Energy Transfer LP (NYSE:ET) (“Energy Transfer” or the
“Partnership”) today reported financial results for the quarter and
year ended December 31, 2021.
Energy Transfer reported net income attributable to partners for
the three months ended December 31, 2021 of $921 million, an
increase of $412 million compared to the same period last year. For
the three months ended December 31, 2021, net income per limited
partner unit (basic and diluted) was $0.29 per unit.
Adjusted EBITDA for the three months ended December 31, 2021 was
$2.81 billion compared to $2.59 billion for the same period last
year. The improved results were primarily driven by increased NGL
transportation and export volumes, higher realized commodity
prices, and the Enable acquisition. Energy Transfer’s NGL business
also had record transportation and fractionation volumes in the
fourth quarter.
Distributable Cash Flow attributable to partners, as adjusted,
for the three months ended December 31, 2021 was $1.60 billion
compared to $1.36 billion for the same period last year.
Growth capital expenditures in 2021 were $1.40 billion, which
was $200 million less than expected due to project deferrals into
2022. Maintenance capital expenditures were $522 million. Looking
ahead, Energy Transfer is updating its 2022 growth and maintenance
capital expenditures outlook as a result of the recently closed
Enable acquisition and rapidly growing demand for midstream
infrastructure. The Partnership expects its 2022 growth capital
expenditures to range from $1.6 billion to $1.9 billion, which
includes the addition of several new capital projects expected to
be completed by year end. Maintenance capital expenditures are
expected to range between $615 million and $665 million for 2022.
Energy Transfer is also providing an outlook for 2022 Adjusted
EBITDA which is expected to range between $11.8 billion and $12.2
billion.
Key accomplishments and recent developments:
Operational
- In February 2022, construction of the final phase of the
Mariner East project was completed and commissioning is in
progress. Energy Transfer’s Mariner East franchise will now include
multiple pipelines across Pennsylvania connecting the prolific
Marcellus/Utica Basins in the west to markets throughout the state
and the broader region, including Energy Transfer’s Marcus Hook
terminal on the east coast.
- During the first quarter 2022, construction began on the Gulf
Run Pipeline project. The 42-inch pipeline with 1.65 Bcf/d of
capacity is expected to be completed by year-end and will provide
natural gas transportation between the Haynesville Shale Basin and
the gulf coast.
- During the fourth quarter 2021, Phase II of the Cushing South
Pipeline project was launched and is expected to nearly double the
project’s oil pipeline capacity to 120,000 barrels per day. This
project primarily utilizes existing facilities to provide
additional connectivity across Energy Transfer’s mid-continent and
gulf coast crude oil network.
- In October 2021, Energy Transfer brought online a three million
barrel high-rate storage well at its Mont Belvieu facility, which
now includes 24 wells with NGL storage capacity of approximately 53
million barrels.
- In the fourth quarter of 2021, Energy Transfer reached its
highest ever volume of NGL transportation and fractionation.
- In October 2021, Energy Transfer completed its Permian Bridge
project, providing increased connectivity and efficiency between
the Partnership’s natural gas gathering and processing assets in
the Delaware Basin and its assets in the Midland Basin.
Strategic
- Energy Transfer is evaluating a new Permian Basin natural gas
takeaway project that would utilize existing Partnership assets and
a new pipeline to connect Permian supply to markets along the gulf
coast, including the Houston Ship Channel, Katy, Carthage, and
Henry Hub.
- In December 2021, Energy Transfer successfully closed the
Enable Midstream Partners, LP (“Enable”) acquisition and
integration of combined operations is ongoing. The merger is
expected to generate annual run-rate cost efficiencies in excess of
$100 million.
- In December 2021, subsequent to the Enable acquisition, the
Partnership and its affiliates purchased more than 20 million
Energy Transfer common units in connection with a secondary
offering executed by one of Enable’s prior sponsors.
- In the fourth quarter of 2021, the Partnership released its
Corporate Responsibility Report, which highlights Energy Transfer’s
business achievements and safety and risk management and emissions
reduction programs.
Financial
- In January 2022, Energy Transfer announced a 15% increase in
its quarterly distribution on common units. For the quarter ended
December 31, 2021, Energy Transfer will pay a quarterly
distribution of $0.175 per common unit ($0.70 annualized). Future
increases to the distribution level will be evaluated quarterly
with the ultimate goal of returning distributions to the previous
level of $0.305 per common unit per quarter ($1.22 annualized)
while balancing the Partnership’s leverage target, growth
opportunities and unit buybacks.
- During the fourth quarter of 2021, the Partnership reduced
outstanding debt by approximately $400 million (excluding debt
assumed in the Enable acquisition), utilizing cash from operations.
For the full year 2021, Energy Transfer reduced its existing
long-term debt by approximately $6.3 billion.
- As of December 31, 2021, the Partnership’s $5.00 billion
revolving credit facilities had an aggregate $2.03 billion of
available capacity, and the leverage ratio, as defined by its
credit agreement, was 3.07x.
Energy Transfer 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 or full year
ended December 31, 2021. The vast majority of the Partnership’s
segment margins are fee-based and therefore have limited commodity
price sensitivity.
Conference call information:
The Partnership has scheduled a conference call for 3:30 p.m.
Central Time/4:30 p.m. Eastern Time on Wednesday, February 16, 2022
to discuss its fourth quarter 2021 results and provide an update on
the Partnership, including its outlook for 2022. The conference
call will be broadcast live via an internet webcast, which can be
accessed through www.energytransfer.com and will also be available
for replay on the Partnership’s website for a limited time.
Energy Transfer LP (NYSE: ET) owns and operates one of
the largest and most diversified portfolios of energy assets in
North America, with a strategic footprint in all of the major U.S.
production basins. Energy Transfer is a publicly traded limited
partnership with core operations that include complementary natural
gas midstream, intrastate and interstate transportation and storage
assets; crude oil, natural gas liquids (“NGL”) and refined product
transportation and terminalling assets; and NGL fractionation.
Energy Transfer 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 40 U.S.
states and territories, as well as refined product transportation
and terminalling assets. SUN’s general partner is owned by Energy
Transfer LP (NYSE: ET). For more information, visit the Sunoco LP
website at www.sunocolp.com.
USA Compression Partners, LP (NYSE: USAC) is a
growth-oriented Delaware limited partnership that is one of the
nation’s largest independent providers of natural gas compression
services in terms of total compression fleet horsepower. USAC
partners with a broad customer base composed of producers,
processors, gatherers and transporters of natural gas and crude
oil. USAC focuses on providing compression services to
infrastructure applications primarily in high-volume gathering
systems, processing facilities and transportation applications. For
more information, visit the USAC website at www.usacompression.com.
Forward-Looking Statements
This news release may include certain statements concerning
expectations for the future that are forward-looking statements as
defined by federal law. Such forward-looking statements are subject
to a variety of known and unknown risks, uncertainties, and other
factors that are difficult to predict and many of which are beyond
management’s control. An extensive list of factors that can affect
future results, including future distribution levels and leverage
ratio, 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. In addition to the risks and
uncertainties previously disclosed, the Partnership has also been,
or may in the future be, impacted by new or heightened risks
related to the COVID-19 pandemic, and we cannot predict the length
and ultimate impact of those risks. The Partnership 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)
December 31, 2021
December 31, 2020
ASSETS
Current assets
$
10,537
$
6,317
Property, plant and equipment, net
81,607
75,107
Advances to and investments in
unconsolidated affiliates
2,947
3,060
Lease right-of-use assets, net
838
866
Other non-current assets, net
1,645
1,657
Intangible assets, net
5,856
5,746
Goodwill
2,533
2,391
Total assets
$
105,963
$
95,144
LIABILITIES AND EQUITY
Current liabilities (1)
$
10,835
$
5,923
Long-term debt, less current
maturities
49,022
51,417
Non-current derivative liabilities
193
237
Non-current operating lease
liabilities
814
837
Deferred income taxes
3,648
3,428
Other non-current liabilities
1,323
1,152
Commitments and contingencies
Redeemable noncontrolling interests
783
762
Equity:
Limited Partners:
Preferred Unitholders
6,051
—
Common Unitholders
25,230
18,531
General Partner
(4
)
(8
)
Accumulated other comprehensive income
(loss)
23
6
Total partners’ capital
31,300
18,529
Noncontrolling interest
8,045
12,859
Total equity
39,345
31,388
Total liabilities and equity
$
105,963
$
95,144
(1)
As of December 31, 2021, current
liabilities included $680 million of current maturities of
long-term debt. This total includes all of the $650 million of
senior notes due in April 2022 from the Bakken Pipeline entities,
for which our proportional ownership is 36.4%.
ENERGY
TRANSFER LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(In millions, except per unit
data)
(unaudited)
Three Months Ended
December 31,
Year Ended December 31,
2021
2020
2021
2020
REVENUES
$
18,657
$
10,034
$
67,417
$
38,954
COSTS AND EXPENSES:
Cost of products sold
14,754
6,703
50,395
25,487
Operating expenses
989
796
3,574
3,218
Depreciation, depletion and
amortization
980
963
3,817
3,678
Selling, general and administrative
235
156
818
711
Impairment losses
10
77
21
2,880
Total costs and expenses
16,968
8,695
58,625
35,974
OPERATING INCOME
1,689
1,339
8,792
2,980
OTHER INCOME (EXPENSE):
Interest expense, net of interest
capitalized
(554
)
(577
)
(2,267
)
(2,327
)
Equity in earnings of unconsolidated
affiliates
55
73
246
119
Impairment of investments in
unconsolidated affiliates
—
—
—
(129
)
Losses on extinguishments of debt
(30
)
(13
)
(38
)
(75
)
Gains (losses) on interest rate
derivatives
(11
)
74
61
(203
)
Other, net
32
6
77
12
INCOME BEFORE INCOME TAX EXPENSE
(BENEFIT)
1,181
902
6,871
377
Income tax expense (benefit)
(50
)
69
184
237
NET INCOME
1,231
833
6,687
140
Less: Net income attributable to
noncontrolling interest
297
312
1,167
739
Less: Net income attributable to
redeemable noncontrolling interests
13
12
50
49
NET INCOME (LOSS) ATTRIBUTABLE TO
PARTNERS
921
509
5,470
(648
)
General Partner’s interest in net income
(loss)
1
—
6
(1
)
Preferred Unitholders’ interest in net
income
100
—
285
—
Limited Partners’ interest in net income
(loss)
$
820
$
509
$
5,179
$
(647
)
NET INCOME (LOSS) PER LIMITED PARTNER
UNIT:
Basic
$
0.29
$
0.19
$
1.89
$
(0.24
)
Diluted
$
0.29
$
0.19
$
1.89
$
(0.24
)
WEIGHTED AVERAGE NUMBER OF UNITS
OUTSTANDING:
Basic
2,824.5
2,699.1
2,734.4
2,695.6
Diluted
2,830.6
2,699.1
2,739.6
2,695.6
ENERGY
TRANSFER LP AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
(Dollars and units in
millions)
(unaudited)
Three Months Ended
December 31,
Year Ended
December 31,
2021
2020
2021 (a)
2020
Reconciliation of net income to
Adjusted EBITDA and Distributable Cash Flow (b):
Net income
$
1,231
$
833
$
6,687
$
140
Interest expense, net of interest
capitalized
554
577
2,267
2,327
Impairment losses
10
77
21
2,880
Income tax expense (benefit)
(50
)
69
184
237
Depreciation, depletion and
amortization
980
963
3,817
3,678
Non-cash compensation expense
30
28
111
121
(Gains) losses on interest rate
derivatives
11
(74
)
(61
)
203
Unrealized (gains) losses on commodity
risk management activities
(88
)
44
(162
)
71
Losses on extinguishments of debt
30
13
38
75
Inventory valuation adjustments (Sunoco
LP)
(22
)
(44
)
(190
)
82
Impairment of investment in an
unconsolidated affiliate
—
—
—
129
Equity in earnings of unconsolidated
affiliates
(55
)
(73
)
(246
)
(119
)
Adjusted EBITDA related to unconsolidated
affiliates
123
148
523
628
Other, net
57
31
57
79
Adjusted EBITDA (consolidated)
2,811
2,592
13,046
10,531
Adjusted EBITDA related to unconsolidated
affiliates
(123
)
(148
)
(523
)
(628
)
Distributable Cash Flow from
unconsolidated affiliates
78
99
346
452
Interest expense, net of interest
capitalized
(554
)
(577
)
(2,267
)
(2,327
)
Preferred unitholders’ distributions
(113
)
(96
)
(418
)
(378
)
Current income tax (expense) benefit
(10
)
(19
)
(44
)
(27
)
Maintenance capital expenditures
(210
)
(152
)
(581
)
(520
)
Other, net
18
17
68
74
Distributable Cash Flow (consolidated)
1,897
1,716
9,627
7,177
Distributable Cash Flow attributable to
Sunoco LP (100%)
(143
)
(97
)
(542
)
(516
)
Distributions from Sunoco LP
41
42
165
165
Distributable Cash Flow attributable to
USAC (100%)
(52
)
(51
)
(209
)
(221
)
Distributions from USAC
24
25
97
97
Distributable Cash Flow attributable to
noncontrolling interest in other non-wholly-owned consolidated
subsidiaries
(327
)
(282
)
(1,113
)
(1,015
)
Distributable Cash Flow attributable to
the partners of Energy Transfer
1,440
1,353
8,025
5,687
Transaction-related adjustments (c)
160
9
194
55
Distributable Cash Flow attributable to
the partners of Energy Transfer, as adjusted
$
1,600
$
1,362
$
8,219
$
5,742
Distributions to partners:
Limited Partners
$
540
$
412
$
1,777
$
2,468
General Partner
1
1
2
3
Total distributions to be paid to
partners
$
541
$
413
$
1,779
$
2,471
Common Units outstanding – end of
period
3,082.5
2,702.3
3,082.5
2,702.3
Distribution coverage ratio
2.96x
3.30x
4.62x
2.32x
(a)
Winter Storm Uri, which occurred in
February 2021, resulted in one-time impacts to the Partnership’s
consolidated net income, Adjusted EBITDA and Distributable Cash
Flow. Please see additional discussion of these impacts, as well as
the potential impacts to future periods, included in the “Summary
Analysis of Quarterly Results by Segment” below.
(b)
Adjusted EBITDA, Distributable Cash Flow
and distribution coverage ratio are non-GAAP financial measures
used by industry analysts, investors, lenders and rating agencies
to assess the financial performance and the operating results of
Energy Transfer’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 Energy
Transfer’s consolidated subsidiaries. However, to the extent that
noncontrolling interests exist among our subsidiaries, the
Distributable Cash Flow generated by our subsidiaries may not be
available to be distributed to our partners. In order to reflect
the cash flows available for distributions to our partners, we have
reported Distributable Cash Flow attributable to partners, which is
calculated by adjusting Distributable Cash Flow (consolidated), as
follows:
- For subsidiaries with publicly traded equity interests,
Distributable Cash Flow (consolidated) includes 100% of
Distributable Cash Flow attributable to such subsidiary, and
Distributable Cash Flow attributable to our partners includes
distributions to be received by the parent company with respect to
the periods presented.
- For consolidated joint ventures or similar entities, where the
noncontrolling interest is not publicly traded, Distributable Cash
Flow (consolidated) includes 100% of Distributable Cash Flow
attributable to such subsidiaries, but Distributable Cash Flow
attributable to partners reflects only the amount of Distributable
Cash Flow of such subsidiaries that is attributable to our
ownership interest.
For Distributable Cash Flow attributable
to partners, as adjusted, certain transaction-related adjustments
and non-recurring expenses that are included in net income are
excluded.
Definition of Distribution Coverage
Ratio
Distribution coverage ratio for a period
is calculated as Distributable Cash Flow attributable to partners,
as adjusted, divided by distributions expected to be paid to the
partners of Energy Transfer in respect of such period.
(c)
For the three months and year
ended December 31, 2021, “Transaction-related adjustments” includes
$143 million of Distributable Cash Flow attributable to the
operations of Enable for October 1 through December 1, 2021, which
represents amounts distributable to Energy Transfer’s common
unitholders (including the holders of the common units issued in
the Enable acquisition) with respect to the fourth quarter 2021
distribution.
ENERGY
TRANSFER LP AND SUBSIDIARIES
SUMMARY
ANALYSIS OF QUARTERLY RESULTS BY SEGMENT
(Tabular dollar amounts in
millions)
(unaudited)
Three Months Ended December
31,
2021
2020
Segment Adjusted EBITDA:
Intrastate transportation and storage
$
274
$
233
Interstate transportation and storage
397
448
Midstream
547
390
NGL and refined products transportation
and services
739
703
Crude oil transportation and services
533
517
Investment in Sunoco LP
198
159
Investment in USAC
99
99
All other
24
43
Total Segment Adjusted EBITDA
$
2,811
$
2,592
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 December
31,
2021
2020
Natural gas transported (BBtu/d)
12,644
11,542
Withdrawals from storage natural gas
inventory (BBtu)
—
7,233
Revenues
$
1,505
$
781
Cost of products sold
1,133
493
Segment margin
372
288
Unrealized gains on commodity risk
management activities
(28
)
(9
)
Operating expenses, excluding non-cash
compensation expense
(69
)
(46
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(11
)
(6
)
Adjusted EBITDA related to unconsolidated
affiliates
8
6
Other
2
—
Segment Adjusted EBITDA
$
274
$
233
For the three months ended December 31, 2021 compared to the
same period last year, transported volumes increased primarily due
to volume ramp-ups in the Permian and Haynesville regions, as well
as incremental volumes from the Enable assets acquired in December
2021.
Segment Adjusted EBITDA. For the three months ended December 31,
2021 compared to the same period last year, Segment Adjusted EBITDA
related to our intrastate transportation and storage segment
increased due to the net impacts of the following:
- an increase of $39 million in transportation fees due to
increased firm transportation volumes from the Permian and the
recognition of certain revenues related to Winter Storm Uri, and
incremental revenues from the Enable assets acquired in December
2021;
- an increase of $19 million in retained fuel revenues primarily
due to higher natural gas prices; and
- an increase of $16 million in realized natural gas sales and
other primarily due to the recognition of certain revenues related
to Winter Storm Uri, partially offset by lower optimization volumes
with shifts to long-term third-party contracts from the Permian to
the Gulf Coast; partially offset by
- an increase of $23 million in operating expenses primarily due
to increases of $11 million in cost of fuel consumption due to
higher gas prices, $5 million in maintenance project costs, $5
million in ad valorem taxes, and $3 million in incremental expenses
from operation of the Enable assets acquired in December 2021;
and
- a decrease of $8 million in realized storage margin due to
lower storage optimization.
Interstate Transportation and Storage
Three Months Ended December
31,
2021
2020
Natural gas transported (BBtu/d)
11,913
10,052
Natural gas sold (BBtu/d)
36
18
Revenues
$
491
$
481
Cost of products sold
11
—
Segment margin
480
481
Operating expenses, excluding non-cash
compensation, amortization, accretion and other non-cash
expenses
(151
)
(138
)
Selling, general and administrative
expenses, excluding non-cash compensation, amortization and
accretion expenses
(20
)
(2
)
Adjusted EBITDA related to unconsolidated
affiliates
82
108
Other
6
(1
)
Segment Adjusted EBITDA
$
397
$
448
For the three months ended December 31, 2021 compared to the
same period last year, transported volumes increased primarily due
to the impact of the Enable acquisition, higher utilization on our
Tiger system and a reduced impact on our Transwestern system from
maintenance of third-party facilities, partially offset by lower
utilization of contracted capacity on our Trunkline system.
Segment Adjusted EBITDA. For the three months ended December 31,
2021 compared to the same period last year, Segment Adjusted EBITDA
related to our interstate transportation and storage segment
decreased due to the net impacts of the following:
- a decrease of $1 million in segment margin primarily due to a
$31 million decrease resulting from shipper contract expirations on
our Tiger system, a $17 million decrease due to a shipper
bankruptcy during 2020 also on our Tiger system, and a $7 million
decrease due to lower utilization on our Panhandle and Trunkline
systems. These decreases were partially offset by a $39 million
impact from the Enable acquisition, an $8 million increase due to
higher utilization on our Rover and Tiger systems, a $5 million
increase due to increased capacity sold on our Transwestern and
Tiger systems and a $3 million increase in operational gas sales on
our Transwestern system;
- an increase of $13 million in operating expenses primarily due
to a $15 million increase due to the impact of the Enable
acquisition, a $20 million increase in ad valorem taxes due to
refunds received in the prior period on Transwestern and a $3
million increase in employee related costs. These increases were
partially offset by a $14 million decrease due to bad debt expense
recorded in the prior period in connection with a shipper
bankruptcy, a $7 million decrease in transportation expense and a
$4 million decrease resulting from a write-off of obsolete
inventory in the prior period;
- an increase of $18 million in selling, general and
administrative expenses primarily due to a $12 million impact
resulting from a settlement related to excise taxes on Rover in the
prior period and a $5 million increase in allocated overhead costs;
and
- a decrease of $26 million in Adjusted EBITDA related to
unconsolidated affiliates primarily due to a $19 million decrease
from our Fayetteville Express Pipeline joint venture as a result of
the expiration of foundation shipper contracts, an $8 million
decrease from our Citrus joint venture due to a contractual rate
adjustment and higher operating expenses, and a $2 million decrease
from our Midcontinent Express Pipeline joint venture due to
capacity sold at lower rates; partially offset by
- an increase of $7 million in other Adjusted EBITDA primarily
due to certain one-time fees received in connection with the
operation of a joint venture.
Midstream
Three Months Ended December
31,
2021
2020
Gathered volumes (BBtu/d)
14,765
12,634
NGLs produced (MBbls/d)
705
596
Equity NGLs (MBbls/d)
40
32
Revenues
$
3,526
$
1,461
Cost of products sold
2,705
882
Segment margin
821
579
Unrealized losses on commodity risk
management activities
(10
)
—
Operating expenses, excluding non-cash
compensation expense
(227
)
(177
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(46
)
(20
)
Adjusted EBITDA related to unconsolidated
affiliates
9
8
Segment Adjusted EBITDA
$
547
$
390
For the three months ended December 31, 2021 compared to the
same period last year, gathered volumes and NGL production
increased during the three months ended December 31, 2021 compared
to the same period last year primarily due to the Enable
acquisition and volume increases in the South Texas, Permian, and
Northeast regions, partially offset by volume declines in the
Ark-La-Tex and Mid-Continent/Panhandle regions.
Segment Adjusted EBITDA. For the three months ended December 31,
2021 compared to the same period last year, Segment Adjusted EBITDA
related to our midstream segment increased due to the net impacts
of the following:
- an increase of $147 million in non fee-based margin due to
favorable NGL prices of $100 million and natural gas prices of $47
million;
- an increase of $15 million in non fee-based margin due to
volume growth in the South Texas, Permian, and Northeast regions;
and
- an increase of $69 million in fee-based margin due to volume
growth in the South Texas, Permian, and Northeast regions and the
Enable acquisition; partially offset by
- an increase of $50 million in operating expenses due to $22
million in incremental operating expenses from operation of the
Enable assets acquired in December 2021, an increase of $10 million
in maintenance project costs and an increase of $10 million in
employee costs; and
- an increase of $26 million in selling, general and
administrative expenses primarily due to $15 million in incremental
selling, general and administrative expenses from the Enable assets
acquired in December 2021 and an increase of $8 million in
allocated overhead costs.
NGL and Refined Products Transportation and Services
Three Months Ended December
31,
2021
2020
NGL transportation volumes (MBbls/d)
1,872
1,449
Refined products transportation volumes
(MBbls/d)
483
463
NGL and refined products terminal volumes
(MBbls/d)
1,227
859
NGL fractionation volumes (MBbls/d)
895
825
Revenues
$
6,187
$
3,056
Cost of products sold
5,213
2,223
Segment margin
974
833
Unrealized gains (losses) on commodity
risk management activities
(17
)
44
Operating expenses, excluding non-cash
compensation expense
(211
)
(175
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(30
)
(18
)
Adjusted EBITDA related to unconsolidated
affiliates
22
19
Other
1
—
Segment Adjusted EBITDA
$
739
$
703
For the three months ended December 31, 2021 compared to the
same period last year, NGL transportation volumes increased
primarily due to the initiation of service on our propane and
ethane export pipelines into our Nederland Terminal in the fourth
quarter of 2020, higher volumes from the Permian and Eagle Ford
regions and higher volumes on our Mariner East pipeline system.
Refined products transportation volumes increased for the three
months ended December 31, 2021 compared to the same period last
year due to recovery from COVID-19 related demand reduction in the
prior period.
NGL and refined products terminal volumes increased for the
three months ended December 31, 2021 compared to the same period
last year primarily due to the previously mentioned start of new
pipelines and refined product demand recovery.
Average fractionated volumes at our Mont Belvieu, Texas
fractionation facility increased for the three months ended
December 31, 2021 compared to the same period last year primarily
due to lower throughput in the prior period caused by maintenance
related downtime at our Mont Belvieu fractionation facility.
Segment Adjusted EBITDA. For the three months ended December 31,
2021 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 $46 million in transportation margin primarily
due to a $29 million increase from higher export volumes feeding
into our Nederland Terminal, a $6 million increase resulting from
increased utilization of our ethane optimization strategy, a $6
million intrasegment gain related to cavern withdrawals which is
offset in our fractionators margin, and a $5 million increase from
volumetric gains on our Texas y-grade pipeline system;
- an increase of $41 million in terminal services margin
primarily due to a $45 million increase from fees for loading
export cargos at our Nederland Terminal. These increases were
partially offset by a $5 million decrease resulting from lower
rates at our Marcus Hook Terminal due to the decrease in the
producer price index effective January 2021; and
- an increase of $17 million in fractionators and refinery
services margin primarily due to a $12 million increase resulting
from higher volumes in the fourth quarter of 2021, a $6 million
increase from operational blending and a $6 million increase due to
a more favorable pricing environment impacting our refinery
services business. These increases were partially offset by a $6
million intrasegment charge related to cavern withdrawals which is
offset in our transportation margin; partially offset by
- an increase of $36 million in operating expenses primarily due
to a $20 million increase in utilities cost resulting from higher
power and gas prices, a $9 million increase due to the timing of
maintenance related expenses, a $5 million increase in allocated
corporate overhead costs and a $4 million increase in employee
related costs;
- a decrease of $26 million in marketing margin primarily due to
a $28 million decrease from the optimization of NGL component
products at our Gulf Coast NGL activities, partially offset by an
increase of $3 million from our northeast blending and optimization
activities; and
- an increase of $12 million in selling, general and
administrative expenses primarily due to corporate cost reductions
in 2020.
Crude Oil Transportation and Services
Three Months Ended December
31,
2021
2020
Crude transportation volumes (MBbls/d)
3,839
3,532
Crude terminals volumes (MBbls/d)
2,606
2,223
Revenues
$
4,948
$
2,802
Cost of products sold
4,239
2,134
Segment margin
709
668
Unrealized gains (losses) on commodity
risk management activities
(16
)
3
Operating expenses, excluding non-cash
compensation expense
(133
)
(125
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(33
)
(36
)
Adjusted EBITDA related to unconsolidated
affiliates
4
5
Other
2
2
Segment Adjusted EBITDA
$
533
$
517
For the three months ended December 31, 2021 compared to the
same period last year, crude transportation volumes were higher on
our Texas pipeline system and Bakken pipeline, driven by a recovery
in crude oil production in these regions as a result of higher
crude oil prices as well as higher refinery demand. Additionally,
volumes benefited from higher demand on our Bayou Bridge pipeline,
the impact of the Cushing South pipeline entering service in 2021,
and contributions from assets acquired. Crude terminal volumes were
higher due to increased refinery and export activity at our Gulf
Coast terminals.
Adjusted EBITDA. For the three months ended December 31, 2021
compared to the same period last year, Segment Adjusted EBITDA
related to our crude oil transportation and services segment
increased due to the net impacts of the following:
- an increase of $23 million in segment margin (excluding
unrealized gains and losses on commodity risk management
activities) primarily due to a $58 million increase due to higher
volumes on our Bakken Pipeline, a $9 million increase due to higher
volumes on our Bayou Bridge pipeline, and a $6 million increase
related to assets acquired in 2021, partially offset by a $16
million decrease from our Texas crude pipeline system due to lower
average tariff rates realized and a $37 million decrease from our
crude oil acquisition and marketing business due to unfavorable
crude inventory valuation adjustments and less favorable pricing
conditions impacting our Bakken to Gulf Coast trading operations;
and
- a decrease of $3 million in selling, general and administrative
expenses primarily due to lower legal expenses, partially offset by
higher employee expenses and higher overhead allocations to the
crude segment as a result of assets acquired; partially offset
by
- an increase of $8 million in operating expenses primarily due
to higher ad valorem taxes, higher employee expenses, and expenses
related to assets acquired in 2021.
Investment in Sunoco LP
Three Months Ended December
31,
2021
2020
Revenues
$
4,954
$
2,553
Cost of products sold
4,615
2,271
Segment margin
339
282
Unrealized (gains) losses on commodity
risk management activities
(9
)
6
Operating expenses, excluding non-cash
compensation expense
(93
)
(71
)
Selling, general and administrative,
excluding non-cash compensation expense
(26
)
(22
)
Adjusted EBITDA related to unconsolidated
affiliates
2
3
Inventory fair value adjustments
(22
)
(44
)
Other, net
7
5
Segment Adjusted EBITDA
$
198
$
159
The Investment in Sunoco LP segment reflects the consolidated
results of Sunoco LP.
Segment Adjusted EBITDA. For the three months ended December 31,
2021 compared to the same period last year, Segment Adjusted EBITDA
related to our investment in Sunoco LP increased due to the net
impacts of the following:
- an increase in the gross profit on motor fuel sales of $47
million primarily due to a 31.1% increase in gross profit per
gallon sold and a 3.1% increase in gallons sold; and
- an increase of $20 million in non motor fuel gross profit and
lease income primarily due to an increase in storage tanks and
terminals gross profit; partially offset by
- an increase in operating expenses and in selling, general and
administrative expenses, primarily attributable to higher employee
costs, acquisition costs, general liability insurance and credit
card costs, as well as a change in expected credit losses,
partially offset by a decrease in consulting costs.
Investment in USAC
Three Months Ended December
31,
2021
2020
Revenues
$
160
$
158
Cost of products sold
24
20
Segment margin
136
138
Operating expenses, excluding non-cash
compensation expense
(26
)
(30
)
Selling, general and administrative,
excluding non-cash compensation expense
(11
)
(10
)
Other, net
—
1
Segment Adjusted EBITDA
$
99
$
99
The Investment in USAC segment reflects the consolidated results
of operations for USAC.
Segment Adjusted EBITDA. For the three months ended December 31,
2021 compared to the same period last year, Segment Adjusted EBITDA
related to our investment in USAC was unchanged due to the
offsetting impacts of a slight decrease in margin due to a decrease
in demand for compression services driven by a decline in U.S.
crude oil and natural gas activity resulting in a decrease in
average revenue generating horsepower per month, which was offset
by favorable variances in operating expenses.
All Other
Three Months Ended December
31,
2021
2020
Revenues
$
692
$
466
Cost of products sold
604
417
Segment margin
88
49
Unrealized gains (losses) on commodity
risk management activities
(8
)
1
Operating expenses, excluding non-cash
compensation expense
(33
)
(33
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(39
)
(21
)
Adjusted EBITDA related to unconsolidated
affiliates
—
1
Other and eliminations
16
46
Segment Adjusted EBITDA
$
24
$
43
Segment Adjusted EBITDA. For the three months ended December 31,
2021 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 $15 million due to higher merger and acquisition
expenses related to the Enable acquisition; and
- a decrease of $22 million due to insurance proceeds received in
the prior period on settled claims related to our MTBE litigation;
partially offset by
- an increase of $6 million from Energy Transfer Canada due to
the aggregate impact of multiple smaller changes;
- an increase of $6 million due to higher compressor sales and
lower operating expenses in our compressor business; and
- an increase of $4 million in revenues earned by our dual drive
compression business.
ENERGY
TRANSFER LP AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION ON LIQUIDITY
(In millions)
(unaudited)
The following table summarizes
the status of our revolving credit facility. We also have
consolidated subsidiaries with revolving credit facilities which
are not included in this table.
Facility Size
Funds Available at December 31,
2021
Maturity Date
Five-Year Revolving Credit Facility
$
5,000
$
2,030
December 1, 2024
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 December
31,
2021
2020
Equity in earnings (losses) of
unconsolidated affiliates:
Citrus
$
34
$
35
FEP
—
19
MEP
(5
)
(3
)
White Cliffs
—
1
Other
26
21
Total equity in earnings of unconsolidated
affiliates
$
55
$
73
Adjusted EBITDA related to
unconsolidated affiliates:
Citrus
$
76
$
83
FEP
—
19
MEP
4
5
White Cliffs
5
6
Other
38
35
Total Adjusted EBITDA related to
unconsolidated affiliates
$
123
$
148
Distributions received from
unconsolidated affiliates:
Citrus
$
44
$
36
FEP
—
20
MEP
3
4
White Cliffs
4
4
Other
26
23
Total distributions received from
unconsolidated affiliates
$
77
$
87
ENERGY
TRANSFER LP AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION ON NON-WHOLLY-OWNED JOINT
VENTURE SUBSIDIARIES
(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,
which are non-wholly-owned subsidiaries that are publicly
traded.
Three Months Ended December
31,
2021
2020
Adjusted EBITDA of non-wholly-owned
subsidiaries (100%) (a)
$
656
$
584
Our proportionate share of Adjusted EBITDA
of non-wholly-owned subsidiaries (b)
312
288
Distributable Cash Flow of
non-wholly-owned subsidiaries (100%) (c)
$
611
$
543
Our proportionate share of Distributable
Cash Flow of non-wholly-owned subsidiaries (d)
284
270
Below is our ownership percentage of
certain non-wholly-owned subsidiaries:
Non-wholly-owned subsidiary:
Energy Transfer Percentage
Ownership (e)
Bakken Pipeline
36.4%
Bayou Bridge
60.0%
Maurepas
51.0%
Ohio River System
75.0%
Permian Express Partners
87.7%
Red Bluff Express
70.0%
Rover
32.6%
Energy Transfer Canada
51.0%
Others
various
(a)
Adjusted EBITDA of
non-wholly-owned subsidiaries reflects the total Adjusted EBITDA of
our non-wholly-owned subsidiaries on an aggregated basis. This is
the amount of 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 Energy Transfer.
(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/20220216006056/en/
Energy Transfer Investor Relations: Bill Baerg, Brent
Ratliff, Lyndsay Hannah, 214-981-0795 or Media Relations:
Vicki Granado, 214-840-5820
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