Energy Transfer Equity Reports First Quarter Results
ETE’s net income attributable to partners was
The Partnership’s recent key accomplishments and other developments include the following:
-
In
April 2018 , ETE acquired the general partner ofUSA Compression Partners, LP (“USAC”) and approximately 12.5 million USAC common units fromUSA Compression Holdings, LLC . -
In
April 2018 , ETE announced a$0.305 distribution per ETE common unit for the quarter ended March 31, 2018, or$1.22 per unit on an annualized basis. -
As of March 31, 2018, ETE’s
$1.5 billion revolving credit facility had$873 million of outstanding borrowings and its leverage ratio, as defined by the credit agreement, was 2.79x. -
In
January 2018 ,Sunoco LP redeemed all outstanding Sunoco LP Series A Preferred Units, for which ETE received proceeds of approximately$313 million .
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 ETP, including 100% of ETP’s
incentive distribution rights, 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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March 31, 2018 | December 31, 2017 | |||||||||
ASSETS | ||||||||||
Current assets | $ | 6,593 | $ | 10,683 | ||||||
Property, plant and equipment, net | 61,975 | 61,088 | ||||||||
Advances to and investments in unconsolidated affiliates | 2,701 | 2,705 | ||||||||
Other non-current assets, net | 936 | 886 | ||||||||
Intangible assets, net | 5,936 | 6,116 | ||||||||
Goodwill | 4,768 | 4,768 | ||||||||
Total assets | $ | 82,909 | $ | 86,246 | ||||||
LIABILITIES AND EQUITY | ||||||||||
Current liabilities | $ | 7,261 | $ | 7,897 | ||||||
Long-term debt, less current maturities | 41,779 | 43,671 | ||||||||
Non-current derivative liabilities | 97 | 145 | ||||||||
Deferred income taxes | 3,026 | 3,315 | ||||||||
Other non-current liabilities | 1,244 | 1,217 | ||||||||
Commitments and contingencies | ||||||||||
Redeemable noncontrolling interests | 21 | 21 | ||||||||
Equity: | ||||||||||
Total partners’ deficit | (1,180 | ) | (1,196 | ) | ||||||
Noncontrolling interest | 30,661 | 31,176 | ||||||||
Total equity | 29,481 | 29,980 | ||||||||
Total liabilities and equity | $ | 82,909 | $ | 86,246 | ||||||
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 March 31, |
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2018 | 2017 | |||||||||
REVENUES | $ | 11,882 | $ | 9,661 | ||||||
COSTS AND EXPENSES: | ||||||||||
Cost of products sold | 9,245 | 7,510 | ||||||||
Operating expenses | 724 | 601 | ||||||||
Depreciation and amortization | 665 | 628 | ||||||||
Selling, general and administrative | 148 | 165 | ||||||||
Total costs and expenses | 10,782 | 8,904 | ||||||||
OPERATING INCOME | 1,100 | 757 | ||||||||
OTHER INCOME (EXPENSE): | ||||||||||
Interest expense, net of interest capitalized | (466 | ) | (473 | ) | ||||||
Equity in earnings of unconsolidated affiliates | 79 | 87 | ||||||||
Losses on extinguishments of debt | (106 | ) | (25 | ) | ||||||
Gains on interest rate derivatives | 52 | 5 | ||||||||
Other, net | 57 | 17 | ||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX (BENEFIT) EXPENSE | 716 | 368 | ||||||||
Income tax (benefit) expense from continuing operations | (10 | ) | 38 | |||||||
INCOME FROM CONTINUING OPERATIONS | 726 | 330 | ||||||||
Loss from discontinued operations | (237 | ) | (11 | ) | ||||||
NET INCOME | 489 | 319 | ||||||||
Less: Net income attributable to noncontrolling interest | 126 | 80 | ||||||||
NET INCOME ATTRIBUTABLE TO PARTNERS | 363 | 239 | ||||||||
General Partner’s interest in net income | 1 | 1 | ||||||||
Convertible Unitholders’ interest in income | 21 | 6 | ||||||||
Limited Partners’ interest in net income | $ | 341 | $ | 232 | ||||||
INCOME FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT: | ||||||||||
Basic | $ | 0.32 | $ | 0.22 | ||||||
Diluted | $ | 0.32 | $ | 0.21 | ||||||
NET INCOME PER LIMITED PARTNER UNIT: | ||||||||||
Basic | $ | 0.31 | $ | 0.22 | ||||||
Diluted | $ | 0.31 | $ | 0.21 | ||||||
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING: | ||||||||||
Basic | 1,079.1 | 1,075.2 | ||||||||
Diluted | 1,154.7 | 1,139.0 | ||||||||
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 March 31, |
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2018 | 2017 | |||||||||
Cash distributions from ETP associated with: | ||||||||||
Limited partner interest | $ | 16 | $ | 15 | ||||||
General partner interest and IDRs | 449 | 381 | ||||||||
IDR relinquishments, net of distributions on Class I Units | (42 | ) | (157 | ) | ||||||
Total cash distributions from ETP | 423 | 239 | ||||||||
Cash distributions from Sunoco LP | 20 | 23 | ||||||||
Total cash distributions from investments in subsidiaries | $ | 443 | $ | 262 | ||||||
Distributable cash flow attributable to Lake Charles LNG: | ||||||||||
Revenues | $ | 49 | $ | 49 | ||||||
Operating expenses | (5 | ) | (5 | ) | ||||||
Selling, general and administrative expenses | (1 | ) | — | |||||||
Distributable cash flow attributable to Lake Charles LNG | $ | 43 | $ | 44 | ||||||
Expenses of the Parent Company on a cash basis: | ||||||||||
Selling, general and administrative expenses, excluding certain non-cash expenses | $ | 2 | $ | 8 | ||||||
Management fee to ETP (1) | — | 5 | ||||||||
Interest expense, net of amortization of financing costs, interest income, and realized gains and losses on interest rate swaps | 84 | 81 | ||||||||
Total Parent Company expenses | $ | 86 | $ | 94 | ||||||
Cash distributions to be paid to the partners of ETE: | ||||||||||
Distributions to be paid to limited partners (2) | $ | 265 | $ | 250 | ||||||
Distributions to be paid to general partner | 1 | 1 | ||||||||
Total cash distributions to be paid to the partners of ETE | $ | 266 | $ | 251 | ||||||
Common units outstanding — end of period | 1,079.1 | 1,079.1 |
(1) |
ETE previously paid certain fees for management services under agreements expired in the first quarter of 2017. | |
(2) |
Includes distributions of $0.11 per common unit for the three months ended March 31, 2017 and 2018, to unitholders who elected to participate in a plan to forgo a portion of their future potential cash distributions on common units and reinvest those distributions in ETE Series A convertible preferred units representing limited partner interests in the Partnership. The quarter ended March 31, 2018 is the final quarter of participation in the plan. | |
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 March 31, |
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2018 | 2017 | |||||||||
Net income attributable to partners | $ | 363 | $ | 239 | ||||||
Equity in earnings related to investments in ETP and Sunoco LP | (414 | ) | (325 | ) | ||||||
Total cash distributions from investments in subsidiaries | 443 | 262 | ||||||||
Amortization included in interest expense (excluding ETP and Sunoco LP) | 2 | 2 | ||||||||
Other non-cash (excluding ETP and Sunoco LP) | 6 | 34 | ||||||||
Distributable Cash Flow | 400 | 212 | ||||||||
Transaction-related expenses (recovery of prior expenses) | (5 | ) | 3 | |||||||
Distributable Cash Flow, as adjusted | $ | 395 | $ | 215 | ||||||
Total cash distributions to be paid to the partners of ETE | $ | 266 | $ | 251 | ||||||
Distribution coverage ratio(1) |
1.48 |
x |
0.86 |
x |
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(1) |
This press release and accompanying schedules include the non-generally accepted accounting principle (“non-GAAP”) financial measures of Distributable Cash Flow, Distributable Cash Flow, as adjusted, and Distributable Cash Flow, as adjusted, per Unit. 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 for ETE on a stand-alone basis (the “Parent Company”).
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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March 31, 2018 | December 31, 2017 | |||||||||
ASSETS | ||||||||||
Current assets | $ | 105 | $ | 67 | ||||||
Property, plant and equipment, net | 27 | 27 | ||||||||
Advances to and investments in unconsolidated affiliates | 5,805 | 6,082 | ||||||||
Goodwill | 9 | 9 | ||||||||
Other non-current assets, net | 8 | 8 | ||||||||
Total assets | $ | 5,954 | $ | 6,193 | ||||||
LIABILITIES AND PARTNERS’ DEFICIT | ||||||||||
Current liabilities | $ | 87 | $ | 70 | ||||||
Long-term debt, less current maturities | 6,386 | 6,700 | ||||||||
Long-term notes payable – related companies | 658 | 617 | ||||||||
Other non-current liabilities | 3 | 2 | ||||||||
Commitments and contingencies | ||||||||||
Total partners’ deficit | (1,180 | ) | (1,196 | ) | ||||||
Total liabilities and partners’ deficit | $ | 5,954 | $ | 6,193 | ||||||
STATEMENTS OF OPERATIONS |
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(In millions) |
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(unaudited) |
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Three Months Ended March 31, |
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2018 | 2017 | |||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | $ | (2 | ) | $ | (13 | ) | ||||
OTHER INCOME (EXPENSE): | ||||||||||
Interest expense, net | (86 | ) | (83 | ) | ||||||
Equity in earnings of unconsolidated affiliates | 448 | 361 | ||||||||
Losses on extinguishments of debt | — | (25 | ) | |||||||
Other, net | 3 | (1 | ) | |||||||
NET INCOME | 363 | 239 | ||||||||
General Partner’s interest in net income | 1 | 1 | ||||||||
Convertible Unitholders’ interest in income | 21 | 6 | ||||||||
Limited Partners’ interest in net income | $ | 341 | $ | 232 | ||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20180509006392/en/
Source:
Energy Transfer
Investor Relations:
Lyndsay Hannah,
Brent Ratliff, Helen Ryoo, 214-981-0795
or
Media Relations:
Vicki
Granado, 214-840-5820