Energy Transfer Equity, L.P. (NYSE:ETE) (“ETE” or the
“Partnership”) today reported financial results for the quarter
ended March 31, 2015.
Distributable Cash Flow, as adjusted, for the three months ended
March 31, 2015 was $321 million compared to $199 million for
the three months ended March 31, 2014, an increase of $122
million. Distributable Cash Flow, as adjusted, per unit was $0.59
for the three months ended March 31, 2015, an increase of 69%
compared to the three months ended March 31, 2014. ETE’s net
income attributable to partners was $284 million for the three
months ended March 31, 2015 compared to $168 million for the
three months ended March 31, 2014, an increase of $116
million.
In April 2015, ETE’s Board of Directors approved its tenth
consecutive increase in its quarterly distribution to $0.49 per
unit on ETE Common Units for the quarter ended March 31, 2015, an
increase of 8.9% on an annualized basis compared to the fourth
quarter of 2014 and an increase of 37% on an annualized basis
compared to the first quarter of 2014. For the quarter ended March
31, 2015, ETE’s distribution coverage ratio was 1.21x.
The Partnership’s recent key accomplishments and other
developments include the following:
- In March 2015, ETE transferred
30.8 million Energy Transfer Partners, L.P. (“ETP”) Common
Units, ETE’s 45% interest in the Bakken Pipeline project, and
$879 million in cash in exchange for 30.8 million newly
issued Class H Units of ETP that, when combined with the
50.2 million previously issued Class H Units, generally
entitle ETE to receive 90.05% of the cash distributions and other
economic attributes of the general partner interest and incentive
distribution rights of Sunoco Logistics Partners L.P. (“SXL”) (the
“Bakken Pipeline Transaction”). In connection with this
transaction, ETP also issued 100 Class I Units that provide
distributions to ETE to offset IDR subsidies previously provided to
ETP. The IDR subsidies from ETE to ETP, including the impact from
distributions on Class I Units, will be reduced by $55 million
in 2015 and $30 million in 2016.
- In March 2015, ETE issued $850 million
of debt under its Senior Secured Term Loan C Agreement to fund the
Bakken Pipeline Transaction.
- In addition, ETP and SXL agreed to
transfer 30% of the Bakken Pipeline to SXL.
- In April 2015, ETP completed its
previously announced acquisition of Regency Energy Partners LP
(“Regency”) with Regency surviving as a wholly-owned subsidiary of
ETP. Each Regency Common Unit and Class F unit was converted into
0.4124 ETP Common Units. The total consideration paid in equity was
approximately 172.2 million ETP Common Units to Regency
unitholders, including 15.5 million units issued to ETP
subsidiaries. The approximately 1.9 million outstanding Regency
Series A Preferred Units were converted into new ETP Series A
Preferred Units. As a result of the merger, ETE’s 57.2 million
Regency Common Units were exchanged into approximately 23.6 million
ETP Common Units.
- Regarding our Lake Charles LNG project,
on April 10, 2015, the draft Environmental Impact Statement for
Lake Charles LNG and the expansion of the Trunkline interstate
pipeline was issued by the Federal Energy Regulatory Commission
(“FERC”). ETE/ETP and BG Group plc (“BG”) were pleased with the
findings and recommendations by the FERC. It moves the Lake Charles
LNG project one step closer to our goal of achieving a final
investment decision (“FID”) in 2016.On April 7, 2015, BG and Royal
Dutch Shell plc (“Shell”) announced a proposed takeover of BG by
Shell. We understand that the closing of the BG/Shell merger is
expected to occur in early 2016. In the interim, BG and ETE/ETP
remain focused on completing the development milestones for the
project as the parties move toward FID.
- As of March 31, 2015, ETE’s $1.5
billion revolving credit facility had $925 million of outstanding
borrowings and its leverage ratio, as defined by the credit
agreement, was 3.23x.
The Partnership has scheduled a conference call for 8:00 a.m.
Central Time, Thursday, May 7, 2015 to discuss its first 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, and 90%
of the underlying economics of the general partner interest and
IDRs of SXL, through ETP Class H Units and the Partnership’s
ownership of Lake Charles LNG. Prior to ETP’s acquisition of
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), approximately 23.6 million ETP
common units, and 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). 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. web site 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 more than 62,000 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 in 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. ETP
owns 100% of Sunoco, Inc. and 100% of Susser
Holdings Corporation. Additionally, ETP owns the general partner,
100% of the incentive distribution rights and approximately 44% 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 ETE. For more information, visit the Energy
Transfer Partners, L.P. web site at www.energytransfer.com.
Sunoco Logistics Partners L.P. (NYSE: SXL), headquartered
in Philadelphia, 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 owned by Energy Transfer Partners, L.P. (NYSE:
ETP). For more information, visit the Sunoco Logistics Partners,
L.P. web site at www.sunocologistics.com.
Sunoco LP (NYSE: SUN) is a master limited partnership
that primarily distributes motor fuel to convenience stores,
independent dealers, commercial customers and distributors. Sunoco
LP also operates more than 150 convenience stores and retail fuel
sites. Sunoco LP’s general partner is owned by Energy Transfer
Partners, L.P. (NYSE:ETP). For more information, visit the Sunoco
LP web site 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)
March 31, 2015 December 31, 2014
ASSETS
CURRENT ASSETS $ 6,789 $ 6,153 PROPERTY, PLANT AND
EQUIPMENT, net 42,342 40,292 ADVANCES TO AND INVESTMENTS IN
UNCONSOLIDATED AFFILIATES 3,656 3,659 NON-CURRENT PRICE RISK
MANAGEMENT ASSETS 9 10 GOODWILL 7,702 7,865 INTANGIBLE ASSETS, net
5,553 5,582 OTHER NON-CURRENT ASSETS, net 953 908
Total assets $ 67,004 $ 64,469
LIABILITIES AND
EQUITY
CURRENT LIABILITIES $ 5,327 $ 6,782 LONG-TERM DEBT,
less current maturities 33,158 29,653 DEFERRED INCOME TAXES 4,139
4,325 NON-CURRENT PRICE RISK MANAGEMENT LIABILITIES 228 154 OTHER
NON-CURRENT LIABILITIES 1,313 1,193 COMMITMENTS AND
CONTINGENCIES PREFERRED UNITS OF SUBSIDIARY 33 33 REDEEMABLE
NONCONTROLLING INTEREST 15 15 EQUITY: Total partners’
capital 707 664 Noncontrolling interest 22,084 21,650
Total equity 22,791 22,314 Total liabilities and
equity $ 67,004 $ 64,469
ENERGY TRANSFER
EQUITY, L.P. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per unit data) (unaudited) Three Months
EndedMarch 31, 2015 2014
REVENUES $ 10,380 $ 13,080 COSTS AND EXPENSES: Cost of products
sold 8,487 11,442 Operating expenses 628 424 Depreciation,
depletion and amortization 493 373 Selling, general and
administrative 155 131 Total costs and
expenses 9,763 12,370 OPERATING INCOME
617 710 OTHER INCOME (EXPENSE): Interest expense, net of interest
capitalized (371 ) (315 ) Equity in earnings of unconsolidated
affiliates 57 104 Losses on interest rate derivatives (77 ) (2 )
Gain on sale of AmeriGas common units — 70 Other, net 7
2 INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAX EXPENSE 233 569 Income tax expense from continuing
operations 12 145 INCOME FROM
CONTINUING OPERATIONS 221 424 Income from discontinued operations
— 24 NET INCOME 221 448 LESS: NET
INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTEREST (63 )
280 NET INCOME ATTRIBUTABLE TO PARTNERS 284 168
General Partner’s interest in net income 1 — Class D Unitholder’s
interest in net income 1 1 Limited
Partners’ interest in net income $ 282 $ 167 INCOME
FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT: Basic $ 0.52
$ 0.30 Diluted $ 0.52 $ 0.30 NET INCOME
PER LIMITED PARTNER UNIT: Basic $ 0.52 $ 0.30 Diluted
$ 0.52 $ 0.30 WEIGHTED AVERAGE NUMBER OF UNITS
OUTSTANDING: Basic 538.8 557.7 Diluted
539.5 558.4
ENERGY TRANSFER
EQUITY, L.P.
DISTRIBUTABLE
CASH FLOW(1)
(Dollars in millions, except per unit amounts) (unaudited)
Three Months EndedMarch 31, 2015 2014
Cash distributions from ETP associated with: Limited partner
interest $ 24 $ 29 Class H Units 56 50 General partner interest 8 5
Incentive distribution rights 300 168 IDR relinquishments, net of
distributions on Class I Units (2) (27 ) (57 ) Total
cash distributions from ETP 361 195 Cash distributions from Regency
associated with (3): Limited partner interest — 13 General partner
interest — 1 Incentive distribution rights — 7 IDR relinquishment
— (1 ) Total cash distributions from Regency
— 20 Total cash distributions and
dividends from ETP and Regency 361 215 Distributable cash
flow attributable to Lake Charles LNG: Revenues 54 54 Operating
expenses (4 ) (4 ) Selling, general and administrative expenses
(1 ) (2 ) Distributable cash flow attributable to
Lake Charles LNG 49 48 Deduct expenses of the Parent Company
on a stand-alone basis: Selling, general and administrative
expenses, excluding non-cash compensation expense (2 ) (2 )
Management fee to ETP (4) (24 ) (24 ) Interest expense, net of
amortization of financing costs, interest income, and realized
gains and losses on interest rate swaps (58 ) (39 )
Distributable Cash Flow 326 198 Transaction-related expenses 1 1
Bakken Pipeline Transaction — pro forma interest expense (5)
(6 ) — Distributable Cash Flow, as adjusted $ 321
$ 199 Distributable Cash Flow, as adjusted,
per Unit $ 0.59 $ 0.35 Cash distributions to be paid to the
partners of ETE: Distributions to be paid to limited partners $ 264
$ 195 Distributions to be paid to general partner 1 — Distributions
to be paid to Class D unitholder 1 1
Total cash distributions to be paid to the partners of ETE $ 266
$ 196 Distribution coverage ratio (6) 1.21x
1.02x
_________________
(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 ending March
31, 2015 will be 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) 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. (5)
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. (6)
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 EndedMarch 31, 2015 2014
Net income attributable to partners $ 284 $ 168 Equity in earnings
related to investments in ETP and Regency (328 ) (201 ) Total cash
distributions from ETP and Regency 361 215 Amortization included in
interest expense (excluding ETP and Regency) 2 2 Other non-cash
(excluding ETP and Regency) 7 14
Distributable Cash Flow 326 198 Transaction-related expenses 1 1
Bakken Pipeline Transaction — pro forma interest expense (6
) — Distributable Cash Flow, as adjusted $ 321
$ 199 Weighted average units outstanding (common,
Class D and General Partner) 541.7 560.6
Distributable Cash Flow, as adjusted, per Unit $ 0.59
$ 0.35
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 from ETP
and Regency in respect of such period in connection with the
Partnership’s investments in limited and general partner interests
of ETP (including the ETP Class H units which track the general
partner and IDRs in SXL) and Regency, 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
beginning January 1, 2014. 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
INFORMATION
FINANCIAL STATEMENTS
FOR PARENT COMPANY
Following are condensed balance sheets and statements of
operations of the Parent Company on a stand-alone basis.
BALANCE
SHEETS
(In millions) (unaudited) March 31,2015 December 31, 2014
ASSETS CURRENT ASSETS $ 22 $ 17 PLANT, PROPERTY AND
EQUIPMENT 5 — ADVANCES TO AND INVESTMENTS IN UNCONSOLIDATED
AFFILIATES 6,304 5,390 INTANGIBLE ASSETS, net 9 10 GOODWILL 9 9
OTHER NON-CURRENT ASSETS, net 55 46
Total assets $ 6,404 $ 5,472
LIABILITIES AND
PARTNERS’ CAPITAL CURRENT LIABILITIES $ 92 $ 72 LONG-TERM DEBT,
less current maturities 5,507 4,680 NOTE PAYABLE TO AFFILIATE 95 54
OTHER NON-CURRENT LIABILITIES 3 2 COMMITMENTS AND CONTINGENCIES
PARTNERS’ CAPITAL: General Partner (1 ) (1 ) Limited Partners:
Common Unitholders 695 648 Class D Units 18 22 Accumulated other
comprehensive loss (5 ) (5 ) Total partners’ capital
707 664 Total liabilities and partners’
capital $ 6,404 $ 5,472
STATEMENTS OF
OPERATIONS
(In millions) (unaudited) Three Months EndedMarch 31, 2015
2014 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES $(28)
$(31) OTHER INCOME (EXPENSE): Interest expense, net of interest
capitalized (61) (40) Equity in earnings of unconsolidated
affiliates 373 239 Other, net 1 — INCOME BEFORE INCOME TAXES 285
168 Income tax expense 1 — NET INCOME 284 168 GENERAL PARTNER’S
INTEREST IN NET INCOME 1 — CLASS D UNITHOLDER’S INTEREST IN NET
INCOME 1 1 LIMITED PARTNERS’ INTEREST IN NET INCOME $282 $167
Investor Relations:Energy TransferBrent Ratliff,
214-981-0700orLyndsay Hannah, 214-840-5477orMedia
Relations:Granado Communications GroupVicki Granado,
214-599-8785214-498-9272 (cell)
Sunoco (NYSE:SUN)
Historical Stock Chart
From Aug 2024 to Sep 2024
Sunoco (NYSE:SUN)
Historical Stock Chart
From Sep 2023 to Sep 2024