Energy Transfer Equity Reports Second Quarter Results
ETE’s net income attributable to partners was
The Partnership’s recent key accomplishments and other developments include the following:
-
In
July 2017 , ETE announced a$0.285 distribution per ETE common unit for the quarter ended June 30, 2017, or$1.14 per unit on an annualized basis. -
As of June 30, 2017, ETE’s
$1.5 billion revolving credit facility had$1.20 billion of outstanding borrowings and its leverage ratio, as defined by the credit agreement, was 3.81x.
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
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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June 30, 2017 | December 31, 2016 | |||||||
ASSETS |
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Current assets | $ | 10,326 | $ | 6,985 | ||||
Property, plant and equipment, net | 56,808 | 53,253 | ||||||
Advances to and investments in unconsolidated affiliates | 3,182 | 3,040 | ||||||
Other non-current assets, net | 852 | 816 | ||||||
Intangible assets, net | 6,267 | 5,489 | ||||||
Goodwill | 5,174 | 5,170 | ||||||
Non-current assets held for sale | — | 4,258 | ||||||
Total assets | $ | 82,609 | $ | 79,011 | ||||
LIABILITIES AND EQUITY |
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Current liabilities | $ | 7,765 | $ | 7,277 | ||||
Long-term debt, less current maturities | 43,084 | 42,608 | ||||||
Long-term notes payable – related companies | — | 250 | ||||||
Non-current derivative liabilities | 201 | 76 | ||||||
Deferred income taxes | 5,170 | 5,112 | ||||||
Other non-current liabilities | 1,178 | 1,055 | ||||||
Liabilities associated with assets held for sale | — | 68 | ||||||
Commitments and contingencies | ||||||||
Preferred units of subsidiary | — | 33 | ||||||
Redeemable noncontrolling interests | 22 | 15 | ||||||
Equity: | ||||||||
Total partners’ deficit | (1,185 | ) | (1,694 | ) | ||||
Noncontrolling interest | 26,374 | 24,211 | ||||||
Total equity | 25,189 | 22,517 | ||||||
Total liabilities and equity | $ | 82,609 | $ | 79,011 |
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 June 30, |
Six Months Ended June 30, |
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2017 | 2016 | 2017 | 2016 | |||||||||||||
REVENUES | $ | 8,935 | $ | 7,415 | $ | 18,163 | $ | 13,522 | ||||||||
COSTS AND EXPENSES: | ||||||||||||||||
Cost of products sold | 6,887 | 5,479 | 14,178 | 9,816 | ||||||||||||
Operating expenses | 478 | 444 | 915 | 852 | ||||||||||||
Depreciation, depletion and amortization | 604 | 537 | 1,208 | 1,048 | ||||||||||||
Selling, general and administrative | 178 | 150 | 342 | 306 | ||||||||||||
Total costs and expenses | 8,147 | 6,610 | 16,643 | 12,022 | ||||||||||||
OPERATING INCOME | 788 | 805 | 1,520 | 1,500 | ||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Interest expense, net | (485 | ) | (443 | ) | (966 | ) | (862 | ) | ||||||||
Equity in earnings of unconsolidated affiliates | 49 | 95 | 136 | 156 | ||||||||||||
Losses on extinguishments of debt | — | — | (25 | ) | — | |||||||||||
Losses on interest rate derivatives | (25 | ) | (81 | ) | (20 | ) | (151 | ) | ||||||||
Other, net | 67 | 26 | 92 | 43 | ||||||||||||
INCOME BEFORE INCOME TAX EXPENSE (BENEFIT) | 394 | 402 | 737 | 686 | ||||||||||||
Income tax expense (benefit) | 21 | (7 | ) | 60 | (62 | ) | ||||||||||
INCOME FROM CONTINUING OPERATIONS | 373 | 409 | 677 | 748 | ||||||||||||
Income (loss) from discontinued operations, net of income taxes | (256 | ) | 15 | (270 | ) | 12 | ||||||||||
NET INCOME | 117 | 424 | 407 | 760 | ||||||||||||
Less: Net income (loss) attributable to noncontrolling interest | (95 | ) | 183 | (44 | ) | 207 | ||||||||||
NET INCOME ATTRIBUTABLE TO PARTNERS | 212 | 241 | 451 | 553 | ||||||||||||
General Partner’s interest in net income | — | 1 | 1 | 2 | ||||||||||||
Convertible Unitholders’ interest in income | 8 | 1 | 14 | 1 | ||||||||||||
Limited Partners’ interest in net income | $ | 204 | $ | 239 | $ | 436 | $ | 550 | ||||||||
INCOME FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT: | ||||||||||||||||
Basic | $ | 0.19 | $ | 0.23 | $ | 0.41 | $ | 0.53 | ||||||||
Diluted | $ | 0.19 | $ | 0.23 | $ | 0.40 | $ | 0.52 | ||||||||
NET INCOME PER LIMITED PARTNER UNIT: | ||||||||||||||||
Basic | $ | 0.18 | $ | 0.23 | $ | 0.40 | $ | 0.53 | ||||||||
Diluted | $ | 0.18 | $ | 0.23 | $ | 0.39 | $ | 0.52 | ||||||||
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING: | ||||||||||||||||
Basic | 1,075.2 | 1,048.9 | 1,077.2 | 1,046.9 | ||||||||||||
Diluted | 1,141.3 | 1,063.8 | 1,143.7 | 1,052.5 |
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 June 30, |
Six Months Ended June 30, |
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2017 | 2016 | 2017 | 2016 | |||||||||||||
Cash distributions from ETP associated with: (1) | ||||||||||||||||
Limited partner interest | $ | 15 | $ | 2 | $ | 30 | $ | 5 | ||||||||
Class H Units | — | 88 | — | 171 | ||||||||||||
General partner interest | 4 | 8 | 8 | 16 | ||||||||||||
Incentive distribution rights | 396 | 335 | 773 | 666 | ||||||||||||
IDR relinquishments, net of distributions on Class I Units (2) | (162 | ) | (110 | ) | (319 | ) | (144 | ) | ||||||||
Total cash distributions from ETP | 253 | 323 | 492 | 714 | ||||||||||||
Cash distributions from Sunoco LP | 31 | 22 | 54 | 44 | ||||||||||||
Total cash distributions from investments in subsidiaries | $ | 284 | $ | 345 | $ | 546 | $ | 758 | ||||||||
Distributable cash flow attributable to Lake Charles LNG: | ||||||||||||||||
Revenues | $ | 50 | $ | 49 | $ | 99 | 98 | |||||||||
Operating expenses | (4 | ) | (5 | ) | (9 | ) | (9 | ) | ||||||||
Selling, general and administrative expenses | (2 | ) | — | (2 | ) | (1 | ) | |||||||||
Distributable cash flow attributable to Lake Charles LNG | $ | 44 | $ | 44 | $ | 88 | $ | 88 | ||||||||
Expenses of the Parent Company on a cash basis: | ||||||||||||||||
Selling, general and administrative expenses, excluding certain non-cash expenses | $ | 9 | $ | 24 | $ | 17 | 55 | |||||||||
Management fee to ETP (3) | — | 24 | 5 | 48 | ||||||||||||
Interest expense, net of amortization of financing costs, interest income, and realized gains and losses on interest rate swaps | 83 | 79 | 164 | 157 | ||||||||||||
Total Parent Company expenses | $ | 92 | $ | 127 | $ | 186 | $ | 260 | ||||||||
Cash distributions to be paid to the partners of ETE: | ||||||||||||||||
Distributions to be paid to limited partners (4) | $ | 250 | $ | 240 | $ | 500 | $ | 480 | ||||||||
Distributions to be paid to general partner | 1 | — | 2 | 1 | ||||||||||||
Total cash distributions to be paid to the partners of ETE | $ | 251 | $ | 240 | $ | 502 | $ | 481 | ||||||||
Common units outstanding — end of period | 1,079.1 | 1,044.8 | 1,079.1 | 1,044.8 | ||||||||||||
_________________
(1) |
Following the merger of Legacy 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 June 30, 2017 include the impact of incentive distribution reductions agreed to between ETE and Legacy ETP in addition to incentive distribution reductions previously agreed to between Legacy ETP and Sunoco Logistics. | |
(3) |
ETE previously paid Legacy ETP certain fees for management services under agreements expired in the first quarter of 2017. | |
(4) |
Includes distributions of $0.11 per common unit for the three months ended June 30, 2017, and $0.22 per common unit for the six months ended June 30, 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 ETE Series A convertible preferred units representing limited partner interest in the Partnership. |
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 June 30, |
Six Months Ended June 30, |
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2017 | 2016 | 2017 | 2016 | |||||||||||||
Net income attributable to partners | $ | 212 | $ | 241 | $ | 451 | $ | 553 | ||||||||
Equity in earnings related to investments in ETP and Sunoco LP | (273 | ) | (334 | ) | (598 | ) | (732 | ) | ||||||||
Total cash distributions from investments in subsidiaries | 284 | 345 | 546 | 758 | ||||||||||||
Amortization included in interest expense (excluding ETP and Sunoco LP) | 3 | 3 | 5 | 6 | ||||||||||||
Other non-cash (excluding ETP and Sunoco LP) | 10 | 7 | 44 | 1 | ||||||||||||
Distributable Cash Flow | 236 | 262 | 448 | 586 | ||||||||||||
Transaction-related expenses | 4 | 14 | 7 | 40 | ||||||||||||
Distributable Cash Flow, as adjusted | $ | 240 | $ | 276 | $ | 455 | $ | 626 | ||||||||
Distribution coverage ratio(1) | 0.96x | 1.15x | 0.91x | 1.30x | ||||||||||||
(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. |
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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. |
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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 attributable to partners. |
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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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June 30, 2017 | December 31, 2016 | |||||||
ASSETS | ||||||||
Current assets | $ | 68 | $ | 57 | ||||
Property, plant and equipment, net | 28 | 36 | ||||||
Advances to and investments in unconsolidated affiliates | 5,980 | 5,088 | ||||||
Intangible assets, net | — | 1 | ||||||
Goodwill | 9 | 9 | ||||||
Other non-current assets, net | 18 | 10 | ||||||
Total assets | $ | 6,103 | $ | 5,201 | ||||
LIABILITIES AND PARTNERS’ CAPITAL | ||||||||
Current liabilities | $ | 63 | $ | 92 | ||||
Long-term debt, less current maturities | 6,693 | 6,358 | ||||||
Long-term notes payable – related companies | 530 | 443 | ||||||
Other non-current liabilities | 2 | 2 | ||||||
Commitments and contingencies | ||||||||
Total partners’ deficit | (1,185 | ) | (1,694 | ) | ||||
Total liabilities and partners’ deficit | $ | 6,103 | $ | 5,201 |
STATEMENTS OF OPERATIONS |
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(In millions) |
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(unaudited) |
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Three Months Ended June 30, |
Six Months Ended June 30, |
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2017 | 2016 | 2017 | 2016 | |||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | $ | (9 | ) | $ | (44 | ) | $ | (22 | ) | $ | (81 | ) | ||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Interest expense, net of interest capitalized | (86 | ) | (82 | ) | (169 | ) | (163 | ) | ||||||||
Equity in earnings of unconsolidated affiliates | 308 | 369 | 669 | 799 | ||||||||||||
Losses on extinguishments of debt | — | — | (25 | ) | — | |||||||||||
Other, net | (1 | ) | (2 | ) | (2 | ) | (2 | ) | ||||||||
NET INCOME | 212 | 241 | 451 | 553 | ||||||||||||
General Partner’s interest in net income | — | 1 | 1 | 2 | ||||||||||||
Convertible Unitholders' interest in income | 8 | 1 | 14 | 1 | ||||||||||||
Limited Partners’ interest in net income | $ | 204 | $ | 239 | $ | 436 | $ | 550 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20170808006487/en/
Source:
Energy Transfer
Investor Relations:
Lyndsay Hannah,
Brent Ratliff, Helen Ryoo, 214-981-0795
or
Media Relations:
Vicki
Granado, 214-840-5820