Energy Transfer LP (NYSE:ET) (“Energy Transfer” or the
“Partnership”) today reported financial results for the quarter
ended March 31, 2022.
Energy Transfer reported net income attributable to partners for
the three months ended March 31, 2022 of $1.27 billion. For the
three months ended March 31, 2022, net income per limited partner
unit (basic) was $0.38 per unit.
Adjusted EBITDA for the three months ended March 31, 2022 was
$3.34 billion compared to $5.04 billion for the three months ended
March 31, 2021. First quarter 2021 results were favorably impacted
by earnings from the historic Winter Storm Uri. Excluding this
contribution, Adjusted EBITDA would have increased over the prior
period.
Distributable Cash Flow attributable to partners, as adjusted,
for the three months ended March 31, 2022 was $2.08 billion
compared to $3.91 billion for the three months ended March 31,
2021. The decrease from the prior period was primarily driven by
the favorable impact on the first quarter 2021 Adjusted EBITDA from
Winter Storm Uri discussed above.
For the first quarter 2022, Energy Transfer had higher
transportation volumes across all of its segments and a full
quarter contribution from the Enable Midstream assets that were
acquired in December 2021.
Key accomplishments and recent developments:
Operational
- During the first quarter 2022:
- Energy Transfer started construction on the new 200 MMcf per
day Grey Wolf high-recovery cryogenic processing plant in response
to increased customer demand for growing natural gas volumes in the
Permian Basin.
- Construction began on the Gulf Run Pipeline project. The
42-inch pipeline with 1.65 Bcf per day of capacity is expected to
be completed by year-end and will provide natural gas
transportation between the prolific Haynesville Shale Basin and the
U.S. Gulf Coast.
- Construction of the final phase of the Mariner East project was
completed, bringing Energy Transfer’s total NGL capacity on the
Mariner East pipeline system to more than 365,000 barrels per day,
including ethane.
- Energy Transfer completed capacity expansions on its Cushing
South crude oil pipeline that provides transportation service from
the Partnership’s Cushing Terminal to its Nederland Terminal, as
well as on its Permian Bridge Project, which connects the
Partnership’s gathering and processing assets in the Delaware and
Midland Basins.
- In April 2022, Energy Transfer placed the Ted Collins Link into
service providing additional connectivity for its Houston Terminal
to the U.S. Gulf Coast pipeline network and the Houston Ship
Channel. Energy Transfer completed its inaugural shipment of oil
from its Houston Terminal for export utilizing this system in
April.
Strategic
- In March 2022, the Partnership announced a definitive agreement
to sell its 51% interest in Energy Transfer Canada. The sale is
expected to result in cash proceeds to Energy Transfer of
approximately $272 million (based on the March 31, 2022 exchange
rate), subject to certain purchase price adjustments, and to reduce
the Partnership’s consolidated debt by approximately $450 million.
The transaction is expected to close by the third quarter of
2022.
- To date in 2022, the Partnership has entered into four
long-term LNG Sale and Purchase Agreements (“SPAs”). Under these
SPAs, Energy Transfer LNG Export, LLC is expected to supply a total
of 4.7 million tonnes of LNG per annum over 20 years, plus another
0.4 million tonnes per annum over 18 years, with first deliveries
expected to commence as early as 2026. The execution of these SPAs
represents a significant step in moving the Lake Charles LNG export
project towards a positive final investment decision.
- The Partnership continues to pursue a natural gas pipeline
project from the Permian Basin to address the growing need for
additional natural gas takeaway from the region. The project would
include the construction of a new intrastate pipeline paralleling
existing right of way from the Midland Basin to interconnnect with
Energy Transfer’s extensive pipeline network south of Dallas/Ft.
Worth, Texas. From that point, Energy Transfer’s vast pipeline
systems provide significant flexibility to deliver natural gas to
premier markets along the Texas Gulf Coast including Katy,
Beaumont, and the Houston Ship Channel, as well as to Carthage,
with potential deliveries to most major U.S. trading hubs and
markets.
- During the first quarter 2022, Energy Transfer continued
integration of the recently acquired Enable Midstream Partners (the
“Enable Acquisition”) business with the majority of back office
integration now complete. This early step, along with further
improved efficiencies, is expected to generate run-rate cost
savings of more than $100 million per year.
Financial
- In April 2022, Energy Transfer announced a more than 30%
increase in its quarterly distribution on common units compared to
the first quarter of 2021. For the quarter ended March 31, 2022,
Energy Transfer will pay a quarterly distribution of $0.20 per
common unit ($0.80 annualized). Future increases to the
distribution level will continue to 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.
- In April 2022, the Partnership amended its revolving credit
facility to extend the maturity to April 2027, with two optional
one-year extensions. As of March 31, 2022, the Partnership’s
revolving credit facility had $2.02 billion of available capacity,
and the leverage ratio, as defined by the credit agreement, was
3.55x.
- For the three months ended March 31, 2022, the Partnership
invested approximately $388 million on growth capital
expenditures.
- Given Energy Transfer’s strong performance in the first
quarter, as well as continued increasing demand, the Partnership
expects Adjusted EBITDA for the full year 2022 to be between $12.2
billion and $12.6 billion (previously $11.8 billion to $12.2
billion). The Partnership also expects its 2022 growth capital
expenditures to be between $1.8 billion and $2.1 billion
(previously $1.6 billion to $1.9 billion).
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 25% of the Partnership’s
consolidated Adjusted EBITDA for the three months ended March 31,
2022. 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, May 4, 2022 to
discuss its first quarter 2022 results and provide an update on the
Partnership. 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 the
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)
March 31, 2022
December 31, 2021
ASSETS
Current assets (1)
$
15,699
$
10,537
Property, plant and equipment, net
80,035
81,607
Investments in unconsolidated
affiliates
2,921
2,947
Lease right-of-use assets, net
830
838
Other non-current assets, net
1,566
1,645
Intangible assets, net
5,608
5,856
Goodwill
2,533
2,533
Total assets
$
109,192
$
105,963
LIABILITIES AND EQUITY
Current liabilities (1) (2)
$
13,719
$
10,835
Long-term debt, less current
maturities
48,826
49,022
Non-current derivative liabilities
139
193
Non-current operating lease
liabilities
809
814
Deferred income taxes
3,540
3,648
Other non-current liabilities
1,337
1,323
Commitments and contingencies
Redeemable noncontrolling interests
493
783
Equity:
Limited Partners:
Preferred Unitholders
6,077
6,051
Common Unitholders
25,881
25,230
General Partner
(3
)
(4
)
Accumulated other comprehensive income
43
23
Total partners’ capital
31,998
31,300
Noncontrolling interests
8,331
8,045
Total equity
40,329
39,345
Total liabilities and equity
$
109,192
$
105,963
(1)
As of March 31, 2022, current assets
include $1.68 billion of current assets held for sale and current
liabilities include $1.03 billion of current liabilities held for
sale, related to the Partnership’s pending sale of its interest in
Energy Transfer Canada.
(2)
As of March 31, 2022, current liabilities
include $652 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%. These notes were repaid in April 2022.
ENERGY
TRANSFER LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(In millions, except per unit
data)
(unaudited)
Three Months Ended March 31,
2022
2021
REVENUES
$
20,491
$
16,995
COSTS AND EXPENSES:
Cost of products sold
16,138
10,948
Operating expenses
949
820
Depreciation, depletion and
amortization
1,028
954
Selling, general and administrative
230
201
Impairment losses
300
3
Total costs and expenses
18,645
12,926
OPERATING INCOME
1,846
4,069
OTHER INCOME (EXPENSE):
Interest expense, net of interest
capitalized
(559
)
(589
)
Equity in earnings of unconsolidated
affiliates
56
55
Losses on extinguishments of debt
—
(7
)
Gains on interest rate derivatives
114
194
Other, net
21
(6
)
INCOME BEFORE INCOME TAX EXPENSE
(BENEFIT)
1,478
3,716
Income tax expense (benefit)
(9
)
75
NET INCOME
1,487
3,641
Less: Net income attributable to
noncontrolling interests
205
341
Less: Net income attributable to
redeemable noncontrolling interests
13
12
NET INCOME ATTRIBUTABLE TO PARTNERS
1,269
3,288
General Partner’s interest in net
income
1
3
Preferred Unitholders’ interest in net
income
106
—
Limited Partners’ interest in net
income
$
1,162
$
3,285
NET INCOME PER COMMON UNIT:
Basic
$
0.38
$
1.22
Diluted
$
0.37
$
1.21
WEIGHTED AVERAGE NUMBER OF UNITS
OUTSTANDING:
Basic
3,083.5
2,702.8
Diluted
3,100.5
2,708.6
ENERGY
TRANSFER LP AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
(Dollars and units in
millions)
(unaudited)
Three Months Ended March 31,
2022
2021(a)
Reconciliation of net income to
Adjusted EBITDA and Distributable Cash Flow(b):
Net income
$
1,487
$
3,641
Interest expense, net of interest
capitalized
559
589
Impairment losses
300
3
Income tax expense (benefit)
(9
)
75
Depreciation, depletion and
amortization
1,028
954
Non-cash compensation expense
36
28
Gains on interest rate derivatives
(114
)
(194
)
Unrealized (gains) losses on commodity
risk management activities
45
(46
)
Losses on extinguishments of debt
—
7
Inventory valuation adjustments (Sunoco
LP)
(120
)
(100
)
Equity in earnings of unconsolidated
affiliates
(56
)
(55
)
Adjusted EBITDA related to unconsolidated
affiliates
125
123
Other, net
59
15
Adjusted EBITDA (consolidated)
3,340
5,040
Adjusted EBITDA related to unconsolidated
affiliates
(125
)
(123
)
Distributable cash flow from
unconsolidated affiliates
86
76
Interest expense, net of interest
capitalized
(559
)
(589
)
Preferred unitholders’ distributions
(118
)
(96
)
Current income tax (expense) benefit
41
(9
)
Transaction-related income taxes(c)
(42
)
—
Maintenance capital expenditures
(118
)
(76
)
Other, net
5
19
Distributable Cash Flow (consolidated)
2,510
4,242
Distributable Cash Flow attributable to
Sunoco LP (100%)
(142
)
(108
)
Distributions from Sunoco LP
41
41
Distributable Cash Flow attributable to
USAC (100%)
(50
)
(53
)
Distributions from USAC
24
24
Distributable Cash Flow attributable to
noncontrolling interests in other non-wholly-owned consolidated
subsidiaries
(317
)
(251
)
Distributable Cash Flow attributable to
the partners of Energy Transfer
2,066
3,895
Transaction-related adjustments
12
19
Distributable Cash Flow attributable to
the partners of Energy Transfer, as adjusted
$
2,078
$
3,914
Distributions to partners:
Limited Partners
$
617
$
412
General Partner
1
—
Total distributions to be paid to
partners
$
618
$
412
Common Units outstanding – end of
period
3,084.7
2,703.5
Distribution coverage ratio
3.36x
9.50x
(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 ended March 31, 2022,
the amount reflected for transaction-related income taxes was
related to an amended return from a previous transaction.
ENERGY
TRANSFER LP AND SUBSIDIARIES
SUMMARY
ANALYSIS OF QUARTERLY RESULTS BY SEGMENT
(Tabular dollar amounts in
millions)
(unaudited)
Three Months Ended March 31,
2022
2021
Segment Adjusted EBITDA:
Intrastate transportation and storage
$
444
$
2,813
Interstate transportation and storage
453
453
Midstream
807
288
NGL and refined products transportation
and services
700
647
Crude oil transportation and services
593
510
Investment in Sunoco LP
191
157
Investment in USAC
98
100
All other
54
72
Total Segment Adjusted EBITDA
$
3,340
$
5,040
The following analysis of segment operating results includes a
measure of segment margin. 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 March 31,
2022
2021
Natural gas transported (BBtu/d)
13,973
11,221
Withdrawals from storage natural gas
inventory (BBtu)
21,858
19,045
Revenues
$
1,632
$
4,900
Cost of products sold
1,171
1,994
Segment margin
461
2,906
Unrealized (gains) losses on commodity
risk management activities
46
(12
)
Operating expenses, excluding non-cash
compensation expense
(63
)
(80
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(12
)
(8
)
Adjusted EBITDA related to unconsolidated
affiliates
6
6
Other
6
1
Segment Adjusted EBITDA
$
444
$
2,813
Transported volumes increased primarily due to the acquisition
of the Enable Oklahoma Intrastate Transmission system, as well as
increased production in the Permian and Haynesville.
Segment Adjusted EBITDA. For the three months ended March 31,
2022 compared to the same period last year, Segment Adjusted EBITDA
related to our intrastate transportation segment decreased due to
the net impacts of the following:
- a decrease of $1.50 billion in realized storage margin
primarily due to higher physical storage margin from withdrawals
during Winter Storm Uri in the prior period;
- a decrease of $862 million in realized natural gas sales and
other primarily due to natural gas sales at prevailing market
prices during Winter Storm Uri in the prior period;
- a decrease of $61 million in retained fuel revenues related to
natural gas prices during Winter Storm Uri in the prior period;
and
- an increase of $4 million in selling, general and
administrative expenses primarily due to higher allocated overhead
costs from the addition of the Enable assets and higher corporate
expenses; partially offset by
- an increase of $35 million in transportation fees primarily due
to fees on the recently acquired Enable Oklahoma Intrastate
Transmission system; and
- a decrease of $17 million in operating expenses primarily due
to a $16 million decrease in cost of fuel consumption and a $9
million decrease in utilities expenses, partially offset by $6
million of additional expenses from the Enable assets and a $2
million increase in ad valorem taxes.
Interstate Transportation and Storage
Three Months Ended March 31,
2022
2021
Natural gas transported (BBtu/d)
15,098
9,654
Natural gas sold (BBtu/d)
41
21
Revenues
$
566
$
525
Cost of products sold
19
—
Segment margin
547
525
Operating expenses, excluding non-cash
compensation, amortization and accretion expenses
(171
)
(134
)
Selling, general and administrative
expenses, excluding non-cash compensation, amortization and
accretion expenses
(31
)
(21
)
Adjusted EBITDA related to unconsolidated
affiliates
88
85
Other
20
(2
)
Segment Adjusted EBITDA
$
453
$
453
Transported volumes increased primarily due to the impact of the
Enable Acquisition, higher utilization on our Tiger system due to
increased production in the Haynesville Shale, higher volumes on
our Transwestern system and increased short-term firm and
interruptible utilization on our Rover system.
Segment Adjusted EBITDA. For the three months ended March 31,
2022 compared to the same period last year, Segment Adjusted EBITDA
related to our interstate transportation and storage segment was
unchanged due to the net impacts of the following:
- an increase of $22 million in segment margin primarily due to a
$110 million increase resulting from the inclusion of interstate
assets acquired in the Enable Acquisition and a $24 million
increase in transportation revenue from our Transwestern, Rover and
Trunkline Gas systems due to increased rates and higher
utilization. These increases were partially offset by an $84
million decrease due to Winter Storm Uri related operational gas
sale gains recorded in the prior period, a $19 million decrease
resulting from shipper contract expirations and a shipper
bankruptcy on our Tiger system in the prior period, and a $9
million decrease on our Panhandle system due to lower rates on
capacity sold;
- an increase of $22 million in other primarily due to the
realization in the current period of certain amounts related to a
shipper bankruptcy that occurred in a prior period; and
- an increase of $3 million in Adjusted EBITDA related to
unconsolidated affiliates primarily due to the Enable Acquisition
in December 2021; offset by
- an increase of $37 million in operating expenses, which
included a $36 million increase from the impact of the Enable
Acquisition, a $4 million increase in maintenance project costs, a
$3 million increase in electricity expense and a $2 million
increase in ad valorem taxes. These increases were partially offset
by a $7 million decrease due to lower utilization of third-party
transportation services; and
- an increase of $10 million in selling, general and
administrative expenses primarily due to a $5 million increase from
the impact of the Enable Acquisition and a $4 million increase
resulting from higher employee costs.
Midstream
Three Months Ended March 31,
2022
2021
Gathered volumes (BBtu/d)
17,333
12,024
NGLs produced (MBbls/d)
757
534
Equity NGLs (MBbls/d)
42
30
Revenues
$
3,925
$
2,672
Cost of products sold
2,885
2,202
Segment margin
1,040
470
Unrealized gains on commodity risk
management activities
(2
)
—
Operating expenses, excluding non-cash
compensation expense
(234
)
(164
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(44
)
(25
)
Adjusted EBITDA related to unconsolidated
affiliates
9
7
Other
38
—
Segment Adjusted EBITDA
$
807
$
288
Gathered volumes and NGL production increased compared to the
same period last year due to increased production in South Texas,
additional gathering capacity from the Permian Bridge Pipeline and
new volumes from the Enable Acquisition in December 2021.
Segment Adjusted EBITDA. For the three months ended March 31,
2022 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 $106 million in non-fee-based margin due to
favorable natural gas prices of $34 million and NGL prices of $72
million;
- an increase of $143 million in non-fee-based margin due to the
impacts of Winter Storm Uri in the prior period;
- an increase of $101 million in non-fee-based margin due to the
Enable Acquisition in December 2021;
- an increase of $20 million in non-fee-based margin due to
increased production in the Permian and South Texas regions;
- an increase of $171 million in fee-based margin due to the
Enable Acquisition in December 2021;
- an increase of $28 million in fee-based margin due to increased
production in the Permian and South Texas regions; and
- an increase of $38 million in other primarily due to the
realization in the current period of certain amounts related to a
shipper bankruptcy that occurred in a prior period; partially
offset by
- an increase of $70 million in operating expenses due to $41
million in incremental operating expenses related to the Enable
assets acquired in December 2021 and an increase of $29 million due
to higher outside services, materials, employee costs and ad
valorem taxes; and
- an increase of $19 million in selling, general and
administrative expenses due to an increase in allocated overhead
costs driven by the Enable Acquisition in December 2021.
NGL and Refined Products Transportation and Services
Three Months Ended March 31,
2022
2021
NGL transportation volumes (MBbls/d)
1,752
1,502
Refined products transportation volumes
(MBbls/d)
496
462
NGL and refined products terminal volumes
(MBbls/d)
1,180
1,042
NGL fractionation volumes (MBbls/d)
804
726
Revenues
$
6,277
$
3,990
Cost of products sold
5,356
3,141
Segment margin
921
849
Unrealized gains on commodity risk
management activities
(5
)
(23
)
Operating expenses, excluding non-cash
compensation expense
(202
)
(172
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(35
)
(28
)
Adjusted EBITDA related to unconsolidated
affiliates
21
21
Segment Adjusted EBITDA
$
700
$
647
NGL transportation volumes increased primarily due to higher
volumes from the Permian and Eagle Ford regions and the ramp-up in
volumes on our propane and ethane export pipelines into our
Nederland Terminal.
Refined products transportation volumes increased due to
recovery from COVID-19 related demand reduction in the prior
period.
NGL and refined products terminal volumes increased primarily
due to the ramp-up in volumes on our propane and ethane export
pipelines and refined product demand recovery.
Segment Adjusted EBITDA. For the three months ended March 31,
2022 compared to the same period last year, Segment Adjusted EBITDA
related to our NGL and refined products transportation and services
segment increased due to the net impacts of the following:
- an increase of $48 million in marketing margin primarily due to
intrasegment charges of $44 million, which are fully offset within
our transportation margin, and an increase of $28 million from our
northeast blending and optimization activities. These increases
were partially offset by a $24 million decrease due to lower gains
from the optimization of NGL component products from our Gulf Coast
NGL activities, primarily due to gains realized during the prior
period due to market volatility;
- an increase of $40 million in fractionators and refinery
services margin primarily due to a $27 million increase from higher
volumes and increased utilization of our ethane optimization
strategy in the first quarter of 2022 and a $15 million
intrasegment charge related to cavern withdrawals, which is fully
offset in our transportation margin;
- an increase of $10 million in terminal services margin
primarily due to increased export volumes loaded at our Nederland
Terminal; and
- an increase of $5 million in storage margin primarily due to
increased volumes exported from our Nederland Terminal; partially
offset by
- an increase of $30 million in operating expenses primarily due
to a $19 million increase in utilities costs resulting from higher
power and gas prices, a $6 million increase in ad valorem taxes and
a $3 million increase in employee related costs;
- a decrease of $13 million in transportation margin primarily
due to intrasegment charges of $44 million, which are fully offset
within our marketing margin, a $15 million intrasegment charge
related to cavern withdrawals, which is offset in our fractionators
margin, and a $4 million decrease resulting from lower throughput
on our Mariner West pipeline. These decreases were partially offset
by a $42 million increase resulting from increased y-grade
throughput on our Texas pipeline system, and an $8 million increase
from higher exported volumes feeding into our Nederland Terminal;
and
- an increase of $7 million in selling, general and
administrative expenses primarily due to a $4 million increase in
information technology costs and a $3 million increase in employee
related costs.
Crude Oil Transportation and Services
Three Months Ended March 31,
2022
2021
Crude transportation volumes (MBbls/d)
4,216
3,537
Crude terminal volumes (MBbls/d)
2,765
2,358
Revenues
$
5,926
$
3,500
Cost of products sold
5,179
2,838
Segment margin
747
662
Unrealized (gains) losses on commodity
risk management activities
11
(5
)
Operating expenses, excluding non-cash
compensation expense
(137
)
(122
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(30
)
(30
)
Adjusted EBITDA related to unconsolidated
affiliates
1
5
Other
1
—
Segment Adjusted EBITDA
$
593
$
510
Crude transportation volumes were higher on our Texas pipeline
system and Bakken pipeline, driven by the continued recovery in
crude oil production in these regions as a result of higher crude
oil prices, higher refinery demand, and Winter Storm Uri impacting
crude oil production in the prior period. Additionally, volumes
benefited from higher demand on our Bayou Bridge pipeline, the
initiation of service on our Cushing South pipeline in 2021, and
contributions from assets acquired in the Enable Acquisition. Crude
terminal volumes were higher due to increased refinery and export
activity at our Gulf Coast terminals.
Segment Adjusted EBITDA. For the three months ended March 31,
2022 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 $101 million in segment margin (excluding
unrealized gains and losses on commodity risk management
activities) primarily due to an $83 million increase due to higher
volumes on our Bakken Pipeline, a $16 million increase due to the
Enable Acquisition in December 2021, an $11 million increase from
our Texas crude pipeline system due to higher volumes transported,
a $6 million increase due to higher volumes on our Bayou Bridge
pipeline, and a $5 million increase in throughput at our Gulf Coast
terminals, partly offset by a $20 million decrease from our crude
oil acquisition and marketing business primarily due to increased
tariffs paid to our affiliate pipeline and terminal businesses;
partially offset by
- an increase of $15 million in operating expenses primarily due
to higher ad valorem taxes, higher volume-driven expenses, and
expenses related to assets acquired in 2021; and
- a decrease of $4 million in Adjusted EBITDA related to
unconsolidated affiliates due to the consolidation of certain
operations that were previously reflected as unconsolidated
affiliates.
Investment in Sunoco LP
Three Months Ended March 31,
2022
2021
Revenues
$
5,402
$
3,471
Cost of products sold
4,972
3,120
Segment margin
430
351
Unrealized gains on commodity risk
management activities
(9
)
(5
)
Operating expenses, excluding non-cash
compensation expense
(97
)
(76
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(22
)
(20
)
Adjusted EBITDA related to unconsolidated
affiliates
2
2
Inventory valuation adjustments
(120
)
(100
)
Other
7
5
Segment Adjusted EBITDA
$
191
$
157
The Investment in Sunoco LP segment reflects the consolidated
results of Sunoco LP.
Segment Adjusted EBITDA. For the three months ended March 31,
2022 compared to the same period last year, Segment Adjusted EBITDA
related to our investment in Sunoco LP segment increased due to the
net impacts of the following:
- an increase in the gross profit on motor fuel sales of $36
million primarily due to a 19.6% increase in gross profit per
gallon sold and a 0.8% increase in gallons sold; and
- an increase in non-motor fuel sales and lease gross profit of
$21 million primarily due to an increase in storage tanks and
terminals gross profit from Sunoco LP’s recent acquisition of
refined product terminals; partially offset by
- an increase in operating expenses and selling, general and
administrative expenses of $23 million primarily due to higher
costs as a result of Sunoco LP’s recent acquisition of refined
product terminals, higher employee costs, credit card processing
fees, environmental costs, maintenance costs, acquisition costs and
expected credit losses.
Investment in USAC
Three Months Ended March 31,
2022
2021
Revenues
$
163
$
158
Cost of products sold
25
21
Segment margin
138
137
Operating expenses, excluding non-cash
compensation expense
(29
)
(28
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(11
)
(9
)
Segment Adjusted EBITDA
$
98
$
100
The Investment in USAC segment reflects the consolidated results
of USAC.
Segment Adjusted EBITDA. For the three months ended March 31,
2022 compared to the same period last year, Segment Adjusted EBITDA
related to our investment in USAC segment decreased primarily due
to an increase of $2 million in selling, general and administrative
expenses primarily due to higher employee expenses and changes in
the provision for credit losses.
All Other
Three Months Ended March 31,
2022
2021
Revenues
$
715
$
1,512
Cost of products sold
614
1,342
Segment margin
101
170
Unrealized (gains) losses on commodity
risk management activities
4
(1
)
Operating expenses, excluding non-cash
compensation expense
(34
)
(51
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(17
)
(39
)
Adjusted EBITDA related to unconsolidated
affiliates
—
(1
)
Other and eliminations
—
(6
)
Segment Adjusted EBITDA
$
54
$
72
For the three months ended March 31, 2022 compared to the same
period last year, Segment Adjusted EBITDA related to our all other
segment decreased primarily due to the net impacts of the
following:
- a decrease of $43 million due to gains in the prior period
related to Winter Storm Uri; partially offset by
- a decrease of $13 million in ad valorem taxes; and
- an increase of $10 million due to higher merger and acquisition
expenses in the prior period.
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 March 31,
2022
Maturity Date
Five-Year Revolving Credit Facility
$
5,000
$
2,024
April 8, 2027
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 March 31,
2022
2021
Equity in earnings (losses) of
unconsolidated affiliates:
Citrus
$
34
$
37
MEP
(4
)
(3
)
White Cliffs
—
—
Other
26
21
Total equity in earnings (losses) of
unconsolidated affiliates
$
56
$
55
Adjusted EBITDA related to
unconsolidated affiliates:
Citrus
$
77
$
79
MEP
5
5
White Cliffs
5
5
Other
38
34
Total Adjusted EBITDA related to
unconsolidated affiliates
$
125
$
123
Distributions received from
unconsolidated affiliates:
Citrus
$
60
$
56
MEP
4
4
White Cliffs
5
15
Other
21
25
Total distributions received from
unconsolidated affiliates
$
90
$
100
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 March 31,
2022
2021
Adjusted EBITDA of non-wholly-owned
subsidiaries (100%) (a)
$
650
$
540
Our proportionate share of Adjusted EBITDA
of non-wholly-owned subsidiaries (b)
317
275
Distributable Cash Flow of
non-wholly-owned subsidiaries (100%) (c)
$
609
$
504
Our proportionate share of Distributable
Cash Flow of non-wholly-owned subsidiaries (d)
292
253
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 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/20220504005973/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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