Energy Transfer Equity Reports First Quarter Results
Distributable Cash Flow, as adjusted, for the three months ended
March 31, 2013 was
The Partnership’s key accomplishments to date in 2013 include the following:
-
On
April 30, 2013 , ETE contributed its interest inETP Holdco Corporation (“Holdco”) toEnergy Transfer Partners, L.P. (“ETP”). -
On
April 30, 2013 ,Southern Union Company (“Southern Union”) contributed toRegency Energy Partners LP (“Regency”) all of the issued and outstanding membership interest inSouthern Union Gathering Company, LLC , and its subsidiaries. -
On
May 6, 2013 , the Partnership's subsidiaries,Sunoco Logistics Partners L.P. andLone Star NGL LLC , announced that long-term, fee-based agreements have been executed with an anchor tenant to move forward with a liquefied petroleum gas (LPG) export/import project. -
On
April 1, 2013 , ETE redeemed of all of its outstanding Series A Convertible Preferred Units fromRegency GP Acquirer L.P. for cash consideration of$340 million , including a redemption premium of$40 million , plus accrued interest.
The Partnership has scheduled a conference call for
The Partnership’s principal sources of cash flow historically have
derived from distributions related to its direct and indirect
investments in the limited and general partner interests in ETP and
Regency, including 100% of ETP’s and Regency’s incentive distribution
rights, approximately 50.2 million of ETP’s common units and
approximately 26.3 million of Regency’s common units. Subsequent to
Use of Non-GAAP Financial Measures
This press release and accompanying schedules include the non-generally accepted accounting principle (“non-GAAP”) financial measures of Distributable Cash Flow. The accompanying schedules provide a reconciliation of these non-GAAP financial measures to their most directly comparable financial measure calculated and presented in accordance with GAAP. The Partnership’s Distributable Cash Flow should not be considered as an alternative 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. The Partnership
defines Distributable Cash Flow for a period as cash distributions
expected to be received from ETP and Regency in respect of such period
in connection with the Partnership’s investments in limited and general
partner interests of ETP and Regency, net of the Partnership’s cash
expenditures for general and administrative costs and interest expense.
The Partnership’s definition of Distributable Cash Flow also includes
distributable cash flow related to
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. Using this measure, 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 is also an important non-GAAP financial measure for our limited partners since it indicates 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 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 is net income for ETE on a stand-alone basis (“Parent Company”). The accompanying analysis of Distributable Cash Flow is presented for the three months ended March 31, 2013 and 2012 for comparative purposes.
Distributable Cash Flow, as adjusted. The
Partnership defines Distributable Cash Flow, as adjusted, for a period
as cash distributions expected to be received from ETP and Regency in
respect of such period in connection with the Partnership’s investments
in limited and general partner interests of ETP and Regency, plus the
distributable cash flow related to
ENERGY TRANSFER EQUITY, L.P. AND SUBSIDIARIES |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(Dollars in millions) |
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(unaudited) |
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March 31, 2013 | December 31, 2012 | ||||||
ASSETS |
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CURRENT ASSETS | $ | 6,627 | $ | 5,597 | |||
PROPERTY, PLANT AND EQUIPMENT, net | 28,640 | 28,284 | |||||
NON-CURRENT ASSETS HELD FOR SALE | 992 | 985 | |||||
ADVANCES TO AND INVESTMENTS IN UNCONSOLIDATED AFFILIATES | 4,708 | 4,737 | |||||
NON-CURRENT PRICE RISK MANAGEMENT ASSETS | 36 | 43 | |||||
GOODWILL | 6,414 | 6,434 | |||||
INTANGIBLES ASSETS, net | 2,266 | 2,291 | |||||
OTHER NON-CURRENT ASSETS, net | 457 | 533 | |||||
Total assets | $ | 50,140 | $ | 48,904 | |||
LIABILITIES AND EQUITY |
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CURRENT LIABILITIES | $ | 6,127 | $ | 5,845 | |||
NON-CURRENT LIABILITIES HELD FOR SALE | 142 | 142 | |||||
LONG-TERM DEBT, less current maturities | 22,343 | 21,440 | |||||
DEFERRED INCOME TAXES | 3,625 | 3,566 | |||||
NON-CURRENT PRICE RISK MANAGEMENT LIABILITIES | 170 | 162 | |||||
SERIES A CONVERTIBLE PREFERRED UNITS | 340 | 331 | |||||
OTHER NON-CURRENT LIABILITIES | 938 | 995 | |||||
COMMITMENTS AND CONTINGENCIES | |||||||
PREFERRED UNITS OF SUBSIDIARY | 73 | 73 | |||||
EQUITY: | |||||||
Total partners’ capital | 2,035 | 2,113 | |||||
Noncontrolling interest | 14,347 | 14,237 | |||||
Total equity | 16,382 | 16,350 | |||||
Total liabilities and equity | $ | 50,140 | $ | 48,904 |
ENERGY TRANSFER EQUITY, L.P. AND SUBSIDIARIES |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(Dollars in millions, except per unit data) |
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(unaudited) |
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Three Months Ended March 31, | ||||||||
2013 | 2012 | |||||||
REVENUES | $ | 11,179 | $ | 1,670 | ||||
COSTS AND EXPENSES: | ||||||||
Cost of products sold | 9,807 | 1,015 | ||||||
Operating expenses | 349 | 170 | ||||||
Depreciation and amortization | 312 | 154 | ||||||
Selling, general and administrative | 180 | 147 | ||||||
Total costs and expenses | 10,648 | 1,486 | ||||||
OPERATING INCOME | 531 | 184 | ||||||
OTHER INCOME (EXPENSE): | ||||||||
Interest expense, net of interest capitalized | (310 | ) | (213 | ) | ||||
Bridge loan related fees | — | (62 | ) | |||||
Equity in earnings of unconsolidated affiliates | 90 | 75 | ||||||
Gain on deconsolidation of Propane Business | — | 1,056 | ||||||
Loss on extinguishment of debt | — | (115 | ) | |||||
Gains on interest rate derivatives | 6 | 27 | ||||||
Other, net | (19 | ) | 12 | |||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE | 298 | 964 | ||||||
Income tax expense (benefit) from continuing operations | (2 | ) | 2 | |||||
INCOME FROM CONTINUING OPERATIONS | 300 | 962 | ||||||
Income (loss) from discontinued operations | 22 | (1 | ) | |||||
NET INCOME | 322 | 961 | ||||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | 232 | 795 | ||||||
NET INCOME ATTRIBUTABLE TO PARTNERS | 90 | 166 | ||||||
GENERAL PARTNER’S INTEREST IN NET INCOME | — | 1 | ||||||
LIMITED PARTNERS’ INTEREST IN NET INCOME | $ | 90 | $ | 165 | ||||
INCOME FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT: | ||||||||
Basic | $ | 0.27 | $ | 0.73 | ||||
Diluted | $ | 0.27 | $ | 0.73 | ||||
NET INCOME PER LIMITED PARTNER UNIT: | ||||||||
Basic | $ | 0.32 | $ | 0.73 | ||||
Diluted | $ | 0.32 | $ | 0.73 | ||||
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING: | ||||||||
Basic | 279,959,091 | 226,730,477 | ||||||
Diluted | 279,959,091 | 226,730,477 |
ENERGY TRANSFER EQUITY, L.P. |
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DISTRIBUTABLE CASH FLOW |
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(Tabular amounts in millions) |
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(unaudited) |
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The following table presents the calculation and reconciliation of Distributable Cash Flow and Distributable Cash Flow, as adjusted, of Energy Transfer Equity, L.P. |
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Three Months Ended March 31, | ||||||||
2013 | 2012 | |||||||
Cash distributions from ETP associated with: (1) | ||||||||
General partner interest | $ | 5 | $ | 5 | ||||
Incentive distribution rights | 156 | 100 | ||||||
Limited partner interest | 45 | 47 | ||||||
Total | 206 | 152 | ||||||
IDR relinquishments | (31 | ) | — | |||||
Total cash distributions from ETP | 175 | 152 | ||||||
Cash distributions from Regency associated with: (2) | ||||||||
General partner interest | 1 | 1 | ||||||
Incentive distribution rights | 2 | 2 | ||||||
Limited partner interest | 12 | 12 | ||||||
Total cash distributions from Regency | 15 | 15 | ||||||
Cash distributions from Holdco | 50 | — | ||||||
Total cash distributions from ETP, Regency and Holdco | 240 | 167 | ||||||
Distributable cash flow attributable to Southern Union (including acquisition-related expenses) from March 26, 2012 through March 31, 2012 (3) | — | (46 | ) | |||||
Deduct expenses of the Parent Company on a stand-alone basis: | ||||||||
Selling, general and administrative expenses, excluding non-cash compensation expense | (6 | ) | (31 | ) | ||||
Interest expense, net of amortization of financing costs, interest income, and realized gains and losses on interest rate swaps | (58 | ) | (42 | ) | ||||
Bridge financing costs | — | (62 | ) | |||||
Distributable Cash Flow (Deficit) | 176 | (14 | ) | |||||
Acquisition-related expenses (4) | 2 | 145 | ||||||
Distributable Cash Flow, as adjusted | $ | 178 | $ | 131 | ||||
Cash distributions to be paid to the partners of ETE: | ||||||||
Distributions to be paid to limited partners | $ | 181 | $ | 175 | ||||
Distributions to be paid to general partner | — | — | ||||||
Total cash distributions to be paid to the partners of ETE (5) | $ | 181 | $ | 175 | ||||
Reconciliation of Non-GAAP “Distributable Cash Flow” and “Distributable Cash Flow, as adjusted” to GAAP “Net income”: | ||||||||
Net income attributable to partners | $ | 90 | $ | 166 | ||||
Equity in income related to investments in ETP, Regency and Holdco | (168 | ) | (345 | ) | ||||
Total cash distributions from ETP, Regency and Holdco | 240 | 167 | ||||||
Amortization included in interest expense (excluding ETP and Regency) | 5 | 1 | ||||||
Fair value adjustment of ETE Preferred Units | 9 | 4 | ||||||
Other non-cash (excluding ETP, Regency and Holdco) | — | (7 | ) | |||||
Distributable Cash Flow (Deficit) | 176 | (14 | ) | |||||
Acquisition-related expenses (4) | 2 | 145 | ||||||
Distributable Cash Flow, as adjusted | $ | 178 | $ | 131 |
(1) For the three months ended March 31, 2013, cash
distributions expected to be received from ETP consist of cash
distributions in respect of the quarter ended March 31, 2013 payable on
For the three months ended
(2) For the three months ended March 31, 2013, cash
distributions expected to be received from Regency consist of cash
distributions in respect of the quarter ended March 31, 2013 payable on
(3) Distributable cash flow attributable to
Period from Acquisition |
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Net loss | $ | (39 | ) | |
Depreciation and amortization | 5 | |||
Deferred income taxes | (12 | ) | ||
Distributable cash flow (deficit) attributable to Southern Union | (46 | ) | ||
Acquisition-related expenses recognized by Southern Union | 53 | |||
Distributable cash flow, as adjusted, attributable to Southern Union | $ | 7 |
Distributable cash flow attributable to
(4) Transaction costs for the three months ended
(5) For the three months ended March 31, 2013, cash
distributions expected to be paid by ETE consist of cash distributions
in respect of the quarter ended March 31, 2013 payable on
SUPPLEMENTAL INFORMATION |
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RESULTS OF OPERATIONS FOR HOLDCO |
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(Dollars in millions) |
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(unaudited) |
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The following is a summary of Holdco’s Adjusted EBITDA and Distributable Cash Flow: |
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Three Months Ended March 31, 2013 | ||||||||||||||||
Southern Union | Sunoco | Other | Total | |||||||||||||
Reconciliation of net income to Adjusted EBITDA and Distributable Cash Flow: | ||||||||||||||||
Net income (loss) | $ | 36 | $ | 49 | $ | (20 | ) | $ | 65 | |||||||
Interest expense, net of interest capitalized | 33 | 8 | 36 | 77 | ||||||||||||
Income tax expense (benefit) | 10 | 4 | (14 | ) | — | |||||||||||
Depreciation and amortization | 59 | 28 | — | 87 | ||||||||||||
Equity in earnings of unconsolidated affiliates (a) | (1 | ) | (29 | ) | (2 | ) | (32 | ) | ||||||||
Adjusted EBITDA attributable to unconsolidated affiliates | 1 | 30 | 2 | 33 | ||||||||||||
LIFO valuation reserve | — | (38 | ) | — | (38 | ) | ||||||||||
Other, net | 20 | (2 | ) | — | 18 | |||||||||||
Adjusted EBITDA | 158 | 50 | 2 | 210 | ||||||||||||
Adjusted EBITDA attributable to unconsolidated affiliates | (1 | ) | (30 | ) | (2 | ) | (33 | ) | ||||||||
Distributions from unconsolidated affiliates (a) | 2 | 111 | 3 | 116 | ||||||||||||
Interest expense, net of interest capitalized | (33 | ) | (8 | ) | (36 | ) | (77 | ) | ||||||||
Income tax (expense) benefit | (10 | ) | (4 | ) | 14 | — | ||||||||||
Maintenance capital expenditures | (14 | ) | (12 | ) | — | (26 | ) | |||||||||
Interest Income | — | 1 | — | 1 | ||||||||||||
Distributable Cash Flow (Deficit) | $ | 102 | $ | 108 | $ | (19 | ) | $ | 191 |
(a) Amounts include earnings and distributions related to Holdco’s investment in ETP Class E Units and Sunoco’s investment in ETP Class F Units. Amounts related to the ETP Class E Units and ETP Class F Units are eliminated in ETE’s consolidated financial information.
The following is a summary of the impact from Holdco that was included in ETE’s Adjusted EBITDA by segment (after elimination of the intercompany amounts described in the footnotes above):
Three Months Ended |
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2013 | ||||
Interstate transportation and storage | $ | 125 | ||
Midstream | (6 | ) | ||
Retail marketing | 37 | |||
All other | 1 | |||
Total Adjusted EBITDA related to Holdco included in segments | 157 | |||
Amounts related to ETP Class E and Class F Units | 53 | |||
Holdco Adjusted EBITDA | $ | 210 |
Source:
Investor Relations:
Energy Transfer
Brent Ratliff,
214-981-0700
or
Media Relations:
Granado
Communications Group
Vicki Granado, 214-599-8785
214-498-9272
(cell)