Energy Transfer Partners Reports First Quarter Results
For the quarter ended March 31, 2014, ETP’s distribution coverage ratio
was 1.36x, which represents a significant increase in distribution
coverage over recent periods. In April, ETP announced that its Board of
Directors approved an increase in its quarterly distribution to
ETP’s other key accomplishments to date in 2014 include the following:
-
In
January 2014 , ETP sold 9.2 millionAmeriGas Partners, L.P. (“AmeriGas”) common units for net proceeds of$381 million . -
In
February 2014 , ETP redeemed 18.7 million ETP Common Units in connection with the transfer toEnergy Transfer Equity, L.P. (“ETE”) ofTrunkline LNG Company, LLC (“Trunkline LNG”), the entity that owns a LNG regasification facility inLake Charles, Louisiana (the “Trunkline LNG Transaction”). -
On
April 27, 2014 , ETP entered into a definitive merger agreement whereby ETP plans to acquireSusser Holdings Corporation in a unit and cash transaction for total consideration valued at approximately$1.8 billion . -
Trunkline LNG Export, LLC , an entity owned jointly by ETP and ETE, and Trunkline LNG filed an application with theFederal Energy Regulatory Commission (“FERC”), seeking authorization for the proposed new liquefaction facilities and modifications to Trunkline LNG’s existing terminal to facilitate the storage and subsequent export of LNG (the “Liquefaction Project”). In addition,Trunkline Gas Company, LLC , a subsidiary of ETP, filed a certificate application with the FERC for the modification and expansion of the Trunkline Gas Pipeline to accommodate volumes of inlet gas contracted for byBG Group in conjunction with theLiquefaction Project . The FERC filings represent the culmination of significant front-end engineering design efforts for theLiquefaction Project and pre-filing consultations with the FERC and other federal, state and local agencies that have been underway since mid-2012. Approval of these applications is requested from the FERC byApril 1, 2015 .
An analysis of ETP’s segment results and other supplementary data is
provided after the financial tables shown below. ETP has scheduled a
conference call for
Forward-Looking Statements
This press 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 Partnerships’ Annual Reports 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 web site at www.energytransfer.com.
ENERGY TRANSFER PARTNERS, 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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March 31, 2014 |
December 31, 2013 |
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ASSETS |
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CURRENT ASSETS | $ | 7,069 | $ | 6,239 | ||||
PROPERTY, PLANT AND EQUIPMENT, net | 25,578 | 25,947 | ||||||
ADVANCES TO AND INVESTMENTS IN UNCONSOLIDATED AFFILIATES | 4,160 | 4,436 | ||||||
NON-CURRENT PRICE RISK MANAGEMENT ASSETS | 1 | 17 | ||||||
GOODWILL | 4,507 | 4,729 | ||||||
INTANGIBLE ASSETS, net | 1,502 | 1,568 | ||||||
OTHER NON-CURRENT ASSETS, net | 772 | 766 | ||||||
Total assets | $ | 43,589 | $ | 43,702 | ||||
LIABILITIES AND EQUITY |
||||||||
CURRENT LIABILITIES | $ | 7,491 | $ | 6,067 | ||||
LONG-TERM DEBT, less current maturities | 16,191 | 16,451 | ||||||
NON-CURRENT PRICE RISK MANAGEMENT LIABILITIES | 39 | 54 | ||||||
DEFERRED INCOME TAXES | 3,599 | 3,762 | ||||||
OTHER NON-CURRENT LIABILITIES | 1,053 | 1,080 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
EQUITY: | ||||||||
Total partners’ capital | 10,438 | 11,540 | ||||||
Noncontrolling interest | 4,778 | 4,748 | ||||||
Total equity | 15,216 | 16,288 | ||||||
Total liabilities and equity | $ | 43,589 | $ | 43,702 | ||||
ENERGY TRANSFER PARTNERS, 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 March 31, | ||||||||||
2014 | 2013 | |||||||||
REVENUES | $ | 12,232 | $ | 10,854 | ||||||
COSTS AND EXPENSES: | ||||||||||
Cost of products sold | 10,866 | 9,594 | ||||||||
Operating expenses | 319 | 327 | ||||||||
Depreciation and amortization | 266 | 260 | ||||||||
Selling, general and administrative | 93 | 139 | ||||||||
Total costs and expenses | 11,544 | 10,320 | ||||||||
OPERATING INCOME | 688 | 534 | ||||||||
OTHER INCOME (EXPENSE): | ||||||||||
Interest expense, net of interest capitalized | (219 | ) | (211 | ) | ||||||
Equity in earnings of unconsolidated affiliates | 79 | 72 | ||||||||
Gain on sale of AmeriGas common units | 70 | — | ||||||||
Gains (losses) on interest rate derivatives | (2 | ) | 7 | |||||||
Other, net | (3 | ) | 3 | |||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE | 613 | 405 | ||||||||
Income tax expense from continuing operations | 146 | 3 | ||||||||
INCOME FROM CONTINUING OPERATIONS | 467 | 402 | ||||||||
Income from discontinued operations | 24 | 22 | ||||||||
NET INCOME | 491 | 424 | ||||||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | 76 | 102 | ||||||||
NET INCOME ATTRIBUTABLE TO PARTNERS | 415 | 322 | ||||||||
GENERAL PARTNER’S INTEREST IN NET INCOME | 113 | 128 | ||||||||
CLASS H UNITHOLDER’S INTEREST IN NET INCOME | 49 | — | ||||||||
COMMON UNITHOLDERS’ INTEREST IN NET INCOME | $ | 253 | $ | 194 | ||||||
INCOME FROM CONTINUING OPERATIONS PER COMMON UNIT: | ||||||||||
Basic | $ | 0.69 | $ | 0.60 | ||||||
Diluted | $ | 0.69 | $ | 0.60 | ||||||
NET INCOME PER COMMON UNIT: | ||||||||||
Basic | $ | 0.76 | $ | 0.63 | ||||||
Diluted | $ | 0.76 | $ | 0.63 | ||||||
WEIGHTED AVERAGE NUMBER OF COMMON UNITS OUTSTANDING: | ||||||||||
Basic | 324.5 | 300.8 | ||||||||
Diluted | 325.5 | 301.8 | ||||||||
SUPPLEMENTAL INFORMATION |
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(Tabular dollar amounts in millions) |
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(unaudited) |
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Three Months Ended March 31, | ||||||||||
2014 | 2013 | |||||||||
Reconciliation of net income to Adjusted EBITDA and Distributable Cash Flow (a): | ||||||||||
Net income | $ | 491 | $ | 424 | ||||||
Interest expense, net of interest capitalized | 219 | 211 | ||||||||
Gain on sale of AmeriGas common units | (70 | ) | — | |||||||
Income tax expense from continuing operations | 146 | 3 | ||||||||
Depreciation and amortization | 266 | 260 | ||||||||
Non-cash compensation expense | 14 | 14 | ||||||||
(Gains) losses on interest rate derivatives | 2 | (7 | ) | |||||||
Unrealized (gains) losses on commodity risk management activities | 29 | (19 | ) | |||||||
LIFO valuation adjustment | (14 | ) | (38 | ) | ||||||
Equity in earnings of unconsolidated affiliates | (79 | ) | (72 | ) | ||||||
Adjusted EBITDA related to unconsolidated affiliates | 196 | 165 | ||||||||
Other, net | 6 | 15 | ||||||||
Adjusted EBITDA (consolidated) | 1,206 | 956 | ||||||||
Adjusted EBITDA related to unconsolidated affiliates | (196 | ) | (165 | ) | ||||||
Distributions from unconsolidated affiliates | 81 | 95 | ||||||||
Interest expense, net of interest capitalized | (219 | ) | (211 | ) | ||||||
Amortization included in interest expense | (16 | ) | (23 | ) | ||||||
Income tax expense from continuing operations | (146 | ) | (3 | ) | ||||||
Income tax expense related to the Trunkline LNG Transaction | 85 | — | ||||||||
Maintenance capital expenditures | (39 | ) | (51 | ) | ||||||
Other, net | 2 | 1 | ||||||||
Distributable Cash Flow (consolidated) | 758 | 599 | ||||||||
Distributable Cash Flow attributable to Sunoco Logistics Partners L.P. (“Sunoco Logistics”) (100%) | (158 | ) | (195 | ) | ||||||
Distributions from Sunoco Logistics to ETP | 62 | 45 | ||||||||
Distributions to ETE in respect of ETP Holdco Corporation (“Holdco”) | — | (50 | ) | |||||||
Distributions to Regency Energy Partners LP (“Regency”) in respect of Lone Star (b) | (33 | ) | (23 | ) | ||||||
Distributable Cash Flow attributable to the partners of ETP | $ | 629 | $ | 376 | ||||||
Distributions to the partners of ETP: | ||||||||||
Limited Partners: | ||||||||||
Common Units held by public |
$ | 268 | $ | 241 | ||||||
Common Units held by ETE |
29 | 45 | ||||||||
Class H Units held by ETE Common Holdings, LLC (“ETE Holdings”) (c) | 50 | — | ||||||||
General Partner interests held by ETE | 5 | 5 | ||||||||
Incentive Distribution Rights (“IDRs”) held by ETE |
168 | 156 | ||||||||
IDR relinquishment related to previous transactions | (57 | ) | (31 | ) | ||||||
Total distributions to be paid to the partners of ETP | $ | 463 | $ | 416 | ||||||
Distribution coverage ratio (d) |
1.36 |
x |
0.90 |
x |
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(a) 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 ETP’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.
There are material limitations to using measures such as Adjusted EBITDA and Distributable Cash Flow, including the difficulty associated with using either as the sole measure to compare the results of one company to another, and the inability to analyze certain significant items that directly affect a company’s net income or loss or cash flows. In addition, our calculations of Adjusted EBITDA and Distributable Cash Flow may not be consistent with similarly titled measures of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP, such as gross margin, operating income, net income, and cash flow from operating activities.
Definition of Adjusted EBITDA
ETP defines Adjusted EBITDA as total partnership earnings before interest, taxes, depreciation, amortization and other non-cash items, such as non-cash compensation expense, gains and losses on disposals of assets, the allowance for equity funds used during construction, unrealized gains and losses on commodity risk management activities and other non-operating income or expense items. Unrealized gains and losses on commodity risk management activities include unrealized gains and losses on commodity derivatives and inventory fair value adjustments (excluding lower of cost or market adjustments). Adjusted EBITDA reflects amounts for less than wholly-owned subsidiaries based on 100% of the subsidiaries’ results of operations and for unconsolidated affiliates based on ETP’s proportionate ownership.
Adjusted EBITDA is used by management to determine our operating performance and, along with other financial and volumetric data, as internal measures for setting annual operating budgets, assessing financial performance of our numerous business locations, as a measure for evaluating targeted businesses for acquisition and as a measurement component of incentive compensation.
Definition of Distributable Cash Flow
ETP defines Distributable Cash Flow as net income, adjusted for certain non-cash items, less maintenance capital expenditures. Non-cash items include depreciation and amortization, non-cash compensation expense, gains and losses on disposals of assets, the allowance for equity funds used during construction and unrealized gains and losses on commodity risk management activities. Unrealized gains and losses on commodity risk management activities includes unrealized gains and losses on commodity derivatives and inventory fair value adjustments (excluding lower of cost or market adjustments). Distributable Cash Flow reflects earnings from unconsolidated affiliates on a cash basis.
Distributable Cash Flow is used by management to evaluate our overall performance. Our partnership agreement requires us to distribute all available cash, and Distributable Cash Flow is calculated to evaluate our ability to fund distributions through cash generated by our operations.
On a consolidated basis, Distributable Cash Flow includes 100% of the Distributable Cash Flow of ETP’s consolidated subsidiaries. However, to the extent that noncontrolling interests exist among ETP’s subsidiaries, the Distributable Cash Flow generated by ETP’s subsidiaries may not be available to be distributed to the partners of ETP. In order to reflect the cash flows available for distributions to the partners of ETP, ETP has reported Distributable Cash Flow attributable to the partners of ETP, which is calculated by adjusting Distributable Cash Flow (consolidated), as follows:
-
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 the partners of ETP includes distributions to be
received by the parent company with respect to the periods presented.
Currently,
Sunoco Logistics is the only such subsidiary. -
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 the partners of ETP is net of distributions to be paid
by the subsidiary to the noncontrolling interests. Currently,
Lone Star is such a subsidiary, as it is 30% owned by Regency, which is an unconsolidated affiliate. Prior toApril 30, 2013 , Holdco was also such a subsidiary, as ETE held a noncontrolling interest in Holdco.
The Partnership has presented Distributable Cash Flow in previous
communications; however, the Partnership changed its calculation of this
non-GAAP measure in the quarter ended
(b) Cash distributions to Regency in respect of
(c) Distributions on the Class H Units for the three months ended March 31, 2014 were calculated as follows:
General partner distributions and incentive distributions from Sunoco Logistics | $ | 39 | |||
50.05 | % | ||||
Share of Sunoco Logistics general partner and incentive distributions payable to Class H Unitholder | 20 | ||||
Incremental distributions payable to Class H Unitholder | 30 | ||||
Total Class H Unit distributions | $ | 50 | |||
Incremental distributions to the Class H Unitholder is based on the scheduled amounts through the first quarter of 2017, as set forth in Amendment No. 5 to ETP’s Amended and Restated Agreement of Limited Partnership.
(d) Distribution coverage ratio for a period is calculated as Distributable Cash Flow attributable to the partners of ETP divided by net distributions expected to be paid to the partners of ETP in respect of such period.
SUMMARY ANALYSIS OF QUARTERLY RESULTS BY SEGMENT
(Tabular
dollar amounts in millions)
(unaudited)
Our segment results were presented based on the measure of Segment Adjusted EBITDA. The tables below identify the components of Segment Adjusted EBITDA, which was calculated as follows:
- Gross margin, operating expenses, and selling, general and administrative. These amounts represent the amounts included in our consolidated financial statements that are attributable to each segment.
- Unrealized gains or losses on commodity risk management activities and LIFO valuation adjustments. These are the unrealized amounts that are included in cost of products sold to calculate gross margin. These amounts are not included in Segment Adjusted EBITDA; therefore, the unrealized losses are added back and the unrealized gains are subtracted to calculate the segment measure.
- Non-cash compensation expense. These amounts represent the total non-cash compensation recorded in operating expenses and selling, general and administrative expenses. This expense is not included in Segment Adjusted EBITDA and therefore is added back to calculate the segment measure.
- Adjusted EBITDA related to unconsolidated affiliates. These amounts represent our proportionate share of the Adjusted EBITDA of our unconsolidated affiliates. Amounts reflected are calculated consistently with our definition of Adjusted EBITDA.
Three Months Ended March 31, | |||||||||||||
2014 | 2013 | Change | |||||||||||
Segment Adjusted EBITDA: | |||||||||||||
Midstream | $ | 126 | $ | 87 | $ | 39 | |||||||
NGL transportation and services | 128 | 80 | 48 | ||||||||||
Interstate transportation and storage | 300 | 297 | 3 | ||||||||||
Intrastate transportation and storage | 177 | 132 | 45 | ||||||||||
Investment in Sunoco Logistics | 208 | 236 | (28 | ) | |||||||||
Retail marketing | 109 | 37 | 72 | ||||||||||
All other | 158 | 87 | 71 | ||||||||||
$ | 1,206 | $ | 956 | $ | 250 | ||||||||
Midstream
Three Months Ended March 31, | |||||||||||||||
2014 | 2013 | Change | |||||||||||||
Gathered volumes (MMBtu/d): | |||||||||||||||
ETP legacy assets | 2,558,851 | 2,334,283 | 224,568 | ||||||||||||
Southern Union gathering and processing(1) | — | 480,339 | (480,339 | ) | |||||||||||
NGLs produced (Bbls/d): | |||||||||||||||
ETP legacy assets | 136,818 | 96,775 | 40,043 | ||||||||||||
Southern Union gathering and processing(1) | — | 39,681 | (39,681 | ) | |||||||||||
Equity NGLs produced (Bbls/d): | |||||||||||||||
ETP legacy assets | 12,106 | 9,744 | 2,362 | ||||||||||||
Southern Union gathering and processing(1) | — | 7,206 | (7,206 | ) | |||||||||||
Revenues | $ | 653 | $ | 600 | $ | 53 | |||||||||
Cost of products sold | 493 | 437 | 56 | ||||||||||||
Gross margin | 160 | 163 | (3 | ) | |||||||||||
Operating expenses, excluding non-cash compensation expense | (28 | ) | (57 | ) | 29 | ||||||||||
Selling, general and administrative expenses, excluding non-cash compensation expense | (6 | ) | (19 | ) | 13 | ||||||||||
Segment Adjusted EBITDA | $ | 126 | $ | 87 | $ | 39 |
(1) On
For the ETP legacy assets, the increases in gathered volumes, NGLs
produced and equity NGLs produced during the three months ended
March 31, 2014 compared to the same period last year were primarily due
to increased capacity from assets recently placed in service and
increased production by our customers in the
Segment Adjusted EBITDA for midstream for the three months ended
March 31, 2014 was favorably impacted by increased capacity from assets
recently placed in service and increased production in the
Segment Adjusted EBITDA for the midstream segment reflected a decrease in gross margin as follows:
Three Months Ended March 31, | ||||||||||||||
2014 | 2013 | Change | ||||||||||||
Gathering and processing fee-based revenues | $ | 123 | $ | 97 | $ | 26 | ||||||||
Non fee-based contracts and processing | 37 | 67 | (30 | ) | ||||||||||
Other | — | (1 | ) | 1 | ||||||||||
Total gross margin | $ | 160 | $ | 163 | $ | (3 | ) | |||||||
Midstream gross margin for the three months ended March 31, 2014
compared to the same period last year reflected increases in fee-based
revenues of
NGL Transportation and Services
Three Months Ended March 31, | |||||||||||||||
2014 | 2013 | Change | |||||||||||||
NGL transportation volumes (Bbls/d) | 417,831 | 274,030 | 143,801 | ||||||||||||
NGL fractionation volumes (Bbls/d) | 156,898 | 86,703 | 70,195 | ||||||||||||
Revenues | $ | 830 | $ | 365 | $ | 465 | |||||||||
Cost of products sold | 671 | 257 | 414 | ||||||||||||
Gross margin | 159 | 108 | 51 | ||||||||||||
Unrealized losses on commodity risk management activities | 1 | — | 1 | ||||||||||||
Operating expenses, excluding non-cash compensation expense | (28 | ) | (22 | ) | (6 | ) | |||||||||
Selling, general and administrative expenses, excluding non-cash compensation expense | (5 | ) | (7 | ) | 2 | ||||||||||
Adjusted EBITDA related to unconsolidated affiliates | 1 | 1 | — | ||||||||||||
Segment Adjusted EBITDA | $ | 128 | $ | 80 | $ | 48 | |||||||||
For the three months ended March 31, 2014 compared to the same period
last year, NGL transportation volumes increased on our wholly-owned and
joint venture NGL pipelines primarily due to increased volumes
originating from
Segment Adjusted EBITDA for the NGL transportation and services segment increased for the three months ended March 31, 2014 compared to the same period last year primarily due to higher gross margin, as discussed below, partially offset by higher operating expenses from new assets placed in service.
Segment Adjusted EBITDA for the NGL transportation and services segment reflected an increase in gross margin as follows:
Three Months Ended March 31, | ||||||||||||
2014 | 2013 | Change | ||||||||||
Transportation margin | $ | 59 | $ | 41 | $ | 18 | ||||||
Processing and fractionation margin | 49 | 34 | 15 | |||||||||
Storage margin | 40 | 32 | 8 | |||||||||
Other margin | 11 | 1 | 10 | |||||||||
Total gross margin | $ | 159 | $ | 108 | $ | 51 | ||||||
Transportation margin increased as a result of higher volumes
transported from
Processing and fractionation margin increased primarily due to higher
volumes resulting from the startup of Lone Star’s second fractionator at
Other margin increased primarily due to higher NGL prices as a result of weather conditions for the three months ended March 31, 2014.
Interstate Transportation and Storage
Three Months Ended March 31, | |||||||||||||||
2014 | 2013 | Change | |||||||||||||
Natural gas transported (MMBtu/d) | 7,315,078 | 7,033,804 | 281,274 | ||||||||||||
Natural gas sold (MMBtu/d) | 15,783 | 16,768 | (985 | ) | |||||||||||
Revenues | $ | 298 | $ | 324 | $ | (26 | ) | ||||||||
Operating expenses, excluding non-cash compensation, amortization and accretion expenses | (71 | ) | (78 | ) | 7 | ||||||||||
Selling, general and administrative expenses, excluding non-cash compensation, amortization and accretion expenses | (14 | ) | (29 | ) | 15 | ||||||||||
Adjusted EBITDA related to unconsolidated affiliates | 87 | 80 | 7 | ||||||||||||
Segment Adjusted EBITDA | $ | 300 | $ | 297 | $ | 3 | |||||||||
Distributions from unconsolidated affiliates | $ | 50 | $ | 41 | $ | 9 | |||||||||
Segment Adjusted EBITDA for the interstate transportation and storage
segment increased for the three months ended March 31, 2014 compared to
the same period last year due to increased revenues from our pipelines
offset by the impact of the deconsolidation of Trunkline LNG. We
experienced an increase in parking and short-term firm revenues as well
as an increase in usage revenues as a result of higher customer demand
driven by colder weather. These favorable variances were offset by the
deconsolidation of Trunkline LNG effective
Intrastate Transportation and Storage
Three Months Ended March 31, | |||||||||||||||
2014 | 2013 | Change | |||||||||||||
Natural gas transported (MMBtu/d) | 9,399,267 | 9,733,480 | (334,213 | ) | |||||||||||
Revenues | $ | 934 | $ | 684 | $ | 250 | |||||||||
Cost of products sold | 734 | 490 | 244 | ||||||||||||
Gross margin | 200 | 194 | 6 | ||||||||||||
Unrealized (gains) losses on commodity risk management activities | 27 | (12 | ) | 39 | |||||||||||
Operating expenses, excluding non-cash compensation expense | (42 | ) | (42 | ) | — | ||||||||||
Selling, general and administrative expenses, excluding non-cash compensation expense | (7 | ) | (8 | ) | 1 | ||||||||||
Adjusted EBITDA related to unconsolidated affiliates | (1 | ) | — | (1 | ) | ||||||||||
Segment Adjusted EBITDA | $ | 177 | $ | 132 | $ | 45 | |||||||||
Segment Adjusted EBITDA for the intrastate transportation and storage
segment increased primarily due an increase in margin realized from
withdrawing natural gas from our
Investment in
Three Months Ended March 31, | |||||||||||||||
2014 | 2013 | Change | |||||||||||||
Revenues | $ | 4,477 | $ | 3,512 | $ | 965 | |||||||||
Cost of products sold | 4,210 | 3,224 | 986 | ||||||||||||
Gross margin | 267 | 288 | (21 | ) | |||||||||||
Unrealized gains on commodity risk management activities | (1 | ) | (3 | ) | 2 | ||||||||||
Operating expenses, excluding non-cash compensation expense | (32 | ) | (26 | ) | (6 | ) | |||||||||
Selling, general and administrative expenses, excluding non-cash compensation expense | (34 | ) | (30 | ) | (4 | ) | |||||||||
Adjusted EBITDA related to unconsolidated affiliates | 8 | 7 | 1 | ||||||||||||
Segment Adjusted EBITDA | $ | 208 | $ | 236 | $ | (28 | ) | ||||||||
Distributions from unconsolidated affiliates | $ | 2 | $ | 3 | $ | (1 | ) | ||||||||
Segment Adjusted EBITDA for the investment in
Sunoco Logistics’ operating expenses increased for the three months ended March 31, 2014 compared to the same period last year primarily due to increased utility expenses associated with higher throughput volumes and increased environmental remediation costs.
Retail Marketing
Three Months Ended March 31, | |||||||||||||||
2014 | 2013 | Change | |||||||||||||
Total retail gasoline outlets, end of period | 5,122 | 4,979 | 143 | ||||||||||||
Total company-operated outlets, end of period | 529 | 439 | 90 | ||||||||||||
Gasoline and diesel throughput per company-operated site (gallons/month) | 178,448 | 187,000 | (8,552 | ) | |||||||||||
Revenues | $ | 5,011 | $ | 5,222 | $ | (211 | ) | ||||||||
Cost of products sold | 4,756 | 5,036 | (280 | ) | |||||||||||
Gross margin | 255 | 186 | 69 | ||||||||||||
Unrealized losses on commodity risk management activities | 3 | — | 3 | ||||||||||||
Operating expenses, excluding non-cash compensation expense | (116 | ) | (98 | ) | (18 | ) | |||||||||
Selling, general and administrative expenses, excluding non-cash compensation expense | (20 | ) | (15 | ) | (5 | ) | |||||||||
LIFO valuation adjustment | (14 | ) | (38 | ) | 24 | ||||||||||
Adjusted EBITDA related to unconsolidated affiliates | 1 | 2 | (1 | ) | |||||||||||
Segment Adjusted EBITDA | $ | 109 | $ | 37 | $ | 72 | |||||||||
Segment Adjusted EBITDA for the retail marketing segment increased for
the three months ended March 31, 2014 compared to the same period last
year primarily due to favorable supply, wholesale and trading margin of
All Other
Three Months Ended March 31, | |||||||||||||||
2014 | 2013 | Change | |||||||||||||
Revenues | $ | 591 | $ | 631 | $ | (40 | ) | ||||||||
Cost of products sold | 564 | 625 | (61 | ) | |||||||||||
Gross margin | 27 | 6 | 21 | ||||||||||||
Unrealized gains on commodity risk management activities | (1 | ) | (4 | ) | 3 | ||||||||||
Operating expenses, excluding non-cash compensation expense | (5 | ) | (6 | ) | 1 | ||||||||||
Selling, general and administrative expenses, excluding non-cash compensation expense | (11 | ) | (19 | ) | 8 | ||||||||||
Adjusted EBITDA related to discontinued operations | 27 | 40 | (13 | ) | |||||||||||
Adjusted EBITDA related to unconsolidated affiliates | 102 | 76 | 26 | ||||||||||||
Other | 19 | — | 19 | ||||||||||||
Elimination | — | (6 | ) | 6 | |||||||||||
Segment Adjusted EBITDA | $ | 158 | $ | 87 | $ | 71 | |||||||||
Distributions from unconsolidated affiliates | $ | 26 | $ | 50 | $ | (24 | ) | ||||||||
Amounts reflected above primarily include:
-
our investment in
AmeriGas ; - our natural gas compression operations;
- an approximate 33% non-operating interest in PES, a refining joint venture;
-
our investment in Regency related to the Regency common and Class F
units received by
Southern Union in exchange for the contribution of its interest inSouthern Union Gathering Company, LLC to Regency onApril 30, 2013 ; and - our natural gas marketing operations.
The increase in gross margin for the three months ended March 31, 2014 compared to the same period last year was primarily due to favorable results from our commodity marketing businesses.
Selling, general and administrative expenses include corporate expenses as well as amounts related to natural gas compression operations and natural gas marketing operations.
Adjusted EBITDA related to discontinued operations for the three months
ended March 31, 2014 related to a marketing business that was sold
effective
Adjusted EBITDA related to unconsolidated affiliates increased for the
three months ended March 31, 2014 primarily from our investment in
Regency, which was included beginning in
“Other” includes certain management fees from ETE. In connection with
the Trunkline LNG Transaction, ETP agreed to continue to provide
management services for ETE through 2015 in relation to both Trunkline
LNG’s regasification facility and the development of a liquefaction
project at Trunkline LNG’s facility, for which ETE has agreed to pay
incremental management fees to ETP of $75 million per year for the years
ending
The decrease in cash distributions from unconsolidated affiliates was
primarily due to no cash distributions from our ownership in PES in the
first quarter of 2014 compared to
SUPPLEMENTAL INFORMATION ON CAPITAL EXPENDITURES
(Tabular
amounts in millions)
(unaudited)
The following is a summary of capital expenditures (net of contributions
in aid of construction costs) during the three months ended
Growth | Maintenance | Total | |||||||||||
Midstream | $ | 130 | $ | 3 | $ | 133 | |||||||
NGL transportation and services(1) | 86 | 2 | 88 | ||||||||||
Interstate transportation and storage | 10 | (2 | ) | 8 | |||||||||
Intrastate transportation and storage | 11 | 5 | 16 | ||||||||||
Investment in Sunoco Logistics | 465 | 18 | 483 | ||||||||||
Retail marketing | 12 | 6 | 18 | ||||||||||
All other (including eliminations) | 4 | 7 | 11 | ||||||||||
Total capital expenditures | $ | 718 | $ | 39 | $ | 757 |
(1) We received
We currently expect capital expenditures for the full year 2014 to be within the following ranges:
Growth | Maintenance | ||||||||||||||||
Low | High | Low | High | ||||||||||||||
Midstream | $ | 400 | $ | 420 | $ | 10 | $ | 15 | |||||||||
NGL transportation and services(1) | 290 | 310 | 20 | 25 | |||||||||||||
Interstate transportation and storage | 50 | 60 | 110 | 120 | |||||||||||||
Intrastate transportation and storage | 150 | 160 | 20 | 25 | |||||||||||||
Investment in Sunoco Logistics | 1,650 | 1,750 | 65 | 75 | |||||||||||||
Retail marketing | 125 | 155 | 50 | 60 | |||||||||||||
All other (including eliminations) | 80 | 90 | 10 | 20 | |||||||||||||
Total capital expenditures | $ | 2,745 | $ | 2,945 | $ | 285 | $ | 340 |
(1) We expect to receive capital contributions from Regency
related to their 30% share of
SUPPLEMENTAL INFORMATION ON UNCONSOLIDATED AFFILIATES |
|||||||||||||||
(In millions) |
|||||||||||||||
(unaudited) |
|||||||||||||||
Three Months Ended March 31, | |||||||||||||||
2014 | 2013 | Change | |||||||||||||
Equity in earnings (losses) of unconsolidated affiliates: | |||||||||||||||
AmeriGas | $ | 34 | $ | 63 | $ | (29 | ) | ||||||||
Citrus | 18 | 14 | 4 | ||||||||||||
FEP | 14 | 13 | 1 | ||||||||||||
Regency | (7 | ) | — | (7 | ) | ||||||||||
PES | 17 | (22 | ) | 39 | |||||||||||
Other | 3 | 4 | (1 | ) | |||||||||||
Total equity in earnings of unconsolidated affiliates | $ | 79 | $ | 72 | $ | 7 | |||||||||
Proportionate share of interest, depreciation, amortization, non-cash items and taxes: | |||||||||||||||
AmeriGas | $ | 17 | $ | 34 | $ | (17 | ) | ||||||||
Citrus | 50 | 48 | 2 | ||||||||||||
FEP | 5 | 5 | — | ||||||||||||
Regency | 34 | — | 34 | ||||||||||||
PES | 6 | 1 | 5 | ||||||||||||
Other | 5 | 5 | — | ||||||||||||
Total proportionate share of interest, depreciation, amortization, non-cash items and taxes |
$ | 117 | $ | 93 | $ | 24 | |||||||||
Adjusted EBITDA related to unconsolidated affiliates: | |||||||||||||||
AmeriGas | $ | 51 | $ | 97 | $ | (46 | ) | ||||||||
Citrus | 68 | 62 | 6 | ||||||||||||
FEP | 19 | 18 | 1 | ||||||||||||
Regency | 27 | — | 27 | ||||||||||||
PES | 23 | (21 | ) | 44 | |||||||||||
Other | 8 | 9 | (1 | ) | |||||||||||
Total Adjusted EBITDA related to unconsolidated affiliates | $ | 196 | $ | 165 | $ | 31 | |||||||||
Distributions received from unconsolidated affiliates: | |||||||||||||||
AmeriGas | $ | 11 | $ | 24 | $ | (13 | ) | ||||||||
Citrus | 34 | 24 | 10 | ||||||||||||
FEP | 16 | 17 | (1 | ) | |||||||||||
Regency | 15 | — | 15 | ||||||||||||
PES | — | 25 | (25 | ) | |||||||||||
Other | 5 | 5 | — | ||||||||||||
Total distributions received from unconsolidated affiliates | $ | 81 | $ | 95 | $ | (14 | ) |
Source:
Investor Relations:
Energy Transfer
Brent Ratliff,
214-981-0700
or
Media Relations:
Granado
Communications Group
Vicki Granado, 214-599-8785
Cell:
214-498-9272