Energy Transfer Partners, L.P. (NYSE: ETP) today reported its financial results for the quarter ended December 31, 2017. For the three months ended December 31, 2017 Energy Transfer Partners, L.P. (“ETP” or the “Partnership”) reported a net income of $1.10 billion, an increase of $1.43 billion compared to a net loss of $336 million for the same period last year primarily due to a deferred tax benefit resulting from the recent tax reform. Adjusted EBITDA for the three months ended December 31, 2017 totaled $1.94 billion, an increase of $453 million over the same period last year, reflecting significantly higher results from the midstream and crude oil transportation and services segments, as discussed in the segment results analysis below. Distributable Cash Flow attributable to the partners of ETP, as adjusted, for the three months ended December 31, 2017 totaled $1.20 billion, an increase of $240 million compared to the same period last year, primarily due to the increase in adjusted EBITDA.
ETP’s other recent key accomplishments include the following:
An analysis of ETP’s segment results and other supplementary data is provided after the financial tables shown below. ETP has scheduled a conference call for 8:00 a.m. Central Time, Thursday, February 22, 2018 to discuss the fourth quarter 2017 results. The conference call will be broadcast live via an internet webcast, which can be accessed through www.energytransfer.com and will also be available for replay on ETP’s website for a limited time.
Energy Transfer Partners, L.P. (NYSE: ETP) is a master limited partnership that owns and operates one of the largest and most diversified portfolios of energy assets in the United States. Strategically positioned in all of the major U.S. production basins, ETP owns and operates a geographically diverse portfolio of complementary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquids (NGL) and refined product transportation and terminalling assets; NGL fractionation assets; and various acquisition and marketing assets. ETP’s general partner is owned by Energy Transfer Equity, L.P. (NYSE: ETE). For more information, visit the Energy Transfer Partners, L.P. website at www.energytransfer.com.
Energy Transfer Equity, L.P. (NYSE:ETE) is a master limited partnership that owns the general partner and 100% of the incentive distribution rights (IDRs) of Energy Transfer Partners, L.P. (NYSE: ETP) and Sunoco LP (NYSE: SUN). ETE also owns Lake Charles LNG Company. On a consolidated basis, ETE’s family of companies owns and operates a diverse portfolio of natural gas, natural gas liquids, crude oil and refined products assets, as well as retail and wholesale motor fuel operations and LNG terminalling. For more information, visit the Energy Transfer Equity, L.P. website at www.energytransfer.com.
Forward-Looking Statements
This news release may include certain statements concerning expectations for the future that are forward-looking statements as defined by federal law. Such forward-looking statements are subject to a variety of known and unknown risks, uncertainties, and other factors that are difficult to predict and many of which are beyond management’s control. An extensive list of factors that can affect future results are discussed in the Partnership’s Annual Report on Form 10-K and other documents filed from time to time with the Securities and Exchange Commission. The Partnership undertakes no obligation to update or revise any forward-looking statement to reflect new information or events.
The information contained in this press release is available on our website at www.energytransfer.com.
ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES |
||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||
(In millions) |
||||||
(unaudited) |
||||||
December 31, | ||||||
2017 | 2016* | |||||
ASSETS | ||||||
Current assets | $ | 6,528 | $ | 5,643 | ||
Property, plant and equipment, net | 58,437 | 50,917 | ||||
Advances to and investments in unconsolidated affiliates | 3,816 | 4,280 | ||||
Other non-current assets, net | 758 | 672 | ||||
Intangible assets, net | 5,311 | 4,696 | ||||
Goodwill | 3,115 | 3,897 | ||||
Total assets | $ | 77,965 | $ | 70,105 | ||
LIABILITIES AND EQUITY | ||||||
Current liabilities | $ | 6,994 | $ | 6,203 | ||
Long-term debt, less current maturities | 32,687 | 31,741 | ||||
Long-term notes payable – related party | — | 250 | ||||
Non-current derivative liabilities | 145 | 76 | ||||
Deferred income taxes | 2,883 | 4,394 | ||||
Other non-current liabilities | 1,084 | 952 | ||||
Commitments and contingencies | ||||||
Series A Preferred Units | — | 33 | ||||
Redeemable noncontrolling interests | 21 | 15 | ||||
Equity: | ||||||
Total partners’ capital | 28,269 | 18,621 | ||||
Noncontrolling interest | 5,882 | 7,820 | ||||
Total equity | 34,151 | 26,441 | ||||
Total liabilities and equity | $ | 77,965 | $ | 70,105 |
* | During the fourth quarter of 2017, the Partnership changed its accounting policy related to certain inventories. Certain crude oil, refined product and NGL inventories associated with the legacy Sunoco Logistics business were changed from the last-in, first-out (“LIFO”) method to the weighted average cost method. These changes have been applied retrospectively to all periods presented, and the prior period amounts reflected below have been adjusted from those amounts previously reported. |
ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES |
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
(In millions, except per unit data) |
||||||||||||||||
(unaudited) |
||||||||||||||||
Three Months Ended |
Years Ended December 31, | |||||||||||||||
2017 | 2016* | 2017 | 2016* | |||||||||||||
REVENUES | $ | 8,610 | $ | 6,526 | $ | 29,054 | $ | 21,827 | ||||||||
COSTS AND EXPENSES: | ||||||||||||||||
Cost of products sold | 6,206 | 4,733 | 20,801 | 15,080 | ||||||||||||
Operating expenses | 567 | 480 | 2,170 | 1,839 | ||||||||||||
Depreciation, depletion and amortization | 619 | 517 | 2,332 | 1,986 | ||||||||||||
Selling, general and administrative | 99 | 122 | 434 | 348 | ||||||||||||
Impairment losses | 920 | 813 | 920 | 813 | ||||||||||||
Total costs and expenses | 8,411 | 6,665 | 26,657 | 20,066 | ||||||||||||
OPERATING INCOME (LOSS) | 199 | (139 | ) | 2,397 | 1,761 | |||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Interest expense, net | (345 | ) | (336 | ) | (1,365 | ) | (1,317 | ) | ||||||||
Equity in earnings (losses) from unconsolidated affiliates | 17 | (201 | ) | 156 | 59 | |||||||||||
Impairment of investment in an unconsolidated affiliate | (313 | ) | — | (313 | ) | (308 | ) | |||||||||
Gains on acquisitions | — | 83 | — | 83 | ||||||||||||
Losses on extinguishments of debt | (42 | ) | — | (42 | ) | — | ||||||||||
Gains (losses) on interest rate derivatives | (9 | ) | 167 | (37 | ) | (12 | ) | |||||||||
Other, net | 72 | 35 | 209 | 131 | ||||||||||||
INCOME (LOSS) BEFORE INCOME TAX BENEFIT | (421 | ) | (391 | ) | 1,005 | 397 | ||||||||||
Income tax benefit | (1,518 | ) | (55 | ) | (1,496 | ) | (186 | ) | ||||||||
NET INCOME (LOSS) | 1,097 | (336 | ) | 2,501 | 583 | |||||||||||
Less: Net income attributable to noncontrolling interest | 154 | 114 | 420 | 295 | ||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO PARTNERS | 943 | (450 | ) | 2,081 | 288 | |||||||||||
General Partner’s interest in net income | 263 | 208 | 990 | 948 | ||||||||||||
Preferred Unitholders’ interest in net income | 12 | — | 12 | — | ||||||||||||
Class H Unitholder’s interest in net income | — | 94 | 93 | 351 | ||||||||||||
Class I Unitholder’s interest in net income | — | 2 | — | 8 | ||||||||||||
Common Unitholders’ interest in net income (loss) | $ | 668 | $ | (754 | ) | $ | 986 | $ | (1,019 | ) | ||||||
NET INCOME (LOSS) PER COMMON UNIT: | ||||||||||||||||
Basic | $ | 0.57 | $ | (0.97 | ) | $ | 0.94 | $ | (1.38 | ) | ||||||
Diluted | $ | 0.57 | $ | (0.97 | ) | $ | 0.93 | $ | (1.38 | ) | ||||||
WEIGHTED AVERAGE NUMBER OF COMMON UNITS OUTSTANDING: | ||||||||||||||||
Basic | 1,159.6 | 783.7 | 1,032.7 | 758.2 | ||||||||||||
Diluted | 1,162.9 | 783.7 | 1,037.8 | 758.2 |
* | During the fourth quarter of 2017, the Partnership changed its accounting policy related to certain inventories. Certain crude oil, refined product and NGL inventories associated with the legacy Sunoco Logistics business were changed from the LIFO method to the weighted average cost method. These changes have been applied retrospectively to all periods presented, and the prior period amounts reflected below have been adjusted from those amounts previously reported. |
SUPPLEMENTAL INFORMATION |
||||||||||||||||
(Dollars and units in millions, except per unit amounts) |
||||||||||||||||
(unaudited) |
||||||||||||||||
Three Months Ended |
Years Ended December 31, | |||||||||||||||
2017 |
2016 (a)(b) |
2017 (a) |
2016 (a)(b) |
|||||||||||||
Reconciliation of net income (loss) to Adjusted EBITDA and Distributable Cash Flow (c): | ||||||||||||||||
Net income (loss) | $ | 1,097 | $ | (336 | ) | $ | 2,501 | $ | 583 | |||||||
Interest expense, net | 345 | 336 | 1,365 | 1,317 | ||||||||||||
Gains on acquisitions | — | (83 | ) | — | (83 | ) | ||||||||||
Impairment losses (d) | 920 | 813 | 920 | 813 | ||||||||||||
Income tax benefit | (1,518 | ) | (55 | ) | (1,496 | ) | (186 | ) | ||||||||
Depreciation, depletion and amortization | 619 | 517 | 2,332 | 1,986 | ||||||||||||
Non-cash compensation expense | 17 | 20 | 74 | 80 | ||||||||||||
(Gains) losses on interest rate derivatives | 9 | (167 | ) | 37 | 12 | |||||||||||
Unrealized (gains) losses on commodity risk management activities | (39 | ) | 35 | (56 | ) | 131 | ||||||||||
Losses on extinguishments of debt | 42 | — | 42 | — | ||||||||||||
Impairment of investments in unconsolidated affiliates (e) | 313 | — | 313 | 308 | ||||||||||||
Equity in (earnings) losses of unconsolidated affiliates (e) | (17 | ) | 201 | (156 | ) | (59 | ) | |||||||||
Adjusted EBITDA related to unconsolidated affiliates | 219 | 235 | 984 | 946 | ||||||||||||
Other, net | (69 | ) | (31 | ) | (148 | ) | (115 | ) | ||||||||
Adjusted EBITDA (consolidated) | 1,938 | 1,485 | 6,712 | 5,733 | ||||||||||||
Adjusted EBITDA related to unconsolidated affiliates | (219 | ) | (235 | ) | (984 | ) | (946 | ) | ||||||||
Distributable cash flow from unconsolidated affiliates | 138 | 134 | 574 | 518 | ||||||||||||
Interest expense, net | (345 | ) | (336 | ) | (1,365 | ) | (1,317 | ) | ||||||||
Preferred Unitholders’ distributions | (12 | ) | — | (12 | ) | — | ||||||||||
Current income tax (expense) benefit | (13 | ) | 40 | (35 | ) | 17 | ||||||||||
Maintenance capital expenditures | (143 | ) | (134 | ) | (429 | ) | (368 | ) | ||||||||
Other, net | (1 | ) | 4 | 42 | 1 | |||||||||||
Distributable Cash Flow (consolidated) | 1,343 | 958 | 4,503 | 3,638 | ||||||||||||
Distributable Cash Flow attributable to PennTex (100%) (f) | — | (11 | ) | (19 | ) | (11 | ) | |||||||||
Distributions from PennTex to ETP (f) | — | 8 | 8 | 16 | ||||||||||||
Distributable cash flow attributable to noncontrolling interest in other consolidated subsidiaries | (151 | ) | (12 | ) | (350 | ) | (40 | ) | ||||||||
Distributable Cash Flow attributable to the partners of ETP | 1,192 | 943 | 4,142 | 3,603 | ||||||||||||
Transaction-related expenses | 3 | 12 | 48 | 16 | ||||||||||||
Distributable Cash Flow attributable to the partners of ETP, as adjusted | $ | 1,195 | $ | 955 | $ | 4,190 | $ | 3,619 | ||||||||
Distributions to the partners of ETP (g): | ||||||||||||||||
Limited Partners: | ||||||||||||||||
Common Units held by public | $ | 641 | $ | 547 | $ | 2,435 | $ | 2,042 | ||||||||
Common Units held by parent | 16 | 14 | 61 | 20 | ||||||||||||
General Partner interests | 4 | 4 | 16 | 14 | ||||||||||||
Incentive Distribution Rights (“IDRs”) held by parent | 434 | 359 | 1,638 | 1,327 | ||||||||||||
IDR relinquishments | (174 | ) | (145 | ) | (656 | ) | (423 | ) | ||||||||
Total distributions to be paid to partners | $ | 921 | $ | 779 | $ | 3,494 | $ | 2,980 | ||||||||
Common Units outstanding – end of period (g)(h) | 1,164.1 | 1,050.1 | 1,164.1 | 1,050.1 | ||||||||||||
Distribution coverage ratio (i) |
1.30 |
x |
1.23 |
x |
1.20 |
x |
1.21 |
x |
||||||||
(a) For the years ended December 31, 2017 and 2016, the calculation of Distributable Cash Flow and the amounts reflected for distributions to partners and common units outstanding reflect the pro forma impacts of the Sunoco Logistics Merger as though the merger had occurred on January 1, 2016. As a result, the prior period amounts reported above differ from information previously reported by legacy ETP, as follows:
(b) During the fourth quarter of 2017, the Partnership changed its accounting policy related to certain inventories. Certain crude oil, refined product and NGL inventories associated with the legacy Sunoco Logistics business were changed from the LIFO method to the weighted average cost method. These changes have been applied retrospectively to all periods presented, and the prior period amounts reflected below have been adjusted from those amounts previously reported. Certain other prior period amounts have also been reclassified to conform to the current period presentation, including a reclassification between capitalized interest and AFUDC from the nine months ended September 30, 2017.
(c) Adjusted EBITDA and Distributable Cash Flow are non-GAAP financial measures used by industry analysts, investors, lenders, and rating agencies to assess the financial performance and the operating results of ETP’s fundamental business activities and should not be considered in isolation or as a substitute for net income, income from operations, cash flows from operating activities, or other GAAP measures.
There are material limitations to using measures such as Adjusted EBITDA and Distributable Cash Flow, including the difficulty associated with using either as the sole measure to compare the results of one company to another, and the inability to analyze certain significant items that directly affect a company’s net income or loss or cash flows. In addition, our calculations of Adjusted EBITDA and Distributable Cash Flow may not be consistent with similarly titled measures of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP, such as segment margin, operating income, net income, and cash flow from operating activities.
Definition of Adjusted EBITDA
We define Adjusted EBITDA as total partnership earnings before interest, taxes, depreciation, depletion, amortization and other non-cash items, such as non-cash compensation expense, gains and losses on disposals of assets, the allowance for equity funds used during construction, unrealized gains and losses on commodity risk management activities, non-cash impairment charges, losses on extinguishments of debt and other non-operating income or expense items. Unrealized gains and losses on commodity risk management activities include unrealized gains and losses on commodity derivatives and inventory fair value adjustments (excluding lower of cost or market adjustments). Adjusted EBITDA reflects amounts for less than wholly-owned subsidiaries based on 100% of the subsidiaries’ results of operations and for unconsolidated affiliates based on our proportionate ownership.
Adjusted EBITDA is used by management to determine our operating performance and, along with other financial and volumetric data, as internal measures for setting annual operating budgets, assessing financial performance of our numerous business locations, as a measure for evaluating targeted businesses for acquisition and as a measurement component of incentive compensation.
Definition of Distributable Cash Flow
We define Distributable Cash Flow as net income, adjusted for certain non-cash items, less maintenance capital expenditures and a proportionate amount of the distributions to be paid on our redeemable perpetual preferred units. 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, non-cash impairment charges, losses on extinguishments of debt and deferred income taxes. Unrealized gains and losses on commodity risk management activities includes unrealized gains and losses on commodity derivatives and inventory fair value adjustments (excluding lower of cost or market adjustments). For unconsolidated affiliates, Distributable Cash Flow reflects the Partnership’s proportionate share of the investee’s distributable cash flow.
Distributable Cash Flow is used by management to evaluate our overall performance. Our partnership agreement requires us to distribute all available cash, and Distributable Cash Flow is calculated to evaluate our ability to fund distributions through cash generated by our operations.
On a consolidated basis, Distributable Cash Flow includes 100% of the Distributable Cash Flow of ETP’s consolidated subsidiaries. However, to the extent that noncontrolling interests exist among our subsidiaries, the Distributable Cash Flow generated by our subsidiaries may not be available to be distributed to our partners. In order to reflect the cash flows available for distributions to our partners, we have reported Distributable Cash Flow attributable to partners, which is calculated by adjusting Distributable Cash Flow (consolidated), as follows:
For Distributable Cash Flow attributable to partners, as adjusted, certain transaction-related and non-recurring expenses that are included in net income are excluded.
(d) During the three months ended December 31, 2017, we recorded goodwill impairments of $223 million related to the compression business, $229 million related to the entity that owns the general partner of Panhandle, $262 million related to the interstate transportation and storage segment, and $79 million related to the NGL and refined products transportation and services segment. In addition, impairment losses for the three months ended December 31, 2017 also include a $127 million impairment to the property, plant and equipment related to Sea Robin.
During the three months ended December 31, 2016, we recorded goodwill impairments of $638 million in the interstate transportation and storage segment and $32 million in the midstream segment. In addition, impairment losses for the three months ended December 31, 2016 also include a $133 million impairment to property, plant and equipment in the interstate transportation and storage segment.
(e) For the three months ended December 31, 2017, impairment of investments in unconsolidated affiliates includes non-cash impairments of the Partnership’s investments in FEP and HPC of $141 million and $172 million, respectively, and equity in losses of affiliates includes the impact of non-cash impairments recorded by HPC, which reduced the Partnership’s equity in earnings by $185 million.
(f) Beginning with the second quarter of 2017, PennTex became a wholly-owned subsidiary of ETP. The amounts reflected above for PennTex relate only to the first quarter of 2017, and no distributable cash flow has been attributed to noncontrolling interests in PennTex subsequent to March 31, 2017.
(g) Distributions on ETP Common Units and the number of ETP Common Units outstanding at the end of the period, both as reflected above, exclude amounts related to ETP Common Units held by subsidiaries of ETP.
(h) Reflects the sum of (i) the ETP Common Units outstanding at the end of period multiplied by a factor of 1.5x and (ii) the Sunoco Logistics Common Units outstanding at end of period minus 67.1 million Sunoco Logistics Common Units held by ETP, which units were cancelled in connection with the closing of the merger.
(i) Distribution coverage ratio for a period is calculated as Distributable Cash Flow attributable to partners, as adjusted, divided by net distributions expected to be paid to the partners of ETP in respect of such period.
SUMMARY ANALYSIS OF QUARTERLY RESULTS BY SEGMENT |
||||||
(Tabular dollar amounts in millions) |
||||||
(unaudited) |
||||||
Three Months Ended |
||||||
2017 | 2016 | |||||
Segment Adjusted EBITDA: | ||||||
Intrastate transportation and storage | $ | 146 | $ | 152 | ||
Interstate transportation and storage | 298 | 269 | ||||
Midstream | 393 | 258 | ||||
NGL and refined products transportation and services (1) | 433 | 424 | ||||
Crude oil transportation and services (1) | 544 | 237 | ||||
All other | 124 | 145 | ||||
$ | 1,938 | $ | 1,485 | |||
(1) | Subsequent to the Sunoco Logistics Merger, the Partnership’s reportable segments were revised. Amounts reflected in prior periods have been retrospectively adjusted to conform to the current reportable segment presentation for NGL and refined products transportation and services and crude oil transportation and services. | |
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.
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.
For prior periods reported herein, certain transactions related to the business of legacy Sunoco Logistics have been reclassified from cost of products sold to operating expenses; these transactions include sales between operating subsidiaries and their marketing affiliates. These reclassifications had no impact on net income or total equity.
Following is a reconciliation of segment margin to operating income (loss), as reported in the Partnership’s consolidated statements of operations:
Three Months Ended December 31, |
||||||||
2017 | 2016 | |||||||
Intrastate transportation and storage | $ | 205 | $ | 191 | ||||
Interstate transportation and storage | 268 | 240 | ||||||
Midstream | 568 | 448 | ||||||
NGL and refined products transportation and services | 582 | 530 | ||||||
Crude oil transportation and services | 683 | 307 | ||||||
All other | 102 | 72 | ||||||
Intersegment eliminations | (4 | ) | 5 | |||||
Total segment margin | 2,404 | 1,793 | ||||||
Less: | ||||||||
Operating expenses | 567 | 480 | ||||||
Depreciation, depletion and amortization | 619 | 517 | ||||||
Selling, general and administrative | 99 | 122 | ||||||
Impairment losses | 920 | 813 | ||||||
Operating income (loss) | $ | 199 | $ | (139 | ) | |||
Intrastate Transportation and Storage
Three Months Ended December 31, | ||||||||
2017 | 2016 | |||||||
Natural gas transported (BBtu/d) | 8,944 | 8,134 | ||||||
Revenues | $ | 741 | $ | 756 | ||||
Cost of products sold | 536 | 565 | ||||||
Segment margin | 205 | 191 | ||||||
Unrealized gains on commodity risk management activities | (21 | ) | (5 | ) | ||||
Operating expenses, excluding non-cash compensation expense | (44 | ) | (45 | ) | ||||
Selling, general and administrative expenses, excluding non-cash compensation expense | (5 | ) | (5 | ) | ||||
Adjusted EBITDA related to unconsolidated affiliates | 11 | 16 | ||||||
Segment Adjusted EBITDA | $ | 146 | $ | 152 | ||||
Transported volumes increased primarily due to higher demand for exports to Mexico, more favorable market pricing, and the addition of new pipelines to our intrastate pipeline system. These increases were partially offset by lower production volumes in the Barnett Shale region.
For the three months ended December 31, 2017 compared to the same period last year, Segment Adjusted EBITDA related to our intrastate transportation and storage segment decreased due to the net impacts of the following:
Interstate Transportation and Storage
Three Months Ended |
||||||||
2017 | 2016 | |||||||
Natural gas transported (BBtu/d) | 7,185 | 5,322 | ||||||
Natural gas sold (BBtu/d) | 18 | 17 | ||||||
Revenues | $ | 268 | $ | 240 | ||||
Operating expenses, excluding non-cash compensation, amortization and accretion expenses | (76 | ) | (79 | ) | ||||
Selling, general and administrative expenses, excluding non-cash compensation, amortization and accretion expenses | (13 | ) | (11 | ) | ||||
Adjusted EBITDA related to unconsolidated affiliates | 115 | 118 | ||||||
Other | 4 | 1 | ||||||
Segment Adjusted EBITDA | $ | 298 | $ | 269 | ||||
Transported volumes reflected increases of 812 BBtu/d due to the partial in-service of the Rover pipeline, 410 BBtu/d on the Tiger pipeline as a result of an increase in production in the Haynesville Shale and deliveries into third party storage and the intrastate markets, and 390 BBtu/d and 356 BBtu/d on the Trunkline and Panhandle pipelines, respectively, resulting from higher demand due to colder weather.
For the three months ended December 31, 2017 compared to the same period last year, Segment Adjusted EBITDA related to our interstate transportation and storage segment increased due to the net effect of the following:
Midstream
Three Months Ended |
||||||||
2017 | 2016 | |||||||
Gathered volumes (BBtu/d) | 11,525 | 9,694 | ||||||
NGLs produced (MBbls/d) | 502 | 431 | ||||||
Equity NGLs produced (MBbls/d) | 27 | 29 | ||||||
Revenues | $ | 1,926 | $ | 1,414 | ||||
Cost of products sold | 1,358 | 966 | ||||||
Segment margin | 568 | 448 | ||||||
Unrealized losses on commodity risk management activities | 3 | 15 | ||||||
Operating expenses, excluding non-cash compensation expense | (168 | ) | (168 | ) | ||||
Selling, general and administrative expenses, excluding non-cash compensation expense | (18 | ) | (42 | ) | ||||
Adjusted EBITDA related to unconsolidated affiliates | 8 | 5 | ||||||
Segment Adjusted EBITDA | $ | 393 | $ | 258 | ||||
Gathered volumes and NGL production increased primarily due to recent acquisitions, including PennTex, and gains in the Permian, Northeast and South Texas regions, partially offset by basin declines in the North Texas and Mid-Continent/Panhandle regions.
For the three months ended December 31, 2017 compared to the same period last year, Segment Adjusted EBITDA related to our midstream segment increased due to the net impacts of the following:
NGL and Refined Products Transportation and Services
Three Months Ended |
||||||||
2017 | 2016 | |||||||
NGL transportation volumes (MBbls/d) | 963 | 791 | ||||||
Refined products transportation volumes (MBbls/d) | 618 | 627 | ||||||
NGL and refined products terminal volumes (MBbls/d) | 792 | 818 | ||||||
NGL fractionation volumes (MBbls/d) | 455 | 394 | ||||||
Revenues | $ | 2,533 | $ | 2,080 | ||||
Cost of products sold | 1,951 | 1,550 | ||||||
Segment margin | 582 | 530 | ||||||
Unrealized (gains) losses on commodity risk management activities | (28 | ) | 16 | |||||
Operating expenses, excluding non-cash compensation expense | (120 | ) | (122 | ) | ||||
Selling, general and administrative expenses, excluding non-cash compensation expense | (15 | ) | (15 | ) | ||||
Adjusted EBITDA related to unconsolidated affiliates | 14 | 14 | ||||||
Other | — | 1 | ||||||
Segment Adjusted EBITDA | $ | 433 | $ | 424 | ||||
NGL transportation volumes increased from the Permian, Barnett/East Texas, Eagle Ford, and Louisiana. Refined products transportation volumes decreased for the three months ended December 31, 2017 compared to the same period last year primarily due to lower volumes from our Midwest refineries.
NGL and refined products terminal volumes decreased for the three months ended December 31, 2017 as compared to the same period last year primarily due to the sale of one of our refined product terminals in April 2017.
Average volumes fractionated at our Mont Belvieu, Texas fractionation facility increased 19% for the three months ended December 31, 2017 compared to the same period last year primarily due to the commissioning of our fourth fractionator in October of 2016, which has a capacity of 120 MBbls/d, as well as increased producer volumes as mentioned above.
For the three months ended December 31, 2017 compared to the same period last year, Segment Adjusted EBITDA related to our NGL and refined products transportation and services segment increased due to net impact of the following:
Crude Oil Transportation and Services
Three Months Ended |
||||||||
2017 | 2016 | |||||||
Crude Transportation Volumes (MBbls/d) | 3,816 | 2,784 | ||||||
Crude Terminals Volumes (MBbls/d) | 2,059 | 1,573 | ||||||
Revenues | $ | 3,938 | $ | 2,393 | ||||
Cost of products sold | 3,255 | 2,086 | ||||||
Segment margin | 683 | 307 | ||||||
Unrealized losses on commodity risk management activities | 4 | 2 | ||||||
Operating expenses, excluding non-cash compensation expense | (125 | ) | (62 | ) | ||||
Selling, general and administrative expenses, excluding non-cash compensation expense | (20 | ) | (14 | ) | ||||
Adjusted EBITDA related to unconsolidated affiliates | 2 | 4 | ||||||
Segment Adjusted EBITDA | $ | 544 | $ | 237 | ||||
For the three months ended December 31, 2017 compared to the same period last year, Segment Adjusted EBITDA related to our crude oil transportation and services segment increased due to the following:
All Other
Three Months Ended |
||||||||
2017 | 2016 | |||||||
Revenue | $ | 652 | $ | 751 | ||||
Cost of products sold | 550 | 679 | ||||||
Segment margin | 102 | 72 | ||||||
Unrealized losses on commodity risk management activities | 3 | 7 | ||||||
Operating expenses, excluding non-cash compensation expense | (31 | ) | (22 | ) | ||||
Selling, general and administrative expenses, excluding non-cash compensation expense | (21 | ) | (26 | ) | ||||
Adjusted EBITDA related to unconsolidated affiliates | 69 | 77 | ||||||
Other | — | 24 | ||||||
Elimination | 2 | 13 | ||||||
Segment Adjusted EBITDA | $ | 124 | $ | 145 | ||||
Amounts reflected in our all other segment primarily include:
For the three months ended December 31, 2017 compared to the same period last year, Segment Adjusted EBITDA decreased primarily due to the net impact of the following:
SUPPLEMENTAL INFORMATION ON LIQUIDITY |
||||||||
(In millions) |
||||||||
(unaudited) |
||||||||
Facility Size |
Funds Available at |
Maturity Date | ||||||
ETP Five-Year Revolving Credit Facility | $ | 4,000 | $ | 1,558 | December 1, 2022 | |||
ETP 364-Day Revolving Credit Facility | 1,000 | 950 | November 30, 2018 | |||||
$ | 5,000 | $ | 2,508 |
SUPPLEMENTAL INFORMATION ON UNCONSOLIDATED AFFILIATES |
||||||||
(In millions) |
||||||||
(unaudited) |
||||||||
Three Months Ended |
||||||||
2017 | 2016 | |||||||
Equity in earnings (losses) of unconsolidated affiliates: | ||||||||
Citrus | $ | 58 | $ | 22 | ||||
FEP | 14 | 13 | ||||||
MEP | 9 | 9 | ||||||
HPC(1) | (185 | ) | 8 | |||||
Sunoco LP(2) | 101 | (265 | ) | |||||
Other | 20 | 12 | ||||||
Total equity in earnings (losses) of unconsolidated affiliates | $ | 17 | $ | (201 | ) | |||
Adjusted EBITDA related to unconsolidated affiliates: | ||||||||
Citrus | $ | 74 | $ | 78 | ||||
FEP | 19 | 19 | ||||||
MEP | 22 | 21 | ||||||
HPC | 6 | 16 | ||||||
Sunoco LP | 57 | 63 | ||||||
Other | 41 | 38 | ||||||
Total Adjusted EBITDA related to unconsolidated affiliates | $ | 219 | $ | 235 | ||||
Distributions received from unconsolidated affiliates: | ||||||||
Citrus | $ | 43 | $ | 32 | ||||
FEP | 19 | 18 | ||||||
MEP | 8 | 18 | ||||||
HPC | 13 | 13 | ||||||
Sunoco LP | 36 | 36 | ||||||
Other | 22 | 20 | ||||||
Total distributions received from unconsolidated affiliates | $ | 141 | $ | 137 |
(1) |
For the three months ended December 31, 2017, equity in earnings (losses) of unconsolidated affiliates includes the impact of non-cash impairments recorded by HPC, which reduced the Partnership’s equity in earnings by $185 million. | |
(2) |
For the three months ended December 31, 2017 and 2016, equity in earnings (losses) of unconsolidated affiliates includes the impact of non-cash impairments recorded by Sunoco LP, which reduced the Partnership’s equity in earnings by $17 million and $277 million, respectively. |
View source version on businesswire.com: http://www.businesswire.com/news/home/20180221006401/en/
Energy Transfer
Investor Relations:
Lyndsay Hannah,
Brent Ratliff, Helen Ryoo, 214-981-0795
or
Media Relations:
Vicki
Granado, 214-840-5820