Energy Transfer LP (NYSE:ET) (“ET” or the “Partnership”)
today reported financial results for the quarter ended September
30, 2021.
ET reported net income attributable to partners for the three
months ended September 30, 2021 of $635 million, an increase of
$1.29 billion compared to the same period the previous year. For
the three months ended September 30, 2021, net income per limited
partner unit (basic and diluted) was $0.20 per unit.
Adjusted EBITDA for the three months ended September 30, 2021
was $2.58 billion compared to $2.87 billion for the three months
ended September 30, 2020. The third quarter of 2020 benefited from
approximately $300 million of one-time items and gains from
optimization activities that did not re-occur in the current
period.
Distributable Cash Flow attributable to partners, as adjusted,
for the three months ended September 30, 2021 was $1.31 billion
compared to $1.69 billion for the three months ended September 30,
2020. The decrease was primarily driven by the decrease in Adjusted
EBITDA discussed above.
Key accomplishments and current developments:
Operational
- In the third quarter of 2021, ET reached a new record for NGL
transportation and fractionation volumes, as well as for NGL and
refined product terminal volumes.
- ET recently completed its Permian Bridge project, which
provides increased connectivity and efficiency between ET’s natural
gas gathering and processing assets in the Delaware Basin and its
assets in the Midland Basin.
- ET has also commissioned the next phase of the Mariner East
Pipeline Project (ME2X).
Strategic
- In September 2021, ET’s patented Dual Drive Technologies
natural gas compression system received a GPA Midstream
Environmental Excellence Award for its impact on reducing CO2
emissions.
- In September 2021, ET entered into its second major solar
energy power purchase arrangement. The agreement is for 120
megawatts of electricity from the Eiffel Solar project in Northeast
Texas.
- During the third quarter, ET signed a memorandum of
understanding with the Republic of Panama to study the feasibility
of a proposed Trans-Panama Gateway LPG pipeline and is reviewing
the potential creation of a new strategically located NGL hub in
Panama.
- ET and Enable Midstream Partners, LP continue to work toward
obtaining Hart-Scott-Rodino Act clearance for their previously
announced merger. ET continues to expect the transaction to close
in the fourth quarter of 2021.
Financial
- During the third quarter of 2021, the Partnership reduced
outstanding debt by approximately $800 million, utilizing cash from
operations. Year-to-date in 2021, ET has reduced its long-term debt
by approximately $6.0 billion.
- As of September 30, 2021, the Partnership’s $6.00 billion
revolving credit facilities had an aggregate $5.37 billion of
available capacity, and the leverage ratio, as defined by the
credit agreement, was 3.15x.
- For the three months ended September 30, 2021, the Partnership
invested approximately $362 million on growth capital
expenditures.
- In October 2021, ET announced a quarterly distribution of
$0.1525 per unit ($0.61 annualized) on ET common units for the
quarter ended September 30, 2021.
- For full year of 2021, ET expects its adjusted EBITDA to be
$12.9 billion to $13.3 billion and its growth capital expenditures
to be approximately $1.6 billion.
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 September 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, Wednesday, November 3, 2021 to discuss its third
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)
September 30, 2021
December 31, 2020
ASSETS
Current assets
$
9,049
$
6,317
Property, plant and equipment, net
74,271
75,107
Investments in unconsolidated
affiliates
2,958
3,060
Lease right-of-use assets, net
829
866
Other non-current assets, net
1,722
1,657
Intangible assets, net
5,474
5,746
Goodwill
2,395
2,391
Total assets
$
96,698
$
95,144
LIABILITIES AND EQUITY
Current liabilities (1)
$
9,834
$
5,923
Long-term debt, less current
maturities
44,793
51,417
Non-current derivative liabilities
187
237
Non-current operating lease
liabilities
799
837
Deferred income taxes
3,683
3,428
Other non-current liabilities
1,270
1,152
Commitments and contingencies
Redeemable noncontrolling interests
783
762
Equity:
Limited Partners:
Preferred Unitholders
5,671
—
Common Unitholders
21,726
18,531
General Partner
(5
)
(8
)
Accumulated other comprehensive income
19
6
Total partners’ capital
27,411
18,529
Noncontrolling interests
7,938
12,859
Total equity
35,349
31,388
Total liabilities and equity
$
96,698
$
95,144
(1)
As of September 30, 2021, current
liabilities include $678 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 September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
REVENUES
$
16,664
$
9,955
$
48,760
$
28,920
COSTS AND EXPENSES:
Cost of products sold
13,188
6,376
35,641
18,784
Operating expenses
898
773
2,585
2,422
Depreciation, depletion and
amortization
943
912
2,837
2,715
Selling, general and administrative
198
176
583
555
Impairment losses
—
1,474
11
2,803
Total costs and expenses
15,227
9,711
41,657
27,279
OPERATING INCOME
1,437
244
7,103
1,641
OTHER INCOME (EXPENSE):
Interest expense, net of interest
capitalized
(558
)
(569
)
(1,713
)
(1,750
)
Equity in earnings (losses) of
unconsolidated affiliates
71
(32
)
191
46
Impairment of investment in an
unconsolidated affiliate
—
(129
)
—
(129
)
Losses on extinguishments of debt
—
—
(8
)
(62
)
Gains (losses) on interest rate
derivatives
1
55
72
(277
)
Other, net
33
71
45
6
INCOME (LOSS) BEFORE INCOME TAX
EXPENSE
984
(360
)
5,690
(525
)
Income tax expense
77
41
234
168
NET INCOME (LOSS)
907
(401
)
5,456
(693
)
Less: Net income attributable to
noncontrolling interests
260
242
870
427
Less: Net income attributable to
redeemable noncontrolling interests
12
12
37
37
NET INCOME (LOSS) ATTRIBUTABLE TO
PARTNERS
635
(655
)
4,549
(1,157
)
General Partner’s interest in net income
(loss)
1
—
5
(1
)
Preferred Unitholders’ interest in net
income
99
—
185
—
Limited Partners’ interest in net income
(loss)
$
535
$
(655
)
$
4,359
$
(1,156
)
NET INCOME (LOSS) PER LIMITED PARTNER
UNIT:
Basic
$
0.20
$
(0.24
)
$
1.61
$
(0.43
)
Diluted
$
0.20
$
(0.24
)
$
1.60
$
(0.43
)
WEIGHTED AVERAGE NUMBER OF UNITS
OUTSTANDING:
Basic
2,705.2
2,696.6
2,704.0
2,694.4
Diluted
2,720.6
2,696.6
2,718.4
2,694.4
ENERGY
TRANSFER LP AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
(Dollars and units in
millions)
(unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021(a)
2020
Reconciliation of net income (loss) to
Adjusted EBITDA and Distributable Cash Flow(b):
Net income (loss)
$
907
$
(401
)
$
5,456
$
(693
)
Interest expense, net of interest
capitalized
558
569
1,713
1,750
Impairment losses
—
1,474
11
2,803
Income tax expense
77
41
234
168
Depreciation, depletion and
amortization
943
912
2,837
2,715
Non-cash compensation expense
26
30
81
93
(Gains) losses on interest rate
derivatives
(1
)
(55
)
(72
)
277
Unrealized (gains) losses on commodity
risk management activities
19
30
(74
)
27
Losses on extinguishments of debt
—
—
8
62
Impairment of investment in an
unconsolidated affiliate
—
129
—
129
Inventory valuation adjustments (Sunoco
LP)
(9
)
(11
)
(168
)
126
Equity in (earnings) losses of
unconsolidated affiliates
(71
)
32
(191
)
(46
)
Adjusted EBITDA related to unconsolidated
affiliates
141
169
400
480
Other, net
(11
)
(53
)
—
48
Adjusted EBITDA (consolidated)
2,579
2,866
10,235
7,939
Adjusted EBITDA related to unconsolidated
affiliates
(141
)
(169
)
(400
)
(480
)
Distributable cash flow from
unconsolidated affiliates
103
128
268
353
Interest expense, net of interest
capitalized
(558
)
(569
)
(1,713
)
(1,750
)
Preferred unitholders’ distributions
(110
)
(97
)
(305
)
(282
)
Current income tax expense
(10
)
(7
)
(34
)
(8
)
Maintenance capital expenditures
(155
)
(129
)
(371
)
(368
)
Other, net
14
17
50
57
Distributable Cash Flow (consolidated)
1,722
2,040
7,730
5,461
Distributable Cash Flow attributable to
Sunoco LP (100%)
(146
)
(139
)
(399
)
(419
)
Distributions from Sunoco LP
41
41
124
123
Distributable Cash Flow attributable to
USAC (100%)
(52
)
(57
)
(157
)
(170
)
Distributions from USAC
25
24
73
72
Distributable Cash Flow attributable to
noncontrolling interests in other non-wholly-owned consolidated
subsidiaries
(284
)
(234
)
(786
)
(733
)
Distributable Cash Flow attributable to
the partners of ET
1,306
1,675
6,585
4,334
Transaction-related adjustments
6
16
34
46
Distributable Cash Flow attributable to
the partners of ET, as adjusted
$
1,312
$
1,691
$
6,619
$
4,380
Distributions to partners:
Limited Partners
$
413
$
411
$
1,238
$
2,055
General Partner
1
1
2
3
Total distributions to be paid to
partners
$
414
$
412
$
1,240
$
2,058
Common Units outstanding – end of
period
2,705.8
2,698.0
2,705.8
2,698.0
Distribution coverage ratio
3.17x
4.10x
5.34x
2.13x
(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 September
30,
2021
2020
Segment Adjusted EBITDA:
Intrastate transportation and storage
$
172
$
203
Interstate transportation and storage
334
425
Midstream
556
530
NGL and refined products transportation
and services
706
762
Crude oil transportation and services
496
631
Investment in Sunoco LP
198
189
Investment in USAC
99
104
All other
18
22
Total Segment Adjusted EBITDA
$
2,579
$
2,866
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 September
30,
2021
2020
Natural gas transported (BBtu/d)
12,335
12,185
Withdrawals from storage natural gas
inventory (BBtu)
2,350
10,315
Revenues
$
1,217
$
654
Cost of products sold
978
434
Segment margin
239
220
Unrealized (gains) losses on commodity
risk management activities
(1
)
23
Operating expenses, excluding non-cash
compensation expense
(64
)
(42
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(8
)
(7
)
Adjusted EBITDA related to unconsolidated
affiliates
6
7
Other
—
2
Segment Adjusted EBITDA
$
172
$
203
Transported volumes increased primarily due to production
increases in the Permian.
Segment Adjusted EBITDA. For the three months ended September
30, 2021 compared to the same period last year, Segment Adjusted
EBITDA related to our intrastate transportation segment decreased
due to the net effects of the following:
- a decrease of $36 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
and lower spreads; and
- an increase of $22 million in operating expenses primarily due
to increases of $9 million in cost of fuel consumption due to
higher gas prices, $6 million in maintenance project costs, $3
million in employee related expenses, and $3 million in ad valorem
taxes; partially offset by
- an increase of $11 million in transportation fees due to
increased firm transportation volumes from the Permian;
- an increase of $17 million in retained fuel revenues primarily
due to higher natural gas prices; and
- an increase of $3 million in realized storage margin due to
higher storage optimization.
Interstate Transportation and Storage
Three Months Ended September
30,
2021
2020
Natural gas transported (BBtu/d)
9,917
10,387
Natural gas sold (BBtu/d)
16
15
Revenues
$
418
$
471
Operating expenses, excluding non-cash
compensation, amortization and accretion expenses
(152
)
(147
)
Selling, general and administrative
expenses, excluding non-cash compensation, amortization and
accretion expenses
(21
)
(20
)
Adjusted EBITDA related to unconsolidated
affiliates
91
122
Other
(2
)
(1
)
Segment Adjusted EBITDA
$
334
$
425
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 Trunkline system.
Segment Adjusted EBITDA. For the three months ended September
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 $53 million in revenues primarily due to a $37
million decline resulting from shipper contract expirations on our
Tiger system and an $18 million decline due to a shipper bankruptcy
during 2020 also on our Tiger system. In addition, transportation
revenues decreased by $16 million on our Panhandle and Trunkline
systems due to lower demand. These decreases were partially offset
by an increase of $13 million in transportation revenue from our
Rover system as a result of more favorable market conditions;
- an increase of $5 million in operating expenses primarily due
to a $7 million increase from the revaluation of system gas, a $5
million increase in maintenance project costs, a $3 million
increase in employee costs, and $2 million increase in ad valorem
taxes; partially offset by a decrease in credit losses in the prior
period;
- an increase of $1 million in selling, general and
administrative expenses primarily due to higher allocated overhead
costs and employee costs; and
- a decrease of $31 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 $9 million
decrease from our Citrus joint venture due to a contractual rate
adjustment and a $3 million decrease from our Midcontinent Express
Pipeline joint venture due to lower rates on short-term
capacity.
Midstream
Three Months Ended September
30,
2021
2020
Gathered volumes (BBtu/d)
12,991
12,904
NGLs produced (MBbls/d)
667
635
Equity NGLs (MBbls/d)
37
32
Revenues
$
2,919
$
1,377
Cost of products sold
2,153
668
Segment margin
766
709
Operating expenses, excluding non-cash
compensation expense
(191
)
(169
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(28
)
(21
)
Adjusted EBITDA related to unconsolidated
affiliates
8
9
Other
1
2
Segment Adjusted EBITDA
$
556
$
530
Gathered volumes and NGL production increased compared to the
same period last year primarily due to volume increases in the
Permian, Ark-La-Tex, and South Texas regions, partially offset by
volume declines in the Northeast and Mid-Continent/Panhandle
regions.
Segment Adjusted EBITDA. For the three months ended September
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 $156 million in non-fee-based margin due to
favorable NGL prices of $96 million and natural gas prices of $60
million; and
- an increase of $8 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; partially offset
by
- a decrease of $107 million in fee-based margin due to the
recognition of $103 million related to the restructuring and
assignment of certain gathering and processing contracts in the
Ark-La-Tex region in the third quarter of 2020;
- an increase of $22 million in operating expenses due to an
increase of $15 million in employee costs and $6 million in outside
services; 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 September
30,
2021
2020
NGL transportation volumes (MBbls/d)
1,803
1,493
Refined products transportation volumes
(MBbls/d)
526
460
NGL and refined products terminal volumes
(MBbls/d)
1,237
850
NGL fractionation volumes (MBbls/d)
884
877
Revenues
$
5,262
$
2,623
Cost of products sold
4,347
1,712
Segment margin
915
911
Unrealized (gains) losses on commodity
risk management activities
(2
)
11
Operating expenses, excluding non-cash
compensation expense
(207
)
(162
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(27
)
(20
)
Adjusted EBITDA related to unconsolidated
affiliates
26
22
Other
1
—
Segment Adjusted EBITDA
$
706
$
762
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 the previously mentioned start of new pipelines and refined
product demand recovery.
Segment Adjusted EBITDA. For the three months ended September
30, 2021 compared to the same period last year, Segment Adjusted
EBITDA related to our NGL and refined products transportation and
services segment decreased due to the net impacts of the
following:
- a decrease of $58 million in marketing margin primarily due to
a $36 million decrease in optimization gains and from the sale of
NGL component products at our Mont Belvieu facility and a $19
million decrease in northeast blending and optimization primarily
due to realized losses on financial instruments and increased costs
related to renewable identification numbers (“RINs”), and a $6
million decrease due to optimization gains realized in 2020 as
marketing prices increased. These decreases were partially offset
by a $4 million increase in butane blending margin due to more
favorable spreads and incremental gasoline blending in the third
quarter of 2021;
- an increase of $45 million in operating expenses primarily due
to a $21 million increase in utilities cost, a $16 million increase
in employee related costs, a $6 million increase in materials and
other associated costs to run the assets and a $2 million increase
in allocated corporate overhead costs;
- an increase of $7 million in selling, general and
administrative expenses primarily due to corporate cost reductions
in 2020; and
- a decrease of $7 million in fractionators and refinery services
margin primarily due to a $10 million decrease resulting from a
slightly lower average rate achieved due to the increased
utilization of our ethane optimization strategy. This decrease was
partially offset by a $5 million increase in blending activity at
our fractionation facility; partially offset by
- an increase of $36 million in terminal services margin
primarily due to a $20 million increase in ethane export fees at
our Nederland Terminal, an increase of $13 million in loading fees
due to higher LPG export volumes at our Nederland Terminal and a $3
million increase at our refined product terminals due to higher
throughput and timing of accounting adjustments;
- an increase of $20 million in transportation margin primarily
due to a $30 million increase due to higher export volumes feeding
into our Nederland Terminal, a $6 million increase from higher
throughput on our Mariner pipeline system, and a $6 million
increase in refined products transportation due to recovery from
COVID-19 related demand reduction in the prior period and other
refined products demand increases. These increases were partially
offset by a $23 million decrease resulting from a slightly lower
average rate achieved due to the increased utilization of our
ethane optimization strategy; and
- an increase of $4 million in Adjusted EBITDA related to
unconsolidated affiliates due to an increase primarily resulting
from higher throughput on Explorer pipeline due to COVID-19 demand
recovery.
Crude Oil Transportation and Services
Three Months Ended September
30,
2021
2020
Crude transportation volumes (MBbls/d)
4,173
3,551
Crude terminals volumes (MBbls/d)
2,703
2,317
Revenues
$
4,578
$
2,850
Cost of products sold
3,918
2,096
Segment margin
660
754
Unrealized (gains) losses on commodity
risk management activities
14
(1
)
Operating expenses, excluding non-cash
compensation expense
(142
)
(112
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(44
)
(28
)
Adjusted EBITDA related to unconsolidated
affiliates
7
9
Other
1
9
Segment Adjusted EBITDA
$
496
$
631
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. Volumes also benefited from a full
quarter of operations from our Cushing South pipeline. Crude
terminal volumes were higher due to increased customer throughput
activity at our Gulf Coast terminals.
Segment Adjusted EBITDA. For the three months ended September
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 $79 million in segment margin (excluding
unrealized gains and losses on commodity risk management
activities) primarily due to a $133 million decrease from our crude
oil acquisition and marketing business due to storage trading gains
realized in the prior period, unfavorable crude inventory valuation
adjustments, and less favorable pricing conditions impacting our
Bakken to Gulf Coast trading operations, a $6 million decrease in
throughput at our crude terminals primarily driven by lower export
demand, and a $3 million decrease from our Texas crude pipeline
system due to lower average tariff rates realized; partially offset
by a $65 million increase from improved performance on our Bayou
Bridge and Bakken pipelines;
- an increase of $30 million in operating expenses primarily due
to higher volume-driven expenses and higher employee expenses;
- an increase of $16 million in selling, general and
administrative expenses primarily due to legal expenses and higher
overhead allocations to the crude segment as a result of assets
acquired; and
- a decrease of $2 million in Adjusted EBITDA related to
unconsolidated affiliates due to lower volumes on White Cliffs
pipeline from lower crude oil production, partially offset by an
increase in jet fuel sales by our joint ventures.
Investment in Sunoco LP
Three Months Ended September
30,
2021
2020
Revenues
$
4,779
$
2,805
Cost of products sold
4,472
2,497
Segment margin
307
308
Unrealized (gains) losses on commodity
risk management activities
2
(6
)
Operating expenses, excluding non-cash
compensation expense
(85
)
(84
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(23
)
(24
)
Adjusted EBITDA related to unconsolidated
affiliates
3
2
Inventory valuation adjustments
(9
)
(11
)
Other
3
4
Segment Adjusted EBITDA
$
198
$
189
The Investment in Sunoco LP segment reflects the consolidated
results of Sunoco LP.
Segment Adjusted EBITDA. For the three months ended September
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 $4
million primarily due to a 6.4% increase in gallons sold, partially
offset by a 7.3% decrease in gross profit per gallon sold; and
- an increase in non-motor fuel sales of $5 million primarily due
to increased credit card transactions, merchandise gross profit and
franchise fee income.
Investment in USAC
Three Months Ended September
30,
2021
2020
Revenues
$
159
$
161
Cost of products sold
19
20
Segment margin
140
141
Operating expenses, excluding non-cash
compensation expense
(31
)
(27
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(10
)
(10
)
Segment Adjusted EBITDA
$
99
$
104
The Investment in USAC segment reflects the consolidated results
of USAC.
Segment Adjusted EBITDA. For the three months ended September
30, 2021 compared to the same period last year, Segment Adjusted
EBITDA related to our investment in USAC segment decreased due to
the following:
- a decrease of $1 million in segment margin primarily due to
slightly lower revenue generating horsepower; and
- an increase of $4 million in operating expenses primarily due
to an increase in property taxes and expenses related to our
vehicle fleet.
All Other
Three Months Ended September
30,
2021
2020
Revenues
$
696
$
367
Cost of products sold
652
318
Segment margin
44
49
Unrealized losses on commodity risk
management activities
6
3
Operating expenses, excluding non-cash
compensation expense
(29
)
(35
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(13
)
(23
)
Adjusted EBITDA related to unconsolidated
affiliates
2
1
Other and eliminations
8
27
Segment Adjusted EBITDA
$
18
$
22
For the three months ended September 30, 2021 compared to the
same period last year, Segment Adjusted EBITDA related to our all
other segment decreased primarily due to the net impacts of the
following:
- a decrease of $12 million due to the settlement of customer
disputes related to prior period activity;
- a decrease of $7 million due to the revaluation of natural gas
inventory; and
- a decrease of $2 million due to lower trading gains; partially
offset by
- an increase of $5 million due to higher compressor sales and
lower operating expenses in our compressor business;
- an increase of $2 million from Energy Transfer Canada due to
the aggregate impact of multiples smaller changes; and
- an increase of $2 million due to lower utility expense.
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 September 30,
2021
Maturity Date
Five-Year Revolving Credit Facility
$
5,000
$
4,370
December 1, 2024
364-Day Revolving Credit Facility
1,000
1,000
November 26, 2021
$
6,000
$
5,370
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 September
30,
2021
2020
Equity in earnings (losses) of
unconsolidated affiliates:
Citrus
$
44
$
50
FEP
—
(106
)
MEP
(5
)
(1
)
White Cliffs
(1
)
2
Other
33
23
Total equity in earnings (losses) of
unconsolidated affiliates
$
71
$
(32
)
Adjusted EBITDA related to
unconsolidated affiliates:
Citrus
$
87
$
96
FEP
—
19
MEP
4
8
White Cliffs
4
11
Other
46
35
Total Adjusted EBITDA related to
unconsolidated affiliates
$
141
$
169
Distributions received from
unconsolidated affiliates:
Citrus
$
106
$
48
FEP
—
20
MEP
1
4
White Cliffs
5
2
Other
26
24
Total distributions received from
unconsolidated affiliates
$
138
$
98
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 September
30,
2021
2020
Adjusted EBITDA of non-wholly-owned
subsidiaries (100%) (a)
$
599
$
529
Our proportionate share of Adjusted EBITDA
of non-wholly-owned subsidiaries (b)
299
269
Distributable Cash Flow of
non-wholly-owned subsidiaries (100%) (c)
$
556
$
483
Our proportionate share of Distributable
Cash Flow of non-wholly-owned subsidiaries (d)
272
249
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/20211103006161/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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