on an aggregated basis. This is
the amount of Adjusted EBITDA included in our consolidated non-GAAP
measure of Adjusted EBITDA.
(b)
Our proportionate share of
Adjusted EBITDA of non-wholly-owned subsidiaries reflects the
amount of Adjusted EBITDA of such subsidiaries (on an aggregated
basis) that is attributable to our ownership interest.
(c)
Distributable Cash Flow of
non-wholly-owned subsidiaries reflects the total Distributable Cash
Flow of our non-wholly-owned subsidiaries on an aggregated
basis.
(d)
Our proportionate share of
Distributable Cash Flow of non-wholly-owned subsidiaries reflects
the amount of Distributable Cash Flow of such subsidiaries (on an
aggregated basis) that is attributable to our ownership interest.
This is the amount of Distributable Cash Flow included in our
consolidated non-GAAP measure of Distributable Cash Flow
attributable to the partners of ET.
(e)
Our ownership reflects the total
economic interest held by us and our subsidiaries. In some cases,
this percentage comprises ownership interests held in (or by)
multiple entities.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200511005874/en/
Energy Transfer Investor Relations: Bill Baerg, Brent
Ratliff, Lyndsay Hannah, 214-981-0795 or Media Relations:
Vicki Granado, 214-840-5820
Energy Transfer (NYSE:ET)
Historical Stock Chart
From Feb 2024 to Mar 2024
Energy Transfer (NYSE:ET)
Historical Stock Chart
From Mar 2023 to Mar 2024