Energy Transfer Equity, L.P. (NYSE:ETE) (“ETE” or the
“Partnership”) today reported financial results for the quarter
ended September 30, 2015.
Distributable Cash Flow, as adjusted, for the three months ended
September 30, 2015 was $325 million compared to $234 million
for the three months ended September 30, 2014, an increase of
$91 million. Distributable Cash Flow, as adjusted, per unit was
$0.31 for the three months ended September 30, 2015, an
increase of 41% compared to the three months ended
September 30, 2014. Distributable Cash Flow, as adjusted, for
the three months ended September 30, 2015 would have been $352
million, or $0.33 per unit, if the SUN GP/IDR Exchange (as defined
below) had not taken place. ETE’s net income attributable to
partners was $293 million for the three months ended
September 30, 2015 compared to $188 million for the three
months ended September 30, 2014, an increase of $105
million.
Distributable Cash Flow, as adjusted, for the nine months ended
September 30, 2015 was $981 million compared to $652 million
for the nine months ended September 30, 2014, an increase of
$329 million. Distributable Cash Flow, as adjusted, per unit was
$0.91 for the nine months ended September 30, 2015, an
increase of 54% compared to the nine months ended
September 30, 2014. ETE’s net income attributable to partners
was $875 million for the nine months ended September 30, 2015
compared to $520 million for the nine months ended
September 30, 2014, an increase of $355 million.
The Partnership’s recent key accomplishments and other
developments include the following:
- In September 2015, ETE and the Williams
Companies, Inc. (“WMB”) announced a business combination
transaction valued at $37.7 billion, including the assumption of
debt and other liabilities. The combination will create the third
largest energy franchise in North America and one of the five
largest global energy companies. The transaction is expected to
close in the first half of 2016.
- In October 2015, ETE entered into an
Amended and Restated Commitment Letter with a syndicate of 20 banks
for a senior secured credit facility in an aggregate principal
amount of $6.05 billion in order to fund the cash portion of the
WMB Merger. Under the terms of the facility, the banks have
committed to provide a 364-day secured loan that can be extended at
ETE’s option for an additional year. The interest rate on the
facility is capped at 5.5%.
- During the third quarter 2015, Lake
Charles LNG Export Company, LLC (“Lake Charles LNG”), an entity
owned 60% by ETE and 40% by Energy Transfer Partners, L.P. (“ETP”),
received the Federal Energy Regulatory Commission (“FERC”) Final
Environmental Impact Study for the liquefaction project. This
issuance starts the 90-day period in which other federal agencies
are required to complete their review of the liquefaction project
and issue any agency authorizations. That decision deadline is
November 12, 2015. The FERC authorization for the liquefaction
project is expected to be issued during this 90-day period. With
the expected emphasis on capital discipline and overall cost, ETE
continues to believe that Lake Charles LNG is one of the most
attractive pre-final investment decision (“FID”) projects for both
Royal Dutch Shell plc and BG Group plc and that as a result, the
project remains on track to receive FID in 2016, with construction
to start immediately thereafter and first LNG exports anticipated
in late-2020.
- Effective July 1, 2015, ETE exchanged
21.0 million of the ETP common units that it held at that time for
100% of the general partner interest and incentive distribution
rights of Sunoco LP (the “SUN GP/IDR Exchange”).
- In October 2015, ETE’s Board of
Directors approved a $0.02 increase in its quarterly distribution
to $0.285 per ETE common unit for the third quarter ended September
30, 2015, an increase of 37% compared to the third quarter of 2014
and an increase of 8% compared to the second quarter of 2015. For
the quarter ended September 30, 2015, ETE’s distribution coverage
ratio is 1.09x, which was lower than the second quarter due to the
cash flow impact from the SUN GP/IDR Exchange.
- During 2015, ETE has repurchased
approximately $1.06 billion of ETE common units under its current
$2.00 billion buyback program.
- As of September 30, 2015, ETE’s $1.5
billion revolving credit facility had $930 million of outstanding
borrowings and its leverage ratio, as defined by the credit
agreement, was 3.27x.
The Partnership has scheduled a conference call for 8:00 a.m.
Central Time, Thursday, November 5, 2015 to discuss its third
quarter 2015 results. The conference call will be broadcast live
via an internet web cast, which can be accessed through
www.energytransfer.com and will also
be available for replay on the Partnership’s web site 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, ETP Common Units, ETP Class
I Units, and, through ETP Class H Units, which track 90% of the
underlying economics of the general partner interest and IDRs of
Sunoco Logistics Partners L.P. (“Sunoco Logistics”), distributions
related to its investments in the general partner interests in
Sunoco Logistics, limited and general partner interest in Sunoco
LP, as well as the Partnership’s ownership of Lake Charles LNG.
Prior to ETP’s acquisition of Regency Energy Partners LP
(“Regency”), the Partnership’s sources of cash flow were also
derived from its direct and indirect investments in the limited and
general partner of Regency. 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 which 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),
approximately 2.6 million ETP common units, approximately 81.0
million ETP Class H Units, which track 90% of the underlying
economics of the general partner interest and IDRs of Sunoco
Logistics Partners L.P. (NYSE: SXL) and 100 ETP Class I Units.
On a consolidated basis, ETE’s family of companies owns and
operates approximately 71,000 miles of natural gas, natural gas
liquids, refined products, and crude oil pipelines. 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 owning and operating one of the largest
and most diversified portfolios of energy assets in the United
States. ETP’s subsidiaries include Panhandle Eastern Pipe Line
Company, LP (the successor of Southern Union Company) and Lone Star
NGL LLC, which owns and operates natural gas liquids storage,
fractionation and transportation assets. In total, ETP currently
owns and operates approximately 62,500 miles of natural gas and
natural gas liquids pipelines. ETP also owns the general partner,
100% of the incentive distribution rights, and approximately 67.1
million common units of Sunoco Logistics Partners L.P. (NYSE: SXL),
which operates a geographically diverse portfolio of crude oil and
refined products pipelines, terminalling and crude oil acquisition
and marketing assets. Additionally, ETP owns fuel distribution and
retail marketing assets and approximately 50.8% of the limited
partner interests in Sunoco LP (formerly Susser Petroleum Partners
LP) (NYSE: SUN), a wholesale fuel distributor and convenience store
operator. 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 Logistics Partners L.P. (NYSE: SXL) is a master
limited partnership that owns and operates a logistics business
consisting of a geographically diverse portfolio of complementary
crude oil, refined products, and natural gas liquids pipeline,
terminalling and acquisition and marketing assets which are used to
facilitate the purchase and sale of crude oil, refined products,
and natural gas liquids. SXL’s general partner is a consolidated
subsidiary of Energy Transfer Partners, L.P. (NYSE: ETP). For more
information, visit the Sunoco Logistics Partners, L.P. website at
www.sunocologistics.com.
Sunoco LP (NYSE: SUN) is a master limited partnership
that operates more than 850 convenience stores and retail fuel
sites and distributes motor fuel to c-stores, independent dealers,
commercial customers and distributors located in 30 states at
approximately 6,800 sites, both directly and through our 31.6
percent interest in Sunoco, LLC, owned in partnership with Energy
Transfer Partners (NYSE: ETP). Our parent -- Energy Transfer Equity
(NYSE: ETE) -- owns SUN's general partner and incentive
distribution rights. ETP owns a 50.8% limited partner interest. For
more information, visit the Sunoco LP website at www.sunocolp.com.
Forward-Looking Statements
This press 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 Reports 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 web site at www.energytransfer.com.
ENERGY TRANSFER
EQUITY, L.P. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In millions)
(unaudited)
September 30, 2015 December 31, 2014
ASSETS
CURRENT ASSETS $ 6,072 $ 6,153 PROPERTY, PLANT AND
EQUIPMENT, net 46,305 40,292 ADVANCES TO AND INVESTMENTS IN
UNCONSOLIDATED AFFILIATES 3,637 3,659 NON-CURRENT DERIVATIVE ASSETS
15 10 GOODWILL 7,655 7,865 INTANGIBLE ASSETS, net 5,522 5,582 OTHER
NON-CURRENT ASSETS, net 962 908 Total assets $
70,168 $ 64,469
LIABILITIES AND
EQUITY
CURRENT LIABILITIES $ 5,049 $ 6,782 LONG-TERM DEBT,
less current maturities 36,332 29,653 DEFERRED INCOME TAXES 4,256
4,325 NON-CURRENT DERIVATIVE LIABILITIES 189 154 OTHER NON-CURRENT
LIABILITIES 1,246 1,193 COMMITMENTS AND CONTINGENCIES
PREFERRED UNITS OF SUBSIDIARY 33 33 REDEEMABLE NONCONTROLLING
INTEREST 15 15 EQUITY: Total partners’ capital (906 ) 664
Noncontrolling interest 23,954 21,650 Total
equity 23,048 22,314 Total liabilities and
equity $ 70,168 $ 64,469
ENERGY TRANSFER
EQUITY, L.P. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per unit data) (unaudited) Three Months
EndedSeptember 30, Nine Months EndedSeptember 30, 2015
2014 2015 2014 REVENUES $ 10,616 $ 14,987 $
32,590 $ 42,210 COSTS AND EXPENSES: Cost of products sold 8,581
13,015 26,406 36,808 Operating expenses 706 557 1,997 1,409
Depreciation, depletion and amortization 524 425 1,531 1,248
Selling, general and administrative 155 168
493 440 Total costs and expenses
9,966 14,165 30,427
39,905 OPERATING INCOME 650 822 2,163 2,305 OTHER
INCOME (EXPENSE): Interest expense, net of interest capitalized
(442 ) (356 ) (1,221 ) (1,015 ) Equity in earnings of
unconsolidated affiliates 110 84 284 265 Gains (losses) on
extinguishments of debt (10 ) 2 (43 ) 2 Losses on interest rate
derivatives (64 ) (25 ) (14 ) (73 ) Gain on sale of AmeriGas common
units — 14 — 177 Other, net 31 (15 ) 55
(38 ) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME
TAX EXPENSE 275 526 1,224 1,623 Income tax expense (benefit) from
continuing operations 37 56 (7 )
271 INCOME FROM CONTINUING OPERATIONS 238 470 1,231
1,352 Income from discontinued operations — —
— 66 NET INCOME 238 470 1,231
1,418 Less: Net income (loss) attributable to noncontrolling
interest (55 ) 282 356
898 NET INCOME ATTRIBUTABLE TO PARTNERS 293 188 875 520
General Partner’s interest in net income 1 — 2 1 Class D
Unitholder’s interest in net income 1 —
2 1 Limited Partners’ interest in net
income $ 291 $ 188 $ 871 $ 518 INCOME
FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT: Basic $ 0.28
$ 0.17 $ 0.81 $ 0.47 Diluted $ 0.28
$ 0.17 $ 0.81 $ 0.47 NET INCOME PER
LIMITED PARTNER UNIT: Basic $ 0.28 $ 0.17 $ 0.81
$ 0.47 Diluted $ 0.28 $ 0.17 $ 0.81
$ 0.47 WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING:
Basic 1,052.5 1,077.5 1,068.9
1,093.2 Diluted 1,054.1
1,079.7 1,070.5 1,095.3
ENERGY TRANSFER
EQUITY, L.P.
DISTRIBUTABLE
CASH FLOW (1)
(Dollars and units in millions, except per unit amounts)
(unaudited) Three Months EndedSeptember 30, Nine Months
EndedSeptember 30, 2015 2014 2015
2014 Cash distributions from ETP
associated with: Limited partner interest $ 3 $ 30 $ 51 $ 88 Class
H Units 68 56 186 159 General partner interest 8 6 23 16 Incentive
distribution rights 320 200 937 546 IDR relinquishments, net of
distributions on Class I Units (2) (28 ) (67 )
(83 ) (182 ) Total cash distributions from ETP 371 225 1,114
627 Total cash distributions from Regency (prior to merger with
ETP) (3) — 38 — 95 Cash distributions from Sunoco LP (4) 8
— 8 — Total cash
distributions from investments in subsidiaries 379 263 1,122 722
Distributable cash flow attributable to Lake Charles LNG:
Revenues 54 55 162 162 Operating expenses (4 ) (5 ) (12 ) (13 )
Selling, general and administrative expenses (1 ) 1
(3 ) (3 ) Distributable cash flow attributable
to Lake Charles LNG 49 51 147 146 Deduct expenses of the
Parent Company on a stand-alone basis: Selling, general and
administrative expenses, excluding non-cash compensation expense (2
) (3 ) (9 ) (10 ) Management fee to ETP (on a cash basis) (5) (24 )
(24 ) (72 ) (71 ) Interest expense, net of amortization of
financing costs, interest income, and realized gains and losses on
interest rate swaps (78 ) (55 ) (206 )
(141 ) Distributable Cash Flow 324 232 982 646 Transaction-related
expenses 1 2 5 6 Bakken Pipeline Transaction — pro forma interest
expense (6) — — (6 ) —
Distributable Cash Flow, as adjusted $ 325 $ 234
$ 981 $ 652 Distributable Cash Flow, as
adjusted, per Unit $ 0.31 $ 0.22 $ 0.91 $ 0.59 Cash
distributions to be paid to the partners of ETE: Distributions to
be paid to limited partners $ 296 $ 224 $ 841 $ 624 Distributions
to be paid to general partner 1 1 2 2 Distributions to be paid to
Class D unitholder 1 1 2
2 Total cash distributions to be paid to the partners
of ETE $ 298 $ 226 $ 845 $ 628
Common units outstanding — end of period 1,044.8
1,077.6 1,044.8 1,077.6
Distribution coverage ratio (7)
1.09
x
1.04
x
1.16
x
1.04
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. See
supplemental information below for a reconciliation of these
non-GAAP financial measures to the most directly comparable
financial measure calculated and presented in accordance with GAAP.
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.
(2)
The Class I Units provide distributions to ETE for the purpose of
offsetting a portion of the IDR subsidies previously provided to
ETP.
(3)
ETP’s acquisition of Regency closed on April 30, 2015; therefore,
no distributions in relation to the quarter ended March 31, 2015
were paid by Regency. Instead, distributions from ETP include
distributions on the limited partner interests received by ETE as
consideration in ETP’s acquisition of Regency.
(4)
Effective July 1, 2015, ETE acquired 100% of the membership
interests of Sunoco GP LLC, the general partner of Sunoco LP, and
all of the IDRs of Sunoco LP from ETP.
(5)
In exchange for management services, ETE has agreed to pay to ETP
fees totaling $95 million, $95 million and $5 million for the years
ending December 31, 2014, 2015 and 2016, respectively. For GAAP
purposes, ETE has capitalized fees totaling $3 million for the
three months ended September 30, 2015 and 2014 and $10 million for
the nine months ended September 30, 2015 and 2014.
(6)
Pro forma interest expense adjustment for $879 million cash payment
to ETP related to the Bakken Pipeline Transaction to adjust for the
effective date of the transaction of January 1, 2015.
(7)
Distribution coverage ratio for a period is calculated 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
INFORMATION
RECONCILIATION OF
DISTRIBUTABLE CASH FLOW
(In millions, except per unit amounts) (unaudited) Three
Months EndedSeptember 30, Nine Months EndedSeptember 30, 2015
2014 2015 2014 Net income attributable
to partners $ 293 $ 188 $ 875 $ 520 Equity in earnings related to
investments in ETP, Regency and Sunoco LP (365 ) (229 ) (1,056 )
(639 ) Total cash distributions from investments in subsidiaries
379 263 1,122 722 Amortization included in interest expense
(excluding ETP, Regency and Sunoco LP) 3 2 7 6 Other non-cash
(excluding ETP, Regency and Sunoco LP) 14 8
34 37 Distributable Cash Flow
324 232 982 646 Transaction-related expenses 1 2 5 6 Bakken
Pipeline Transaction — pro forma interest expense —
— (6 ) — Distributable Cash
Flow, as adjusted $ 325 $ 234 $ 981 $ 652
Weighted average units outstanding (common, Class D
and General Partner on a post-split basis) 1,057.4
1,083.3 1,074.1 1,099.1
Distributable Cash Flow, as adjusted, per Unit $ 0.31
$ 0.22 $ 0.91 $ 0.59 Distributable Cash
Flow, as adjusted $ 325 Impact of SUN GP/IDR Exchange (1) 27
Distributable Cash Flow, as adjusted, excluding impact of
SUN GP/IDR Exchange $ 352 Distributable Cash Flow, as
adjusted, excluding impact of SUN GP/IDR Exchange, per unit $ 0.33
(1) Based on pro forma distributions of $22 million
on 21.0 million ETP common units redeemed in the SUN GP/IDR
Exchange, plus the related general partner and IDR impacts of $13
million, minus actual distributions received on the SUN general
partner and IDR interest of $8 million.
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”).
Distributable Cash Flow, as adjusted, per
Unit. The Partnership defines Distributable Cash Flow, as
adjusted, per Unit for a period as the quotient of Distributable
Cash Flow, as adjusted, divided by the weighted average number of
units outstanding. For purposes of this calculation, the number of
units outstanding represents the Partnership’s basic average common
units outstanding plus Class D units outstanding and the general
partner common unit equivalent.
Similar to Distributable Cash Flow, as adjusted, as described
above, Distributable Cash Flow, as adjusted, per Unit 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 to its
unitholders.
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) September 30,2015
December 31,2014
ASSETS CURRENT ASSETS $ 99 $ 17 PLANT, PROPERTY AND
EQUIPMENT 15 — ADVANCES TO AND INVESTMENTS IN UNCONSOLIDATED
AFFILIATES 5,760 5,390 INTANGIBLE ASSETS, net 7 10 GOODWILL 9 9
OTHER NON-CURRENT ASSETS, net 51 46
Total assets $ 5,941 $ 5,472
LIABILITIES AND
PARTNERS’ CAPITAL CURRENT LIABILITIES $ 222 $ 72 LONG-TERM
DEBT, less current maturities 6,439 4,680 NOTE PAYABLE TO AFFILIATE
184 54 OTHER NON-CURRENT LIABILITIES 2 2 COMMITMENTS AND
CONTINGENCIES PARTNERS’ CAPITAL: General Partner (2 ) (1 ) Limited
Partners: Common Unitholders (925 ) 648 Class D Units 21 22
Accumulated other comprehensive loss — (5 )
Total partners’ capital (906 ) 664 Total
liabilities and partners’ capital $ 5,941 $ 5,472
STATEMENTS OF
OPERATIONS
(In millions) (unaudited) Three Months EndedSeptember 30,
Nine Months EndedSeptember 30, 2015 2014 2015
2014 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES $ (24 ) $
(20 ) $ (81 ) $ (83 ) OTHER INCOME (EXPENSE): Interest expense, net
of interest capitalized (81 ) (57 ) (214 ) (147 ) Equity in
earnings of unconsolidated affiliates 403 269 1,174 756 Other, net
(4 ) (2 ) (3 ) (4 ) INCOME BEFORE
INCOME TAXES 294 190 876 522 Income tax benefit 1
2 1 2 NET INCOME 293 188
875 520 GENERAL PARTNER’S INTEREST IN NET INCOME 1 — 2 1 CLASS D
UNITHOLDER’S INTEREST IN NET INCOME 1 —
2 1 LIMITED PARTNERS’ INTEREST IN NET
INCOME $ 291 $ 188 $ 871 $ 518
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151104006889/en/
Investor Relations:Energy TransferBrent Ratliff,
214-981-0700orLyndsay Hannah, 214-840-5477orMedia
Relations:Granado Communications GroupVicki Granado,
214-599-8785214-498-9272 (cell)
Sunoco Logistics Partners L.P. (NYSE:ETP)
Historical Stock Chart
From Mar 2024 to Apr 2024
Sunoco Logistics Partners L.P. (NYSE:ETP)
Historical Stock Chart
From Apr 2023 to Apr 2024