Energy Transfer Partners Reports Fourth Quarter Results
In
ETP’s other recent key accomplishments include the following:
-
In
November 2016 ,ETP andSunoco Logistics Partners L.P. (“Sunoco Logistics”) entered into a merger agreement providing for the acquisition of ETP bySunoco Logistics in a unit-for-unit transaction. Under the terms of the transaction, ETP unitholders will receive 1.5 common units ofSunoco Logistics for each common unit of ETP they own. -
On
November 1, 2016 , ETP acquired certain interests inPennTex Midstream Partners, LP (“PennTex”) from various parties for total consideration of approximately$640 million in ETP units and cash. -
In
February 2017 , ETP announced that theFederal Energy Regulatory Commission (“FERC”) approved Rover Pipeline LLC’s (“Rover”) application to construct and operate the Rover Pipeline project, allowing Rover to move forward with its targeted in-service goals ofJuly 2017 for Phase I andNovember 2017 for Phase II. -
On
February 8, 2017 , ETP announced thatDakota Access, LLC had received an easement from theU.S. Army Corps of Engineers (“Army Corps”) to construct a pipeline across land owned by theArmy Corps on both sides ofLake Oahe inNorth Dakota . With the receipt of the easement, ETP expects to commence commercial operations on the Dakota Access Pipeline and the adjoining Energy Transfer Crude Oil Pipeline (collectively, the “Bakken Pipeline”) in the second quarter of 2017. In addition, the previously announced project financing for the Bakken Pipeline and the sale of a 36.75% interest in the Bakken Pipeline were completed inFebruary 2017 . -
In
January 2017 , the previously announced Comanche Trail Pipeline, which transports natural gas from thePermian Basin toMexico , was placed into service. -
In the fourth quarter of 2016, ETP issued 6.5 million common units
through its at-the-market equity program, generating net proceeds of
$236 million. In addition, in
January 2017 , ETP raised$568 million through a private placement of its common units and$1.48 billion through a senior notes offering. -
As of December 31, 2016, ETP’s
$3.75 billion revolving credit facility had$2.78 billion of outstanding borrowings, and its leverage ratio, as defined by the credit agreement, was 4.32x.
An analysis of ETP’s segment results and other supplementary data is
provided after the financial tables shown below. ETP has scheduled a
conference call for
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
The information contained in this press release is available on our website at www.energytransfer.com.
ENERGY TRANSFER PARTNERS, L.P. AND
SUBSIDIARIES |
||||||||
December 31, | ||||||||
2016 | 2015 | |||||||
ASSETS | ||||||||
Current assets | $ | 5,729 | $ | 4,698 | ||||
Property, plant and equipment, net | 50,917 | 45,087 | ||||||
Advances to and investments in unconsolidated affiliates | 4,280 | 5,003 | ||||||
Other non-current assets, net | 672 | 536 | ||||||
Intangible assets, net | 4,696 | 4,421 | ||||||
Goodwill | 3,897 | 5,428 | ||||||
Total assets | $ | 70,191 | $ | 65,173 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities | $ | 6,203 | $ | 4,121 | ||||
Long-term debt, less current maturities | 31,741 | 28,553 | ||||||
Long-term notes payable – related party | 250 | 233 | ||||||
Non-current derivative liabilities | 76 | 137 | ||||||
Deferred income taxes | 4,394 | 4,082 | ||||||
Other non-current liabilities | 952 | 968 | ||||||
Commitments and contingencies | ||||||||
Series A Preferred Units | 33 | 33 | ||||||
Redeemable noncontrolling interests | 15 | 15 | ||||||
Equity: | ||||||||
Total partners’ capital | 18,642 | 20,836 | ||||||
Noncontrolling interest | 7,885 | 6,195 | ||||||
Total equity | 26,527 | 27,031 | ||||||
Total liabilities and equity | $ | 70,191 | $ | 65,173 | ||||
ENERGY TRANSFER PARTNERS, L.P. AND
SUBSIDIARIES |
|||||||||||||||||||||
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
REVENUES | $ | 6,526 | $ | 5,825 | $ | 21,827 | $ | 34,292 | |||||||||||||
COSTS AND EXPENSES: | |||||||||||||||||||||
Cost of products sold | 4,865 | 4,237 | 15,394 | 27,029 | |||||||||||||||||
Operating expenses | 374 | 498 | 1,484 | 2,261 | |||||||||||||||||
Depreciation, depletion and amortization | 517 | 478 | 1,986 | 1,929 | |||||||||||||||||
Selling, general and administrative | 122 | 86 | 348 | 475 | |||||||||||||||||
Impairment losses | 813 | 339 | 813 | 339 | |||||||||||||||||
Total costs and expenses | 6,691 | 5,638 | 20,025 | 32,033 | |||||||||||||||||
OPERATING INCOME (LOSS) | (165 | ) | 187 | 1,802 | 2,259 | ||||||||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||||||||
Interest expense, net | (336 | ) | (312 | ) | (1,317 | ) | (1,291 | ) | |||||||||||||
Equity in earnings (losses) from unconsolidated affiliates | (201 | ) | 81 | 59 | 469 | ||||||||||||||||
Impairment of investment in an unconsolidated affiliate | — | — | (308 | ) | — | ||||||||||||||||
Gains on acquisitions | 83 | — | 83 | — | |||||||||||||||||
Losses on extinguishments of debt | — | — | — | (43 | ) | ||||||||||||||||
Gains (losses) on interest rate derivatives | 167 | (4 | ) | (12 | ) | (18 | ) | ||||||||||||||
Other, net | 35 | (34 | ) | 131 | 22 | ||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAX EXPENSE | (417 | ) | (82 | ) | 438 | 1,398 | |||||||||||||||
Income tax benefit | (55 | ) | (103 | ) | (186 | ) | (123 | ) | |||||||||||||
NET INCOME (LOSS) | (362 | ) | 21 | 624 | 1,521 | ||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interest | 96 | (25 | ) | 327 | 157 | ||||||||||||||||
Less: Net loss attributable to predecessor | — | — | — | (34 | ) | ||||||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO PARTNERS | (458 | ) | 46 | 297 | 1,398 | ||||||||||||||||
General Partner’s interest in net income | 208 | 285 | 948 | 1,064 | |||||||||||||||||
Class H Unitholder’s interest in net income | 94 | 74 | 351 | 258 | |||||||||||||||||
Class I Unitholder’s interest in net income | 2 | 14 | 8 | 94 | |||||||||||||||||
Common Unitholders’ interest in net loss | $ | (762 | ) | $ | (327 | ) | $ | (1,010 | ) | $ | (18 | ) | |||||||||
NET LOSS PER COMMON UNIT: | |||||||||||||||||||||
Basic | $ | (1.47 | ) | $ | (0.68 | ) | $ | (2.06 | ) | $ | (0.09 | ) | |||||||||
Diluted | $ | (1.47 | ) | $ | (0.68 | ) | $ | (2.06 | ) | $ | (0.10 | ) | |||||||||
WEIGHTED AVERAGE NUMBER OF COMMON UNITS OUTSTANDING: | |||||||||||||||||||||
Basic | 522.5 | 485.1 | 505.5 | 432.8 | |||||||||||||||||
Diluted | 522.5 | 485.5 | 505.5 | 433.5 | |||||||||||||||||
SUPPLEMENTAL INFORMATION |
|||||||||||||||||||||
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Reconciliation of net income (loss) to Adjusted EBITDA and Distributable Cash Flow (a): | |||||||||||||||||||||
Net income (loss) | $ | (362 | ) | $ | 21 | $ | 624 | $ | 1,521 | ||||||||||||
Interest expense, net | 336 | 312 | 1,317 | 1,291 | |||||||||||||||||
Gains on acquisitions | (83 | ) | — | (83 | ) | — | |||||||||||||||
Impairment losses (b) | 813 | 339 | 813 | 339 | |||||||||||||||||
Income tax benefit | (55 | ) | (103 | ) | (186 | ) | (123 | ) | |||||||||||||
Depreciation, depletion and amortization | 517 | 478 | 1,986 | 1,929 | |||||||||||||||||
Non-cash compensation expense | 20 | 20 | 80 | 79 | |||||||||||||||||
(Gains) losses on interest rate derivatives | (167 | ) | 4 | 12 | 18 | ||||||||||||||||
Unrealized (gains) losses on commodity risk management activities | 35 | (7 | ) | 131 | 65 | ||||||||||||||||
Inventory valuation adjustments | (27 | ) | 120 | (170 | ) | 104 | |||||||||||||||
Impairment of investment in an unconsolidated affiliate | — | — | 308 | — | |||||||||||||||||
Losses on extinguishments of debt | — | — | — | 43 | |||||||||||||||||
Equity in (earnings) losses of unconsolidated affiliates | 201 | (81 | ) | (59 | ) | (469 | ) | ||||||||||||||
Adjusted EBITDA related to unconsolidated affiliates | 235 | 226 | 946 | 937 | |||||||||||||||||
Other, net | (30 | ) | 31 | (114 | ) | (20 | ) | ||||||||||||||
Adjusted EBITDA (consolidated) | 1,433 | 1,360 | 5,605 | 5,714 | |||||||||||||||||
Adjusted EBITDA related to unconsolidated affiliates | (235 | ) | (226 | ) | (946 | ) | (937 | ) | |||||||||||||
Distributable cash flow from unconsolidated affiliates | 134 | 129 | 518 | 646 | |||||||||||||||||
Interest expense, net of interest capitalized | (336 | ) | (312 | ) | (1,317 | ) | (1,291 | ) | |||||||||||||
Amortization included in interest expense | (4 | ) | (6 | ) | (20 | ) | (36 | ) | |||||||||||||
Current income tax benefit (c) | 40 | 283 | 17 | 325 | |||||||||||||||||
Transaction-related income taxes (c) | — | (51 | ) | — | (51 | ) | |||||||||||||||
Maintenance capital expenditures | (134 | ) | (177 | ) | (368 | ) | (485 | ) | |||||||||||||
Other, net | 8 | 1 | 21 | 12 | |||||||||||||||||
Distributable Cash Flow (consolidated) | 906 | 1,001 | 3,510 | 3,897 | |||||||||||||||||
Distributable Cash Flow attributable to Sunoco Logistics (100%) | (247 | ) | (240 | ) | (943 | ) | (874 | ) | |||||||||||||
Distributions from Sunoco Logistics to ETP | 139 | 118 | 532 | 413 | |||||||||||||||||
Distributable Cash Flow attributable to PennTex (100%) | (11 | ) | — | (11 | ) | — | |||||||||||||||
Distributions from PennTex to ETP | 8 | — | 16 | — | |||||||||||||||||
Distributable Cash Flow attributable to Sunoco LP (100%) (d) | — | — | — | (68 | ) | ||||||||||||||||
Distributions from Sunoco LP to ETP (d) | — | — | — | 24 | |||||||||||||||||
Distributable cash flow attributable to noncontrolling interest in other consolidated subsidiaries | (11 | ) | (5 | ) | (37 | ) | (20 | ) | |||||||||||||
Distributable Cash Flow attributable to the partners of ETP | 784 | 874 | 3,067 | 3,372 | |||||||||||||||||
Transaction-related expenses | 12 | 5 | 16 | 42 | |||||||||||||||||
Distributable Cash Flow attributable to the partners of ETP, as adjusted | $ | 796 | $ | 879 | $ | 3,083 | $ | 3,414 | |||||||||||||
Distributions to the partners of ETP (e): | |||||||||||||||||||||
Limited Partners: | |||||||||||||||||||||
Common units held by public | $ | 561 | $ | 512 | $ | 2,168 | $ | 1,970 | |||||||||||||
Common units held by ETE | 20 | 3 | 28 | 54 | |||||||||||||||||
Class H Units held by ETE (f) | 94 | 77 | 357 | 263 | |||||||||||||||||
General Partner interests held by ETE | 8 | 8 | 32 | 31 | |||||||||||||||||
Incentive Distribution Rights (“IDRs”) held by ETE | 351 | 324 | 1,363 | 1,261 | |||||||||||||||||
IDR relinquishments net of Class I Unit distributions (g) | (138 | ) | (28 | ) | (409 | ) | (111 | ) | |||||||||||||
Total distributions to be paid to the partners of ETP | $ | 896 | $ | 896 | $ | 3,539 | $ | 3,468 | |||||||||||||
Common Units outstanding – end of period (e) | 529.9 | 505.6 | 529.9 | 505.6 | |||||||||||||||||
Distribution coverage ratio (h) |
0.89 |
x |
0.98 |
x |
0.87 |
x |
0.98 |
x |
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(a) Adjusted EBITDA and Distributable Cash Flow are non-GAAP financial measures used by industry analysts, investors, lenders, and rating agencies to assess the financial performance and the operating results of ETP’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 and Distributable Cash Flow, including the difficulty associated with using either 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 and Distributable Cash Flow 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 gross margin, operating income, net income, and cash flow from operating activities.
Definition of Adjusted EBITDA
ETP defines 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, non-cash impairment charges, losses on extinguishments of debt and other non-operating income or expense items. Unrealized gains and losses on commodity risk management activities include unrealized gains and losses on commodity derivatives and inventory fair value adjustments (excluding lower of cost or market adjustments). Adjusted EBITDA reflects amounts for less than wholly-owned subsidiaries based on 100% of the subsidiaries’ results of operations and for unconsolidated affiliates based on ETP’s proportionate ownership.
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
ETP defines Distributable Cash Flow as net income, adjusted for certain non-cash items, less maintenance capital expenditures. Non-cash items include depreciation, depletion and amortization, 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, non-cash impairment charges, losses on extinguishments of debt and deferred income taxes. Unrealized gains and losses on commodity risk management activities includes unrealized gains and losses on commodity derivatives and inventory fair value adjustments (excluding lower of cost or market adjustments). 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 ETP’s consolidated subsidiaries. However, to the extent that noncontrolling interests exist among ETP’s subsidiaries, the Distributable Cash Flow generated by ETP’s subsidiaries may not be available to be distributed to the partners of ETP. In order to reflect the cash flows available for distributions to the partners of ETP, ETP has reported Distributable Cash Flow attributable to the partners of ETP, 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 the partners of ETP 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 subsidiary, but Distributable Cash Flow attributable to the partners of ETP is net of distributions to be paid by the subsidiary to the noncontrolling interests.
For Distributable Cash Flow attributable to the partners of ETP, as adjusted, certain transaction-related and non-recurring expenses that are included in net income are excluded.
(b) During the three months ended
(c) The three months ended December 31, 2015 reflect current income tax
benefits of
(d) Amounts related to
(e) Distributions on ETP Common Units and the number of ETP Common Units outstanding at the end of the period, both as reflected above, exclude amounts related to ETP Common Units held by subsidiaries of ETP.
(f) Distributions on the Class H Units for the three months and years ended December 31, 2016 and 2015 were calculated as follows:
Three Months Ended |
Years Ended |
||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
General partner distributions and incentive distributions from Sunoco Logistics | $ | 105 | $ | 86 | $ | 397 | $ | 293 | |||||||||||||
90.05 | % | 90.05 | % | 90.05 | % | 90.05 | % | ||||||||||||||
Total Class H Unit distributions | $ | 94 | $ | 77 | $ | 357 | $ | 263 | |||||||||||||
* Incremental distributions previously paid to the Class H Unitholder were eliminated in Amendment No. 9 to ETP’s Amended and Restated Agreement of Limited Partnership effective in the first quarter of 2015.
(g) IDR relinquishments for the three and twelve months ended
December 31, 2016 include the impact of $95 million and $255 million,
respectively, of incentive distribution reductions beginning with
respect to the second quarter 2016 distributions, as agreed to between
ETE and ETP in
(h) Distribution coverage ratio for a period is calculated as Distributable Cash Flow attributable to the partners of ETP, as adjusted, divided by net distributions expected to be paid to the partners of ETP in respect of such period.
SUMMARY ANALYSIS OF QUARTERLY RESULTS BY SEGMENT
(Tabular
dollar amounts in millions)
(unaudited)
Our segment results are presented based on the measure of Segment Adjusted EBITDA. The tables below identify the components of Segment Adjusted EBITDA, which was calculated as follows:
- Gross margin, operating expenses, and selling, general and administrative expenses. These amounts represent the amounts included in our consolidated financial statements that are attributable to each segment.
- Unrealized gains or losses on commodity risk management activities and inventory valuation adjustments. These are the unrealized amounts that are included in cost of products sold to calculate gross margin. These amounts are not included in Segment Adjusted EBITDA; therefore, the unrealized losses are added back and the unrealized gains are subtracted to calculate the segment measure.
- Non-cash compensation expense. These amounts represent the total non-cash compensation recorded in operating expenses and selling, general and administrative expenses. This expense is not included in Segment Adjusted EBITDA and therefore is added back to calculate the segment measure.
- Adjusted EBITDA related to unconsolidated affiliates. These amounts represent our proportionate share of the Adjusted EBITDA of our unconsolidated affiliates. Amounts reflected are calculated consistently with our definition of Adjusted EBITDA.
Three Months Ended |
||||||||
2016 | 2015 | |||||||
Segment Adjusted EBITDA: | ||||||||
Midstream | $ | 258 | $ | 260 | ||||
Liquids transportation and services | 281 | 226 | ||||||
Interstate transportation and storage | 269 | 283 | ||||||
Intrastate transportation and storage | 152 | 122 | ||||||
Investment in Sunoco Logistics | 327 | 317 | ||||||
All other | 146 | 152 | ||||||
$ | 1,433 | $ | 1,360 | |||||
Midstream
Three Months Ended |
||||||||||
2016 | 2015 | |||||||||
Gathered volumes (MMBtu/d): | 9,693,728 | 10,051,593 | ||||||||
NGLs produced (Bbls/d): | 430,603 | 443,741 | ||||||||
Equity NGLs produced (Bbls/d): | 29,001 | 29,437 | ||||||||
Revenues | $ | 1,414 | $ | 1,286 | ||||||
Cost of products sold | 966 | 841 | ||||||||
Gross margin | 448 | 445 | ||||||||
Unrealized losses on commodity risk management activities | 15 | — | ||||||||
Operating expenses, excluding non-cash compensation expense | (168 | ) | (183 | ) | ||||||
Selling, general and administrative expenses, excluding non-cash compensation expense | (42 | ) | (8 | ) | ||||||
Adjusted EBITDA related to unconsolidated affiliates | 5 | 6 | ||||||||
Segment Adjusted EBITDA | $ | 258 | $ | 260 | ||||||
For the three months ended December 31, 2016 compared to the same period
last year, gathered volumes decreased during the three months ended
For the three months ended December 31, 2016 compared to the same period last year, Segment Adjusted EBITDA related to our midstream segment decreased due to the net impacts of the following:
-
a decrease of
$2 million in non-fee based margin due to volume declines in theSouth Texas ,North Texas , and Mid-Continent/Panhandle regions; -
a decrease of
$4 million in fee-based revenue due to declines in SouthTexas ,North Texas and the Mid-Continent/Panhandle regions offset by growth in the Permian, Northeast and the impact of acquisitions, including PennTex; -
a decrease of
$3 million (excluding unrealized losses of$13 million ) due to lower benefit from settled derivatives used to hedge commodity margins; and - an increase in general and administrative expenses of $34 million primarily due to year-end accruals and costs associated with the acquisition of PennTex; partially offset by
-
an increase of
$31 million in non-fee based margins due to higher crude oil and NGL prices; and - a decrease in operating expenses of $15 million primarily due to lower ad valorem taxes and lower employee costs.
Liquids Transportation and Services
Three Months Ended |
||||||||||
2016 | 2015 | |||||||||
Liquids transportation volumes (Bbls/d) | 669,694 | 523,285 | ||||||||
NGL fractionation volumes (Bbls/d) | 393,663 | 249,566 | ||||||||
Revenues | $ | 1,561 | $ | 975 | ||||||
Cost of products sold | 1,235 | 715 | ||||||||
Gross margin | 326 | 260 | ||||||||
Unrealized losses on commodity risk management activities | 12 | 6 | ||||||||
Operating expenses, excluding non-cash compensation expense | (51 | ) | (38 | ) | ||||||
Selling, general and administrative expenses, excluding non-cash compensation expense | (6 | ) | (4 | ) | ||||||
Adjusted EBITDA related to unconsolidated affiliates | (1 | ) | 2 | |||||||
Other | 1 | — | ||||||||
Segment Adjusted EBITDA | $ | 281 | $ | 226 | ||||||
For the three months ended December 31, 2016 compared to the same period
last year, NGL transportation volumes increased in several of the major
producing regions including the Permian,
Average daily fractionated volumes increased approximately 144,000
Bbls/d for the three months ended
For the three months ended December 31, 2016 compared to the same period last year, Segment Adjusted EBITDA related to our liquids transportation and services segment increased due to the net impacts of the following:
-
an increase of
$40 million in transportation margin due to higher NGL and crude transportation volumes. NGL volumes were higher from several major producing regions, with the increases from the Permian region being the most significant. These increases in NGL transportation volumes resulted in a$22 million increase in transportation fees. In addition, crude transportation fees increased$8 million due to new assets being placed in-service, including the first phase of theBayou Bridge pipeline inApril 2016 and crude gathering assets inWest Texas during 2016; -
an increase of
$38 million in processing and fractionation margin (excluding changes in unrealized losses of$9 million ) primarily due to increased producer volumes, primarily from theWest Texas region along with an increase in our fractionation capacity due to the placing in service of our third fractionator inDecember 2015 and our fourth fractionator inOctober 2016 ; and -
an increase of
$12 million in storage margin due to an increase in volumes from ourMont Belvieu fractionators. Throughput volumes, on which we earn a fee in our storage assets, increased 26%, which resulted in an increase in margin of$6 million . We also realized an increase of$2 million due to increased demand for our leased storage capacity as a result of more favorable market conditions. In addition, we realized increased terminal and pipeline fees revenue of$4 million compared to the prior year; partially offset by -
a decrease of
$14 million in other margin (excluding changes in unrealized losses of$3 million ) primarily due to the timing of the withdrawal and sale of NGL component inventory; -
an increase of $13 million in operating expenses primarily due to
increased costs associated with our third fractionator at
Mont Belvieu ; and - an increase of $2 million in selling, general and administrative expenses due to lower capitalized overhead as a result of reduced capital spending.
Interstate Transportation and Storage
Three Months Ended |
||||||||||
2016 | 2015 | |||||||||
Natural gas transported (MMBtu/d) | 5,322,091 | 5,739,157 | ||||||||
Natural gas sold (MMBtu/d) | 17,190 | 18,665 | ||||||||
Revenues | $ | 240 | $ | 258 | ||||||
Operating expenses, excluding non-cash compensation, amortization and accretion expenses | (79 | ) | (83 | ) | ||||||
Selling, general and administrative expenses, excluding non-cash compensation, amortization and accretion expenses | (11 | ) | (9 | ) | ||||||
Adjusted EBITDA related to unconsolidated affiliates | 118 | 117 | ||||||||
Other | 1 | — | ||||||||
Segment Adjusted EBITDA | $ | 269 | $ | 283 | ||||||
Distributions from unconsolidated affiliates | $ | 68 | $ | 75 | ||||||
For the three months ended December 31, 2016 compared to the same period
last year, transported volumes decreased 222,289 MMBtu/d on the
Trunkline pipeline and 171,369 MMBtu/d in the West and
For the three months ended December 31, 2016 compared to the same period last year, Segment Adjusted EBITDA related to our interstate transportation and storage segment decreased due to the net effect of the following:
-
a decrease of
$11 million in revenues due to lower contracted capacity and rates on the Panhandle and Trunkline pipelines due to weak transportation spreads and lower contracted capacity on the Transwestern pipeline due to mild weather, a decrease of$9 million in revenues due to contract restructuring on the Tiger pipeline, and a decrease of$2 million on the Sea Robin pipeline due to declines in production and third party maintenance. These decreases were partially offset by higher reservation revenues on the Transwestern pipeline of$4 million from a growth project; partially offset by - a decrease of $4 million in operating expenses primarily due to lower maintenance projects.
The decrease in cash distributions from unconsolidated affiliates is due to higher Citrus cash taxes.
Intrastate Transportation and Storage
Three Months Ended |
||||||||||
2016 | 2015 | |||||||||
Natural gas transported (MMBtu/d) | 7,913,134 | 7,926,907 | ||||||||
Revenues | $ | 756 | $ | 503 | ||||||
Cost of products sold | 565 | 327 | ||||||||
Gross margin | 191 | 176 | ||||||||
Unrealized gains on commodity risk management activities | (5 | ) | (23 | ) | ||||||
Operating expenses, excluding non-cash compensation expense | (45 | ) | (42 | ) | ||||||
Selling, general and administrative expenses, excluding non-cash compensation expense | (5 | ) | (4 | ) | ||||||
Adjusted EBITDA related to unconsolidated affiliates | 16 | 15 | ||||||||
Segment Adjusted EBITDA | $ | 152 | $ | 122 | ||||||
For the three months ended December 31, 2016 compared to the same period
last year, transported volumes decreased compared to the same period
last year primarily due to lower production volumes, primarily in the
For the three months ended December 31, 2016 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
$17 million (excluding unrealized losses of$9 million ) due to higher realized gains from the buying and selling of gas along our system; -
an increase of
$2 million from the sale of retained fuel as a fee along our system, primarily due to higher rates in the current period, which was partially offset by lower throughput volumes; and -
an increase of
$11 million in storage margin (excluding unrealized losses of$8 million ) due to the timing of withdrawals and sales of natural gas from ourBammel storage cavern.
Investment in
Three Months Ended |
||||||||||
2016 | 2015 | |||||||||
Revenue | $ | 2,917 | $ | 2,305 | ||||||
Cost of products sold | 2,542 | 2,067 | ||||||||
Gross margin | 375 | 238 | ||||||||
Unrealized losses on commodity risk management activities | 6 | 13 | ||||||||
Operating expenses, excluding non-cash compensation expense | (23 | ) | (42 | ) | ||||||
Selling, general and administrative expenses, excluding non-cash compensation expense | (24 | ) | (24 | ) | ||||||
Inventory valuation adjustments | (27 | ) | 118 | |||||||
Adjusted EBITDA related to unconsolidated affiliates | 20 | 14 | ||||||||
Segment Adjusted EBITDA | $ | 327 | $ | 317 | ||||||
For the three months ended December 31, 2016 compared to the same period
last year, Segment Adjusted EBITDA related to
-
an increase of
$30 million from Sunoco Logistics’ crude oil operations, primarily due to improved results from Sunoco Logistics’ crude oil pipelines which benefited from theDelaware Basin Extension and Permian Longview and Louisiana Extension pipelines that commenced operations in the third quarter 2016. Also contributing to the increase were higher contributions from Sunoco Logistics’ crude oil terminals, and increased earnings attributable to the acquisition fromVitol, Inc. and Sunoco Logistics’ joint venture interests. These positive factors were partially offset by lower operating results from Sunoco Logistics’ crude oil acquisition and marketing activities, which includes transportation and storage fees related toSunoco Logistics’ crude oil pipelines and terminal facilities, resulting from lower crude oil differentials compared to the prior year period; and -
an increase of
$2 million from Sunoco Logistics’ refined products operations, primarily due to improved operating results fromSunoco Logistics’ refined products pipelines which benefited from higher volumes on Sunoco Logistics’ Allegheny Access pipeline; offset by -
a decrease of
$22 million from Sunoco Logistics’ NGL operations, primarily due to lower operating results from Sunoco Logistics’ NGLs acquisition and marketing activities driven by decreased volumes and margins. These factors were partially offset by increased volumes and fees from Sunoco Logistics’ Mariner NGLs projects, which includes Sunoco Logistics’ NGLs pipelines andMarcus Hook andNederland facilities.
All Other
Three Months Ended |
||||||||||
2016 | 2015 | |||||||||
Revenue | $ | 750 | $ | 1,630 | ||||||
Cost of products sold | 679 | 1,403 | ||||||||
Gross margin | 71 | 227 | ||||||||
Unrealized (gains) losses on commodity risk management activities | 7 | (3 | ) | |||||||
Operating expenses, excluding non-cash compensation expense | (22 | ) | (116 | ) | ||||||
Selling, general and administrative expenses, excluding non-cash compensation expense | (26 | ) | (43 | ) | ||||||
Adjusted EBITDA related to unconsolidated affiliates | 77 | 74 | ||||||||
Inventory valuation adjustments | — | 2 | ||||||||
Other | 24 | 24 | ||||||||
Elimination | 15 | (13 | ) | |||||||
Segment Adjusted EBITDA | $ | 146 | $ | 152 | ||||||
Distributions from unconsolidated affiliates | $ | 39 | $ | 85 | ||||||
Amounts reflected in our all other segment primarily include:
-
our retail marketing operations prior to the transfer of the general
partner interest of
Sunoco LP from ETP to ETE in 2015 and completion of the dropdown of remaining Retail Marketing interests from ETP toSunoco LP inMarch 2016 ; -
our equity method investment in limited partnership units of
Sunoco LP consisting of 43.5 million units, representing 44.3% of Sunoco LP’s total outstanding common units; - our natural gas marketing and compression operations;
- a non-controlling interest in PES, comprising 33% of PES’ outstanding common units; and
- our investment in Coal Handling, an entity that owns and operates end-user coal handling facilities.
Segment Adjusted EBITDA. For the three months ended December 31, 2016 compared to the same period last year, Segment Adjusted EBITDA decreased primarily due to the net impact of the following:
- a decrease of $156 million in gross margin primarily resulting from a decrease in revenue-generating horsepower and lower project revenue from our compression operations and unfavorable results from our natural resources operations. This decrease in margin was partially offset by a decrease in operating expenses of $94 million; and
- a decrease of $17 million in selling, general and administrative expenses resulting from lower transaction-related expenses.
SUPPLEMENTAL INFORMATION ON CAPITAL EXPENDITURES
(Tabular
amounts in millions)
(unaudited)
The following is a summary of capital expenditures (net of contributions in aid of construction costs) during the year ended December 31, 2016:
Growth | Maintenance | Total | ||||||||||
Direct(1): | ||||||||||||
Midstream | $ | 1,133 | $ | 122 | $ | 1,255 | ||||||
Liquids transportation and services(2) | 2,296 | 20 | 2,316 | |||||||||
Interstate transportation and storage(2) | 191 | 89 | 280 | |||||||||
Intrastate transportation and storage | 53 | 23 | 76 | |||||||||
All other (including eliminations) | 93 | 51 | 144 | |||||||||
Total direct capital expenditures | 3,766 | 305 | 4,071 | |||||||||
Indirect(1): | ||||||||||||
Investment in Sunoco Logistics | 1,676 | 63 | 1,739 | |||||||||
Total capital expenditures | $ | 5,442 | $ | 368 | $ | 5,810 |
(1) |
Indirect capital expenditures comprise those funded by our publicly traded subsidiary; all other capital expenditures are reflected as direct capital expenditures. | |
(2) |
Includes capital expenditures related to the Bakken, Rover and Bayou Bridge pipeline projects, which includes $572 million related to Sunoco Logistics’ proportionate ownership in the Bakken and Bayou Bridge projects. Capital expenditures include $961 million funded to the Bakken pipeline project by ETP and Sunoco Logistics under a promissory note, which amount was repaid to ETP and Sunoco Logistics in 2017. | |
We currently expect capital expenditures for the full year 2017 to be within the following ranges:
Growth | Maintenance | ||||||||||||||||||
Low | High | Low | High | ||||||||||||||||
Direct(1): | |||||||||||||||||||
Midstream | $ | 935 | $ | 985 | $ | 120 | $ | 130 | |||||||||||
Liquids transportation and services: | |||||||||||||||||||
NGL | 370 | 390 | 20 | 25 | |||||||||||||||
Crude (2) | 200 | 230 | — | 5 | |||||||||||||||
Interstate transportation and storage (2) | 1,750 | 1,790 | 100 | 110 | |||||||||||||||
Intrastate transportation and storage | 30 | 40 | 20 | 25 | |||||||||||||||
All other (including eliminations) | 70 | 80 | 65 | 70 | |||||||||||||||
Total direct capital expenditures | 3,355 | 3,515 | 325 | 365 | |||||||||||||||
Less: Project level non-recourse financing | (600 | ) | (600 | ) | — | — | |||||||||||||
Partnership level capital funding | $ | 2,755 | $ | 2,915 | $ | 325 | $ | 365 |
(1) |
Direct capital expenditures exclude those funded by our publicly traded subsidiary. |
|
(2) |
Includes capital expenditures related to our proportionate ownership of the Bakken, Rover and Bayou Bridge pipeline projects. | |
SUPPLEMENTAL INFORMATION ON
UNCONSOLIDATED AFFILIATES |
||||||||||
Three Months Ended |
||||||||||
2016 | 2015 | |||||||||
Equity in earnings (losses) of unconsolidated affiliates: | ||||||||||
Citrus | $ | 22 | $ | 20 | ||||||
FEP | 13 | 14 | ||||||||
PES | (1 | ) | (25 | ) | ||||||
MEP | 9 | 12 | ||||||||
HPC | 8 | 8 | ||||||||
AmeriGas | (1 | ) | (5 | ) | ||||||
Sunoco, LLC | — | 3 | ||||||||
Sunoco LP(1) | (265 | ) | 85 | |||||||
Other | 14 | (31 | ) | |||||||
Total equity in earnings (losses) of unconsolidated affiliates | $ | (201 | ) | $ | 81 | |||||
Adjusted EBITDA related to unconsolidated affiliates(2): | ||||||||||
Citrus | $ | 78 | $ | 73 | ||||||
FEP | 19 | 19 | ||||||||
PES | 8 | (16 | ) | |||||||
MEP | 21 | 25 | ||||||||
HPC | 16 | 15 | ||||||||
Sunoco, LLC | — | 38 | ||||||||
Sunoco LP | 63 | 56 | ||||||||
Other | 30 | 16 | ||||||||
Total Adjusted EBITDA related to unconsolidated affiliates | $ | 235 | $ | 226 | ||||||
Distributions received from unconsolidated affiliates: | ||||||||||
Citrus | $ | 32 | $ | 37 | ||||||
FEP | 18 | 18 | ||||||||
PES | — | 42 | ||||||||
MEP | 18 | 20 | ||||||||
HPC | 13 | 11 | ||||||||
AmeriGas | 3 | 3 | ||||||||
Sunoco LP | 36 | 39 | ||||||||
Other | 17 | 12 | ||||||||
Total distributions received from unconsolidated affiliates | $ | 137 | $ | 182 |
(1) |
For the three months ended December 31, 2016, equity in earnings (losses) of unconsolidated affiliates includes the impact of non-cash impairments recorded by Sunoco LP, which reduced the Partnership’s equity in earnings by $277 million. | |
(2) |
These amounts represent our proportionate share of the Adjusted EBITDA of our unconsolidated affiliates and are based on our equity in earnings or losses of our unconsolidated affiliates adjusted for our proportionate share of the unconsolidated affiliates’ interest, depreciation, depletion, amortization, non-cash items and taxes. | |
View source version on businesswire.com: http://www.businesswire.com/news/home/20170222006656/en/
Source:
Investor Relations:
Energy Transfer
Helen Ryoo, Lyndsay
Hannah or Brent Ratliff, 214-981-0795
or
Media Relations:
Granado
Communications Group
Vicki Granado, 214-599-8785
Cell:
214-498-9272