Delaware | 1-32740 | 30-0108820 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
Exhibit Number | Description of the Exhibit | |
ENERGY TRANSFER LP | |||
By: | LE GP, LLC, its general partner | ||
Date: | November 7, 2018 | By: | /s/ Thomas E. Long |
Thomas E. Long | |||
Chief Financial Officer (duly authorized to sign on behalf of the registrant) |
• | On October 19, 2018, ET and Energy Transfer Operating, L.P. (formerly named Energy Transfer Partners, L.P. and referred to herein as “ETP”) completed a merger transaction (the “Merger”) whereby the publicly held common units of ETP were exchanged for 1.28 common units of ET. Consequently, the former common unitholders of ETP, along with the existing common unitholders of ETE, now comprise the current common unitholders of ET. The financial results of ETP have been included separately as supplemental information in this release. |
• | In October 2018, ET announced a quarterly distribution of $0.305 per unit ($1.220 annualized) on ET common units for the quarter ended September 30, 2018. |
• | In September 2018, the Partnership, along with Magellan Midstream, MPLX and Delek announced it had received sufficient commitments to proceed with plans to construct the Permian Gulf Coast Pipeline (“PGC”), a new 30-inch diameter, 600-mile common carrier pipeline to transport crude oil from the Permian Basin to the Texas Gulf Coast region, including the Partnership’s Nederland, Texas terminal. The project is subject to receipt of customary regulatory and Board approvals. |
• | In August 2018, the Partnership received approval to commence service on the Burgettstown and Majorsville supply laterals which allowed for 100 percent of the long-haul contractual commitments on Rover to begin September 1, 2018, and on November 2, 2018, the Partnership announced that it received approval to commence service on the final laterals needed to complete the Rover pipeline project. |
• | As of September 30, 2018, the Partnership’s $6.50 billion revolving credit facilities had an aggregate $3.66 billion of available capacity, and ETP’s leverage ratio, as defined by its credit agreement, was 3.53x. |
September 30, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
Current assets | $ | 7,527 | $ | 10,683 | |||
Property, plant and equipment, net | 65,643 | 61,088 | |||||
Advances to and investments in unconsolidated affiliates | 2,656 | 2,705 | |||||
Other non-current assets, net | 1,106 | 886 | |||||
Intangible assets, net | 6,013 | 6,116 | |||||
Goodwill | 5,242 | 4,768 | |||||
Total assets | $ | 88,187 | $ | 86,246 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities | $ | 10,219 | $ | 7,897 | |||
Long-term debt, less current maturities | 42,117 | 43,671 | |||||
Non-current derivative liabilities | 58 | 145 | |||||
Deferred income taxes | 3,008 | 3,315 | |||||
Other non-current liabilities | 1,253 | 1,217 | |||||
Commitments and contingencies | |||||||
Redeemable noncontrolling interests | 499 | 21 | |||||
Equity: | |||||||
Total partners’ deficit | (1,103 | ) | (1,196 | ) | |||
Noncontrolling interest | 32,136 | 31,176 | |||||
Total equity | 31,033 | 29,980 | |||||
Total liabilities and equity | $ | 88,187 | $ | 86,246 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 (a) | 2018 | 2017 (a) | ||||||||||||
REVENUES | $ | 14,514 | $ | 9,984 | $ | 40,514 | $ | 29,072 | |||||||
COSTS AND EXPENSES: | |||||||||||||||
Cost of products sold | 11,093 | 7,341 | 31,681 | 22,018 | |||||||||||
Operating expenses | 784 | 918 | 2,280 | 2,167 | |||||||||||
Depreciation, depletion and amortization | 750 | 642 | 2,109 | 1,877 | |||||||||||
Selling, general and administrative | 184 | 142 | 515 | 480 | |||||||||||
Impairment losses | — | 10 | — | 99 | |||||||||||
Total costs and expenses | 12,811 | 9,053 | 36,585 | 26,641 | |||||||||||
OPERATING INCOME | 1,703 | 931 | 3,929 | 2,431 | |||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Interest expense, net of interest capitalized | (535 | ) | (490 | ) | (1,511 | ) | (1,440 | ) | |||||||
Equity in earnings of unconsolidated affiliates | 87 | 92 | 258 | 228 | |||||||||||
Gains on disposal of assets | 18 | 5 | 14 | — | |||||||||||
Losses on extinguishments of debt | — | — | (106 | ) | (25 | ) | |||||||||
Gains (losses) on interest rate derivatives | 45 | (8 | ) | 117 | (28 | ) | |||||||||
Other, net | 23 | 54 | 83 | 133 | |||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE (BENEFIT) | 1,341 | 584 | 2,784 | 1,299 | |||||||||||
Income tax expense (benefit) from continuing operations | (52 | ) | (157 | ) | 6 | (86 | ) | ||||||||
INCOME FROM CONTINUING OPERATIONS | 1,393 | 741 | 2,778 | 1,385 | |||||||||||
Income (loss) from discontinued operations, net of income taxes | (2 | ) | 17 | (265 | ) | (187 | ) | ||||||||
NET INCOME | 1,391 | 758 | 2,513 | 1,198 | |||||||||||
Less: Net income attributable to noncontrolling interest | 1,008 | 506 | 1,412 | 495 | |||||||||||
Less: Net income attributable to redeemable noncontrolling interests | 12 | — | 24 | — | |||||||||||
NET INCOME ATTRIBUTABLE TO PARTNERS | 371 | 252 | 1,077 | 703 | |||||||||||
Convertible Unitholders’ interest in income | — | 11 | 33 | 25 | |||||||||||
General Partner’s interest in net income | 1 | 1 | 3 | 2 | |||||||||||
Limited Partners’ interest in net income | $ | 370 | $ | 240 | $ | 1,041 | $ | 676 | |||||||
NET INCOME PER LIMITED PARTNER UNIT: | |||||||||||||||
Basic | $ | 0.32 | $ | 0.22 | $ | 0.93 | $ | 0.62 | |||||||
Diluted | $ | 0.32 | $ | 0.22 | $ | 0.93 | $ | 0.61 | |||||||
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING: | |||||||||||||||
Basic | 1,158.2 | 1,079.1 | 1,117.7 | 1,077.9 | |||||||||||
Diluted | 1,158.2 | 1,148.3 | 1,158.2 | 1,147.4 |
(a) | During the fourth quarter of 2017, ETP changed its accounting policy related to certain inventories. Certain crude oil, refined product and NGL inventories associated with the legacy Sunoco Logistics business were changed from the LIFO method to the weighted average cost method. These changes have been applied retrospectively to all periods presented, and the prior period amounts reflected below have been adjusted from those amounts previously reported. Certain other prior period amounts have also been reclassified to conform to the current period presentation, including a reclassification between capitalized interest and AFUDC from the three months and nine months ended September 30, 2017. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 (a) | 2017 (a)(b) | 2018 (a) | 2017 (a)(b) | ||||||||||||
Reconciliation of net income to Adjusted EBITDA and Distributable Cash Flow (c): | |||||||||||||||
Net income | $ | 1,391 | $ | 758 | $ | 2,513 | $ | 1,198 | |||||||
(Income) loss from discontinued operations | 2 | (17 | ) | 265 | 187 | ||||||||||
Interest expense, net | 535 | 490 | 1,511 | 1,440 | |||||||||||
Impairment losses | — | 10 | — | 99 | |||||||||||
Income tax expense (benefit) | (52 | ) | (157 | ) | 6 | (86 | ) | ||||||||
Depreciation, depletion and amortization | 750 | 642 | 2,109 | 1,877 | |||||||||||
Non-cash compensation expense | 27 | 29 | 82 | 76 | |||||||||||
(Gains) losses on interest rate derivatives | (45 | ) | 8 | (117 | ) | 28 | |||||||||
Unrealized (gains) losses on commodity risk management activities | (97 | ) | 76 | 255 | (22 | ) | |||||||||
Gains on disposal of assets | (18 | ) | (5 | ) | (14 | ) | — | ||||||||
Losses on extinguishments of debt | — | — | 106 | 25 | |||||||||||
Inventory valuation adjustments | 7 | (50 | ) | (50 | ) | (8 | ) | ||||||||
Equity in earnings of unconsolidated affiliates | (87 | ) | (92 | ) | (258 | ) | (228 | ) | |||||||
Adjusted EBITDA related to unconsolidated affiliates | 179 | 205 | 503 | 554 | |||||||||||
Adjusted EBITDA from discontinued operations | — | 76 | (25 | ) | 179 | ||||||||||
Other, net | (15 | ) | (24 | ) | (45 | ) | (76 | ) | |||||||
Adjusted EBITDA (consolidated) | 2,577 | 1,949 | 6,841 | 5,243 | |||||||||||
Adjusted EBITDA related to unconsolidated affiliates | (179 | ) | (205 | ) | (503 | ) | (554 | ) | |||||||
Distributable cash flow from unconsolidated affiliates | 109 | 133 | 312 | 329 | |||||||||||
Interest expense, net | (535 | ) | (503 | ) | (1,513 | ) | (1,461 | ) | |||||||
Preferred unitholders’ distributions | (51 | ) | — | (116 | ) | — | |||||||||
Current income tax expense | (24 | ) | (15 | ) | (465 | ) | (29 | ) | |||||||
Transaction-related income taxes | — | — | 470 | — | |||||||||||
Maintenance capital expenditures | (156 | ) | (130 | ) | (373 | ) | (322 | ) | |||||||
Other, net | 16 | 23 | 29 | 62 | |||||||||||
Distributable Cash Flow (consolidated) | 1,757 | 1,252 | 4,682 | 3,268 | |||||||||||
Distributable Cash Flow attributable to Sunoco LP (100%) | (147 | ) | (125 | ) | (330 | ) | (360 | ) | |||||||
Distributions from Sunoco LP | 41 | 66 | 123 | 191 | |||||||||||
Distributable Cash Flow attributable to USAC (100%) | (47 | ) | — | (93 | ) | — | |||||||||
Distributions from USAC | 21 | — | 52 | — | |||||||||||
Distributable Cash Flow attributable to PennTex Midstream Partners, LP (“PennTex”) (100%) (d) | — | — | — | (19 | ) | ||||||||||
Distributions from PennTex to ETP (d) | — | — | — | 8 | |||||||||||
Distributable Cash Flow attributable to noncontrolling interest in other non-wholly-owned consolidated subsidiaries | (253 | ) | (119 | ) | (580 | ) | (199 | ) | |||||||
Distributable Cash Flow attributable to the partners of ET – pro forma for the Merger (a) | 1,372 | 1,074 | 3,854 | 2,889 | |||||||||||
Transaction-related expenses | 12 | 14 | 25 | 53 | |||||||||||
Distributable Cash Flow attributable to the partners of ET, as adjusted – pro forma for the Merger (a) | $ | 1,384 | $ | 1,088 | $ | 3,879 | $ | 2,942 | |||||||
Distributions to partners – pro forma for the Merger (a): | |||||||||||||||
Limited Partners (e) | $ | 798 | $ | 683 | $ | 2,305 | $ | 1,961 | |||||||
General Partner | 1 | 1 | 3 | 3 | |||||||||||
Total distributions to be paid to partners | $ | 799 | $ | 684 | $ | 2,308 | $ | 1,964 | |||||||
Common Units outstanding – end of period – pro forma for the Merger (a) | 2,617.1 | 2,523.0 | 2,617.1 | 2,523.0 | |||||||||||
Distribution coverage ratio – pro forma for the Merger (a)(f) | 1.73x | 1.59x | 1.68x | 1.50x |
(a) | The closing of the Merger (as discussed above) has impacted the Partnership’s calculation of Distributable Cash Flow attributable to partners, as well as the number of ET Common Units outstanding and the amount of distributions to be paid to partners. In order to provide information on a comparable basis for pre-Merger and post-Merger periods, the Partnership has included certain pro forma information. |
• | ETP is reflected as a wholly owned subsidiary and pro forma Distributable Cash Flow attributable to partners reflects ETP’s consolidated Distributable Cash Flow (less certain other adjustments, as follows). |
• | Distributions from Sunoco LP include distributions to both ET and ETP. |
• | Distributions from PennTex are separately included in Distributable Cash Flow attributable to partners. |
• | Distributable Cash Flow attributable to noncontrolling interest in ETP’s other non-wholly-owned subsidiaries is subtracted from consolidated Distributable Cash Flow to calculate Distributable Cash Flow attributable to partners. |
(b) | During the fourth quarter of 2017, ETP changed its accounting policy related to certain inventories. Certain crude oil, refined product and NGL inventories associated with the legacy Sunoco Logistics business were changed from the LIFO method to the weighted average cost method. These changes have been applied retrospectively to all periods presented, and the prior period amounts reflected above have been adjusted from those amounts previously reported. Certain other prior period amounts have also been reclassified to conform to the current period presentation, including a reclassification between capitalized interest and AFUDC from the three months and nine months ended September 30, 2017. |
(c) | 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 ET’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. |
• | 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 subsidiary, but Distributable Cash Flow attributable to partners is net of distributions to be paid by the subsidiary to the noncontrolling interests. |
(d) | Beginning with the second quarter of 2017, PennTex became a wholly-owned subsidiary of ETP. The amounts reflected above for PennTex relate only to the first quarter of 2017, and no distributable cash flow has been attributed to noncontrolling interests in PennTex subsequent to March 31, 2017. |
(e) | Includes distributions 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 was the final quarter of participation in the plan. |
(f) | Distribution coverage ratio for a period is calculated as Distributable Cash Flow attributable to partners, as adjusted, divided by net distributions expected to be paid to the partners of ET in respect of such period. |
Facility Size | Funds Available at September 30, 2018 | Maturity Date | |||||||
ETE Revolving Credit Facility (1) | $ | 1,500 | $ | 602 | March 24, 2022 | ||||
ETP Five-Year Revolving Credit Facility (2) | 4,000 | 2,057 | December 1, 2022 | ||||||
ETP 364-Day Revolving Credit Facility (3) | 1,000 | 1,000 | November 30, 2018 | ||||||
$ | 6,500 | $ | 3,659 |
(1) | In connection with the closing of the Merger, on October 19, 2018, all of the outstanding borrowings under the ETE revolving credit facility were repaid in full and the facility was terminated. |
(2) | In connection with the closing of the Merger, on October 19, 2018, the ETP Five-Year Credit Facility was amended to increase the borrowing capacity by $1.00 billion, to $5.00 billion, and to extend the maturity date to December 1, 2023. |
(3) | In connection with the closing of the Merger, on October 19, 2018, the ETP 364-Day Facility was amended to extend the maturity date to November 29, 2019. |
September 30, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
Current assets | $ | 6,353 | $ | 6,528 | |||
Property, plant and equipment, net | 60,550 | 58,437 | |||||
Advances to and investments in unconsolidated affiliates | 3,599 | 3,816 | |||||
Other non-current assets, net | 863 | 758 | |||||
Intangible assets, net | 4,925 | 5,311 | |||||
Goodwill | 2,866 | 3,115 | |||||
Total assets | $ | 79,156 | $ | 77,965 |
LIABILITIES AND EQUITY | |||||||
Current liabilities | $ | 9,258 | $ | 6,994 | |||
Long-term debt, less current maturities | 31,198 | 32,687 | |||||
Non-current derivative liabilities | 57 | 145 | |||||
Deferred income taxes | 2,845 | 2,883 | |||||
Other non-current liabilities | 1,100 | 1,084 | |||||
Commitments and contingencies | |||||||
Redeemable noncontrolling interests | 22 | 21 | |||||
Equity: | |||||||
Total partners’ capital | 28,342 | 28,269 | |||||
Noncontrolling interest | 6,334 | 5,882 | |||||
Total equity | 34,676 | 34,151 | |||||
Total liabilities and equity | $ | 79,156 | $ | 77,965 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 (a) | 2018 | 2017 (a) | ||||||||||||
REVENUES | $ | 9,641 | $ | 6,973 | $ | 27,331 | $ | 20,444 | |||||||
COSTS AND EXPENSES: | |||||||||||||||
Cost of products sold | 6,745 | 4,922 | 19,873 | 14,595 | |||||||||||
Operating expenses | 632 | 571 | 1,863 | 1,603 | |||||||||||
Depreciation, depletion and amortization | 636 | 596 | 1,827 | 1,713 | |||||||||||
Selling, general and administrative | 123 | 105 | 347 | 335 | |||||||||||
Total costs and expenses | 8,136 | 6,194 | 23,910 | 18,246 | |||||||||||
OPERATING INCOME | 1,505 | 779 | 3,421 | 2,198 | |||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Interest expense, net | (387 | ) | (352 | ) | (1,091 | ) | (1,020 | ) | |||||||
Equity in earnings of unconsolidated affiliates | 113 | 127 | 147 | 139 | |||||||||||
Gain on Sunoco LP common unit repurchase | — | — | 172 | — | |||||||||||
Loss on deconsolidation of CDM | — | — | (86 | ) | — | ||||||||||
Gains (losses) on interest rate derivatives | 45 | (8 | ) | 117 | (28 | ) | |||||||||
Other, net | 21 | 57 | 127 | 137 | |||||||||||
INCOME BEFORE INCOME TAX EXPENSE (BENEFIT) | 1,297 | 603 | 2,807 | 1,426 | |||||||||||
Income tax expense (benefit) | (61 | ) | (112 | ) | (32 | ) | 22 | ||||||||
NET INCOME | 1,358 | 715 | 2,839 | 1,404 | |||||||||||
Less: Net income attributable to noncontrolling interest | 223 | 110 | 557 | 266 | |||||||||||
NET INCOME ATTRIBUTABLE TO PARTNERS | $ | 1,135 | $ | 605 | $ | 2,282 | $ | 1,138 |
(a) | During the fourth quarter of 2017, ETP changed its accounting policy related to certain inventories. Certain crude oil, refined product and NGL inventories associated with the legacy Sunoco Logistics business were changed from the LIFO method to the weighted average cost method. These changes have been applied retrospectively to all periods presented, and the prior period amounts reflected above have been adjusted from those amounts previously reported. Certain other prior period amounts have also been reclassified to conform to the current period presentation, including a reclassification between capitalized interest and AFUDC from the three months and nine months ended September 30, 2017. |
Three Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Segment Adjusted EBITDA: | |||||||
Intrastate transportation and storage | $ | 221 | $ | 163 | |||
Interstate transportation and storage | 416 | 273 | |||||
Midstream | 434 | 356 | |||||
NGL and refined products transportation and services | 498 | 439 | |||||
Crude oil transportation and services | 682 | 420 | |||||
All other | 78 | 133 | |||||
Total Segment Adjusted EBITDA | $ | 2,329 | $ | 1,784 |
Three Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Segment Margin: | |||||||
Intrastate transportation and storage | $ | 284 | $ | 167 | |||
Interstate transportation and storage | 395 | 224 | |||||
Midstream | 622 | 530 | |||||
NGL and refined products transportation and services | 634 | 483 | |||||
Crude oil transportation and services | 944 | 548 | |||||
All other | 25 | 112 | |||||
Intersegment eliminations | (8 | ) | (13 | ) | |||
Total segment margin | 2,896 | 2,051 | |||||
Less: | |||||||
Operating expenses | 632 | 571 | |||||
Depreciation, depletion and amortization | 636 | 596 | |||||
Selling, general and administrative | 123 | 105 | |||||
Operating income | $ | 1,505 | $ | 779 |
Three Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Natural gas transported (BBtu/d) | 12,146 | 8,951 | |||||
Revenues | $ | 922 | $ | 773 | |||
Cost of products sold | 638 | 606 | |||||
Segment margin | 284 | 167 | |||||
Unrealized (gains) losses on commodity risk management activities | (12 | ) | 22 | ||||
Operating expenses, excluding non-cash compensation expense | (51 | ) | (40 | ) | |||
Selling, general and administrative expenses, excluding non-cash compensation expense | (7 | ) | (6 | ) | |||
Adjusted EBITDA related to unconsolidated affiliates | 6 | 19 | |||||
Other | 1 | 1 | |||||
Segment Adjusted EBITDA | $ | 221 | $ | 163 |
• | an increase of $55 million in realized natural gas sales and other margin due to higher realized gains from pipeline optimization activity; |
• | an increase of $7 million in transportation fees, excluding the incremental transportation fees related to the RIGS consolidation discussed above, primarily due to new contracts and the impact of the Red Bluff Express pipeline coming online in May 2018; and |
• | a net increase of $6 million due to the consolidation of RIGS beginning in April 2018, resulting in increases in transportation fees, operating expenses, and selling, general and administrative expenses of $25 million, $5 million and $2 million, respectively, and a decrease of $12 million in Adjusted EBITDA related to unconsolidated affiliates; partially offset by |
• | a decrease of $5 million in realized storage margin primarily due to lower realized derivative gains. |
Three Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Natural gas transported (BBtu/d) | 10,155 | 6,075 | |||||
Natural gas sold (BBtu/d) | 18 | 19 | |||||
Revenues | $ | 395 | $ | 224 | |||
Operating expenses, excluding non-cash compensation, amortization and accretion expenses | (97 | ) | (79 | ) | |||
Selling, general and administrative expenses, excluding non-cash compensation, amortization and accretion expenses | (19 | ) | (14 | ) | |||
Adjusted EBITDA related to unconsolidated affiliates | 135 | 140 | |||||
Other | 2 | 2 | |||||
Segment Adjusted EBITDA | $ | 416 | $ | 273 |
• | an increase of $128 million associated with the Rover pipeline with increases of $149 million in revenues, $14 million in net operating expenses and $7 million in selling, general and administrative expenses; and |
• | an aggregate increase of $22 million in revenues, excluding the incremental revenue related to the Rover pipeline discussed above, primarily due to capacity sold at higher rates on the Transwestern and Panhandle pipelines; partially offset by |
• | an increase of $4 million in operating expenses, excluding the incremental expenses related to the Rover pipeline discussed above, primarily due to slightly higher system gas expense and higher maintenance project costs due to scope and level of activity, offset by lower ad valorem taxes due to favorable valuations; and |
• | a decrease of $5 million in Adjusted EBITDA related to unconsolidated affiliates primarily related to sale of capacity on MEP at lower rates and lower sales of short term firm capacity on Citrus. |
Three Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Gathered volumes (BBtu/d) | 12,774 | 11,090 | |||||
NGLs produced (MBbls/d) | 583 | 453 | |||||
Equity NGLs (MBbls/d) | 32 | 27 | |||||
Revenues | $ | 2,253 | $ | 1,765 | |||
Cost of products sold | 1,631 | 1,235 | |||||
Segment margin | 622 | 530 | |||||
Unrealized losses on commodity risk management activities | — | 1 | |||||
Operating expenses, excluding non-cash compensation expense | (179 | ) | (157 | ) | |||
Selling, general and administrative expenses, excluding non-cash compensation expense | (19 | ) | (26 | ) | |||
Adjusted EBITDA related to unconsolidated affiliates | 9 | 6 | |||||
Other | 1 | 2 | |||||
Segment Adjusted EBITDA | $ | 434 | $ | 356 |
• | an increase of $38 million in fee-based margin due to growth in the North Texas, Permian and Northeast regions, offset by declines in the Ark-La-Tex and midcontinent/Panhandle regions; |
• | an increase of $27 million in non-fee-based margin due to increased throughput volume in the South Texas and Permian regions; |
• | an increase of $26 million in non-fee-based margin primarily due to higher crude oil and NGL prices; |
• | a decrease of $7 million in selling, general and administrative expenses primarily due to a decrease of $3 million in merger and acquisition costs and a $3 million change in capitalized overhead; and |
• | an increase of $3 million in Adjusted EBITDA related to unconsolidated affiliates due to higher earnings from ETP’s Aqua, Mi Vida and Ranch joint ventures; partially offset by |
• | an increase of $22 million in operating expenses due to increases of $6 million in materials, $5 million in outside services and $4 million in maintenance project costs, as well as a $7 million change in capitalized overhead. |
Three Months Ended September 30, | |||||||
2018 | 2017 | ||||||
NGL transportation volumes (MBbls/d) | 1,086 | 836 | |||||
Refined products transportation volumes (MBbls/d) | 627 | 612 | |||||
NGL and refined products terminal volumes (MBbls/d) | 858 | 782 | |||||
NGL fractionation volumes (MBbls/d) | 567 | 390 | |||||
Revenues | $ | 3,063 | $ | 2,070 | |||
Cost of products sold | 2,429 | 1,587 | |||||
Segment margin | 634 | 483 | |||||
Unrealized losses on commodity risk management activities | 26 | 56 | |||||
Operating expenses, excluding non-cash compensation expense | (168 | ) | (106 | ) | |||
Selling, general and administrative expenses, excluding non-cash compensation expense | (17 | ) | (13 | ) | |||
Adjusted EBITDA related to unconsolidated affiliates | 23 | 19 | |||||
Segment Adjusted EBITDA | $ | 498 | $ | 439 |
• | an increase of $76 million in transportation margin due to a $63 million increase resulting from higher producer volumes from the Permian region on ETP’s Texas NGL pipelines, an $11 million increase due to higher throughput volumes on Mariner West driven by end user facility constraints in the prior period, an $8 million increase due to higher throughput volumes from the Eagle Ford and Barnett regions, a $3 million increase due to higher throughput volumes in ETP’s Northeast refined products system and a $3 million increase due to higher throughput volumes on Mariner South and Mariner East 1 NGL systems. These increases were partially offset by a $7 million decrease resulting from the timing of deficiency revenue recognition and a $5 million decrease from lower volumes from the Southeast Texas region; |
• | an increase of $47 million in fractionation and refinery services margin due to a $40 million increase resulting from the commissioning of ETP’s fifth fractionator in July 2018 and higher NGL volumes from the Permian region feeding ETP’s Mont Belvieu fractionation facility, a $4 million increase from Mariner South as more cargoes were loaded due to increased demand for export and a $3 million increase from blending gains as a result of improved market pricing; and |
• | an increase of $19 million in terminal services margin due to a $9 million increase resulting from a change in the classification of certain customer reimbursements previously recorded in operating expenses, a $6 million increase at ETP’s Nederland terminal due to increased demand for propane exports and a $6 million increase due to higher throughput at ETP’s Marcus Hook Industrial Complex. These increases were partially offset by a $2 million decrease due to reduced rental fees at ETP’s Eagle Point facility; partially offset by |
• | an increase of $62 million in operating expenses due to increases of $25 million from higher throughput on ETP’s fractionator, pipeline and terminal assets and the commissioning of ETP’s fifth fractionator in July 2018, $10 million due to a legal settlement in the prior period, $9 million resulting from a change in the classification of certain customer reimbursements previously recorded as a reduction to operating expenses that are now classified as revenue following the adoption of ASC 606 on January |
• | a decrease of $21 million in marketing margin primarily due to a $13 million decrease in optimization gains from ETP’s Mont Belvieu marketing activities, a $4 million decrease from sales of propane and other products at ETP’s Marcus Hook Industrial Complex and a $2 million decrease from ETP’s butane blending operations resulting from a decrease in blending volumes. |
Three Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Crude transportation volumes (MBbls/d) | 4,276 | 3,773 | |||||
Crude terminals volumes (MBbls/d) | 2,134 | 1,923 | |||||
Revenues | $ | 4,438 | $ | 2,725 | |||
Cost of products sold | 3,494 | 2,177 | |||||
Segment margin | 944 | 548 | |||||
Unrealized gains on commodity risk management activities | (118 | ) | (1 | ) | |||
Operating expenses, excluding non-cash compensation expense | (126 | ) | (119 | ) | |||
Selling, general and administrative expenses, excluding non-cash compensation expense | (22 | ) | (13 | ) | |||
Adjusted EBITDA related to unconsolidated affiliates | 4 | 5 | |||||
Segment Adjusted EBITDA | $ | 682 | $ | 420 |
• | an increase of $279 million in segment margin (excluding unrealized losses on commodity risk management activities) due to the following: a $131 million increase resulting from higher throughput, primarily from ETP’s Bakken pipeline and from Permian producers on existing pipeline assets, as well as a $30 million increase resulting primarily from placing ETP’s Permian Express 3 pipeline in service in the fourth quarter of 2017; a $108 million increase (excluding a net change of $117 million in unrealized gains and losses) from ETP’s crude oil acquisition and marketing business primarily resulting from more favorable market price differentials between the West Texas and Gulf Coast markets; and a $10 million increase from higher throughput and ship loading fees at ETP’s Nederland terminal; partially offset by |
• | an increase of $9 million in selling, general and administrative expenses primarily due to increases of $4 million in overhead allocations, $2 million in employee costs and $2 million in insurance costs; and |
• | an increase of $7 million in operating expenses due to a $5 million increase due to higher throughput related expenses on existing assets and a $2 million increase from placing ETP’s Permian Express 3 pipeline in service in the fourth quarter of 2017. |
Three Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Revenues | $ | 525 | $ | 683 | |||
Cost of products sold | 500 | 571 | |||||
Segment margin | 25 | 112 | |||||
Unrealized losses on commodity risk management activities | 7 | 3 | |||||
Operating expenses, excluding non-cash compensation expense | (9 | ) | (34 | ) | |||
Selling, general and administrative expenses, excluding non-cash compensation expense | (26 | ) | (34 | ) | |||
Adjusted EBITDA related to unconsolidated affiliates | 80 | 88 | |||||
Other and eliminations | 1 | (2 | ) | ||||
Segment Adjusted EBITDA | $ | 78 | $ | 133 |
• | a decrease of $16 million in Adjusted EBITDA related to unconsolidated affiliates from ETP’s investment in Sunoco LP resulting from ETP’s lower ownership in Sunoco LP and lower operating results of Sunoco LP due to the sale of the majority of its retail assets in January 2018; |
• | a decrease of $12 million due to ETP’s contribution of CDM to USAC in April 2018, which decrease reflects the impact of deconsolidating CDM, partially offset by an increase in Adjusted EBITDA related to unconsolidated affiliates due to the equity method investment in USAC held by ETP subsequent to the CDM contribution; |
• | a decrease of $12 million in Adjusted EBITDA related to unconsolidated affiliates from ETP’s investment in PES primarily due to ETP’s lower ownership in PES subsequent to its reorganization, which resulted in PES no longer being reflected as an affiliate beginning in the third quarter of 2018; |
• | an increase of $7 million in general and administrative expenses from higher professional expenses; |
• | a decrease of $6 million due to losses from commodity trading and risk management activities; and |
• | a decrease of $3 million primarily due to lower margin from ETP’s compression equipment business. |
Three Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Equity in earnings (losses) of unconsolidated affiliates: | |||||||
Citrus | $ | 42 | $ | 35 | |||
FEP | 14 | 14 | |||||
MEP | 7 | 9 | |||||
Sunoco LP | 29 | 35 | |||||
USAC | (4 | ) | — | ||||
Other | 25 | 34 | |||||
Total equity in earnings of unconsolidated affiliates | $ | 113 | $ | 127 | |||
Adjusted EBITDA related to unconsolidated affiliates: | |||||||
Citrus | $ | 96 | $ | 99 | |||
FEP | 19 | 18 | |||||
MEP | 20 | 23 | |||||
Sunoco LP | 58 | 74 | |||||
USAC | 20 | — | |||||
Other | 44 | 65 | |||||
Total Adjusted EBITDA related to unconsolidated affiliates | $ | 257 | $ | 279 | |||
Distributions received from unconsolidated affiliates: | |||||||
Citrus | $ | 52 | $ | 50 | |||
FEP | 18 | 18 | |||||
MEP | 9 | 13 | |||||
Sunoco LP | 21 | 36 | |||||
USAC | 10 | — | |||||
Other | 34 | 27 | |||||
Total distributions received from unconsolidated affiliates | $ | 144 | $ | 144 |
Three Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Adjusted EBITDA of non-wholly-owned subsidiaries (100%) (a) | $ | 565 | $ | 325 | |||
ETP’s proportionate share of Adjusted EBITDA of non-wholly-owned subsidiaries (b) | 291 | 192 | |||||
Distributable Cash Flow of non-wholly-owned subsidiaries (100%) (c) | $ | 531 | $ | 289 | |||
ETP’s proportionate share of Distributable Cash Flow of non-wholly-owned subsidiaries (d) | 277 | 173 |
Non-wholly-owned subsidiary: | ETP Percentage Ownership (e) | |
Bakken Pipeline | 36.4 | % |
Bayou Bridge | 60.0 | % |
Ohio River System | 75.0 | % |
Permian Express Partners | 87.7 | % |
Rover | 32.6 | % |
Others | various |
(a) | Adjusted EBITDA of non-wholly-owned subsidiaries reflects the total Adjusted EBITDA of ETP’s non-wholly-owned subsidiaries on an aggregated basis. This is the amount of EBITDA included in ETP’s consolidated non-GAAP measure of Adjusted EBITDA. |
(b) | ETP’s 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 ETP’s ownership interest. |
(c) | Distributable Cash Flow of non-wholly-owned subsidiaries reflects the total Distributable Cash Flow of ETP’s non-wholly-owned subsidiaries on an aggregated basis. |
(d) | ETP’s 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 ETP’s ownership interest. This is the amount of Distributable Cash Flow included in ETP’s consolidated non-GAAP measure of Distributable Cash Flow attributable to the partners of ETP. |
(e) | ETP ownership reflects the total economic interest held by ETP and its subsidiaries. In some cases, this percentage comprises ownership interests held in (or by) multiple entities. |