Energy Transfer LP (NYSE:ET) (“ET” or the “Partnership”)
today reported financial results for the quarter ended June 30,
2021.
ET reported net income attributable to partners for the three
months ended June 30, 2021 of $626 million, an increase of $273
million compared to the same period the previous year. For the
three months ended June 30, 2021, net income per limited partner
unit (basic and diluted) was $0.20 per unit.
Adjusted EBITDA for the three months ended June 30, 2021 was
$2.62 billion compared to $2.44 billion for the three months ended
June 30, 2020. The increase was largely driven by improved earnings
from several of the Partnership’s core segments.
Distributable Cash Flow attributable to partners, as adjusted,
for the three months ended June 30, 2021 was $1.39 billion compared
to $1.27 billion for the three months ended June 30, 2020. The
increase in distributable cash flow was primarily due to the higher
Adjusted EBITDA.
Key accomplishments and current developments:
Operational
- In June 2021, the Partnership commenced service on its Cushing
to Nederland expansion project, which utilizes a crude oil pipeline
previously servicing the Permian Basin. The new service provides
connectivity to transport crude oil barrels from the
Denver-Julesburg Basin and Cushing, Oklahoma to ET’s Nederland,
Texas terminal.
- During the second quarter of 2021, the Partnership continued to
ramp up volumes at its newly expanded Nederland, Texas terminal. As
a result, when combined with Energy Transfer’s Marcus Hook Terminal
on the east coast, ET exported more NGLs than any other company
worldwide in the months of May and June.
- The Partnership recently commenced work on its Permian Bridge
project, which converts existing pipeline assets to connect ET’s
natural gas gathering and processing assets in the Delaware Basin
with Midland Basin assets.
Strategic
- In May 2021, ET’s acquisition of Enable Midstream Partners, LP
(“Enable”), which was announced in February 2021, was approved by a
vote of the Enable unitholders. ET and Enable continue to work
toward obtaining Hart-Scott-Rodino Act (“HSR”) clearance for the
merger. ET continues to expect the transaction to close in the
second half of 2021.
- In June 2021, ET’s patented Dual Drive Technologies natural gas
compression system was awarded a 2021 GPA Midstream Environmental
Excellence Award for its impact on reducing CO2 emissions.
- In July 2021, ET signed a memorandum of understanding with the
Republic of Panama to study the feasibility of a proposed
Trans-Panama Gateway LPG pipeline and the potential creation of a
new strategically located NGL hub.
Financial
- During the second quarter of 2021, the Partnership reduced
outstanding debt by approximately $1.5 billion, utilizing cash from
operations and proceeds from its recent $900 million Series H
preferred unit offering. Year-to-date in 2021, ET has reduced its
long-term debt by approximately $5.2 billion.
- In May 2021, two credit rating agencies affirmed ET’s
investment grade ratings and revised ET’s outlook from negative to
stable.
- As of June 30, 2021, the Partnership’s $6.00 billion revolving
credit facilities had an aggregate $5.02 billion of available
capacity, and the leverage ratio, as defined by the credit
agreement, was 3.14x.
- For the three months ended June 30, 2021, the Partnership
invested approximately $355 million on growth capital
expenditures.
- In July 2021, ET announced a quarterly distribution of $0.1525
per unit ($0.61 annualized) on ET common units for the quarter
ended June 30, 2021.
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% of the Partnership’s consolidated
Adjusted EBITDA for the three months ended June 30, 2021. 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 3:30 p.m.
Central Time, Tuesday, August 3, 2021 to discuss its second quarter
2021 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 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, natural gas liquids (“NGL”) and refined product
transportation and terminalling assets; NGL fractionation; and
various acquisition and marketing assets. ET 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 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 natural gas 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 we
cannot predict the length and ultimate impact of those risks. The
Partnership has also been, and may in the future be, impacted by
the winter storm in February 2021 and the resolution of related
contingencies, including credit losses, disputed purchases and
sales, litigation and/or potential legislative action. 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)
June 30, 2021
December 31,
2020
ASSETS
Current assets
$
8,208
$
6,317
Property, plant and equipment, net
74,551
75,107
Investments in unconsolidated
affiliates
3,025
3,060
Lease right-of-use assets, net
841
866
Other non-current assets, net
1,664
1,657
Intangible assets, net
5,562
5,746
Goodwill
2,391
2,391
Total assets
$
96,242
$
95,144
LIABILITIES AND EQUITY
Current liabilities (1)
$
8,547
$
5,923
Long-term debt, less current
maturities
45,612
51,417
Non-current derivative liabilities
378
237
Non-current operating lease
liabilities
812
837
Deferred income taxes
3,618
3,428
Other non-current liabilities
1,224
1,152
Commitments and contingencies
Redeemable noncontrolling interests
776
762
Equity:
Limited Partners:
Preferred Unitholders
5,654
—
Common Unitholders
21,579
18,531
General Partner
(5)
(8)
Accumulated other comprehensive income
26
6
Total partners’ capital
27,254
18,529
Noncontrolling interests
8,021
12,859
Total equity
35,275
31,388
Total liabilities and equity
$
96,242
$
95,144
(1) As of June 30, 2021, current
liabilities include $674 million of current maturities of long-term
debt. This total includes all of the $650 million of senior notes
due in April 2022 from the Bakken Pipeline entities, for which our
proportionate ownership is 36.4%.
ENERGY
TRANSFER LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(In millions, except per unit
data)
(unaudited)
Three Months Ended
June 30,
Six Months Ended June 30,
2021
2020
2021
2020
REVENUES
$
15,101
$
7,338
$
32,096
$
18,965
COSTS AND EXPENSES:
Cost of products sold
11,505
4,117
22,453
12,408
Operating expenses
867
770
1,687
1,649
Depreciation, depletion and
amortization
940
936
1,894
1,803
Selling, general and administrative
184
175
385
379
Impairment losses
8
4
11
1,329
Total costs and expenses
13,504
6,002
26,430
17,568
OPERATING INCOME
1,597
1,336
5,666
1,397
OTHER INCOME (EXPENSE):
Interest expense, net of interest
capitalized
(566)
(579)
(1,155)
(1,181)
Equity in earnings of unconsolidated
affiliates
65
85
120
78
Losses on extinguishments of debt
(1)
—
(8)
(62)
Gains (losses) on interest rate
derivatives
(123)
(3)
71
(332)
Other, net
18
(68)
12
(65)
INCOME (LOSS) BEFORE INCOME TAX
EXPENSE
990
771
4,706
(165)
Income tax expense
82
99
157
127
NET INCOME (LOSS)
908
672
4,549
(292)
Less: Net income attributable to
noncontrolling interests
269
306
610
185
Less: Net income attributable to
redeemable noncontrolling interests
13
13
25
25
NET INCOME (LOSS) ATTRIBUTABLE TO
PARTNERS
626
353
3,914
(502)
General Partner’s interest in net income
(loss)
1
—
4
(1)
Preferred Unitholders’ interest in net
income
86
—
86
—
Limited Partners’ interest in net income
(loss)
$
539
$
353
$
3,824
$
(501)
NET INCOME (LOSS) PER LIMITED PARTNER
UNIT:
Basic
$
0.20
$
0.13
$
1.41
$
(0.19)
Diluted
$
0.20
$
0.13
$
1.41
$
(0.19)
WEIGHTED AVERAGE NUMBER OF UNITS
OUTSTANDING:
Basic
2,704.0
2,694.9
2,703.4
2,693.3
Diluted
2,717.8
2,695.8
2,715.5
2,693.3
ENERGY
TRANSFER LP AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
(Dollars and units in
millions)
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2021
2020
2021(a)
2020
Reconciliation of net income (loss) to
Adjusted EBITDA and
Distributable Cash Flow(b):
Net income (loss)
$
908
$
672
$
4,549
$
(292)
Interest expense, net of interest
capitalized
566
579
1,155
1,181
Impairment losses
8
4
11
1,329
Income tax expense
82
99
157
127
Depreciation, depletion and
amortization
940
936
1,894
1,803
Non-cash compensation expense
27
41
55
63
(Gains) losses on interest rate
derivatives
123
3
(71)
332
Unrealized (gains) losses on commodity
risk management activities
(47)
48
(93)
(3)
Losses on extinguishments of debt
1
—
8
62
Inventory valuation adjustments (Sunoco
LP)
(59)
(90)
(159)
137
Equity in earnings of unconsolidated
affiliates
(65)
(85)
(120)
(78)
Adjusted EBITDA related to unconsolidated
affiliates
136
157
259
311
Other, net
(4)
74
11
101
Adjusted EBITDA (consolidated)
2,616
2,438
7,656
5,073
Adjusted EBITDA related to unconsolidated
affiliates
(136)
(157)
(259)
(311)
Distributable cash flow from
unconsolidated affiliates
89
112
165
225
Interest expense, net of interest
capitalized
(566)
(579)
(1,155)
(1,181)
Preferred unitholders’ distributions
(99)
(96)
(195)
(185)
Current income tax expense
(15)
(15)
(24)
(1)
Maintenance capital expenditures
(140)
(136)
(216)
(239)
Other, net
17
18
36
40
Distributable Cash Flow (consolidated)
1,766
1,585
6,008
3,421
Distributable Cash Flow attributable to
Sunoco LP (100%)
(145)
(122)
(253)
(281)
Distributions from Sunoco LP
42
41
83
82
Distributable Cash Flow attributable to
USAC (100%)
(52)
(58)
(105)
(113)
Distributions from USAC
24
24
48
48
Distributable Cash Flow attributable to
noncontrolling interests in other non-wholly-owned consolidated
subsidiaries
(251)
(209)
(502)
(499)
Distributable Cash Flow attributable to
the partners of ET
1,384
1,261
5,279
2,658
Transaction-related adjustments
9
10
28
30
Distributable Cash Flow attributable to
the partners of ET, as adjusted
$
1,393
$
1,271
$
5,307
$
2,688
Distributions to partners:
Limited Partners
$
413
$
822
$
825
$
1,644
General Partner
1
1
1
2
Total distributions to be paid to
partners
$
414
$
823
$
826
$
1,646
Common Units outstanding – end of
period
2,704.6
2,695.6
2,704.6
2,695.6
Distribution coverage ratio
3.36x
1.54x
6.42x
1.63x
(a) Winter Storm Uri, which occurred in February 2021, resulted
in one-time impacts to the Partnership’s consolidated net income,
Adjusted EBITDA and Distributable Cash Flow. Please see additional
discussion of these impacts, as well as the potential impacts to
future periods, included in the “Summary Analysis of Quarterly
Results by Segment” below.
(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. Inventory adjustments that
are excluded from the calculation of Adjusted EBITDA represent only
the changes in lower of cost or market reserves on inventory that
is carried at last-in, first-out (“LIFO”). These amounts are
unrealized valuation adjustments applied to Sunoco LP’s fuel
volumes remaining in inventory at the end of the period.
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. The use of Adjusted
EBITDA or Adjusted EBITDA related to unconsolidated affiliates as
an analytical tool should be limited accordingly.
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 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,
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 June 30,
2021
2020
Segment Adjusted EBITDA:
Intrastate transportation and storage
$
224
$
187
Interstate transportation and storage
331
403
Midstream
477
367
NGL and refined products transportation
and services
736
674
Crude oil transportation and services
484
519
Investment in Sunoco LP
201
182
Investment in USAC
100
105
All other
63
1
Total Segment Adjusted EBITDA
$
2,616
$
2,438
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 June 30,
2021
2020
Natural gas transported (BBtu/d)
13,205
12,921
Withdrawals from storage natural gas
inventory (BBtu)
10,643
(1,910)
Revenues
$
949
$
516
Cost of products sold
664
248
Segment margin
285
268
Unrealized gains on commodity risk
management activities
(5)
(33)
Operating expenses, excluding non-cash
compensation expense
(55)
(48)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(9)
(6)
Adjusted EBITDA related to unconsolidated
affiliates
7
6
Other
1
—
Segment Adjusted EBITDA
$
224
$
187
Transported volumes increased primarily due to volume ramp-ups
in the Permian.
Segment Adjusted EBITDA. For the three months ended June 30,
2021 compared to the same period last year, Segment Adjusted EBITDA
related to our intrastate transportation segment increased due to
the net effects of the following:
- an increase of $52 million in transportation fees due to
revenues related to Winter Storm Uri of $39 million, as well as
increased firm transportation volumes from the Permian, partially
offset by the expiration of certain contracts on our Regency
Intrastate Gas System; and
- an increase of $13 million in retained fuel revenues primarily
due to higher gas prices; partially offset by
- a decrease of $11 million in realized natural gas sales and
other primarily due to lower optimization volumes with shifts to
long-term third-party contracts from the Permian to the Gulf
Coast;
- a decrease of $9 million in realized storage margin due to
lower storage optimization; and
- an increase of $7 million in operating expenses primarily due
to higher cost of fuel consumption from higher gas prices.
Interstate Transportation and Storage
Three Months Ended June 30,
2021
2020
Natural gas transported (BBtu/d)
9,735
10,152
Natural gas sold (BBtu/d)
18
17
Revenues
$
407
$
445
Operating expenses, excluding non-cash
compensation, amortization and accretion expenses
(143)
(139)
Selling, general and administrative
expenses, excluding non-cash compensation, amortization
and accretion expenses
(21)
(16)
Adjusted EBITDA related to unconsolidated
affiliates
89
115
Other
(1)
(2)
Segment Adjusted EBITDA
$
331
$
403
Transported volumes decreased primarily due to foundation
shipper contract expirations and a shipper bankruptcy on our Tiger
system, as well as lower utilization resulting from unfavorable
market conditions on our Panhandle and Trunkline systems, partially
offset by increased short-term firm and interruptible utilization
on our Rover system.
Segment Adjusted EBITDA. For the three months ended June 30,
2021 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 $38 million in revenues primarily due to a $30
million decline as a result of shipper contract expirations on our
Tiger system and a $14 million decline due to a shipper bankruptcy
during 2020 also on our Tiger system. These decreases were
partially offset by an increase of $6 million from interruptible
and short-term firm transportation volumes sold primarily on our
Rover system due to increased demand on the system;
- an increase of $4 million in operating expenses primarily due
to higher employee costs of $12 million, partially offset by credit
losses recorded in 2020 related to a shipper bankruptcy;
- an increase of $5 million in selling, general and
administrative expenses primarily due to higher allocated overhead
costs and employee costs; and
- a decrease of $26 million in Adjusted EBITDA related to
unconsolidated affiliates primarily due to a $19 million decrease
from our Fayetteville Express Pipeline joint venture as a result of
the expiration of foundation shipper contracts, a $4 million
decrease from our Citrus joint venture resulting from higher
employee costs and maintenance project costs and a $3 million
decrease from our Midcontinent Express Pipeline joint venture as a
result of lower revenue due to capacity sold at lower rates.
Midstream
Three Months Ended June 30,
2021
2020
Gathered volumes (BBtu/d)
13,112
12,964
NGLs produced (MBbls/d)
665
602
Equity NGLs (MBbls/d)
38
37
Revenues
$
2,199
$
1,018
Cost of products sold
1,509
473
Segment margin
690
545
Operating expenses, excluding non-cash
compensation expense
(196)
(166)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(27)
(20)
Adjusted EBITDA related to unconsolidated
affiliates
8
7
Other
2
1
Segment Adjusted EBITDA
$
477
$
367
Gathered volumes and NGL production increased compared to the
same period last year primarily due to increases in the Permian,
Ark-La-Tex, South Texas and North Texas regions, partially offset
by volume declines in the Northeast and Mid-Continent/Panhandle
regions.
Segment Adjusted EBITDA. For the three months ended June 30,
2021 compared to the same period last year, Segment Adjusted EBITDA
related to our midstream segment increased due to the net impacts
of the following:
- an increase of $111 million in non-fee-based margin due to
favorable NGL prices of $75 million and natural gas prices of $36
million;
- an increase of $15 million in non-fee-based margin due to
increased throughput in the Permian region and the ramp-up of
recently completed assets in the Northeast region; and
- an increase of $19 million in fee-based margin due to volume
growth in the Permian region; partially offset by
- an increase of $30 million in operating expenses due to
increases of $19 million in employee costs, $4 million in outside
services, $3 million in allocated overhead costs and $2 million in
maintenance project costs; and
- an increase of $7 million in selling, general and
administrative expenses due to higher allocated overhead
costs.
NGL and Refined Products Transportation and Services
Three Months Ended June 30,
2021
2020
NGL transportation volumes (MBbls/d)
1,748
1,401
Refined products transportation volumes
(MBbls/d)
510
377
NGL and refined products terminal volumes
(MBbls/d)
1,186
746
NGL fractionation volumes (MBbls/d)
833
836
Revenues
$
4,522
$
2,119
Cost of products sold
3,547
1,368
Segment margin
975
751
Unrealized (gains) losses on commodity
risk management activities
(46)
78
Operating expenses, excluding non-cash
compensation expense
(194)
(154)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(27)
(19)
Adjusted EBITDA related to unconsolidated
affiliates
28
18
Segment Adjusted EBITDA
$
736
$
674
NGL transportation volumes increased primarily due to the
initiation of service on our propane and ethane export pipelines
into our Nederland Terminal in the fourth quarter of 2020, higher
volumes from the Eagle Ford region and higher volumes on our
Mariner East and West pipeline systems.
Refined products transportation volumes increased due to
recovery from COVID-19 related demand reduction in the prior
period.
NGL and refined products terminal volumes increased primarily
due to increased export volumes at our Nederland Terminal due to
the initiation of service on our propane and ethane export
pipelines in the fourth quarter of 2020, higher throughput volumes
on our Mariner East and West pipeline systems and increased
throughput at our refined product terminals due to recovery from
COVID-19 related demand reduction in the prior period.
Segment Adjusted EBITDA. For the three months ended June 30,
2021 compared to the same period last year, Segment Adjusted EBITDA
related to our NGL and refined products transportation and services
segment increased due to the net impacts of the following:
- an increase of $40 million in transportation margin primarily
due to a $27 million increase due to higher export volumes feeding
into our Nederland Terminal and a $17 million increase from higher
throughput on our Mariner pipeline system;
- an increase of $34 million in terminal services margin
primarily due to a $22 million increase in ethane export fees at
our Nederland Terminal, a $10 million increase due to higher
throughput at our Marcus Hook Terminal, an increase of $9 million
in loading fees due to higher LPG export volumes at our Nederland
Terminal and a $5 million increase due to higher throughput at our
refined product terminals. These increases were partially offset by
an $11 million decrease resulting from an expiration of a
third-party contract at our Nederland Terminal in the second
quarter of 2020;
- an increase of $15 million in storage margin primarily due to a
$9 million increase in fees generated from exported volumes, as
well as increases related to blending activity due to a more
favorable pricing environment and the timing of cavern withdrawals;
and
- an increase of $10 million in fractionators and refinery
services margin primarily due to a more favorable pricing
environment impacting our refinery services business; partially
offset by
- an increase of $40 million in operating expenses primarily due
to a $19 million increase in utilities cost, a $12 million increase
in employee related costs and an $8 million increase in allocated
corporate overhead costs; and
- an increase of $8 million in selling, general and
administrative expenses primarily due to corporate cost reductions
in 2020.
Crude Oil Transportation and Services
Three Months Ended June 30,
2021
2020
Crude transportation volumes (MBbls/d)
3,943
3,549
Crude terminals volumes (MBbls/d)
2,532
2,703
Revenues
$
4,420
$
1,814
Cost of products sold
3,764
1,150
Segment margin
656
664
Unrealized losses on commodity risk
management activities
3
—
Operating expenses, excluding non-cash
compensation expense
(150)
(131)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(28)
(26)
Adjusted EBITDA related to unconsolidated
affiliates
3
11
Other
—
1
Segment Adjusted EBITDA
$
484
$
519
Crude transportation volumes were higher on our Texas pipeline
system and Bakken pipeline, driven by a recovery in crude oil
production in these regions as a result of higher crude oil prices
as well as a recovery in refinery utilization. Volumes on our Bayou
Bridge pipeline were also higher, driven by more favorable crude
oil differentials for shippers. Crude Terminal volumes were lower
primarily due to reduced export demand.
Segment Adjusted EBITDA. For the three months ended June 30,
2021 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 $5 million in segment margin (excluding
unrealized gains and losses on commodity risk management
activities) primarily due to a $35 million decrease from our Texas
crude pipeline system due to lower average tariff rates, a $17
million decrease (excluding unrealized gains and losses on
commodity risk management activities) from our crude oil
acquisition and marketing business due primarily to storage trading
gains realized in the second quarter of 2020 due to favorable
market conditions and a $2 million decrease in throughput at our
crude terminals primarily driven by lower export demand; partially
offset by a $33 million increase due to higher volumes on our
Bakken Pipeline and a $17 million increase due to higher volumes on
our Bayou Bridge pipeline;
- an increase of $19 million in operating expenses primarily due
to the timing of higher utility expenses resulting from Winter
Storm Uri and timing of maintenance projects;
- an increase of $2 million in selling, general and
administrative expenses primarily due to higher corporate
allocations to the crude segment; and
- a decrease of $8 million in Adjusted EBITDA related to
unconsolidated affiliates due to lower volumes on White Cliffs
pipeline from lower crude oil production.
Investment in Sunoco LP
Three Months Ended June 30,
2021
2020
Revenues
$
4,392
$
2,080
Cost of products sold
4,039
1,722
Segment margin
353
358
Unrealized gains on commodity risk
management activities
(2)
—
Operating expenses, excluding non-cash
compensation expense
(75)
(72)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(24)
(22)
Adjusted EBITDA related to unconsolidated
affiliates
2
3
Inventory valuation adjustments
(59)
(90)
Other
6
5
Segment Adjusted EBITDA
$
201
$
182
The Investment in Sunoco LP segment reflects the consolidated
results of Sunoco LP.
Segment Adjusted EBITDA. For the three months ended June 30,
2021 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 in the gross profit on motor fuel sales of $12
million primarily due to a 27.6% increase in gallons sold,
partially offset by a 16.6% decrease in gross profit per gallon
sold; and
- an increase in non-motor fuel sales of $12 million primarily
due to increased credit card transactions, merchandise gross profit
and franchise fee income; partially offset by
- an increase in operating expenses and selling, general and
administrative expenses primarily due to higher maintenance and
advertising costs.
Investment in USAC
Three Months Ended
June 30,
2021
2020
Revenues
$
156
$
169
Cost of products sold
21
18
Segment margin
135
151
Operating expenses, excluding non-cash
compensation expense
(24)
(30)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(11)
(16)
Segment Adjusted EBITDA
$
100
$
105
The Investment in USAC segment reflects the consolidated results
of USAC.
Segment Adjusted EBITDA. For the three months ended June 30,
2021 compared to the same period last year, Segment Adjusted EBITDA
related to our investment in USAC segment decreased due to the net
impacts of the following:
- a decrease of $16 million in segment margin primarily due to a
decrease in demand for compression services driven by continued
capital discipline and optimization of existing compression service
requirements by existing customers; partially offset by
- a decrease of $6 million in operating expenses primarily due to
sales tax refunds received in the current period; and
- a decrease of $5 million in selling, general and administrative
expenses primarily due to a $2 million decrease in the provision
for expected credit losses and a $2 million decrease in severance
charges related to the departure of an executive.
All Other
Three Months Ended June 30,
2021
2020
Revenues
$
576
$
492
Cost of products sold
470
377
Segment margin
106
115
Unrealized losses on commodity risk
management activities
3
2
Operating expenses, excluding non-cash
compensation expense
(38)
(27)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(19)
(22)
Other and eliminations
11
(67)
Segment Adjusted EBITDA
$
63
$
1
For the three months ended June 30, 2021 compared to the same
period last year, Segment Adjusted EBITDA related to our all other
segment increased primarily due to the net impacts of the
following:
- an increase of $8 million from power trading activities;
- an increase of $14 million due to the realization of amounts in
excess of book values on previously reserved receivables in our
marketing business;
- an increase of $11 million primarily due to higher gas revenue
and lower power costs at our compressor equipment business;
- an increase of $7 million due to lower allocated utility
expense;
- an increase of $9 million due to lower corporate expenses;
and
- an increase of $4 million primarily due to increased service
fees and foreign currency fluctuations at Energy Transfer Canada.
ENERGY
TRANSFER LP AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION ON LIQUIDITY
(In millions)
(unaudited)
The following table is a summary
of our 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
June 30, 2021
Maturity Date
Five-Year Revolving Credit Facility
$
5,000
$
4,024
December 1, 2024
364-Day Revolving Credit Facility
1,000
1,000
November 26, 2021
$
6,000
$
5,024
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 June 30,
2021
2020
Equity in earnings (losses) of
unconsolidated affiliates:
Citrus
$
42
$
42
FEP
—
18
MEP
(4)
(2)
White Cliffs
1
9
Other
26
18
Total equity in earnings (losses) of
unconsolidated affiliates
$
65
$
85
Adjusted EBITDA related to
unconsolidated affiliates:
Citrus
$
85
89
FEP
—
19
MEP
5
7
White Cliffs
5
13
Other
41
29
Total Adjusted EBITDA related to
unconsolidated affiliates
$
136
$
157
Distributions received from
unconsolidated affiliates:
Citrus
$
29
$
58
FEP
—
17
MEP
4
7
White Cliffs
5
10
Other
26
20
Total distributions received from
unconsolidated affiliates
$
64
$
112
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 June 30,
2021
2020
Adjusted EBITDA of non-wholly-owned
subsidiaries (100%) (a)
$
549
$
494
Our proportionate share of Adjusted EBITDA
of non-wholly-owned subsidiaries (b)
283
264
Distributable Cash Flow of
non-wholly-owned subsidiaries (100%) (c)
$
508
$
456
Our proportionate share of Distributable
Cash Flow of non-wholly-owned subsidiaries (d)
257
247
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 %
Energy Transfer Canada
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/20210803006040/en/
Energy Transfer Investor Relations: Bill Baerg, Brent
Ratliff, Lyndsay Hannah, 214-981-0795 or Media Relations:
Vicki Granado, 214-840-5820
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