Energy Transfer Partners, L.P. (NYSE: ETP) today reported its
financial results for the quarter ended March 31, 2013.
Adjusted EBITDA for Energy Transfer Partners, L.P. (“ETP” or the
“Partnership”) for the three months ended March 31, 2013 totaled $956
million, an increase of $462 million compared to the same period last
year. Distributable Cash Flow for the three months ended March 31, 2013
totaled $622 million, an increase of $351 million compared to the same
period last year. Income from continuing operations for the three months
ended March 31, 2013 was $402 million, a decrease of $687 million
compared to the same period last year that was primarily due to the
recognition of a $1.06 billion gain as a result of the contribution of
ETP’s Propane Business in January 2012. The increases in Adjusted EBITDA
and Distributable Cash Flow were primarily due to strategic acquisitions
in 2012, including Sunoco, Inc. (“Sunoco”) and ownership interests in
Citrus Corp (“Citrus”), Sunoco Logistics Partners L.P. (“Sunoco
Logistics”), and ETP Holdco Corporation (“Holdco”).
The Partnership’s key accomplishments to date in 2013 include the
following:
-
During the first quarter of 2013, Phase I of the Jackson Plant was
completed.
-
On April 30, 2013, the Partnership acquired from Energy Transfer
Equity, L.P. (“ETE”) its interest in Holdco for approximately 49.5
million newly issued ETP common units and $1.4 billion in cash, less
$68 million of estimated closing adjustments.
-
On April 30, 2013, Southern Union Company (“Southern Union”)
contributed its interest in Southern Union Gathering Company, LLC to
Regency Energy Partners LP (“Regency”), a subsidiary of ETE, in
exchange for cash and Regency common units.
-
On May 6, 2013, the Partnership's subsidiaries, Sunoco Logistics and
Lone 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.
An analysis of the Partnership’s segment results and other supplementary
data is provided after the financial tables shown below. The Partnership
has scheduled a conference call for 8:30 a.m. Central Time, Thursday,
May 9, 2013 to discuss the first quarter 2013 results. The conference
call will be broadcast live via an internet web cast which can be
accessed through www.energytransfer.com
and will also be available for replay on the Partnership’s website for a
limited time.
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 the Partnership’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. A table reconciling Adjusted EBITDA and Distributable Cash
Flow with appropriate GAAP financial measures is included in the
summarized financial information included in this release. Beginning
with the quarter ended December 31, 2012 and applied retroactively to
all periods presented, the Partnership has revised its calculation of
Adjusted EBITDA and Distributable Cash Flow. (See notes under
“Supplemental Information” for further information.)
Energy Transfer Partners, L.P. (NYSE: ETP) is a master limited
partnership owning and operating one of the largest and most diversified
portfolios of energy assets in the United States. ETP currently has
natural gas operations that include approximately 47,000 miles of
gathering and transportation pipelines, treating and processing assets,
and storage facilities. ETP owns 100% of ETP Holdco Corporation, which
owns Southern Union Company and Sunoco, Inc., and a 70% interest in Lone
Star NGL LLC, a joint venture that owns and operates natural gas liquids
storage, fractionation and transportation assets. ETP also owns the
general partner, 100% of the incentive distribution rights, and
approximately 33.5 million common units in Sunoco Logistics Partners
L.P. (NYSE: SXL), which operates a geographically diverse portfolio of
crude oil and refined products pipelines, terminalling and crude oil
acquisition and marketing assets. ETP’s general partner is owned by ETE.
For more information, visit the Energy Transfer Partners, L.P. website
at www.energytransfer.com.
Energy Transfer Equity, L.P. (NYSE: ETE) is a master
limited partnership which owns the general partner and 100% of the
incentive distribution rights (IDRs) of Energy Transfer Partners, L.P.
(NYSE: ETP) and approximately 99.7 million ETP common units; and owns
the general partner and 100% of the IDRs of Regency Energy Partners LP
(NYSE: RGP) and approximately 26.3 million RGP common units. The Energy
Transfer family of companies owns more than 71,000 miles of natural gas,
natural gas liquids, refined products, and crude pipelines. For more
information, visit the Energy Transfer Equity, L.P. website at www.energytransfer.com.
Sunoco Logistics Partners L.P. (NYSE: SXL), headquartered in
Philadelphia, is a master limited partnership that owns and operates a
logistics business consisting of a geographically diverse portfolio of
complementary crude oil and refined product pipeline, terminalling, and
acquisition and marketing assets. SXL’s general partner is owned by
Energy Transfer Partners, L.P. (NYSE: ETP). For more information, visit
the Sunoco Logistics Partners, L.P. web site at www.sunocologistics.com.
The information contained in this press release is available on our
website at www.energytransfer.com.
|
|
|
|
|
ENERGY TRANSFER PARTNERS, L.P. AND
SUBSIDIARIES
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
(Dollars in millions)
|
|
(unaudited)
|
|
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
$
|
6,359
|
|
|
$
|
5,404
|
|
|
|
|
|
|
|
|
|
PROPERTY, PLANT AND EQUIPMENT, net
|
|
|
|
26,007
|
|
|
|
25,773
|
|
|
|
|
|
|
|
|
|
NON-CURRENT ASSETS HELD FOR SALE
|
|
|
|
992
|
|
|
|
985
|
|
ADVANCES TO AND INVESTMENTS IN UNCONSOLIDATED AFFILIATES
|
|
|
|
3,489
|
|
|
|
3,502
|
|
NON-CURRENT PRICE RISK MANAGEMENT ASSETS
|
|
|
|
35
|
|
|
|
42
|
|
GOODWILL
|
|
|
|
5,586
|
|
|
|
5,606
|
|
INTANGIBLE ASSETS, net
|
|
|
|
1,544
|
|
|
|
1,561
|
|
OTHER NON-CURRENT ASSETS, net
|
|
|
|
356
|
|
|
|
357
|
|
Total assets
|
|
|
$
|
44,368
|
|
|
$
|
43,230
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
$
|
5,783
|
|
|
$
|
5,548
|
|
|
|
|
|
|
|
|
|
NON-CURRENT LIABILITIES HELD FOR SALE
|
|
|
|
142
|
|
|
|
142
|
|
LONG-TERM DEBT, less current maturities
|
|
|
|
16,135
|
|
|
|
15,442
|
|
LONG-TERM NOTES PAYABLE — RELATED PARTY
|
|
|
|
166
|
|
|
|
166
|
|
NON-CURRENT PRICE RISK MANAGEMENT LIABILITIES
|
|
|
|
124
|
|
|
|
129
|
|
DEFERRED INCOME TAXES
|
|
|
|
3,541
|
|
|
|
3,476
|
|
OTHER NON-CURRENT LIABILITIES
|
|
|
|
1,008
|
|
|
|
995
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY:
|
|
|
|
|
|
|
|
Total partners’ capital
|
|
|
|
9,340
|
|
|
|
9,201
|
|
Noncontrolling interest
|
|
|
|
8,129
|
|
|
|
8,131
|
|
Total equity
|
|
|
|
17,469
|
|
|
|
17,332
|
|
Total liabilities and equity
|
|
|
$
|
44,368
|
|
|
$
|
43,230
|
|
|
|
|
|
ENERGY TRANSFER PARTNERS, L.P. AND
SUBSIDIARIES
|
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
|
(Dollars in millions, except per unit data)
|
|
(unaudited)
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
2013
|
|
|
2012(1)
|
|
REVENUES
|
|
|
$
|
10,854
|
|
|
|
$
|
1,323
|
|
|
COSTS AND EXPENSES:
|
|
|
|
|
|
|
|
Cost of products sold
|
|
|
|
9,594
|
|
|
|
|
781
|
|
|
Operating expenses
|
|
|
|
304
|
|
|
|
|
130
|
|
|
Depreciation and amortization
|
|
|
|
260
|
|
|
|
|
99
|
|
|
Selling, general and administrative
|
|
|
|
162
|
|
|
|
|
104
|
|
|
Total costs and expenses
|
|
|
|
10,320
|
|
|
|
|
1,114
|
|
|
OPERATING INCOME
|
|
|
|
534
|
|
|
|
|
209
|
|
|
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
Interest expense, net of interest capitalized
|
|
|
|
(211
|
)
|
|
|
|
(141
|
)
|
|
Equity in earnings of unconsolidated affiliates
|
|
|
|
72
|
|
|
|
|
55
|
|
|
Gain on deconsolidation of Propane Business
|
|
|
|
—
|
|
|
|
|
1,056
|
|
|
Loss on extinguishment of debt
|
|
|
|
—
|
|
|
|
|
(115
|
)
|
|
Gains on interest rate derivatives
|
|
|
|
7
|
|
|
|
|
28
|
|
|
Other, net
|
|
|
|
3
|
|
|
|
|
(1
|
)
|
|
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE
|
|
|
|
405
|
|
|
|
|
1,091
|
|
|
Income tax expense from continuing operations
|
|
|
|
3
|
|
|
|
|
2
|
|
|
INCOME FROM CONTINUING OPERATIONS
|
|
|
|
402
|
|
|
|
|
1,089
|
|
|
Income (loss) from discontinued operations
|
|
|
|
22
|
|
|
|
|
(1
|
)
|
|
NET INCOME
|
|
|
|
424
|
|
|
|
|
1,088
|
|
|
LESS: NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTEREST
|
|
|
|
102
|
|
|
|
|
(27
|
)
|
|
NET INCOME ATTRIBUTABLE TO PARTNERS
|
|
|
|
322
|
|
|
|
|
1,115
|
|
|
GENERAL PARTNER’S INTEREST IN NET INCOME
|
|
|
|
128
|
|
|
|
|
117
|
|
|
LIMITED PARTNERS’ INTEREST IN NET INCOME
|
|
|
$
|
194
|
|
|
|
$
|
998
|
|
|
INCOME FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT:
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.60
|
|
|
|
$
|
4.37
|
|
|
Diluted
|
|
|
$
|
0.60
|
|
|
|
$
|
4.36
|
|
|
NET INCOME PER LIMITED PARTNER UNIT:
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.63
|
|
|
|
$
|
4.36
|
|
|
Diluted
|
|
|
$
|
0.63
|
|
|
|
$
|
4.35
|
|
|
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING:
|
|
|
|
|
|
|
|
Basic
|
|
|
|
300,831,573
|
|
|
|
|
226,549,263
|
|
|
Diluted
|
|
|
|
301,832,910
|
|
|
|
|
227,406,484
|
|
|
(1)
|
|
In accordance with generally accepted accounting principles, amounts
previously reported for interim periods in 2012 have been revised to
reflect the retrospective consolidation of Southern Union into ETP
as a result of the Holdco Transaction as the transfer of Southern
Union into Holdco met the definition of a transaction between
entities under common control. Thus, Southern Union is retroactively
consolidated beginning March 26, 2012, the date that ETE completed
its merger with Southern Union.
|
|
|
|
|
|
SUPPLEMENTAL INFORMATION
|
|
(Dollars in millions)
|
|
(unaudited)
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
2013
|
|
|
2012 (b) (c)
|
|
Reconciliation of net income to Adjusted EBITDA and Distributable
Cash Flow (a):
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
424
|
|
|
|
$
|
1,088
|
|
|
Interest expense, net of interest capitalized
|
|
|
|
211
|
|
|
|
|
141
|
|
|
Gain on deconsolidation of Propane Business
|
|
|
|
—
|
|
|
|
|
(1,056
|
)
|
|
Income tax expense
|
|
|
|
3
|
|
|
|
|
2
|
|
|
Depreciation and amortization
|
|
|
|
260
|
|
|
|
|
99
|
|
|
Non-cash compensation expense
|
|
|
|
14
|
|
|
|
|
11
|
|
|
Gains on interest rate derivatives
|
|
|
|
(7
|
)
|
|
|
|
(28
|
)
|
|
Unrealized (gains) losses on commodity risk management activities
|
|
|
|
(19
|
)
|
|
|
|
86
|
|
|
LIFO valuation adjustment
|
|
|
|
(38
|
)
|
|
|
|
—
|
|
|
Loss on extinguishment of debt
|
|
|
|
—
|
|
|
|
|
115
|
|
|
Adjusted EBITDA related to unconsolidated affiliates
|
|
|
|
165
|
|
|
|
|
99
|
|
|
Equity in earnings of unconsolidated affiliates
|
|
|
|
(72
|
)
|
|
|
|
(55
|
)
|
|
Other, net
|
|
|
|
15
|
|
|
|
|
(8
|
)
|
|
Adjusted EBITDA
|
|
|
|
956
|
|
|
|
|
494
|
|
|
Adjusted EBITDA related to unconsolidated affiliates
|
|
|
|
(165
|
)
|
|
|
|
(99
|
)
|
|
Distributions from unconsolidated affiliates
|
|
|
|
95
|
|
|
|
|
42
|
|
|
Interest expense, net of interest capitalized
|
|
|
|
(211
|
)
|
|
|
|
(141
|
)
|
|
Income tax expense
|
|
|
|
(3
|
)
|
|
|
|
(2
|
)
|
|
Maintenance capital expenditures
|
|
|
|
(51
|
)
|
|
|
|
(24
|
)
|
|
Other, net
|
|
|
|
1
|
|
|
|
|
1
|
|
|
Distributable Cash Flow
|
|
|
$
|
622
|
|
|
|
$
|
271
|
|
|
|
|
|
|
|
|
|
|
Distributions to be paid to the partners of ETP (d):
|
|
|
|
|
|
|
|
Limited Partners:
|
|
|
|
|
|
|
|
Common units held by ETE
|
|
|
$
|
45
|
|
|
|
$
|
45
|
|
|
Common units held by public
|
|
|
|
241
|
|
|
|
|
160
|
|
|
General Partner interest held by ETE
|
|
|
|
5
|
|
|
|
|
5
|
|
|
Incentive Distribution Rights (“IDR”) held by ETE
|
|
|
|
156
|
|
|
|
|
114
|
|
|
|
|
|
|
447
|
|
|
|
|
324
|
|
|
IDR relinquishment related to previous acquisitions
|
|
|
|
(31
|
)
|
|
|
|
(14
|
)
|
|
Total distributions to be paid to the partners of ETP
|
|
|
|
416
|
|
|
|
|
310
|
|
|
|
|
|
|
|
|
|
|
Distributions to be paid to noncontrolling interests:
|
|
|
|
|
|
|
|
Distributions to ETE in respect of Holdco (e)
|
|
|
|
50
|
|
|
|
|
—
|
|
|
Distributions to Regency in respect of Lone Star (f)
|
|
|
|
23
|
|
|
|
|
11
|
|
|
Distributions to Sunoco Logistics unitholders (common units held by
public) (g)
|
|
|
|
40
|
|
|
|
|
—
|
|
|
Total distributions to be paid to noncontrolling interests
|
|
|
|
113
|
|
|
|
|
11
|
|
|
Total distributions to be paid to the partners of ETP and
noncontrolling interests
|
|
|
$
|
529
|
|
|
|
$
|
321
|
|
|
|
|
|
|
(a)
|
|
The Partnership has disclosed in this press release Adjusted EBITDA
and Distributable Cash Flow, which are non-GAAP financial measures.
Management believes Adjusted EBITDA and Distributable Cash Flow
provide useful information to investors as measures of comparison
with peer companies, including companies that may have different
financing and capital structures. The presentation of Adjusted
EBITDA and Distributable Cash Flow also allows investors to view our
performance in a manner similar to the methods used by management
and provides additional insight into our operating results.
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
The Partnership 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, non-cash impairment charges, loss on
extinguishment of debt, gain on deconsolidation of our Propane
Business 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 the
Partnership’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
|
|
|
|
|
|
|
|
The Partnership 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,
unrealized gains and losses on commodity risk management activities,
non-cash impairment charges, loss on extinguishment of debt and gain
on deconsolidation of our Propane Business. 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.
|
|
|
|
|
|
(b)
|
|
In accordance with generally accepted accounting principles, amounts
previously reported for interim periods in 2012 have been revised to
reflect the retrospective consolidation of Southern Union into ETP
as a result of the Holdco Transaction as the transfer of Southern
Union into Holdco met the definition of a transaction between
entities under common control. Thus, Southern Union is retroactively
consolidated beginning March 26, 2012, the date that ETE completed
its merger with Southern Union.
|
|
|
|
|
|
(c)
|
|
The Partnership has presented Adjusted EBITDA and Distributable
Cash Flow in previous communications; however, the Partnership
changed its definition for these non-GAAP measures in the quarter
ended December 31, 2012 to reflect less than wholly-owned
subsidiaries on a fully consolidated basis. Previously, the
Partnership presented less than wholly-owned subsidiaries on a
proportionate basis. The Partnership believes that with this
change, Adjusted EBITDA and Distributable Cash Flow more
accurately reflect the Partnership’s operating performance and
therefore are more useful measures. This change has been applied
retroactively to all periods presented. See “Non-GAAP Measures”
available on the Partnership’s website at www.energytransfer.com
for the reconciliation of net income to Adjusted EBITDA for recent
prior periods reflecting the changes described above.
|
|
|
|
|
|
(d)
|
|
For the three months ended March 31, 2013, cash distributions to be
paid to the partners of ETP consist of cash distributions payable on
May 15, 2013 to holders of record on May 6, 2013 in respect of the
quarter ended March 31, 2013. For the three months ended March 31,
2012, cash distributions to be paid to the partners of ETP consist
of cash distributions paid on May 15, 2012 in respect of the quarter
ended March 31, 2012.
|
|
|
|
|
|
|
|
For the three months ended March 31, 2013, cash distributions to be
paid to the partners of ETP exclude distributions to be paid on 49.5
million ETP common units issued to ETE as a portion of the
consideration for ETP's acquisition of ETE's interest in Holdco on
April 30, 2013. These newly issued ETP common units will receive
cash distributions on May 15, 2013; however, such distributions were
reduced from the total cash portion of the consideration paid to ETE
in connection with the April 30, 2013 Holdco transaction.
|
|
|
|
|
|
(e)
|
|
For the three months ended March 31, 2013, cash distributions to ETE
in respect of Holdco consist of cash distributions paid in April
2013 in respect of the quarter ended March 31, 2013.
|
|
|
|
|
|
(f)
|
|
Cash distributions to Regency in respect of Lone Star consist of
cash distributions paid on a quarterly basis. The amounts reflected
above are in respect of the periods then ended, including payments
made in arrears subsequent to period end.
|
|
|
|
|
|
(g)
|
|
For the three months ended March 31, 2013, cash distributions to be
paid to the partners of Sunoco Logistics consist of cash
distributions payable on May 15, 2013 to holders of record on May 9,
2013 in respect of the quarter ended March 31, 2013.
|
|
|
|
|
|
|
|
|
SUMMARY ANALYSIS OF QUARTERLY RESULTS BY SEGMENT
(Dollars
in millions)
(unaudited)
Subsequent to the Sunoco Merger and Holdco Transactions in October 2012,
our reportable segments changed, as follows:
-
Interstate transportation and storage segment now includes Southern
Union’s transportation and storage operations;
-
Midstream segment now includes Southern Union’s gathering and
processing operations;
-
Investment in Sunoco Logistics segment reflects the consolidated
operations of Sunoco Logistics;
-
Retail marketing segment reflects the consolidated operations of
Sunoco’s retail marketing business; and,
-
All other now includes the investments and operations identified under
the segment table below.
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.
These are the unrealized amounts that are included in 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. These amounts are not included in
Segment Adjusted EBITDA and therefore are 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 above.
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
2013
|
|
2012
|
|
Segment Adjusted EBITDA:
|
|
|
|
|
|
|
Intrastate transportation and storage
|
|
|
$
|
132
|
|
$
|
192
|
|
Interstate transportation and storage
|
|
|
|
297
|
|
|
80
|
|
Midstream
|
|
|
|
79
|
|
|
89
|
|
NGL transportation and services
|
|
|
|
80
|
|
|
50
|
|
Investment in Sunoco Logistics
|
|
|
|
236
|
|
|
—
|
|
Retail marketing
|
|
|
|
37
|
|
|
—
|
|
All other
|
|
|
|
95
|
|
|
83
|
|
|
|
|
$
|
956
|
|
$
|
494
|
|
|
|
Intrastate Transportation and Storage
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
Natural gas transported (MMBtu/d)
|
|
|
|
9,733,480
|
|
|
|
|
10,114,354
|
|
|
Revenues
|
|
|
$
|
690
|
|
|
|
$
|
482
|
|
|
Cost of products sold
|
|
|
|
496
|
|
|
|
|
314
|
|
|
Gross margin
|
|
|
|
194
|
|
|
|
|
168
|
|
|
Unrealized (gains) losses on commodity risk management activities
|
|
|
|
(12
|
)
|
|
|
|
82
|
|
|
Operating expenses, excluding non-cash compensation expense
|
|
|
|
(39
|
)
|
|
|
|
(39
|
)
|
|
Selling, general and administrative expenses, excluding non-cash
compensation expense
|
|
|
|
(11
|
)
|
|
|
|
(19
|
)
|
|
Segment Adjusted EBITDA
|
|
|
$
|
132
|
|
|
|
$
|
192
|
|
|
|
|
|
|
|
|
|
|
Distributions from unconsolidated affiliates
|
|
|
$
|
—
|
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted EBITDA for the intrastate transportation and storage
segment decreased primarily due to a lower realized margin on natural
gas storage activities. Additionally, a decrease in transportation fees
was offset by increases in natural gas sales and other activities,
improved retention margins and lower selling, general and administrative
expenses.
|
|
|
Interstate Transportation and Storage
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
Natural gas transported (MMBtu/d):
|
|
|
|
|
|
|
|
ETP legacy assets
|
|
|
|
2,613,154
|
|
|
|
|
3,153,073
|
|
|
Southern Union transportation and storage
|
|
|
|
4,420,650
|
|
|
|
|
3,764,599
|
|
|
Natural gas sold (MMBtu/d) – ETP legacy assets
|
|
|
|
16,768
|
|
|
|
|
20,517
|
|
|
Revenues
|
|
|
$
|
324
|
|
|
|
$
|
142
|
|
|
Operating expenses, excluding non-cash compensation, amortization
and accretion expenses
|
|
|
|
(72
|
)
|
|
|
|
(32
|
)
|
|
Selling, general and administrative expenses, excluding non-cash
compensation, amortization and accretion expenses
|
|
|
|
(35
|
)
|
|
|
|
(53
|
)
|
|
Adjusted EBITDA related to unconsolidated affiliates
|
|
|
|
80
|
|
|
|
|
23
|
|
|
Segment Adjusted EBITDA
|
|
|
$
|
297
|
|
|
|
$
|
80
|
|
|
|
|
|
|
|
|
|
|
Distributions from unconsolidated affiliates
|
|
|
$
|
41
|
|
|
|
$
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted EBITDA for the interstate transportation and storage
segment increased primarily due to the consolidation of Southern Union’s
transportation and storage operations beginning March 26, 2012. Selling,
general and administrative expenses decreased because the incremental
expenses from Southern Union’s transportation and storage operations in
the current year was more than offset by Southern Union’s recognition of
merger-related expenses during the period from March 26, 2012 to March
31, 2012. Adjusted EBITDA related to the Transwestern and Tiger
pipelines also contributed approximately $1 million to the increase.
Adjusted EBITDA related to unconsolidated affiliates increased primarily
due to an increase of $58 million from Citrus, in which we acquired a
50% interest on March 26, 2012.
|
|
|
Midstream
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
Gathered volumes (MMBtu/d):
|
|
|
|
|
|
|
|
ETP legacy assets
|
|
|
|
2,587,787
|
|
|
|
|
2,239,220
|
|
|
Southern Union gathering and processing
|
|
|
|
480,339
|
|
|
|
|
404,422
|
|
|
NGLs produced (Bbls/d):
|
|
|
|
|
|
|
|
ETP legacy assets
|
|
|
|
96,775
|
|
|
|
|
65,627
|
|
|
Southern Union gathering and processing
|
|
|
|
39,681
|
|
|
|
|
38,723
|
|
|
Equity NGLs produced (Bbls/d):
|
|
|
|
|
|
|
|
ETP legacy assets
|
|
|
|
9,499
|
|
|
|
|
17,630
|
|
|
Southern Union gathering and processing
|
|
|
|
7,206
|
|
|
|
|
8,744
|
|
|
Revenues
|
|
|
$
|
951
|
|
|
|
$
|
563
|
|
|
Cost of products sold
|
|
|
|
794
|
|
|
|
|
436
|
|
|
Gross margin
|
|
|
|
157
|
|
|
|
|
127
|
|
|
Unrealized losses on commodity risk management activities
|
|
|
|
—
|
|
|
|
|
2
|
|
|
Operating expenses, excluding non-cash compensation expense
|
|
|
|
(49
|
)
|
|
|
|
(26
|
)
|
|
Selling, general and administrative expenses, excluding non-cash
compensation expense
|
|
|
|
(29
|
)
|
|
|
|
(19
|
)
|
|
Adjusted EBITDA attributable to discontinued operations
|
|
|
|
—
|
|
|
|
|
5
|
|
|
Segment Adjusted EBITDA
|
|
|
$
|
79
|
|
|
|
$
|
89
|
|
|
|
|
Segment Adjusted EBITDA for the midstream segment reflected
increases in gross margin as follows:
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
Gathering and processing fee-based revenues
|
|
|
$
|
97
|
|
|
|
$
|
70
|
|
|
Non fee-based contracts and processing
|
|
|
|
67
|
|
|
|
|
64
|
|
|
Other
|
|
|
|
(7
|
)
|
|
|
|
(7
|
)
|
|
Total gross margin
|
|
|
$
|
157
|
|
|
|
$
|
127
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increased production in the Eagle Ford Shale resulted in increased
fee-based revenues of $22 million. Additional volumes from the Woodford
Shale also increased gross margin from our North Texas system by $3
million. The consolidation of Southern Union's gathering and processing
operations, beginning March 26, 2012, also increased gross margin by $5
million.
Segment Adjusted EBITDA also reflected higher operating expenses and
selling, general and administrative expenses primarily due to the
consolidation of Southern Union’s gathering and processing operations
beginning March 26, 2012.
|
|
|
NGL Transportation and Services
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
NGL transportation volumes (Bbls/d)
|
|
|
|
274,030
|
|
|
|
|
150,881
|
|
|
NGL fractionation volumes (Bbls/d)
|
|
|
|
86,703
|
|
|
|
|
20,006
|
|
|
Revenues
|
|
|
$
|
365
|
|
|
|
$
|
167
|
|
|
Cost of products sold
|
|
|
|
257
|
|
|
|
|
98
|
|
|
Gross margin
|
|
|
|
108
|
|
|
|
|
69
|
|
|
Operating expenses, excluding non-cash compensation expense
|
|
|
|
(19
|
)
|
|
|
|
(14
|
)
|
|
Selling, general and administrative expenses, excluding non-cash
compensation expense
|
|
|
|
(10
|
)
|
|
|
|
(5
|
)
|
|
Adjusted EBITDA related to unconsolidated affiliates
|
|
|
|
1
|
|
|
|
|
—
|
|
|
Segment Adjusted EBITDA
|
|
|
$
|
80
|
|
|
|
$
|
50
|
|
|
|
|
|
|
|
|
|
|
Distributions from unconsolidated affiliates
|
|
|
$
|
1
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted EBITDA for the NGL transportation and services segment
reflected higher gross margin, as discussed below, offset by higher
operating expenses due to increased ad valorem taxes and other expenses
related to the start-up of Lone Star’s fractionator and higher selling,
general and administrative expenses due to increased employee-related
costs and allocated overhead expenses resulting from overall asset
growth on the system.
Segment Adjusted EBITDA for the NGL transportation and services segment
reflected increases in gross margin as follows:
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
2013
|
|
2012
|
|
Storage margin
|
|
|
$
|
32
|
|
$
|
32
|
|
Transportation margin
|
|
|
|
41
|
|
|
13
|
|
Processing and fractionation margin
|
|
|
|
34
|
|
|
24
|
|
Other margin
|
|
|
|
1
|
|
|
—
|
|
Total gross margin
|
|
|
$
|
108
|
|
$
|
69
|
|
|
|
|
|
|
|
|
|
Transportation margin increased due to an increase in volumes
transported out of West Texas due to the commissioning of Lone Star’s
Gateway pipeline during the fourth quarter of 2012. A higher
concentration of volumes sourced from transportation contracts
originating in West Texas and renegotiated contracts on the East side of
the legacy Lone Star pipeline system increased our average realized
rate. These volume and rate factors increases on our Lone Star pipeline
system accounted for $21 million of the increase in transportation
margin between the periods. The completion of our Justice pipeline
connection to Mont Belvieu, Texas and additional NGL production from our
processing plants accounted for the remainder of the increase in
transportation margin.
Processing and fractionation margin increased due to the startup of Lone
Star’s fractionator at Mont Belvieu, Texas in December 2012, which
contributed $16 million during the three months ended March 31, 2013.
The increase in margin related to our fractionator was offset by a
decrease in margin attributable to our fractionator in Geismar,
Louisiana due to a less favorable pricing environment and contract mix.
|
|
|
Investment in Sunoco Logistics
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
Revenue
|
|
|
$
|
3,512
|
|
|
|
$
|
—
|
|
Cost of products sold
|
|
|
|
3,226
|
|
|
|
|
—
|
|
Gross margin
|
|
|
|
286
|
|
|
|
|
—
|
|
Unrealized gains on commodity risk management activities
|
|
|
|
(3
|
)
|
|
|
|
—
|
|
Operating expenses, excluding non-cash compensation expense
|
|
|
|
(24
|
)
|
|
|
|
—
|
|
Selling, general and administrative expenses, excluding non-cash
compensation expense
|
|
|
|
(30
|
)
|
|
|
|
—
|
|
Adjusted EBITDA related to unconsolidated affiliates
|
|
|
|
7
|
|
|
|
|
—
|
|
Segment Adjusted EBITDA
|
|
|
$
|
236
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
Distributions from unconsolidated affiliates
|
|
|
$
|
3
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
We obtained control of Sunoco Logistics Partners L.P. on October 5, 2012
in connection with our acquisition of Sunoco, Inc.; therefore, no
comparative results were reflected in our financial statements.
|
|
|
Retail Marketing
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
2013
|
|
2012
|
|
Total retail gasoline outlets, end of period
|
|
|
|
4,979
|
|
|
|
—
|
|
Total company-operated outlets, end of period
|
|
|
|
439
|
|
|
|
—
|
|
Gasoline and diesel throughput per company-operated site
(gallons/month)
|
|
|
|
187,000
|
|
|
|
—
|
|
Revenue
|
|
|
$
|
5,222
|
|
|
$
|
—
|
|
Cost of products sold
|
|
|
|
5,036
|
|
|
|
—
|
|
Gross margin
|
|
|
|
186
|
|
|
|
—
|
|
Operating expenses, excluding non-cash compensation expense
|
|
|
|
(98
|
)
|
|
|
—
|
|
Selling, general and administrative expenses, excluding non-cash
compensation expense
|
|
|
|
(15
|
)
|
|
|
—
|
|
LIFO valuation adjustment
|
|
|
|
(38
|
)
|
|
|
—
|
|
Adjusted EBITDA related to unconsolidated affiliates
|
|
|
|
2
|
|
|
|
—
|
|
Segment Adjusted EBITDA
|
|
|
$
|
37
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
We acquired our retail marketing segment on October 5, 2012 in
connection with our acquisition of Sunoco, Inc.; therefore, no
comparative results were reflected in our financial statements.
|
|
|
All Other
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
Revenue
|
|
|
$
|
150
|
|
|
|
$
|
129
|
|
|
Cost of products sold
|
|
|
|
137
|
|
|
|
|
91
|
|
|
Gross margin
|
|
|
|
13
|
|
|
|
|
38
|
|
|
Unrealized (gains) losses on commodity risk management activities
|
|
|
|
(4
|
)
|
|
|
|
2
|
|
|
Operating expenses, excluding non-cash compensation expense
|
|
|
|
(5
|
)
|
|
|
|
(20
|
)
|
|
Selling, general and administrative expenses, excluding non-cash
compensation expense
|
|
|
|
(18
|
)
|
|
|
|
(13
|
)
|
|
Adjusted EBITDA attributable to discontinued operations
|
|
|
|
40
|
|
|
|
|
2
|
|
|
Adjusted EBITDA related to unconsolidated affiliates
|
|
|
|
76
|
|
|
|
|
75
|
|
|
Elimination
|
|
|
|
(7
|
)
|
|
|
|
(1
|
)
|
|
Segment Adjusted EBITDA
|
|
|
$
|
95
|
|
|
|
$
|
83
|
|
|
|
|
|
|
|
|
|
|
Distributions from unconsolidated affiliates
|
|
|
$
|
50
|
|
|
|
$
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts reflected in our all other segment primarily include:
-
Our retail propane and other retail propane related operations prior
to our contribution of those operations to AmeriGas in January 2012.
Our investment in AmeriGas was reflected in the all other segment
subsequent to that transaction;
-
Southern Union’s local distribution operations beginning March 26,
2012;
-
Our natural gas compression operations; and,
-
An approximate 30% non-operating interest in PES, a refining joint
venture, effective upon our acquisition of Sunoco on October 5, 2012.
The decrease in gross margin and operating expenses was primarily due to
our recognition of $31 million of gross margin and $18 million of
operating expenses from our retail propane operations prior to the
deconsolidation of those operations in January 2012.
Adjusted EBITDA attributable to discontinued operations reflected the
results of Southern Union's local distribution operations. Adjusted
EBITDA related to unconsolidated affiliates reflected the results from
our investments in AmeriGas and PES. Additional information related to
unconsolidated affiliates is provided below in “Supplemental Information
on Unconsolidated Affiliates.”
SUPPLEMENTAL INFORMATION ON CAPITAL EXPENDITURES
(Dollars
in millions)
(unaudited)
The following is a summary of capital expenditures recorded during the
three months ended March 31, 2013:
|
|
|
|
Growth
|
|
|
Maintenance
|
|
|
Total
|
|
ETP legacy assets:
|
|
|
|
|
|
|
|
|
|
|
Intrastate transportation and storage
|
|
|
$
|
2
|
|
|
|
$
|
3
|
|
|
|
$
|
5
|
|
|
Interstate transportation and storage
|
|
|
|
2
|
|
|
|
|
3
|
|
|
|
|
5
|
|
|
Midstream
|
|
|
|
113
|
|
|
|
|
5
|
|
|
|
|
118
|
|
|
NGL transportation and services(1) |
|
|
|
102
|
|
|
|
|
3
|
|
|
|
|
105
|
|
|
|
|
|
|
219
|
|
|
|
|
14
|
|
|
|
|
233
|
|
|
Holdco:
|
|
|
|
|
|
|
|
|
|
|
Southern Union transportation and storage
|
|
|
|
—
|
|
|
|
|
(1
|
)
|
|
|
|
(1
|
)
|
|
Southern Union gathering and processing
|
|
|
|
80
|
|
|
|
|
7
|
|
|
|
|
87
|
|
|
Retail marketing
|
|
|
|
6
|
|
|
|
|
10
|
|
|
|
|
16
|
|
|
|
|
|
|
86
|
|
|
|
|
16
|
|
|
|
|
102
|
|
|
Investment in Sunoco Logistics
|
|
|
|
136
|
|
|
|
|
4
|
|
|
|
|
140
|
|
|
All other (including eliminations)
|
|
|
|
(6
|
)
|
|
|
|
17
|
|
|
|
|
11
|
|
|
Total capital expenditures
|
|
|
$
|
435
|
|
|
|
$
|
51
|
|
|
|
$
|
486
|
|
(1) We received capital contributions from Regency related to their 30%
share of Lone Star of $27 million.
We currently expect capital expenditures for the full year 2013 to be
within the following ranges:
|
|
|
|
Growth
|
|
|
Maintenance
|
|
|
|
|
Low
|
|
|
High
|
|
|
Low
|
|
|
High
|
|
ETP legacy assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Midstream and intrastate transportation and storage
|
|
|
$
|
315
|
|
|
|
$
|
355
|
|
|
|
$
|
75
|
|
|
$
|
85
|
|
Interstate transportation and storage
|
|
|
|
10
|
|
|
|
|
25
|
|
|
|
|
20
|
|
|
|
30
|
|
NGL transportation and services(1) |
|
|
|
540
|
|
|
|
|
600
|
|
|
|
|
15
|
|
|
|
25
|
|
|
|
|
|
865
|
|
|
|
|
980
|
|
|
|
|
110
|
|
|
|
140
|
|
Holdco:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Southern Union transportation and storage
|
|
|
|
30
|
|
|
|
|
40
|
|
|
|
|
90
|
|
|
|
100
|
|
Southern Union gathering and processing
|
|
|
|
80
|
|
|
|
|
80
|
|
|
|
|
5
|
|
|
|
5
|
|
Retail marketing
|
|
|
|
25
|
|
|
|
|
55
|
|
|
|
|
65
|
|
|
|
75
|
|
|
|
|
|
135
|
|
|
|
|
175
|
|
|
|
|
160
|
|
|
|
180
|
|
Investment in Sunoco Logistics
|
|
|
|
635
|
|
|
|
|
735
|
|
|
|
|
60
|
|
|
|
70
|
|
All other (including eliminations)
|
|
|
|
(5
|
)
|
|
|
|
(5
|
)
|
|
|
|
15
|
|
|
|
15
|
|
Total capital expenditures
|
|
|
$
|
1,630
|
|
|
|
$
|
1,885
|
|
|
|
$
|
345
|
|
|
$
|
405
|
(1) We expect to receive capital contributions from Regency related to
their 30% share of Lone Star of $100 million.
|
|
|
|
|
SUPPLEMENTAL INFORMATION ON
UNCONSOLIDATED AFFILIATES
|
|
(Dollars in millions)
|
|
(unaudited)
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
Equity in earnings of unconsolidated affiliates:
|
|
|
|
|
|
|
|
AmeriGas
|
|
|
$
|
63
|
|
|
|
$
|
40
|
|
Citrus
|
|
|
|
14
|
|
|
|
|
1
|
|
FEP
|
|
|
|
13
|
|
|
|
|
13
|
|
Other
|
|
|
|
(18
|
)
|
|
|
|
1
|
|
Total equity in earnings of unconsolidated affiliates
|
|
|
$
|
72
|
|
|
|
$
|
55
|
|
Proportionate share of interest, depreciation, amortization,
non-cash compensation expense, loss on debt extinguishment and taxes:
|
|
|
|
|
|
|
|
AmeriGas
|
|
|
$
|
34
|
|
|
|
$
|
35
|
|
Citrus
|
|
|
|
48
|
|
|
|
|
3
|
|
FEP
|
|
|
|
5
|
|
|
|
|
6
|
|
Other
|
|
|
|
6
|
|
|
|
|
—
|
|
Total proportionate share of interest, depreciation, amortization,
non-cash compensation expense, loss on debt extinguishment and taxes
|
|
|
$
|
93
|
|
|
|
$
|
44
|
|
Adjusted EBITDA related to unconsolidated affiliates:
|
|
|
|
|
|
|
|
AmeriGas
|
|
|
$
|
97
|
|
|
|
$
|
75
|
|
Citrus
|
|
|
|
62
|
|
|
|
|
4
|
|
FEP
|
|
|
|
18
|
|
|
|
|
19
|
|
Other
|
|
|
|
(12
|
)
|
|
|
|
1
|
|
Total Adjusted EBITDA attributable to unconsolidated affiliates
|
|
|
$
|
165
|
|
|
|
$
|
99
|
|
Distributions received from unconsolidated affiliates:
|
|
|
|
|
|
|
|
AmeriGas
|
|
|
$
|
24
|
|
|
|
$
|
23
|
|
Citrus
|
|
|
|
24
|
|
|
|
|
—
|
|
FEP
|
|
|
|
17
|
|
|
|
|
18
|
|
Other
|
|
|
|
30
|
|
|
|
|
1
|
|
Total distributions received from unconsolidated affiliates
|
|
|
$
|
95
|
|
|
|
$
|
42
|
