Energy Transfer Equity, L.P. (NYSE:ETE) (“ETE” or the
“Partnership”) today reported financial results for the quarter
ended March 31, 2018.
ETE’s net income attributable to partners was $363 million for
the three months ended March 31, 2018, an increase of $124
million compared to $239 million for the three months ended
March 31, 2017. Distributable Cash Flow, as adjusted, for the
three months ended March 31, 2018 was $395 million, an
increase of $180 million compared to $215 million for the three
months ended March 31, 2017. The improved results reflect an
increase of $183 million in general partner and incentive
distributions from Energy Transfer Partners, L.P. (“ETP”) of which
$115 million was attributable to a reduction in incentive
distribution waivers.
The Partnership’s recent key accomplishments and other
developments include the following:
- In April 2018, ETE acquired the general
partner of USA Compression Partners, LP (“USAC”) and approximately
12.5 million USAC common units from USA Compression Holdings,
LLC.
- In April 2018, ETE announced a $0.305
distribution per ETE common unit for the quarter ended
March 31, 2018, or $1.22 per unit on an annualized basis.
- As of March 31, 2018, ETE’s $1.5
billion revolving credit facility had $873 million of outstanding
borrowings and its leverage ratio, as defined by the credit
agreement, was 2.79x.
- In January 2018, Sunoco LP redeemed all
outstanding Sunoco LP Series A Preferred Units, for which ETE
received proceeds of approximately $313 million.
The Partnership has scheduled a conference call for 8:00 a.m.
Central Time, Thursday, May 10, 2018 to discuss its first
quarter 2018 results. The conference call will be broadcast live
via an internet webcast, which can be accessed through www.energytransfer.com and will also be available
for replay on the Partnership’s website for a limited time.
The Partnership’s principal sources of cash flow are derived
from distributions related to its direct and indirect investments
in the limited and general partner interests in ETP, including 100%
of ETP’s incentive distribution rights, limited and general partner
interests in Sunoco LP, as well as the Partnership’s ownership of
Lake Charles LNG Company, LLC (“Lake Charles LNG”). Subsequent to
the acquisition on April 2, 2018, the Partnership also owns
interests in USAC, as discussed above. The Partnership’s primary
cash requirements are for general and administrative expenses, debt
service requirements and distributions to its partners.
Energy Transfer Equity, L.P. (NYSE: ETE) is a master
limited partnership that owns the general partner and 100% of the
incentive distribution rights (IDRs) of Energy Transfer
Partners, L.P. (NYSE: ETP) and Sunoco LP (NYSE: SUN). ETE also
owns Lake Charles LNG Company and the general partner of USA
Compression Partners, LP (NYSE: USAC). On a consolidated basis,
ETE’s family of companies owns and operates a diverse portfolio of
natural gas, natural gas liquids, crude oil and refined products
assets, as well as retail and wholesale motor fuel operations and
LNG terminalling. For more information, visit the Energy Transfer
Equity, L.P. website at www.energytransfer.com.
Energy Transfer Partners, L.P. (NYSE: ETP) is a
master limited partnership that owns and operates one of the
largest and most diversified portfolios of energy assets in the
United States. Strategically positioned in all of the major U.S.
production basins, ETP owns and operates a geographically diverse
portfolio of complementary natural gas midstream, intrastate and
interstate transportation and storage assets; crude oil, natural
gas liquids (NGL) and refined product transportation and
terminalling assets; NGL fractionation; and various acquisition and
marketing assets. ETP’s general partner is owned by Energy Transfer
Equity, L.P. (NYSE: ETE). For more information, visit the Energy
Transfer Partners, L.P. website at www.energytransfer.com.
Sunoco LP (NYSE: SUN) is a master limited partnership
that distributes motor fuel to approximately 9,200 convenience
stores, independent dealers, commercial customers and distributors
located in more than 30 states. SUN’s general partner is owned by
Energy Transfer Equity, L.P. (NYSE: ETE). 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 unit horsepower. USAC
partners with a broad customer base composed of producers,
processors, gatherers and transporters of natural gas. USAC focuses
on providing compression services to infrastructure applications
primarily in high volume gathering systems, processing facilities
and transportation applications. More information is available
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. The Partnership undertakes no
obligation to update or revise any forward-looking statement to
reflect new information or events.
The information contained in this press release is available on
our website at www.energytransfer.com.
ENERGY TRANSFER
EQUITY, L.P. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In millions)
(unaudited)
March 31, 2018 December 31, 2017
ASSETS Current
assets $ 6,593 $ 10,683 Property, plant and equipment, net
61,975 61,088 Advances to and investments in unconsolidated
affiliates 2,701 2,705 Other non-current assets, net 936 886
Intangible assets, net 5,936 6,116 Goodwill 4,768
4,768 Total assets $ 82,909 $ 86,246
LIABILITIES AND EQUITY Current liabilities $ 7,261 $ 7,897
Long-term debt, less current maturities 41,779 43,671
Non-current derivative liabilities 97 145 Deferred income taxes
3,026 3,315 Other non-current liabilities 1,244 1,217
Commitments and contingencies Redeemable noncontrolling interests
21 21 Equity: Total partners’ deficit (1,180 ) (1,196 )
Noncontrolling interest 30,661 31,176
Total equity 29,481 29,980 Total
liabilities and equity $ 82,909 $ 86,246
ENERGY TRANSFER
EQUITY, L.P. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per unit data)
(unaudited)
Three Months EndedMarch 31, 2018 2017 REVENUES
$ 11,882 $ 9,661 COSTS AND EXPENSES: Cost of products sold 9,245
7,510 Operating expenses 724 601 Depreciation and amortization 665
628 Selling, general and administrative 148
165 Total costs and expenses 10,782
8,904 OPERATING INCOME 1,100 757 OTHER INCOME (EXPENSE):
Interest expense, net of interest capitalized (466 ) (473 ) Equity
in earnings of unconsolidated affiliates 79 87 Losses on
extinguishments of debt (106 ) (25 ) Gains on interest rate
derivatives 52 5 Other, net 57 17
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX (BENEFIT)
EXPENSE 716 368 Income tax (benefit) expense from continuing
operations (10 ) 38 INCOME FROM CONTINUING
OPERATIONS 726 330 Loss from discontinued operations (237 )
(11 ) NET INCOME 489 319 Less: Net income attributable to
noncontrolling interest 126 80 NET
INCOME ATTRIBUTABLE TO PARTNERS 363 239 General Partner’s interest
in net income 1 1 Convertible Unitholders’ interest in income
21 6 Limited Partners’ interest in net
income $ 341 $ 232 INCOME FROM CONTINUING OPERATIONS
PER LIMITED PARTNER UNIT: Basic $ 0.32 $ 0.22 Diluted
$ 0.32 $ 0.21 NET INCOME PER LIMITED PARTNER UNIT:
Basic $ 0.31 $ 0.22 Diluted $ 0.31 $ 0.21
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING: Basic
1,079.1 1,075.2 Diluted 1,154.7
1,139.0
ENERGY TRANSFER
EQUITY, L.P.
SUPPLEMENTAL
INFORMATION
(In millions)
(unaudited)
Three Months EndedMarch 31, 2018 2017 Cash
distributions from ETP associated with: Limited partner interest $
16 $ 15 General partner interest and IDRs 449 381 IDR
relinquishments, net of distributions on Class I Units (42 )
(157 ) Total cash distributions from ETP 423 239 Cash
distributions from Sunoco LP 20 23
Total cash distributions from investments in subsidiaries $ 443 $
262 Distributable cash flow attributable to Lake Charles
LNG: Revenues $ 49 $ 49 Operating expenses (5 ) (5 ) Selling,
general and administrative expenses (1 ) —
Distributable cash flow attributable to Lake Charles LNG $ 43 $ 44
Expenses of the Parent Company on a cash basis: Selling,
general and administrative expenses, excluding certain non-cash
expenses $ 2 $ 8 Management fee to ETP (1) — 5 Interest expense,
net of amortization of financing costs, interest income, and
realized gains and losses on interest rate swaps 84
81 Total Parent Company expenses $ 86 $ 94
Cash distributions to be paid to the partners of ETE: Distributions
to be paid to limited partners (2) $ 265 $ 250 Distributions to be
paid to general partner 1 1 Total cash
distributions to be paid to the partners of ETE $ 266 $ 251
Common units outstanding — end of period
1,079.1 1,079.1
(1)
ETE previously paid certain fees for management services under
agreements expired in the first quarter of 2017.
(2)
Includes distributions of $0.11 per common unit for the three
months ended March 31, 2017 and 2018, to unitholders who elected to
participate in a plan to forgo a portion of their future potential
cash distributions on common units and reinvest those distributions
in ETE Series A convertible preferred units representing limited
partner interests in the Partnership. The quarter ended March 31,
2018 is the final quarter of participation in the plan.
SUPPLEMENTAL
INFORMATION
RECONCILIATION OF
DISTRIBUTABLE CASH FLOW
(Dollars in millions)
(unaudited)
Three Months EndedMarch 31, 2018 2017 Net
income attributable to partners $ 363 $ 239 Equity in earnings
related to investments in ETP and Sunoco LP (414 ) (325 ) Total
cash distributions from investments in subsidiaries 443 262
Amortization included in interest expense (excluding ETP and Sunoco
LP) 2 2 Other non-cash (excluding ETP and Sunoco LP) 6
34 Distributable Cash Flow 400 212
Transaction-related expenses (recovery of prior expenses) (5
) 3 Distributable Cash Flow, as adjusted $ 395
$ 215 Total cash distributions to be paid to the
partners of ETE $ 266 $ 251 Distribution
coverage ratio(1)
1.48
x
0.86
x
(1)
This press release and accompanying schedules include the
non-generally accepted accounting principle (“non-GAAP”) financial
measures of Distributable Cash Flow, Distributable Cash Flow, as
adjusted, and Distributable Cash Flow, as adjusted, per Unit. The
Partnership’s non-GAAP financial measures should not be considered
as alternatives to GAAP financial measures such as net income, cash
flow from operating activities or any other GAAP measure of
liquidity or financial performance.
Distributable Cash Flow and Distributable
Cash Flow, as adjusted. The Partnership defines
Distributable Cash Flow and Distributable Cash Flow, as adjusted,
for a period as cash distributions expected to be received in
respect of such period in connection with the Partnership’s
investments in limited and general partner interests, net of the
Partnership’s cash expenditures for general and administrative
costs and interest expense. The Partnership’s definitions of
Distributable Cash Flow and Distributable Cash Flow, as adjusted,
also include distributable cash flow from Lake Charles LNG to the
Partnership. For Distributable Cash Flow, as adjusted, certain
transaction-related expenses that are included in net income are
excluded.
Distributable Cash Flow is a significant liquidity measure used
by the Partnership’s senior management to compare net cash flows
generated by the Partnership to the distributions the Partnership
expects to pay its unitholders. Due to cash expenses incurred from
time to time in connection with the Partnership’s merger and
acquisition activities and other transactions, Distributable Cash
Flow, as adjusted, is also a significant liquidity measure used by
the Partnership’s senior management to compare net cash flows
generated by the Partnership to the distributions the Partnership
expects to pay its unitholders. Using these measures, the
Partnership’s management can compute the coverage ratio of
estimated cash flows for a period to planned cash distributions for
such period.
Distributable Cash Flow and Distributable Cash Flow, as
adjusted, are also important non-GAAP financial measures for our
limited partners since these indicate to investors whether the
Partnership’s investments are generating cash flows at a level that
can sustain or support an increase in quarterly cash distribution
levels. Financial measures such as Distributable Cash Flow and
Distributable Cash Flow, as adjusted, are quantitative standards
used by the investment community with respect to publicly traded
partnerships because the value of a partnership unit is in part
measured by its yield (which in turn is based on the amount of cash
distributions a partnership can pay to a unitholder). The GAAP
measure most directly comparable to Distributable Cash Flow, and
Distributable Cash Flow, as adjusted, is net income for ETE on a
stand-alone basis (the “Parent Company”).
Distribution Coverage Ratio. The
Partnership defines Distribution Coverage Ratio for a period as
Distributable Cash Flow, as adjusted, divided by total cash
distributions expected to be paid to the partners of ETE in respect
of such period.
SUPPLEMENTAL
INFORMATIONFINANCIAL STATEMENTS
FOR PARENT COMPANY
Following are condensed balance sheets and
statements of operations of the Parent Company on a stand-alone
basis.
BALANCE
SHEETS
(In millions)
(unaudited)
March 31, 2018 December 31, 2017
ASSETS Current
assets $ 105 $ 67 Property, plant and equipment, net 27 27 Advances
to and investments in unconsolidated affiliates 5,805 6,082
Goodwill 9 9 Other non-current assets, net 8 8
Total assets $ 5,954 $ 6,193
LIABILITIES
AND PARTNERS’ DEFICIT Current liabilities $ 87 $ 70 Long-term
debt, less current maturities 6,386 6,700 Long-term notes payable –
related companies 658 617 Other non-current liabilities 3 2
Commitments and contingencies Total partners’ deficit (1,180
) (1,196 ) Total liabilities and partners’ deficit $ 5,954
$ 6,193
STATEMENTS OF
OPERATIONS
(In millions)
(unaudited)
Three Months EndedMarch 31, 2018 2017 SELLING,
GENERAL AND ADMINISTRATIVE EXPENSES $ (2 ) $ (13 ) OTHER INCOME
(EXPENSE): Interest expense, net (86 ) (83 ) Equity in earnings of
unconsolidated affiliates 448 361 Losses on extinguishments of debt
— (25 ) Other, net 3 (1 ) NET INCOME 363 239
General Partner’s interest in net income 1 1 Convertible
Unitholders’ interest in income 21 6
Limited Partners’ interest in net income $ 341 $ 232
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Energy TransferInvestor Relations:Lyndsay Hannah, Brent
Ratliff, Helen Ryoo, 214-981-0795orMedia Relations:Vicki
Granado, 214-840-5820
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