Energy Transfer Equity Reports Third Quarter Results
ETE’s net income attributable to partners was
The Partnership’s recent key accomplishments and other developments include the following:
-
In
October 2017 , ETE issued $1 billion aggregate principal amount of 4.25% senior notes due 2023. The$990 million net proceeds from the offering are intended to be used to repay a portion of the outstanding indebtedness under its term loan facility and for general partnership purposes. -
In
October 2017 , ETE amended its existing senior secured term loan agreement to reduce the applicable margin for LIBOR rate loans from 2.75% to 2.0% and for base rate loans 1.75% to 1.0%. -
In
October 2017 , ETE announced a$0.295 distribution per ETE common unit for the quarter ended September 30, 2017, or$1.18 per unit on an annualized basis. -
As of September 30, 2017, ETE’s
$1.5 billion revolving credit facility had$1.19 billion of outstanding borrowings and its leverage ratio, as defined by the credit agreement, was 3.45x.
The Partnership has scheduled a conference call for
The Partnership’s principal sources of cash flow are derived from
distributions related to its direct and indirect investments in the
limited and general partner interests in
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 EQUITY, L.P. AND SUBSIDIARIES |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(In millions) |
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(unaudited) |
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September 30, 2017 | December 31, 2016 | |||||||||
ASSETS |
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Current assets | $ | 10,689 | $ | 6,985 | ||||||
Property, plant and equipment, net | 59,267 | 53,253 | ||||||||
Advances to and investments in unconsolidated affiliates | 3,177 | 3,040 | ||||||||
Other non-current assets, net | 891 | 816 | ||||||||
Intangible assets, net | 6,195 | 5,489 | ||||||||
Goodwill | 5,161 | 5,170 | ||||||||
Non-current assets held for sale | — | 4,258 | ||||||||
Total assets | $ | 85,380 | $ | 79,011 | ||||||
LIABILITIES AND EQUITY |
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Current liabilities | $ | 7,847 | $ | 7,277 | ||||||
Long-term debt, less current maturities | 44,495 | 42,608 | ||||||||
Long-term notes payable – related company | — | 250 | ||||||||
Non-current derivative liabilities | 132 | 76 | ||||||||
Deferred income taxes | 5,027 | 5,112 | ||||||||
Other non-current liabilities | 1,218 | 1,055 | ||||||||
Liabilities associated with assets held for sale | — | 68 | ||||||||
Commitments and contingencies | ||||||||||
Preferred units of subsidiary | — | 33 | ||||||||
Redeemable noncontrolling interests | 21 | 15 | ||||||||
Equity: | ||||||||||
Total partners’ deficit | (1,192 | ) | (1,694 | ) | ||||||
Noncontrolling interest | 27,832 | 24,211 | ||||||||
Total equity | 26,640 | 22,517 | ||||||||
Total liabilities and equity | $ | 85,380 | $ | 79,011 |
ENERGY TRANSFER EQUITY, L.P. AND SUBSIDIARIES |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(In millions, except per unit data) |
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(unaudited) |
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Three Months Ended September 30, |
Nine Months Ended September 30, |
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2017 | 2016 | 2017 | 2016 | |||||||||||||||||
REVENUES | $ | 9,474 | $ | 7,705 | $ | 27,637 | $ | 21,227 | ||||||||||||
COSTS AND EXPENSES: | ||||||||||||||||||||
Cost of products sold | 7,078 | 5,776 | 21,028 | 15,430 | ||||||||||||||||
Operating expenses | 636 | 526 | 1,779 | 1,540 | ||||||||||||||||
Depreciation, depletion and amortization | 632 | 548 | 1,840 | 1,596 | ||||||||||||||||
Selling, general and administrative | 142 | 209 | 484 | 515 | ||||||||||||||||
Total costs and expenses | 8,488 | 7,059 | 25,131 | 19,081 | ||||||||||||||||
OPERATING INCOME | 986 | 646 | 2,506 | 2,146 | ||||||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||||||
Interest expense, net | (505 | ) | (474 | ) | (1,471 | ) | (1,336 | ) | ||||||||||||
Equity in earnings of unconsolidated affiliates | 92 | 49 | 228 | 205 | ||||||||||||||||
Losses on extinguishments of debt | — | — | (25 | ) | — | |||||||||||||||
Impairment of investment in an unconsolidated affiliate | — | (308 | ) | — | (308 | ) | ||||||||||||||
Losses on interest rate derivatives | (8 | ) | (28 | ) | (28 | ) | (179 | ) | ||||||||||||
Other, net | 76 | 55 | 168 | 98 | ||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAX BENEFIT | 641 | (60 | ) | 1,378 | 626 | |||||||||||||||
Income tax benefit | (157 | ) | (89 | ) | (97 | ) | (151 | ) | ||||||||||||
INCOME FROM CONTINUING OPERATIONS | 798 | 29 | 1,475 | 777 | ||||||||||||||||
Income (loss) from discontinued operations, net of income taxes | 6 | 12 | (264 | ) | 24 | |||||||||||||||
NET INCOME | 804 | 41 | 1,211 | 801 | ||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interest | 552 | (168 | ) | 508 | 39 | |||||||||||||||
NET INCOME ATTRIBUTABLE TO PARTNERS | 252 | 209 | 703 | 762 | ||||||||||||||||
General Partner’s interest in net income | 1 | — | 2 | 2 | ||||||||||||||||
Convertible Unitholders’ interest in income | 11 | 2 | 25 | 3 | ||||||||||||||||
Limited Partners’ interest in net income | $ | 240 | $ | 207 | $ | 676 | $ | 757 | ||||||||||||
INCOME FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT: | ||||||||||||||||||||
Basic | $ | 0.22 | $ | 0.20 | $ | 0.64 | $ | 0.72 | ||||||||||||
Diluted | $ | 0.22 | $ | 0.19 | $ | 0.62 | $ | 0.71 | ||||||||||||
NET INCOME PER LIMITED PARTNER UNIT: | ||||||||||||||||||||
Basic | $ | 0.22 | $ | 0.20 | $ | 0.63 | $ | 0.72 | ||||||||||||
Diluted | $ | 0.22 | $ | 0.19 | $ | 0.61 | $ | 0.71 | ||||||||||||
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING: | ||||||||||||||||||||
Basic | 1,079.1 | 1,045.5 | 1,077.9 | 1,045.0 | ||||||||||||||||
Diluted | 1,148.3 | 1,100.7 | 1,147.3 | 1,071.3 |
ENERGY TRANSFER EQUITY, L.P. |
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SUPPLEMENTAL INFORMATION |
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(In millions) |
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(unaudited) |
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Three Months Ended September 30, |
Nine Months Ended September 30, |
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2017 | 2016 | 2017 | 2016 | |||||||||||||||||
Cash distributions from ETP associated with: (1) | ||||||||||||||||||||
Limited partner interest | $ | 15 | $ | 3 | $ | 45 | $ | 8 | ||||||||||||
Class H Units | — | 92 | — | 263 | ||||||||||||||||
General partner interest | 4 | 8 | 12 | 24 | ||||||||||||||||
Incentive distribution rights | 431 | 346 | 1,204 | 1,012 | ||||||||||||||||
IDR relinquishments, net of distributions on Class I Units (2) | (163 | ) | (127 | ) | (482 | ) | (271 | ) | ||||||||||||
Total cash distributions from ETP | 287 | 322 | 779 | 1,036 | ||||||||||||||||
Cash distributions from Sunoco LP | 30 | 22 | 84 | 66 | ||||||||||||||||
Total cash distributions from investments in subsidiaries | $ | 317 | $ | 344 | $ | 863 | $ | 1,102 | ||||||||||||
Distributable cash flow attributable to Lake Charles LNG: | ||||||||||||||||||||
Revenues | $ | 49 | $ | 50 | $ | 148 | 148 | |||||||||||||
Operating expenses | (6 | ) | (4 | ) | (15 | ) | (13 | ) | ||||||||||||
Maintenance capital expenditures | (1 | ) | — | (1 | ) | — | ||||||||||||||
Selling, general and administrative expenses | — | (1 | ) | (2 | ) | (2 | ) | |||||||||||||
Distributable cash flow attributable to Lake Charles LNG | $ | 42 | $ | 45 | $ | 130 | $ | 133 | ||||||||||||
Expenses of the Parent Company on a cash basis: | ||||||||||||||||||||
Selling, general and administrative expenses, excluding certain non-cash expenses | $ | 2 | $ | 17 | $ | 19 | 72 | |||||||||||||
Management fee to ETP (3) | — | 24 | 5 | 72 | ||||||||||||||||
Interest expense, net of amortization of financing costs, interest income, and realized gains and losses on interest rate swaps | 87 | 78 | 251 | 235 | ||||||||||||||||
Total Parent Company expenses | $ | 89 | $ | 119 | $ | 275 | $ | 379 | ||||||||||||
Cash distributions to be paid to the partners of ETE: | ||||||||||||||||||||
Distributions to be paid to limited partners (4) | $ | 257 | $ | 241 | $ | 757 | $ | 721 | ||||||||||||
Distributions to be paid to general partner | — | 1 | 2 | 2 | ||||||||||||||||
Total cash distributions to be paid to the partners of ETE | $ | 257 | $ | 242 | $ | 759 | $ | 723 | ||||||||||||
Common units outstanding — end of period | 1,079.1 | 1,047.0 | 1,079.1 | 1,047.0 |
_________________
(1) Following the merger of Legacy ETP and
(2) IDR relinquishments for the three months ended
September 30, 2017 include the impact of incentive distribution
reductions agreed to between ETE and Legacy ETP in addition to incentive
distribution reductions previously agreed to between Legacy ETP and
(3) ETE previously paid Legacy ETP certain fees for management services under agreements expired in the first quarter of 2017.
(4) Includes distributions of
SUPPLEMENTAL INFORMATION |
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RECONCILIATION OF DISTRIBUTABLE CASH FLOW |
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(Dollars in millions) |
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(unaudited) |
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Three Months Ended September 30, |
Nine Months Ended September 30, |
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2017 | 2016 | 2017 | 2016 | |||||||||||||||||
Net income attributable to partners | $ | 252 | $ | 209 | $ | 703 | $ | 762 | ||||||||||||
Equity in earnings related to investments in ETP and Sunoco LP | (310 | ) | (333 | ) | (908 | ) | (1,065 | ) | ||||||||||||
Total cash distributions from investments in subsidiaries | 317 | 344 | 863 | 1,102 | ||||||||||||||||
Amortization included in interest expense (excluding ETP and Sunoco LP) | 2 | 3 | 7 | 9 | ||||||||||||||||
Lake Charles LNG maintenance capital expenditures | (1 | ) | — | (1 | ) | — | ||||||||||||||
Other non-cash (excluding ETP and Sunoco LP) | 10 | 47 | 54 | 48 | ||||||||||||||||
Distributable Cash Flow | 270 | 270 | 718 | 856 | ||||||||||||||||
Transaction-related expenses | 1 | 11 | 8 | 51 | ||||||||||||||||
Distributable Cash Flow, as adjusted | $ | 271 | $ | 281 | $ | 726 | $ | 907 | ||||||||||||
Distribution coverage ratio(1) | 1.05x | 1.16x | 0.96x | 1.25x | ||||||||||||||||
(1) This press release and accompanying schedules include the non-generally accepted accounting principle (“non-GAAP”) financial measures of Distributable Cash Flow and Distributable Cash Flow, as adjusted. The Partnership’s non-GAAP financial measures should not be considered as alternatives to GAAP financial measures such as net income, cash flow from operating activities or any other GAAP measure of liquidity or financial performance.
Distributable Cash Flow and Distributable Cash Flow, as adjusted. The Partnership defines Distributable Cash Flow and Distributable Cash Flow, as adjusted, for a period as cash distributions expected to be received in respect of such period in connection with the Partnership’s investments in limited and general partner interests, net of the Partnership’s cash expenditures for general and administrative costs and interest expense. The Partnership’s definitions of Distributable Cash Flow and Distributable Cash Flow, as adjusted, also include distributable cash flow from Lake Charles LNG to the Partnership. For Distributable Cash Flow, as adjusted, certain transaction-related expenses that are included in net income are excluded.
Distributable Cash Flow is a significant liquidity measure used by the Partnership’s senior management to compare net cash flows generated by the Partnership to the distributions the Partnership expects to pay its unitholders. Due to cash expenses incurred from time to time in connection with the Partnership’s merger and acquisition activities and other transactions, Distributable Cash Flow, as adjusted, is also a significant liquidity measure used by the Partnership’s senior management to compare net cash flows generated by the Partnership to the distributions the Partnership expects to pay its unitholders. Using these measures, the Partnership’s management can compute the coverage ratio of estimated cash flows for a period to planned cash distributions for such period.
Distributable Cash Flow and Distributable Cash Flow, as adjusted, are also important non-GAAP financial measures for our limited partners since these indicate to investors whether the Partnership’s investments are generating cash flows at a level that can sustain or support an increase in quarterly cash distribution levels. Financial measures such as Distributable Cash Flow and Distributable Cash Flow, as adjusted, are quantitative standards used by the investment community with respect to publicly traded partnerships because the value of a partnership unit is in part measured by its yield (which in turn is based on the amount of cash distributions a partnership can pay to a unitholder). The GAAP measure most directly comparable to Distributable Cash Flow and Distributable Cash Flow, as adjusted, is net income attributable to partners.
Distribution Coverage Ratio. The Partnership defines Distribution Coverage Ratio for a period as Distributable Cash Flow, as adjusted, divided by total cash distributions expected to be paid to the partners of ETE in respect of such period.
SUPPLEMENTAL INFORMATION |
FINANCIAL STATEMENTS FOR PARENT COMPANY |
Following are condensed balance sheets and statements of operations of the Parent Company on a stand-alone basis. |
BALANCE SHEETS |
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(In millions) |
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(unaudited) |
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September 30, 2017 | December 31, 2016 | |||||||||
ASSETS | ||||||||||
Current assets | $ | 66 | $ | 57 | ||||||
Property, plant and equipment, net | 27 | 36 | ||||||||
Advances to and investments in unconsolidated affiliates | 6,031 | 5,088 | ||||||||
Intangible assets, net | — | 1 | ||||||||
Goodwill | 9 | 9 | ||||||||
Other non-current assets, net | 17 | 10 | ||||||||
Total assets | $ | 6,150 | $ | 5,201 | ||||||
LIABILITIES AND PARTNERS’ CAPITAL | ||||||||||
Current liabilities | $ | 82 | $ | 92 | ||||||
Long-term debt, less current maturities | 6,684 | 6,358 | ||||||||
Long-term notes payable – related companies | 574 | 443 | ||||||||
Other non-current liabilities | 2 | 2 | ||||||||
Commitments and contingencies | ||||||||||
Total partners’ deficit | (1,192 | ) | (1,694 | ) | ||||||
Total liabilities and partners’ deficit | $ | 6,150 | $ | 5,201 |
STATEMENTS OF OPERATIONS |
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(In millions) |
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(unaudited) |
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Three Months Ended September 30, |
Nine Months Ended September 30, |
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2017 | 2016 | 2017 | 2016 | |||||||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | $ | (3 | ) | $ | (75 | ) | $ | (25 | ) | $ | (156 | ) | ||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||||||
Interest expense, net of interest capitalized | (88 | ) | (81 | ) | (257 | ) | (244 | ) | ||||||||||||
Equity in earnings of unconsolidated affiliates | 343 | 367 | 1,012 | 1,166 | ||||||||||||||||
Losses on extinguishments of debt | — | — | (25 | ) | — | |||||||||||||||
Other, net | — | (2 | ) | (2 | ) | (4 | ) | |||||||||||||
NET INCOME | 252 | 209 | 703 | 762 | ||||||||||||||||
General Partner’s interest in net income | 1 | — | 2 | 2 | ||||||||||||||||
Convertible Unitholders' interest in income | 11 | 2 | 25 | 3 | ||||||||||||||||
Limited Partners’ interest in net income | $ | 240 | $ | 207 | $ | 676 | $ | 757 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20171107006756/en/
Source:
Energy Transfer
Investor Relations:
Lyndsay Hannah,
Brent Ratliff, Helen Ryoo, 214-981-0795
or
Media Relations:
Vicki
Granado, 214-840-5820