Energy Transfer Equity Reports Third Quarter Results
Distributable Cash Flow, as adjusted, for the three months ended
September 30, 2013 was
Distributable Cash Flow, as adjusted, for the nine months ended
September 30, 2013 was
The Partnership’s key accomplishments during or subsequent to the quarter include the following:
-
ETE’s Board of Directors approved an increase in its quarterly
distribution to
$0.6725 per unit ($2.69 annualized) on ETE Common Units for the quarter endedSeptember 30, 2013 , representing an increase of$0.07 per common unit on an annualized basis. -
ETP completed the sale of the assets of Missouri Gas Energy to
Laclede Gas Company , a subsidiary of TheLaclede Group, Inc. , for$975 million . -
The Department of Energy conditionally granted authorization to ETE,Energy Transfer Partners, L.P. (“ETP”) andBG Group to export from the existing Trunkline liquefied natural gas (“LNG”) import terminal up to 15 million metric tons per annum of LNG to non-free trade agreement nations. ETE,ETP andBG Group subsequently announced their entry into a project development agreement to jointly develop the LNG export project at the existing Trunkline LNG import terminal inLake Charles, Louisiana . -
ETE exchanged 50.2 million ETP common units for newly issued Class H
Units by ETP that track 50% of the underlying economics of the general
partner interest and the incentive distribution rights of
Sunoco Logistics Partners L.P. -
ETP andRegency Energy Partners LP (“Regency”), both subsidiaries of ETE, announced thatLone Star NGL LLC (“Lone Star”), a joint venture between ETP and Regency, has placed in service a second natural gas liquids fractionator at its facility inMont Belvieu, Texas , bringing Lone Star’s total fractionation capacity atMont Belvieu to 200,000 barrels per day.
Furthermore, ETE commenced a tender offer on
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 and Regency, including 100% of ETP’s and Regency’s incentive distribution rights, approximately 49.6 million of ETP’s common units, approximately 26.3 million of Regency’s common units and approximately 50.2 million ETP Class H 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. AND SUBSIDIARIES |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(In millions) | ||||||
(unaudited) | ||||||
September 30, |
December 31, |
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ASSETS |
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CURRENT ASSETS | $ | 6,887 | $ | 5,597 | ||
PROPERTY, PLANT AND EQUIPMENT, net | 29,674 | 28,284 | ||||
NON-CURRENT ASSETS HELD FOR SALE | 145 | 985 | ||||
ADVANCES TO AND INVESTMENTS IN UNCONSOLIDATED AFFILIATES | 4,087 | 4,737 | ||||
NON-CURRENT PRICE RISK MANAGEMENT ASSETS | 20 | 43 | ||||
GOODWILL | 6,428 | 6,434 | ||||
INTANGIBLES ASSETS, net | 2,195 | 2,291 | ||||
OTHER NON-CURRENT ASSETS, net | 607 | 533 | ||||
Total assets | $ | 50,043 | $ | 48,904 | ||
LIABILITIES AND EQUITY |
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CURRENT LIABILITIES | $ | 6,047 | $ | 5,845 | ||
NON-CURRENT LIABILITIES HELD FOR SALE | 70 | 142 | ||||
LONG-TERM DEBT, less current maturities | 22,011 | 21,440 | ||||
DEFERRED INCOME TAXES | 3,708 | 3,566 | ||||
NON-CURRENT PRICE RISK MANAGEMENT LIABILITIES | 78 | 162 | ||||
SERIES A CONVERTIBLE PREFERRED UNITS | — | 331 | ||||
OTHER NON-CURRENT LIABILITIES | 893 | 995 | ||||
COMMITMENTS AND CONTINGENCIES | ||||||
PREFERRED UNITS OF SUBSIDIARY | 32 | 73 | ||||
EQUITY: | ||||||
Total partners’ capital | 1,400 | 2,113 | ||||
Noncontrolling interest | 15,804 | 14,237 | ||||
Total equity | 17,204 | 16,350 | ||||
Total liabilities and equity | $ | 50,043 | $ | 48,904 |
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) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three Months Ended |
Nine Months Ended |
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2013 | 2012 | 2013 | 2012 | |||||||||||||
REVENUES | $ | 12,486 | $ | 2,104 | $ | 35,728 | $ | 5,651 | ||||||||
COSTS AND EXPENSES: | ||||||||||||||||
Cost of products sold | 11,064 | 1,228 | 31,436 | 3,205 | ||||||||||||
Operating expenses | 403 | 208 | 1,127 | 614 | ||||||||||||
Depreciation and amortization | 332 | 211 | 962 | 571 | ||||||||||||
Selling, general and administrative | 158 | 98 | 499 | 353 | ||||||||||||
Total costs and expenses | 11,957 | 1,745 | 34,024 | 4,743 | ||||||||||||
OPERATING INCOME | 529 | 359 | 1,704 | 908 | ||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Interest expense, net of interest capitalized | (298 | ) | (237 | ) | (913 | ) | (732 | ) | ||||||||
Bridge loan related fees | — | — | — | (62 | ) | |||||||||||
Equity in earnings of unconsolidated affiliates | 38 | 21 | 182 | 118 | ||||||||||||
Gain on deconsolidation of Propane Business | — | — | — | 1,057 | ||||||||||||
Losses on extinguishments of debt | — | — | (7 | ) | (123 | ) | ||||||||||
Gains (losses) on interest rate derivatives | 3 | (6 | ) | 55 | (23 | ) | ||||||||||
Gain on sale of AmeriGas common units | 87 | — | 87 | — | ||||||||||||
Other, net | 33 | (3 | ) | — | 28 | |||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE | 392 | 134 | 1,108 | 1,171 | ||||||||||||
Income tax expense from continuing operations | 49 | 26 | 136 | 33 | ||||||||||||
INCOME FROM CONTINUING OPERATIONS | 343 | 108 | 972 | 1,138 | ||||||||||||
Income (loss) from discontinued operations | 13 | (142 | ) | 44 | (136 | ) | ||||||||||
NET INCOME (LOSS) | 356 | (34 | ) | 1,016 | 1,002 | |||||||||||
LESS: NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTEREST | 205 | (69 | ) | 648 | 747 | |||||||||||
NET INCOME ATTRIBUTABLE TO PARTNERS | 151 | 35 | 368 | 255 | ||||||||||||
GENERAL PARTNER’S INTEREST IN NET INCOME | 1 | — | 1 | 1 | ||||||||||||
LIMITED PARTNERS’ INTEREST IN NET INCOME | $ | 150 | $ | 35 | $ | 367 | $ | 254 | ||||||||
INCOME FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT: | ||||||||||||||||
Basic | $ | 0.52 | $ | 0.23 | $ | 1.24 | $ | 1.06 | ||||||||
Diluted | $ | 0.52 | $ | 0.23 | $ | 1.24 | $ | 1.06 | ||||||||
NET INCOME PER LIMITED PARTNER UNIT: | ||||||||||||||||
Basic | $ | 0.54 | $ | 0.13 | $ | 1.31 | $ | 0.97 | ||||||||
Diluted | $ | 0.54 | $ | 0.13 | $ | 1.31 | $ | 0.97 | ||||||||
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING: | ||||||||||||||||
Basic and diluted | 280.7 | 280.0 | 280.4 | 262.3 |
ENERGY TRANSFER EQUITY, L.P. |
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DISTRIBUTABLE CASH FLOW |
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(Tabular dollar amounts in millions) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three Months Ended |
Nine Months Ended September 30, |
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2013 | 2012 | 2013 | 2012 | |||||||||||||
“Distributable Cash Flow,” “Distributable Cash Flow, as adjusted,” and “Distribution Coverage Ratio” (1): | ||||||||||||||||
Cash distributions from ETP associated with: (2) | ||||||||||||||||
Limited partner interest | $ | 45 | $ | 45 | $ | 223 | $ | 135 | ||||||||
Class H Units | 16 | — | 16 | — | ||||||||||||
General partner interest | 5 | 5 | 15 | 15 | ||||||||||||
Incentive distribution rights | 165 | 147 | 528 | 381 | ||||||||||||
IDR relinquishments | (21 | ) | (31 | ) | (107 | ) | (59 | ) | ||||||||
Distributions credited to Holdco consideration (3) | — | — | (68 | ) | — | |||||||||||
Total cash distributions from ETP | 210 | 166 | 607 | 472 | ||||||||||||
Cash distributions from Regency associated with: (4) | ||||||||||||||||
Limited partner interest | 12 | 12 | 36 | 36 | ||||||||||||
General partner interest | 1 | 1 | 3 | 4 | ||||||||||||
Incentive distribution rights | 3 | 2 | 8 | 6 | ||||||||||||
IDR relinquishment | (1 | ) | — | (2 | ) | — | ||||||||||
Total cash distributions from Regency | 15 | 15 | 45 | 46 | ||||||||||||
Cash distributions from Holdco | — | — | 50 | — | ||||||||||||
Total cash distributions from ETP, Regency and Holdco | 225 | 181 | 702 | 518 | ||||||||||||
Distributable cash flow attributable to Southern Union (including acquisition-related expenses) from March 26, 2012 through September 30, 2012 (5) | — | 77 | — | 82 | ||||||||||||
Deduct expenses of the Parent Company on a stand-alone basis: | ||||||||||||||||
Selling, general and administrative expenses, excluding non-cash compensation expense | (8 | ) | (6 | ) | (38 | ) | (47 | ) | ||||||||
Interest expense, net of amortization of financing costs, interest income, and realized gains and losses on interest rate swaps | (43 | ) | (64 | ) | (149 | ) | (172 | ) | ||||||||
Bridge financing costs | — | — | — | (62 | ) | |||||||||||
Distributable Cash Flow | 174 | 188 | 515 | 319 | ||||||||||||
Transaction-related expenses (6) | 2 | 1 | 19 | 157 | ||||||||||||
Distributable Cash Flow, as adjusted | $ | 176 | $ | 189 | $ | 534 | $ | 476 | ||||||||
Cash distributions to be paid to the partners of ETE: | ||||||||||||||||
Distributions to be paid to limited partners | $ | 189 | $ | 175 | $ | 554 | $ | 525 | ||||||||
Distributions to be paid to general partner | — | — | 1 | 1 | ||||||||||||
Total cash distributions to be paid to the partners of ETE (7) | $ | 189 | $ | 175 | $ | 555 | $ | 526 | ||||||||
Distribution Coverage Ratio (8) |
0.93 |
x |
1.08 |
x |
0.96 |
x |
0.90 |
x |
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Reconciliation of Non-GAAP “Distributable Cash Flow” and “Distributable Cash Flow, as adjusted” to GAAP “Net income” (1): | ||||||||||||||||
Net income attributable to partners | $ | 151 | $ | 35 | $ | 368 | $ | 255 | ||||||||
Equity in income related to investments in ETP, Regency and Holdco | (207 | ) | (101 | ) | (573 | ) | (562 | ) | ||||||||
Total cash distributions from ETP, Regency and Holdco | 225 | 181 | 702 | 518 | ||||||||||||
Amortization included in interest expense (excluding ETP and Regency) | 5 | 5 | 14 | 10 | ||||||||||||
Fair value adjustment of ETE Preferred Units | — | 8 | 9 | 5 | ||||||||||||
Other non-cash (excluding ETP, Regency and Holdco) | — | 60 | (5 | ) | 93 | |||||||||||
Distributable Cash Flow | 174 | 188 | 515 | 319 | ||||||||||||
Transaction-related expenses (6) | 2 | 1 | 19 | 157 | ||||||||||||
Distributable Cash Flow, as adjusted | $ | 176 | $ | 189 | $ | 534 | $ | 476 | ||||||||
(1) This press release and accompanying schedules include the non-generally accepted accounting principle (“non-GAAP”) financial measures of Distributable Cash Flow. The schedule above provides 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 and nine months ended September 30, 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
(2) For the three months ended September 30, 2013, cash
distributions expected to be received from ETP consist of cash
distributions in respect of the quarter ended September 30, 2013 payable
on
For the nine months ended
(3) For the nine months ended
(4) For the three months ended September 30, 2013, cash
distributions expected to be received from Regency consist of cash
distributions in respect of the quarter ended September 30, 2013 payable
on
For the nine months ended
(5) Distributable cash flow attributable to
Three Months Ended |
Period from |
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Net income (loss) | $ | 17 | $ | (10 | ) | |||
Amortization of finance costs charged to interest | (12 | ) | (21 | ) | ||||
Depreciation and amortization | 76 | 155 | ||||||
Deferred income taxes | 27 | 26 | ||||||
Non-cash equity-based compensation, accretion expense and amortization of regulatory assets | — | 5 | ||||||
Other, net | 11 | 17 | ||||||
Maintenance capital expenditures | (42 | ) | (90 | ) | ||||
Distributable cash flow attributable to Southern Union | 77 | 82 | ||||||
Acquisition-related expenses recognized by Southern Union | 1 | 57 | ||||||
Distributable cash flow, as adjusted, attributable to Southern Union | $ | 78 | $ | 139 | ||||
Distributable cash flow attributable to
(6) Transaction-related expenses for the nine months ended
(7) For the three months ended September 30, 2013, cash
distributions expected to be paid by ETE consist of cash distributions
in respect of the quarter ended September 30, 2013 payable on
For the nine months ended
(8) Distribution Coverage Ratio is calculated as Distributable Cash Flow, as adjusted, divided by total cash distributions to be paid to the partners of ETE.
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)