Energy Transfer LP (NYSE:ET) (“ET” or the “Partnership”)
today reported financial results for the quarter ended September
30, 2020.
ET reported an earnings net loss attributable to partners for
the three months ended September 30, 2020 of $782 million, which
included non-cash impairments of goodwill and joint venture
investments totaling $1.6 billion.
Adjusted EBITDA for the three months ended September 30, 2020
was $2.87 billion compared with $2.81 billion for the three months
ended September 30, 2019. Results included record operating
performance in the Partnership’s NGL and refined products
segment.
Distributable Cash Flow attributable to partners, as adjusted,
for the three months ended September 30, 2020 was $1.69 billion
compared to $1.55 billion for the three months ended September 30,
2019. The change between periods reflected the increase in Adjusted
EBITDA, along with a decrease in maintenance capital
expenditures.
ET once again reduced its 2020 growth capital outlook. As a
result of project cost savings, the Partnership now expects to
invest less than $3.3 billion for the full-year 2020, which is more
than $100 million below previous estimates.
In addition, due to Partnership performance this year and
improving market conditions, ET now expects to have full-year
results at the high end of its 2020 outlook for Adjusted EBITDA
range of $10.2 billion to $10.5 billion.
Key accomplishments and current developments:
Operational
- As the COVID-19 pandemic continues, our field operations have
continued uninterrupted, and remote work and other COVID-19 related
conditions have not significantly impacted our ability to maintain
operations nor caused us to incur significant additional
expenses.
- For the third quarter of 2020, ET achieved record high
transportation and fractionation volumes in its NGL and refined
products transportation and services segment.
- The Partnership successfully managed operations through two
major hurricanes hitting the Gulf Coast without an employee safety
incident and without any significant service disruption to our
customers.
Strategic
- During the third quarter of 2020, the Partnership completed its
Lone Star Express expansion under budget and ahead of
schedule.
- The Partnership has also continued to make significant progress
on other major capital projects throughout the U.S. The Partnership
currently expects the next phase of Mariner East, Orbit and other
NGL export projects to be placed in service by year-end.
Financial
- In October 2020, ET announced a quarterly distribution of
$0.1525 per unit ($0.61 annualized) on ET common units for the
quarter ended September 30, 2020. The distribution coverage ratio
for the third quarter of 2020 was 4.10x. ET expects to use the
excess cash resulting from this distribution decrease to reduce
debt.
- As of September 30, 2020, Energy Transfer Operating, L.P.’s
(“ETO”) $6.00 billion revolving credit facilities had an aggregate
$2.65 billion of available capacity, and the leverage ratio, as
defined by the credit agreement, was 4.24x.
- ET has also updated its 2020 outlook with reduced capex and
improved Adjusted EBITDA expectations.
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, 2020. 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 4:00 p.m.
Central Time, Wednesday, November 4, 2020 to discuss its third
quarter 2020 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 or ir.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, NGL and refined product transportation and
terminalling assets; NGL fractionation; and various acquisition and
marketing assets. ET, through its ownership of Energy Transfer
Operating, L.P., 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
Operating, L.P., a subsidiary of 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 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 the
recent decline in commodity prices, and we cannot predict the
length and ultimate impact of those risks. 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,
2020
December 31,
2019
ASSETS
Current assets (1)
$
6,150
$
7,464
Property, plant and equipment, net
75,128
74,193
Advances to and investments in
unconsolidated affiliates
3,068
3,460
Lease right-of-use assets, net
934
964
Other non-current assets, net (1)
1,582
1,571
Intangible assets, net
5,915
6,154
Goodwill
2,418
5,167
Total assets
$
95,195
$
98,973
LIABILITIES AND EQUITY
Current liabilities
$
6,047
$
7,724
Long-term debt, less current
maturities
51,424
51,028
Non-current derivative liabilities
275
273
Non-current operating lease
liabilities
901
901
Deferred income taxes
3,349
3,208
Other non-current liabilities
1,152
1,162
Commitments and contingencies
Redeemable noncontrolling interests
756
739
Equity:
Total partners’ capital
18,284
21,920
Noncontrolling interests
13,007
12,018
Total equity
31,291
33,938
Total liabilities and equity
$
95,195
$
98,973
(1)
Effective January 1, 2020, the Partnership
elected to change its accounting policy related to certain barrels
of crude oil that were previously accounted for as inventory.
Under the revised accounting policy, certain amounts of crude oil
that are not available for sale have been reclassified from
inventory to non current assets. The balances as of December 31,
2019 have been adjusted to reflect this change in accounting
policy.
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,
2020
2019(1)
2020
2019(1)
REVENUES
$
9,955
$
13,495
$
28,920
$
40,493
COSTS AND EXPENSES:
Cost of products sold
6,376
9,864
18,784
29,642
Operating expenses
773
806
2,422
2,406
Depreciation, depletion and
amortization
912
784
2,715
2,343
Selling, general and administrative
176
173
555
499
Impairment losses
1,474
12
2,803
62
Total costs and expenses
9,711
11,639
27,279
34,952
OPERATING INCOME
244
1,856
1,641
5,541
OTHER INCOME (EXPENSE):
Interest expense, net of interest
capitalized
(569
)
(579
)
(1,750
)
(1,747
)
Equity in earnings (losses) of
unconsolidated affiliates
(32
)
82
46
224
Impairment of investment in an
unconsolidated affiliate
(129
)
—
(129
)
—
Losses on extinguishments of debt
—
—
(62
)
(18
)
Gains (losses) on interest rate
derivatives
55
(175
)
(277
)
(371
)
Other, net
71
57
6
99
INCOME (LOSS) BEFORE INCOME TAX
EXPENSE
(360
)
1,241
(525
)
3,728
Income tax expense
41
54
168
214
NET INCOME (LOSS)
(401
)
1,187
(693
)
3,514
Less: Net income attributable to
noncontrolling interests
369
317
554
931
Less: Net income attributable to
redeemable noncontrolling interests
12
12
37
38
NET INCOME (LOSS) ATTRIBUTABLE TO
PARTNERS
(782
)
858
(1,284
)
2,545
General Partner’s interest in net income
(loss)
—
1
(1
)
3
Limited Partners’ interest in net income
(loss)
$
(782
)
$
857
$
(1,283
)
$
2,542
NET INCOME (LOSS) PER LIMITED PARTNER
UNIT:
Basic
$
(0.29
)
$
0.33
$
(0.48
)
$
0.97
Diluted
$
(0.29
)
$
0.33
$
(0.48
)
$
0.97
WEIGHTED AVERAGE NUMBER OF UNITS
OUTSTANDING:
Basic
2,696.6
2,624.9
2,694.4
2,621.9
Diluted
2,696.6
2,635.5
2,694.4
2,632.9
(1)
Effective January 1, 2020, the Partnership
elected to change its accounting policy related to certain barrels
of crude oil that were previously accounted for as inventory. Under
the revised accounting policy, certain amounts of crude oil that
are not available for sale have been reclassified from inventory to
non-current assets. The condensed consolidated statement of
operations for the three and nine months ended September 30, 2019
has been adjusted to reflect this change in accounting policy.
ENERGY
TRANSFER LP AND SUBSIDIARIES SUPPLEMENTAL INFORMATION
(Dollars and units in millions)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020
2019(a)
2020
2019(a)
Reconciliation of net income (loss) to
Adjusted EBITDA and Distributable Cash Flow(b):
Net income (loss)
$
(401
)
$
1,187
$
(693
)
$
3,514
Interest expense, net of interest
capitalized
569
579
1,750
1,747
Impairment losses
1,474
12
2,803
62
Income tax expense
41
54
168
214
Depreciation, depletion and
amortization
912
784
2,715
2,343
Non-cash compensation expense
30
27
93
85
(Gains) losses on interest rate
derivatives
(55
)
175
277
371
Unrealized (gains) losses on commodity
risk management activities
30
(64
)
27
(90
)
Losses on extinguishments of debt
—
—
62
18
Impairment of investment in an
unconsolidated affiliate
129
—
129
—
Inventory valuation adjustments (Sunoco
LP)
(11
)
26
126
(71
)
Equity in (earnings) losses of
unconsolidated affiliates
32
(82
)
(46
)
(224
)
Adjusted EBITDA related to unconsolidated
affiliates
169
161
480
470
Other, net
(53
)
(47
)
48
(67
)
Adjusted EBITDA (consolidated)
2,866
2,812
7,939
8,372
Adjusted EBITDA related to unconsolidated
affiliates
(169
)
(161
)
(480
)
(470
)
Distributable cash flow from
unconsolidated affiliates
128
107
353
307
Interest expense, net of interest
capitalized
(569
)
(579
)
(1,750
)
(1,747
)
Preferred unitholders’ distributions
(97
)
(68
)
(282
)
(185
)
Current income tax expense
(7
)
(2
)
(8
)
(23
)
Maintenance capital expenditures
(129
)
(178
)
(368
)
(440
)
Other, net
17
18
57
55
Distributable Cash Flow (consolidated)
2,040
1,949
5,461
5,869
Distributable Cash Flow attributable to
Sunoco LP (100%)
(139
)
(133
)
(419
)
(331
)
Distributions from Sunoco LP
41
41
123
123
Distributable Cash Flow attributable to
USAC (100%)
(57
)
(55
)
(170
)
(164
)
Distributions from USAC
24
24
72
66
Distributable Cash Flow attributable to
noncontrolling interests in other non-wholly-owned consolidated
subsidiaries
(234
)
(283
)
(733
)
(827
)
Distributable Cash Flow attributable to
the partners of ET
1,675
1,543
4,334
4,736
Transaction-related adjustments
16
3
46
6
Distributable Cash Flow attributable to
the partners of ET, as adjusted
$
1,691
$
1,546
$
4,380
$
4,742
Distributions to partners:
Limited Partners
$
411
$
808
2,055
2,407
General Partner
1
1
3
3
Total distributions to be paid to
partners
$
412
$
809
$
2,058
$
2,410
Common Units outstanding – end of
period
2,698.0
2,627.0
2,698.0
2,627.0
Distribution coverage ratio
4.10x
1.91x
2.13x
1.97x
(a)
Effective January 1, 2020, the Partnership
elected to change its accounting policy related to certain barrels
of crude oil that were previously accounted for as inventory. Under
the revised accounting policy, certain amounts of crude oil that
are not available for sale have been reclassified from inventory to
non-current assets. The results for the three and nine months ended
September 30, 2019 have been adjusted to reflect this change in
accounting policy.
(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, other
than ETO, 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,
2020
2019
Segment Adjusted EBITDA:
Intrastate transportation and storage
$
203
$
235
Interstate transportation and storage
425
442
Midstream
530
411
NGL and refined products transportation
and services
762
667
Crude oil transportation and services
631
726
Investment in Sunoco LP
189
192
Investment in USAC
104
104
All other
22
35
Total Segment Adjusted EBITDA
$
2,866
$
2,812
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,
2020
2019
Natural gas transported (BBtu/d)
12,185
12,560
Withdrawals from storage natural gas
inventory (BBtu)
10,315
—
Revenues
$
654
$
764
Cost of products sold
434
501
Segment margin
220
263
Unrealized losses on commodity risk
management activities
23
19
Operating expenses, excluding non-cash
compensation expense
(42
)
(48
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(7
)
(7
)
Adjusted EBITDA related to unconsolidated
affiliates
7
7
Other
2
1
Segment Adjusted EBITDA
$
203
$
235
Transported volumes decreased primarily due to the bankruptcy
filing of a transportation customer.
Segment Adjusted EBITDA. For the three months ended September
30, 2020 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:
- a decrease of $37 million in realized natural gas sales and
other primarily due to lower realized gains from pipeline
optimization activity;
- a decrease of $2 million in retained fuel revenues primarily
due to lower gas prices; and
- a decrease of $1 million in realized storage margin due to
lower realized gains from financial derivatives used to hedge
physical storage gas; partially offset by
- a decrease of $6 million in operating expenses primarily due to
$2 million decrease in employee costs, a $2 million decrease in
maintenance project costs and a $1 million decrease in outside
services.
Interstate Transportation and Storage
Three Months Ended
September 30,
2020
2019
Natural gas transported (BBtu/d)
10,387
11,407
Natural gas sold (BBtu/d)
15
17
Revenues
$
471
$
479
Operating expenses, excluding non-cash
compensation, amortization and accretion expenses
(147
)
(141
)
Selling, general and administrative
expenses, excluding non-cash compensation, amortization and
accretion expenses
(20
)
(17
)
Adjusted EBITDA related to unconsolidated
affiliates
122
124
Other
(1
)
(3
)
Segment Adjusted EBITDA
$
425
$
442
Transported volumes decreased primarily due to lower crude
production resulting in lower associated gas production and a
decrease in demand for LNG export.
Segment Adjusted EBITDA. For the three months ended September
30, 2020 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 $8 million in revenues primarily due to a
decrease of $16 million due to a contractual rate adjustment on
commitments at our Lake Charles LNG facility effective January 2020
and a decrease of $9 million due to less capacity sold on our
Panhandle and Trunkline systems. These decreases were partially
offset by increased margin from short-term firm contracts on our
Transwestern and Rover systems due to increased demand and higher
parking due to the timing of transactions;
- an increase of $6 million in operating expense primarily due to
an increase in bad debt reserves and higher ad valorem taxes,
partially offset by the impact of cost cutting initiatives;
- an increase of $3 million in selling, general and
administrative expenses primarily resulting from legal and
consulting fees related to an ongoing rate case and a shipper
bankruptcy; and
- a decrease of $2 million in Adjusted EBITDA related to
unconsolidated affiliates primarily due to lower earnings of $6
million from our Midcontinent Express Pipeline primarily as a
result of lower rates received following the expiration of certain
contracts, partially offset by a $4 million increase from Citrus
primarily due to higher margins and lower operating expenses.
Midstream
Three Months Ended
September 30,
2020
2019
Gathered volumes (BBtu/d)
12,904
13,955
NGLs produced (MBbls/d)
635
574
Equity NGLs (MBbls/d)
32
30
Revenues
$
1,377
$
1,580
Cost of products sold
668
953
Segment margin
709
627
Operating expenses, excluding non-cash
compensation expense
(169
)
(202
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(21
)
(21
)
Adjusted EBITDA related to unconsolidated
affiliates
9
6
Other
2
1
Segment Adjusted EBITDA
$
530
$
411
Gathered volumes decreased compared to the same period last year
primarily due to decreases in the South Texas and Northeast Texas
regions, partially offset by the impact of the SemGroup acquisition
in the Mid-Continent/Panhandle region and volume growth in the
Permian region. NGL production increased due to the impact of the
SemGroup acquisition in the Mid-Continent/Panhandle region and
increased ethane recovery in the Permian, South Texas and North
Texas regions.
Segment Adjusted EBITDA. For the three months ended September
30, 2020 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 $92 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, which included the recognition of $75 million of
deferred revenue received in prior periods;
- a decrease of $33 million in operating expenses due to
decreases of $17 million in outside services, $10 million in
employee costs and $9 million in materials; and
- an increase of $2 million in non fee-based margin due to
unfavorable NGL prices of $5 million and favorable gas prices of $7
million; partially offset by
- a decrease of $12 million in non fee-based margin due to
decreased throughput volumes, primarily in the South Texas
region.
NGL and Refined Products Transportation and Services
Three Months Ended
September 30,
2020
2019
NGL transportation volumes (MBbls/d)
1,493
1,358
Refined products transportation volumes
(MBbls/d)
460
552
NGL and refined products terminal volumes
(MBbls/d)
850
872
NGL fractionation volumes (MBbls/d)
877
713
Revenues
$
2,623
$
2,878
Cost of products sold
1,712
1,962
Segment margin
911
916
Unrealized (gains) losses on commodity
risk management activities
11
(81
)
Operating expenses, excluding non-cash
compensation expense
(162
)
(167
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(20
)
(22
)
Adjusted EBITDA related to unconsolidated
affiliates
22
24
Other
—
(3
)
Segment Adjusted EBITDA
$
762
$
667
NGL transportation volumes increased due to higher throughput
volumes on our Mariner East pipeline system. In addition,
throughput barrels on our Texas NGL pipeline system increased due
to higher receipt of liquids production from both wholly-owned and
third-party gas plants primarily in the Permian and North Texas
regions.
Refined products transportation volumes decreased due to the
closure of a third-party refinery during the third quarter of 2019,
which negatively impacted supply to our refined products
transportation system, and less domestic demand for jet fuel and
other refined products. These decreases in volumes were partially
offset by the initiation of service of our JC Nolan diesel fuel
pipeline in the third quarter of 2019.
NGL and refined products terminal volumes decreased primarily
due to the closure of a third-party refinery during the third
quarter of 2019, and less domestic demand for jet fuel and other
refined products. These decreases were partially offset by higher
volumes from our Mariner East system, and the initiation of service
on our JC Nolan diesel fuel pipeline and natural gasoline export
project, both of which commenced service in the third quarter of
2019.
Average fractionated volumes at our Mont Belvieu, Texas
fractionation facility increased primarily due to the commissioning
of our seventh fractionator in February 2020.
Segment Adjusted EBITDA. For the three months ended September
30, 2020 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 impacts of the following:
- an increase of $88 million in marketing margin primarily due to
a $66 million increase driven by higher optimization gains from the
sale of NGL component products at our Mont Belvieu facility, a $12
million increase from capacity lease fees incurred by our marketing
affiliate on our Mariner East pipeline system, and a $10 million
increase in gasoline blending and optimization;
- an increase of $20 million in transportation margin primarily
due to a $13 million increase from higher throughput volumes on our
Mariner East pipeline system, a $9 million increase from higher
throughput volumes received from the Permian region on our Texas
NGL pipelines, a $4 million increase due to the initiation of
service on our JC Nolan diesel fuel pipeline in the third quarter
of 2019, and a $3 million increase due to higher throughput volumes
from the Barnett region. These increases were partially offset by a
$3 million decrease resulting from the recognition of third party
deferred revenue on our export pipeline in the third quarter of
2019, a $2 million decrease due to less domestic demand for jet
fuel and other refined products, and a $2 million decrease
resulting from the closure of a third-party refinery during the
third quarter of 2019;
- an increase of $18 million in fractionators and refinery
services margin primarily due to the commissioning of our seventh
fractionator in February 2020 and higher NGL volumes from the
Permian and Barnett regions feeding our Mont Belvieu fractionation
facility;
- a decrease of $5 million in operating expenses primarily due to
a $9 million decrease in power costs, partially offset by increases
totaling $4 million for costs associated with operating additional
assets; and
- an increase of $6 million in storage margin primarily due to a
$4 million increase primarily from a new intra-segment storage
contract effective June 2020 and a $2 million increase in
throughput fees generated primarily from exported volumes;
partially offset by
- a decrease of $45 million in terminal services margin primarily
due to a $40 million decrease resulting from the expiration of a
third party contract at our Nederland export facility in the second
quarter of 2020, a $6 million decrease due to lower storage fees at
our Marcus Hook Industrial Complex due to the closure of a
third-party refinery during the third quarter of 2019, a $3 million
decrease due to less domestic demand for jet fuel and other refined
products, and a $2 million decrease due to the closure of a
third-party refinery. These decreases were partially offset by an
$11 million increase due to higher throughput on our Mariner East
system.
Crude Oil Transportation and Services
Three Months Ended
September 30,
2020
2019
Crude transportation volumes (MBbls/d)
3,587
4,223
Crude terminals volumes (MBbls/d)
2,276
2,322
Revenues
$
2,850
$
4,453
Cost of products sold
2,096
3,594
Segment margin
754
859
Unrealized gains on commodity risk
management activities
(1
)
(2
)
Operating expenses, excluding non-cash
compensation expense
(112
)
(110
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(28
)
(21
)
Adjusted EBITDA related to unconsolidated
affiliates
9
1
Other
9
(1
)
Segment Adjusted EBITDA
$
631
$
726
Crude transportation and terminal volumes were lower on our
Texas pipeline system and our Bakken pipeline, primarily driven by
lower production in these regions and refinery utilization due to
COVID-19 related demand decreases, partly offset by contributions
from assets acquired in 2019. Crude terminal volumes were lower
primarily due to lower pipeline volumes, refinery utilization, and
impacts from weather events in the third quarter of 2020, partially
offset by contributions from assets acquired in 2019.
Segment Adjusted EBITDA. For the three months ended September
30, 2020 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 $104 million in segment margin (excluding
unrealized gains and losses on commodity risk management
activities) primarily due to a $113 million decrease from our Texas
crude pipeline system due to lower utilization and lower average
tariff rates realized, an $84 million decrease due to lower volumes
on our Bakken Pipeline from lower basin production, and a $7
million decrease in throughput at our crude terminals primarily
driven by lower Permian and Bakken pipeline volumes, reduced
refinery utilization, and weather events in the third quarter of
2020 impacting operations, partially offset by a $78 million
increase related to assets acquired in 2019 and a $31 million
increase (excluding a net change of $2 million in unrealized gains
and losses on commodity risk management activities) from our crude
oil acquisition and marketing business primarily due to trading
gains realized from contango storage positions, as well as an
inventory valuation write-down recognized in the prior period;
- an increase of $2 million in operating expenses primarily due
to increased costs related to assets acquired in 2019, partially
offset by lower volume-driven pipeline expenses; and
- an increase of $7 million in selling, general and
administrative expenses primarily due to a $3 million increase in
legal expenses, a $2 million increase in insurance expenses, a $1
million increase in information technology expenses, and a $1
million increase in employee costs; partially offset by
- an increase of $8 million in Adjusted EBITDA related to
unconsolidated affiliates due to assets acquired in 2019.
Investment in Sunoco LP
Three Months Ended
September 30,
2020
2019
Revenues
$
2,805
$
4,331
Cost of products sold
2,497
4,039
Segment margin
308
292
Unrealized gains on commodity risk
management activities
(6
)
(1
)
Operating expenses, excluding non-cash
compensation expense
(84
)
(94
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(24
)
(36
)
Adjusted EBITDA related to unconsolidated
affiliates
2
1
Inventory valuation adjustments
(11
)
26
Other
4
4
Segment Adjusted EBITDA
$
189
$
192
The Investment in Sunoco LP segment reflects the consolidated
results of Sunoco LP.
Segment Adjusted EBITDA. For the three months ended September
30, 2020 compared to the same period last year, Segment Adjusted
EBITDA related to our investment in Sunoco LP segment decreased due
to the net impacts of the following:
- a decrease in the gross profit on motor fuel sales of $23
million, primarily due to a 4% increase in gross profit per gallon
sold, offset by a 12% decrease in gallons sold; and
- a decrease of $3 million in non-motor fuel sales and lease
gross margin as a result of rent concessions during the three
months ended September 30, 2020; partially offset by
- a decrease of $22 million in operating expenses and selling,
general and administrative expenses, primarily attributable to
lower employee costs, professional fees, credit card processing
fees and advertising costs; and
- an increase of $1 million in Adjusted EBITDA related to
unconsolidated affiliates which was attributable to the JC Nolan
joint venture entered into in 2019.
Investment in USAC
Three Months Ended
September 30,
2020
2019
Revenues
$
161
$
175
Cost of products sold
20
23
Segment margin
141
152
Operating expenses, excluding non-cash
compensation expense
(29
)
(35
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(11
)
(13
)
Other
3
—
Segment Adjusted EBITDA
$
104
$
104
The Investment in USAC segment reflects the consolidated results
of USAC.
Segment Adjusted EBITDA. For the three months ended September
30, 2020 Segment Adjusted EBITDA related to our investment in USAC
segment was consistent with the same period last year primarily due
to the offsetting impacts of the following:
- a decrease of $11 million in segment margin primarily driven by
a decrease in U.S. crude oil and natural gas activity; offset
by
- a decrease of $6 million in operating expenses primarily driven
by a decrease in average revenue generating horsepower and reduced
headcount; and
- a decrease of $2 million in selling, general and administrative
expenses primarily due to a decrease in employee expenses.
All Other
Three Months Ended
September 30,
2020
2019
Revenues
$
367
$
441
Cost of products sold
318
393
Segment margin
49
48
Unrealized losses on commodity risk
management activities
3
1
Operating expenses, excluding non-cash
compensation expense
(35
)
(39
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(23
)
(11
)
Adjusted EBITDA related to unconsolidated
affiliates
1
—
Other and eliminations
27
36
Segment Adjusted EBITDA
$
22
$
35
Segment Adjusted EBITDA. For the three months ended September
30, 2020 compared to the same period last year, Segment Adjusted
EBITDA related to our all other segment decreased due to the net
impacts of the following:
- a decrease of $10 million due to lower compression market
demand from our compression equipment business;
- a decrease of $6 million due to power trading activities;
- a decrease of $11 million due to lower demand and operator
production, as well as a contract expiration at our natural
resources business; and
- an increase of $10 million in merger and acquisition expense;
partially offset by
- an increase of $26 million from the acquisition of
SemCAMS.
ENERGY
TRANSFER LP AND SUBSIDIARIES SUPPLEMENTAL INFORMATION ON
LIQUIDITY (In millions)
(unaudited)
The following table is a summary of ETO’s
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, 2020
Maturity Date
ETO Five-Year Revolving Credit
Facility
$
5,000
$
1,652
December 1, 2023
ETO 364-Day Revolving Credit Facility
1,000
1,000
November 27, 2020
$
6,000
$
2,652
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,
2020
2019
Equity in earnings (losses) of
unconsolidated affiliates:
Citrus
$
50
$
44
FEP
(106
)
15
MEP
(1
)
1
White Cliffs
2
—
Other
23
22
Total equity in earnings (losses) of
unconsolidated affiliates
$
(32
)
$
82
Adjusted EBITDA related to
unconsolidated affiliates:
Citrus
$
96
$
92
FEP
19
19
MEP
8
13
White Cliffs
11
—
Other
35
37
Total Adjusted EBITDA related to
unconsolidated affiliates
$
169
$
161
Distributions received from
unconsolidated affiliates:
Citrus
$
48
$
54
FEP
20
20
MEP
4
7
White Cliffs
2
—
Other
23
22
Total distributions received from
unconsolidated affiliates
$
97
$
103
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,
2020
2019
Adjusted EBITDA of non-wholly-owned
subsidiaries (100%) (a)
$
529
$
683
Our proportionate share of Adjusted EBITDA
of non-wholly-owned subsidiaries (b)
269
378
Distributable Cash Flow of
non-wholly-owned subsidiaries (100%) (c)
$
483
$
647
Our proportionate share of Distributable
Cash Flow of non-wholly-owned subsidiaries (d)
249
364
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
%
SemCAMS
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/20201104005684/en/
Energy Transfer Investor Relations: Bill Baerg, Brent
Ratliff, Lyndsay Hannah, 214-981-0795 or Media Relations:
Vicki Granado, 214-840-5820
Energy Transfer (NYSE:ET)
Historical Stock Chart
From Mar 2024 to Apr 2024
Energy Transfer (NYSE:ET)
Historical Stock Chart
From Apr 2023 to Apr 2024