DALLAS--(BUSINESS WIRE)--May 3, 2017--
Energy Transfer Equity, L.P. (NYSE:ETE) (“ETE” or the
“Partnership”) today reported financial results for the quarter ended
March 31, 2017.
ETE’s net income attributable to partners was $239 million for the three
months ended March 31, 2017 compared to $312 million for the three
months ended March 31, 2016. Distributable Cash Flow, as adjusted, for
the three months ended March 31, 2017 was $215 million compared to $349
million for the three months ended March 31, 2016. The decreases in net
income attributable to partners and Distributable Cash Flow, as
adjusted, were primarily driven by a $105 million reduction in incentive
distributions from ETP. As previously reported, ETE has agreed to a
reduction in incentive distributions from ETP in the aggregate amount of
$720 million over a period of seven quarters, beginning the quarter
ended June 30, 2016.
The Partnership’s recent key accomplishments and other developments
include the following:
-
In April 2017, ETE announced a $0.285 distribution per ETE common unit
for the quarter ended March 31, 2017, or $1.14 per unit on an
annualized basis.
-
In March 2017, ETE invested $300 million in Sunoco LP through a
preferred equity private placement, and Sunoco LP used the proceeds to
repay borrowings under its revolving credit facility.
-
In February 2017, the Partnership entered into an equity distribution
agreement with an aggregate offering price up to $1 billion. There was
no activity under the distribution agreements for the three months
ended March 31, 2017.
-
In January 2017, ETE issued 32.2 million common units representing
limited partner interests in the Partnership to certain institutional
investors in a private transaction for gross proceeds of approximately
$580 million, which ETE used to purchase 15.8 million newly issued
Energy Transfer, LP (“ETP”) common units.
-
As of March 31, 2017, ETE’s $1.5 billion revolving credit facility had
$1.15 billion of outstanding borrowings and its leverage ratio, as
defined by the credit agreement, was 3.88x.
The Partnership has scheduled a conference call for 8:00 a.m. Central
Time, Thursday, May 4, 2017 to discuss its first quarter 2017 results.
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.
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 Energy Transfer Partners, L.P.
(“Post-Merger ETP”), including 100% of ETP’s incentive distribution
rights, ETP Common Units and ETP Class I Units, limited and general
partner interest in Sunoco LP, including Sunoco LP Common Units, as well
as the Partnership’s ownership of Lake Charles LNG. In connection with
the merger of ETP and Sunoco Logistics Partners L.P. (“Sunoco
Logistics”), the ETP Class H units were cancelled, and ETE now owns 27.5
million Post-Merger ETP Common Units (representing 2.5% of the total
outstanding Post-Merger ETP common units) and 100 Post-Merger ETP Class
I units. The Partnership’s primary cash requirements are for general and
administrative expenses, debt service requirements and distributions to
its partners.
Energy Transfer Equity, L.P. (NYSE:ETE) is a master limited
partnership that owns the general partner and 100% of the incentive
distribution rights (IDRs) of Energy Transfer Partners, L.P. (NYSE: ETP)
and Sunoco LP (NYSE: SUN). ETE also owns Lake Charles LNG Company. On a
consolidated basis, ETE’s family of companies owns and operates a
diverse portfolio of natural gas, natural gas liquids, crude oil and
refined products assets, as well as retail and wholesale motor fuel
operations and LNG terminalling. For more information, visit the Energy
Transfer Equity, L.P. website at www.energytransfer.com.
Energy Transfer Partners, L.P. (NYSE: ETP) is a master limited
partnership that owns and operates one of the largest and most
diversified portfolios of energy assets in the United States.
Strategically positioned in all of the major U.S. production basins, ETP
owns and operates a geographically diverse portfolio of complementary
natural gas midstream, intrastate and interstate transportation and
storage assets; crude oil, natural gas liquids (NGL) and refined product
transportation and terminalling assets; NGL fractionation; and various
acquisition and marketing assets. ETP’s general partner is owned by
Energy Transfer Equity, L.P. (NYSE: ETE). For more information, visit
the Energy Transfer Partners, L.P. website at www.energytransfer.com.
Sunoco LP (NYSE: SUN) is a master limited partnership that
operates 1,355 convenience stores and retail fuel sites and distributes
motor fuel to 7,845 convenience stores, independent dealers, commercial
customers and distributors located in 30 states. Our parent — Energy
Transfer Equity, L.P. (NYSE: ETE) — owns SUN’s general partner and
incentive distribution rights. For more information, visit the Sunoco LP
website at www.sunocolp.com.
PennTex Midstream Partners, LP (NASDAQ: PTXP) is a
growth-oriented master limited partnership focused on owning, operating,
acquiring and developing midstream energy infrastructure assets in North
America. PTXP provides natural gas gathering and processing and residue
gas and natural gas liquids transportation services to producers in the
Terryville Complex in northern Louisiana. PennTex Midstream Partners,
LP’s general partner is a consolidated subsidiary of Energy Transfer
Partners, L.P. (NYSE: ETP). For more information, visit the PennTex
Midstream Partners, LP website at www.penntex.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 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. 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 EQUITY, L.P. AND
SUBSIDIARIES
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In millions)
|
(unaudited)
|
|
|
|
|
March 31, 2017
|
|
|
December 31, 2016
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
$
|
6,514
|
|
|
|
$
|
6,985
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
|
56,967
|
|
|
|
|
55,438
|
|
|
|
|
|
|
|
|
Advances to and investments in unconsolidated affiliates
|
|
|
|
3,103
|
|
|
|
|
3,040
|
|
Other non-current assets, net
|
|
|
|
826
|
|
|
|
|
818
|
|
Intangible assets, net
|
|
|
|
6,837
|
|
|
|
|
5,992
|
|
Goodwill
|
|
|
|
6,750
|
|
|
|
|
6,738
|
|
Total assets
|
|
|
$
|
80,997
|
|
|
|
$
|
79,011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
$
|
6,218
|
|
|
|
$
|
7,277
|
|
|
|
|
|
|
|
|
Long-term debt, less current maturities
|
|
|
|
42,583
|
|
|
|
|
42,608
|
|
Long-term notes payable – related companies
|
|
|
|
—
|
|
|
|
|
250
|
|
Non-current derivative liabilities
|
|
|
|
72
|
|
|
|
|
76
|
|
Deferred income taxes
|
|
|
|
5,130
|
|
|
|
|
5,112
|
|
Other non-current liabilities
|
|
|
|
1,237
|
|
|
|
|
1,123
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred units of subsidiary
|
|
|
|
—
|
|
|
|
|
33
|
|
Redeemable noncontrolling interests
|
|
|
|
15
|
|
|
|
|
15
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
Total partners’ deficit
|
|
|
|
(1,147
|
)
|
|
|
|
(1,694
|
)
|
Noncontrolling interest
|
|
|
|
26,889
|
|
|
|
|
24,211
|
|
Total equity
|
|
|
|
25,742
|
|
|
|
|
22,517
|
|
Total liabilities and equity
|
|
|
$
|
80,997
|
|
|
|
$
|
79,011
|
|
|
|
ENERGY TRANSFER EQUITY, L.P. AND
SUBSIDIARIES
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
(In millions, except per unit data)
|
(unaudited)
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
REVENUES
|
|
|
$
|
11,247
|
|
|
|
$
|
7,695
|
|
COSTS AND EXPENSES:
|
|
|
|
|
|
|
Cost of products sold
|
|
|
|
8,991
|
|
|
|
|
5,623
|
|
Operating expenses
|
|
|
|
673
|
|
|
|
|
641
|
|
Depreciation, depletion and amortization
|
|
|
|
661
|
|
|
|
|
562
|
|
Selling, general and administrative
|
|
|
|
197
|
|
|
|
|
168
|
|
Total costs and expenses
|
|
|
|
10,522
|
|
|
|
|
6,994
|
|
OPERATING INCOME
|
|
|
|
725
|
|
|
|
|
701
|
|
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
Interest expense, net of interest capitalized
|
|
|
|
(486
|
)
|
|
|
|
(427
|
)
|
Equity in earnings of unconsolidated affiliates
|
|
|
|
87
|
|
|
|
|
61
|
|
Losses on extinguishments of debt
|
|
|
|
(25
|
)
|
|
|
|
—
|
|
Gains (losses) on interest rate derivatives
|
|
|
|
5
|
|
|
|
|
(70
|
)
|
Other, net
|
|
|
|
19
|
|
|
|
|
16
|
|
INCOME BEFORE INCOME TAX EXPENSE (BENEFIT)
|
|
|
|
325
|
|
|
|
|
281
|
|
Income tax expense (benefit)
|
|
|
|
35
|
|
|
|
|
(55
|
)
|
NET INCOME
|
|
|
|
290
|
|
|
|
|
336
|
|
Less: Net income attributable to noncontrolling interest
|
|
|
|
51
|
|
|
|
|
24
|
|
NET INCOME ATTRIBUTABLE TO PARTNERS
|
|
|
|
239
|
|
|
|
|
312
|
|
General Partner’s interest in net income
|
|
|
|
1
|
|
|
|
|
1
|
|
Convertible Unitholders’ interest in income
|
|
|
|
6
|
|
|
|
|
—
|
|
Limited Partners’ interest in net income
|
|
|
$
|
232
|
|
|
|
$
|
311
|
|
NET INCOME PER LIMITED PARTNER UNIT:
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.22
|
|
|
|
$
|
0.30
|
|
Diluted
|
|
|
$
|
0.21
|
|
|
|
$
|
0.30
|
|
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING:
|
|
|
|
|
|
|
Basic
|
|
|
|
1,075.2
|
|
|
|
|
1,044.8
|
|
Diluted
|
|
|
|
1,139.0
|
|
|
|
|
1,044.8
|
|
|
|
ENERGY TRANSFER EQUITY, L.P.
|
SUPPLEMENTAL INFORMATION
|
(In millions)
|
(unaudited)
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
Cash distributions from ETP associated with: (1)
|
|
|
|
|
|
|
Limited partner interest
|
|
|
$
|
15
|
|
|
|
$
|
3
|
|
Class H Units
|
|
|
|
—
|
|
|
|
|
83
|
|
General partner interest
|
|
|
|
4
|
|
|
|
|
8
|
|
Incentive distribution rights
|
|
|
|
377
|
|
|
|
|
331
|
|
IDR relinquishments, net of distributions on Class I Units (2)
|
|
|
|
(157
|
)
|
|
|
|
(34
|
)
|
Total cash distributions from ETP
|
|
|
|
239
|
|
|
|
|
391
|
|
Cash distributions from Sunoco LP
|
|
|
|
23
|
|
|
|
|
21
|
|
Total cash distributions from investments in subsidiaries
|
|
|
$
|
262
|
|
|
|
$
|
412
|
|
|
|
|
|
|
|
|
Distributable cash flow attributable to Lake Charles LNG:
|
|
|
|
|
|
|
Revenues
|
|
|
$
|
49
|
|
|
|
$
|
49
|
|
Operating expenses
|
|
|
|
(5
|
)
|
|
|
|
(4
|
)
|
Selling, general and administrative expenses
|
|
|
|
—
|
|
|
|
|
(1
|
)
|
Distributable cash flow attributable to Lake Charles LNG
|
|
|
$
|
44
|
|
|
|
$
|
44
|
|
|
|
|
|
|
|
|
Expenses of the Parent Company on a cash basis:
|
|
|
|
|
|
|
Selling, general and administrative expenses, excluding certain
non-cash expenses
|
|
|
$
|
8
|
|
|
|
$
|
31
|
|
Management fee to ETP (3)
|
|
|
|
5
|
|
|
|
|
24
|
|
Interest expense, net of amortization of financing costs, interest
income, and realized gains and losses on interest rate swaps
|
|
|
|
81
|
|
|
|
|
78
|
|
Total Parent Company expenses
|
|
|
$
|
94
|
|
|
|
$
|
133
|
|
|
|
|
|
|
|
|
Cash distributions to be paid to the partners of ETE:
|
|
|
|
|
|
|
Distributions to be paid to limited partners (4)
|
|
|
$
|
250
|
|
|
|
$
|
240
|
|
Distributions to be paid to general partner
|
|
|
|
1
|
|
|
|
|
1
|
|
Total cash distributions to be paid to the partners of ETE
|
|
|
$
|
251
|
|
|
|
$
|
241
|
|
|
|
|
|
|
|
|
Common units outstanding — end of period
|
|
|
|
1,079.1
|
|
|
|
|
1,044.8
|
|
_________________
|
(1)
|
|
Following the merger of ETP and Sunoco Logistics in April 2017, the
Post-Merger ETP partnership agreement contains distribution
requirements consistent with those of Sunoco Logistics prior to the
merger.
|
|
|
|
(2)
|
|
IDR relinquishments for the three months ended March 31, 2017
include the impact of incentive distribution reductions agreed to
between ETE and ETP in addition to incentive distribution reductions
previously agreed to between ETP and Sunoco Logistics.
|
|
|
|
(3)
|
|
In exchange for management services, ETE agreed to pay ETP certain
fees during the periods presented. These agreements have expired as
of March 31, 2017.
|
|
|
|
(4)
|
|
Includes distributions of $0.11 per common unit for the three
months ended March 31, 2017 to unitholders who elected to
participate in a plan to forgo a portion of their future potential
cash distributions on common units for a period of up to nine
fiscal quarters, commencing with the distributions for the quarter
ended March 31, 2016, and reinvest those distributions in the
Convertible Units representing limited partner interest in the
Partnership.
|
|
|
SUPPLEMENTAL INFORMATION
|
RECONCILIATION OF DISTRIBUTABLE CASH FLOW
|
(Dollars in millions)
|
(unaudited)
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
Net income attributable to partners
|
|
|
$
|
239
|
|
|
|
$
|
312
|
|
Equity in earnings related to investments in ETP and Sunoco LP
|
|
|
|
(325
|
)
|
|
|
|
(398
|
)
|
Total cash distributions from investments in subsidiaries
|
|
|
|
262
|
|
|
|
|
412
|
|
Amortization included in interest expense (excluding ETP and Sunoco
LP)
|
|
|
|
2
|
|
|
|
|
3
|
|
Other non-cash (excluding ETP and Sunoco LP)
|
|
|
|
34
|
|
|
|
|
(6
|
)
|
Distributable Cash Flow
|
|
|
|
212
|
|
|
|
|
323
|
|
Transaction-related expenses
|
|
|
|
3
|
|
|
|
|
26
|
|
Distributable Cash Flow, as adjusted
|
|
|
$
|
215
|
|
|
|
$
|
349
|
|
|
|
|
|
|
|
|
Distribution coverage ratio(1)
|
|
|
0.86x
|
|
|
1.45x
|
(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 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
|
(In millions)
|
(unaudited)
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
ASSETS
|
|
|
|
|
|
|
Current assets
|
|
|
$
|
62
|
|
|
|
$
|
57
|
|
Property, plant and equipment, net
|
|
|
|
35
|
|
|
|
|
36
|
|
Advances to and investments in unconsolidated affiliates
|
|
|
|
5,940
|
|
|
|
|
5,088
|
|
Intangible assets, net
|
|
|
|
—
|
|
|
|
|
1
|
|
Goodwill
|
|
|
|
9
|
|
|
|
|
9
|
|
Other non-current assets, net
|
|
|
|
19
|
|
|
|
|
10
|
|
Total assets
|
|
|
$
|
6,065
|
|
|
|
$
|
5,201
|
|
LIABILITIES AND PARTNERS’ CAPITAL
|
|
|
|
|
|
|
Current liabilities
|
|
|
$
|
86
|
|
|
|
$
|
92
|
|
Long-term debt, less current maturities
|
|
|
|
6,639
|
|
|
|
|
6,358
|
|
Long-term notes payable – related companies
|
|
|
|
485
|
|
|
|
|
443
|
|
Other non-current liabilities
|
|
|
|
2
|
|
|
|
|
2
|
|
Commitments and contingencies
|
|
|
|
|
|
|
Total partners’ deficit
|
|
|
|
(1,147
|
)
|
|
|
|
(1,694
|
)
|
Total liabilities and partners’ deficit
|
|
|
$
|
6,065
|
|
|
|
$
|
5,201
|
|
|
|
STATEMENTS OF OPERATIONS
|
(In millions)
|
(unaudited)
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
|
|
|
$
|
(13
|
)
|
|
|
$
|
(37
|
)
|
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
Interest expense, net of interest capitalized
|
|
|
|
(83
|
)
|
|
|
|
(81
|
)
|
Equity in earnings of unconsolidated affiliates
|
|
|
|
361
|
|
|
|
|
430
|
|
Losses on extinguishments of debt
|
|
|
|
(25
|
)
|
|
|
|
—
|
|
Other, net
|
|
|
|
(1
|
)
|
|
|
|
—
|
|
NET INCOME
|
|
|
|
239
|
|
|
|
|
312
|
|
General Partner’s interest in net income
|
|
|
|
1
|
|
|
|
|
1
|
|
Convertible Unitholders' interest in income
|
|
|
|
6
|
|
|
|
|
—
|
|
Limited Partners’ interest in net income
|
|
|
$
|
232
|
|
|
|
$
|
311
|
|
|
|
|
|
|
|
|
|
|
|
|

View source version on businesswire.com: http://www.businesswire.com/news/home/20170503006668/en/
Source: Energy Transfer Equity, L.P.
Energy Transfer Investor Relations: Lyndsay Hannah,
Brent Ratliff, Helen Ryoo, 214-981-0795 or Media Relations: Vicki
Granado, 214-981-0761
|