Energy Transfer Partners, L.P. (NYSE: ETP) today reported its
financial results for the quarter ended June 30, 2014. Adjusted EBITDA
for Energy Transfer Partners, L.P. (“ETP” or the “Partnership”) for the
three months ended June 30, 2014 totaled $1.17 billion, an increase of
$100 million over the same period last year. Distributable Cash Flow
attributable to the partners of ETP for the three months ended June 30,
2014 totaled $538 million, an increase of $55 million over the same
period last year. Income from continuing operations for the three months
ended June 30, 2014 was $539 million, an increase of $135 million over
the same period last year.
Adjusted EBITDA for ETP for the six months ended June 30, 2014 totaled
$2.38 billion, an increase of $350 million over the same period last
year. Distributable Cash Flow attributable to the partners of ETP for
the six months ended June 30, 2014 totaled $1.25 billion, an increase of
$379 million over the same period last year. Income from continuing
operations for the six months ended June 30, 2014 was $1.01 billion, an
increase of $200 million over the same period last year.
In July, ETP announced that its Board of Directors approved an increase
in its quarterly distribution to $0.955 per unit ($3.82 annualized) on
ETP Common Units for the quarter ended June 30, 2014, representing an
increase of $0.08 per Common Unit on an annualized basis compared to the
first quarter of 2014. For the quarter ended June 30, 2014, ETP’s
distribution coverage ratio was 1.10x.
ETP’s other recent key accomplishments include the following:
-
In June 2014, ETP announced that our Board of Directors approved the
construction of a pipeline (“ET Rover”) to transport natural gas from
the prolific Marcellus and Utica Shale areas to numerous market
regions in the United States and Canada. To date, ETP has secured 2.95
billion cubic feet per day (“Bcf/d”) of binding, fee-based commitments
under predominantly 20 year agreements, representing 91% of the 3.25
Bcf/d total design capacity, and is still evaluating additional bids
that were received in the open season. The project is fully subscribed
to the Dawn, Ontario hub at 1.3 Bcf/d, with the balance of capacity
commitments delivered to interconnects with other pipelines in the
Midwest. ETP has ordered the pipe for the project and expects the
segment to the Midwest markets to be in-service by December 2016 and
in-service to Dawn, Ontario by July 2017.
-
In June 2014, ETP also announced that our Board of Directors approved
the construction of an approximately 1,100 mile pipeline to transport
crude oil supply from strategic receipt points in the Bakken/Three
Forks production area in North Dakota to Patoka, Illinois, where the
pipeline will interconnect with ETP’s existing Trunkline Pipeline,
which is being converted from natural gas service to crude oil
transportation service. ETP currently expects to build the pipeline to
a capacity as high as 570,000 barrels per day based on binding
commitments received to date and ongoing discussions with a number of
key potential shippers. The pipeline is expected to be in-service by
December 2016.
-
In June 2014, ETP sold 8.5 million AmeriGas Partners, L.P.
(“AmeriGas”) common units for net proceeds of $377 million, and sold
an additional 1.2 million AmeriGas common units for net proceeds of
$55 million in August 2014.
-
The Partnership continues to make progress toward the close of its
recently announced acquisition of Susser Holdings Corporation
(“Susser”) with Susser’s shareholders scheduled to vote on the
acquisition at a meeting to be held on August 28, 2014.
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 8:30 a.m. Central Time, Thursday, August 7, 2014 to
discuss the second quarter 2014 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 ETP’s web site for a limited
time.
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 owns and
operates approximately 35,000 miles of natural gas and natural gas
liquids pipelines. ETP owns 100% of Panhandle Eastern Pipe Line Company,
LP (the successor of 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 67.1 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. web site 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), approximately 30.8 million ETP common units, and
approximately 50.2 million ETP Class H Units, which track 50% of the
underlying economics of the general partner interest and the IDRs of
Sunoco Logistics Partners L.P. (NYSE: SXL). ETE also owns the general
partner and 100% of the IDRs of Regency Energy Partners LP (NYSE: RGP)
and approximately 57.2 million RGP common units. The Energy Transfer
family of companies owns approximately 71,000 miles of natural gas,
natural gas liquids, refined products, and crude oil pipelines. For more
information, visit the Energy Transfer Equity, L.P. web site 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, refined products, and natural gas liquids
pipeline, terminalling and acquisition and marketing assets which are
used to facilitate the purchase and sale of crude oil, refined products,
and natural gas liquids. 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.
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 Partnership’s Annual Reports on Form 10-K and other
documents filed from time to time with the Securities and Exchange
Commission. The Partnership undertakes no obligation to update or revise
any forward-looking statement to reflect new information or events.
The information contained in this press release is available on our web
site at www.energytransfer.com.
|
|
|
|
|
ENERGY TRANSFER PARTNERS, L.P. AND
SUBSIDIARIES
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
(In millions)
|
|
(unaudited)
|
|
|
|
|
|
|
June 30,
2014
|
|
|
December 31,
2013
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
$
|
7,213
|
|
|
$
|
6,239
|
|
|
|
|
|
|
|
|
|
PROPERTY, PLANT AND EQUIPMENT, net
|
|
|
|
26,491
|
|
|
|
25,947
|
|
|
|
|
|
|
|
|
|
ADVANCES TO AND INVESTMENTS IN UNCONSOLIDATED AFFILIATES
|
|
|
|
3,850
|
|
|
|
4,436
|
|
NON-CURRENT PRICE RISK MANAGEMENT ASSETS
|
|
|
|
—
|
|
|
|
17
|
|
GOODWILL
|
|
|
|
4,521
|
|
|
|
4,729
|
|
INTANGIBLE ASSETS, net
|
|
|
|
1,512
|
|
|
|
1,568
|
|
OTHER NON-CURRENT ASSETS, net
|
|
|
|
636
|
|
|
|
766
|
|
Total assets
|
|
|
$
|
44,223
|
|
|
$
|
43,702
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
$
|
7,515
|
|
|
$
|
6,067
|
|
|
|
|
|
|
|
|
|
LONG-TERM DEBT, less current maturities
|
|
|
|
16,220
|
|
|
|
16,451
|
|
NON-CURRENT PRICE RISK MANAGEMENT LIABILITIES
|
|
|
|
69
|
|
|
|
54
|
|
DEFERRED INCOME TAXES
|
|
|
|
3,612
|
|
|
|
3,762
|
|
OTHER NON-CURRENT LIABILITIES
|
|
|
|
1,037
|
|
|
|
1,080
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
REDEEMABLE NONCONTROLLING INTERESTS
|
|
|
|
15
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
EQUITY:
|
|
|
|
|
|
|
|
Total partners’ capital
|
|
|
|
10,816
|
|
|
|
11,540
|
|
Noncontrolling interest
|
|
|
|
4,939
|
|
|
|
4,748
|
|
Total equity
|
|
|
|
15,755
|
|
|
|
16,288
|
|
Total liabilities and equity
|
|
|
$
|
44,223
|
|
|
$
|
43,702
|
|
|
|
|
|
ENERGY TRANSFER PARTNERS, L.P. AND
SUBSIDIARIES
|
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
|
(In millions, except per unit data)
|
|
(unaudited)
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
|
|
2014
|
|
|
|
|
2013
|
|
|
|
|
2014
|
|
|
|
|
2013
|
|
|
REVENUES
|
|
|
$
|
13,029
|
|
|
|
$
|
11,551
|
|
|
|
$
|
25,261
|
|
|
|
$
|
22,405
|
|
|
COSTS AND EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products sold
|
|
|
|
11,636
|
|
|
|
|
10,229
|
|
|
|
|
22,502
|
|
|
|
|
19,823
|
|
|
Operating expenses
|
|
|
|
308
|
|
|
|
|
327
|
|
|
|
|
627
|
|
|
|
|
654
|
|
|
Depreciation and amortization
|
|
|
|
268
|
|
|
|
|
251
|
|
|
|
|
534
|
|
|
|
|
511
|
|
|
Selling, general and administrative
|
|
|
|
81
|
|
|
|
|
112
|
|
|
|
|
174
|
|
|
|
|
251
|
|
|
Total costs and expenses
|
|
|
|
12,293
|
|
|
|
|
10,919
|
|
|
|
|
23,837
|
|
|
|
|
21,239
|
|
|
OPERATING INCOME
|
|
|
|
736
|
|
|
|
|
632
|
|
|
|
|
1,424
|
|
|
|
|
1,166
|
|
|
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net of interest capitalized
|
|
|
|
(217
|
)
|
|
|
|
(211
|
)
|
|
|
|
(436
|
)
|
|
|
|
(422
|
)
|
|
Equity in earnings of unconsolidated affiliates
|
|
|
|
57
|
|
|
|
|
37
|
|
|
|
|
136
|
|
|
|
|
109
|
|
|
Gain on sale of AmeriGas common units
|
|
|
|
93
|
|
|
|
|
—
|
|
|
|
|
163
|
|
|
|
|
—
|
|
|
Gains (losses) on interest rate derivatives
|
|
|
|
(46
|
)
|
|
|
|
39
|
|
|
|
|
(48
|
)
|
|
|
|
46
|
|
|
Other, net
|
|
|
|
(14
|
)
|
|
|
|
(4
|
)
|
|
|
|
(17
|
)
|
|
|
|
(1
|
)
|
|
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE
|
|
|
|
609
|
|
|
|
|
493
|
|
|
|
|
1,222
|
|
|
|
|
898
|
|
|
Income tax expense from continuing operations
|
|
|
|
70
|
|
|
|
|
89
|
|
|
|
|
216
|
|
|
|
|
92
|
|
|
INCOME FROM CONTINUING OPERATIONS
|
|
|
|
539
|
|
|
|
|
404
|
|
|
|
|
1,006
|
|
|
|
|
806
|
|
|
Income from discontinued operations
|
|
|
|
42
|
|
|
|
|
9
|
|
|
|
|
66
|
|
|
|
|
31
|
|
|
NET INCOME
|
|
|
|
581
|
|
|
|
|
413
|
|
|
|
|
1,072
|
|
|
|
|
837
|
|
|
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST
|
|
|
|
110
|
|
|
|
|
93
|
|
|
|
|
186
|
|
|
|
|
195
|
|
|
NET INCOME ATTRIBUTABLE TO PARTNERS
|
|
|
|
471
|
|
|
|
|
320
|
|
|
|
|
886
|
|
|
|
|
642
|
|
|
GENERAL PARTNER’S INTEREST IN NET INCOME
|
|
|
|
125
|
|
|
|
|
155
|
|
|
|
|
238
|
|
|
|
|
283
|
|
|
CLASS H UNITHOLDER’S INTEREST IN NET INCOME
|
|
|
|
51
|
|
|
|
|
—
|
|
|
|
|
100
|
|
|
|
|
—
|
|
|
COMMON UNITHOLDERS’ INTEREST IN NET INCOME
|
|
|
$
|
295
|
|
|
|
$
|
165
|
|
|
|
$
|
548
|
|
|
|
$
|
359
|
|
|
INCOME FROM CONTINUING OPERATIONS PER COMMON UNIT:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.79
|
|
|
|
$
|
0.52
|
|
|
|
$
|
1.47
|
|
|
|
$
|
1.04
|
|
|
Diluted
|
|
|
$
|
0.79
|
|
|
|
$
|
0.52
|
|
|
|
$
|
1.47
|
|
|
|
$
|
1.04
|
|
|
NET INCOME PER COMMON UNIT:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.92
|
|
|
|
$
|
0.53
|
|
|
|
$
|
1.67
|
|
|
|
$
|
1.08
|
|
|
Diluted
|
|
|
$
|
0.92
|
|
|
|
$
|
0.53
|
|
|
|
$
|
1.67
|
|
|
|
$
|
1.08
|
|
|
WEIGHTED AVERAGE NUMBER OF COMMON UNITS OUTSTANDING:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
318.5
|
|
|
|
|
352.6
|
|
|
|
|
321.4
|
|
|
|
|
326.9
|
|
|
Diluted
|
|
|
|
319.5
|
|
|
|
|
353.8
|
|
|
|
|
322.4
|
|
|
|
|
328.1
|
|
|
|
|
|
|
SUPPLEMENTAL INFORMATION
|
|
(Tabular dollar amounts in millions)
|
|
(unaudited)
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
|
|
2014
|
|
|
|
|
2013
|
|
|
|
|
2014
|
|
|
|
|
2013
|
|
|
Reconciliation of net income to Adjusted EBITDA and Distributable
Cash Flow (a):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
581
|
|
|
|
$
|
413
|
|
|
|
$
|
1,072
|
|
|
|
$
|
837
|
|
|
Interest expense, net of interest capitalized
|
|
|
|
217
|
|
|
|
|
211
|
|
|
|
|
436
|
|
|
|
|
422
|
|
|
Gain on sale of AmeriGas common units
|
|
|
|
(93
|
)
|
|
|
|
—
|
|
|
|
|
(163
|
)
|
|
|
|
—
|
|
|
Income tax expense from continuing operations
|
|
|
|
70
|
|
|
|
|
89
|
|
|
|
|
216
|
|
|
|
|
92
|
|
|
Depreciation and amortization
|
|
|
|
268
|
|
|
|
|
251
|
|
|
|
|
534
|
|
|
|
|
511
|
|
|
Non-cash compensation expense
|
|
|
|
13
|
|
|
|
|
10
|
|
|
|
|
27
|
|
|
|
|
24
|
|
|
(Gains) losses on interest rate derivatives
|
|
|
|
46
|
|
|
|
|
(39
|
)
|
|
|
|
48
|
|
|
|
|
(46
|
)
|
|
Unrealized (gains) losses on commodity risk management activities
|
|
|
|
1
|
|
|
|
|
(18
|
)
|
|
|
|
30
|
|
|
|
|
(37
|
)
|
|
LIFO valuation adjustment
|
|
|
|
(20
|
)
|
|
|
|
22
|
|
|
|
|
(34
|
)
|
|
|
|
(16
|
)
|
|
Equity in earnings of unconsolidated affiliates
|
|
|
|
(57
|
)
|
|
|
|
(37
|
)
|
|
|
|
(136
|
)
|
|
|
|
(109
|
)
|
|
Adjusted EBITDA related to unconsolidated affiliates
|
|
|
|
170
|
|
|
|
|
158
|
|
|
|
|
366
|
|
|
|
|
323
|
|
|
Other, net
|
|
|
|
(27
|
)
|
|
|
|
9
|
|
|
|
|
(21
|
)
|
|
|
|
24
|
|
|
Adjusted EBITDA (consolidated)
|
|
|
|
1,169
|
|
|
|
|
1,069
|
|
|
|
|
2,375
|
|
|
|
|
2,025
|
|
|
Adjusted EBITDA related to unconsolidated affiliates
|
|
|
|
(170
|
)
|
|
|
|
(158
|
)
|
|
|
|
(366
|
)
|
|
|
|
(323
|
)
|
|
Distributions from unconsolidated affiliates
|
|
|
|
92
|
|
|
|
|
102
|
|
|
|
|
173
|
|
|
|
|
197
|
|
|
Interest expense, net of interest capitalized
|
|
|
|
(217
|
)
|
|
|
|
(211
|
)
|
|
|
|
(436
|
)
|
|
|
|
(422
|
)
|
|
Amortization included in interest expense
|
|
|
|
(18
|
)
|
|
|
|
(24
|
)
|
|
|
|
(34
|
)
|
|
|
|
(47
|
)
|
|
Current income tax expense from continuing operations
|
|
|
|
(74
|
)
|
|
|
|
(24
|
)
|
|
|
|
(327
|
)
|
|
|
|
(19
|
)
|
|
Income tax expense related to the Trunkline LNG Transaction
|
|
|
|
6
|
|
|
|
|
—
|
|
|
|
|
277
|
|
|
|
|
—
|
|
|
Maintenance capital expenditures
|
|
|
|
(59
|
)
|
|
|
|
(121
|
)
|
|
|
|
(98
|
)
|
|
|
|
(172
|
)
|
|
Other, net
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
3
|
|
|
|
|
2
|
|
|
Distributable Cash Flow (consolidated)
|
|
|
|
730
|
|
|
|
|
634
|
|
|
|
|
1,567
|
|
|
|
|
1,241
|
|
|
Distributable Cash Flow attributable to Sunoco Logistics Partners
L.P. (“Sunoco Logistics”) (100%)
|
|
|
|
(223
|
)
|
|
|
|
(184
|
)
|
|
|
|
(381
|
)
|
|
|
|
(379
|
)
|
|
Distributions from Sunoco Logistics to ETP
|
|
|
|
68
|
|
|
|
|
49
|
|
|
|
|
130
|
|
|
|
|
94
|
|
|
Distributions to ETE in respect of ETP Holdco Corporation (“Holdco”)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(50
|
)
|
|
Distributions to Regency Energy Partners LP (“Regency”) in respect
of Lone Star (b)
|
|
|
|
(37
|
)
|
|
|
|
(16
|
)
|
|
|
|
(70
|
)
|
|
|
|
(39
|
)
|
|
Distributable Cash Flow attributable to the partners of ETP
|
|
|
$
|
538
|
|
|
|
$
|
483
|
|
|
|
$
|
1,246
|
|
|
|
$
|
867
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions to the partners of ETP:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limited Partners:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Units held by public
|
|
|
$
|
282
|
|
|
|
$
|
246
|
|
|
|
$
|
550
|
|
|
|
$
|
487
|
|
|
Common Units held by ETE
|
|
|
|
29
|
|
|
|
|
89
|
|
|
|
|
58
|
|
|
|
|
178
|
|
|
Class H Units held by ETE Common Holdings, LLC (“ETE Holdings”) (c)
|
|
|
|
53
|
|
|
|
|
—
|
|
|
|
|
103
|
|
|
|
|
—
|
|
|
General Partner interests held by ETE
|
|
|
|
5
|
|
|
|
|
5
|
|
|
|
|
10
|
|
|
|
|
10
|
|
|
Incentive Distribution Rights (“IDRs”) held by ETE
|
|
|
|
178
|
|
|
|
|
183
|
|
|
|
|
346
|
|
|
|
|
363
|
|
|
IDR relinquishment related to previous transactions
|
|
|
|
(58
|
)
|
|
|
|
(55
|
)
|
|
|
|
(115
|
)
|
|
|
|
(86
|
)
|
|
Total distributions to be paid to the partners of ETP
|
|
|
$
|
489
|
|
|
|
$
|
468
|
|
|
|
$
|
952
|
|
|
|
$
|
952
|
|
|
Distributions credited to Holdco transactions (d)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(68
|
)
|
|
Net distributions to the partners of ETP
|
|
|
$
|
489
|
|
|
|
$
|
468
|
|
|
|
$
|
952
|
|
|
|
$
|
884
|
|
|
Distribution coverage ratio (e)
|
|
|
1.10x
|
|
|
1.03x
|
|
|
1.31x
|
|
|
0.98x
|
(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, unrealized gains and losses on commodity risk
management activities and deferred income taxes. 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 to April 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 recent periods and has revised amounts in prior
periods to be consistent with the Partnership’s updated calculation of
this measure.
Following is a summary of these changes:
-
Previously, the Partnership’s calculation of Distributable Cash Flow
reflected the impact of amortization included in interest expense.
Such amortization includes amortization of deferred financing costs,
premiums or discounts on the issuance of long-term debt, and fair
value adjustments on long-term debt assumed in acquisitions. The
Partnership revised its calculation of Distributable Cash Flow to
exclude the impact of such amortization. Management believes that this
revised calculation is more useful and more accurately reflects the
cash flows of the Partnership that are available for payment of
distributions.
-
Previously, the Partnership’s calculation of Distributable Cash Flow
reflected income tax expense from continuing operations, which
included current and deferred income taxes. Current income tax expense
represents the estimated taxes that will be payable or refundable for
the current period, while deferred income taxes represent the
estimated tax effects of tax carryforwards and the reversal of
temporary differences between financial reporting carrying amounts and
the tax basis of existing assets and liabilities. The Partnership
revised its calculation of Distributable Cash Flow to reflect current
income tax expense from continuing operations, rather than total
income tax expense from continuing operations. Management believes
that this revised calculation is more useful and more accurately
reflects the cash flows of the Partnership that are available for
payment of distributions.
Distributable Cash Flow previously reported for the three and six months
ended June 30, 2013 has been revised to reflect these changes.
(b) Cash distributions to Regency in respect of Lone Star consist of
cash distributions paid in arrears on a quarterly basis. These amounts
are in respect of the periods then ended, including payments made in
arrears subsequent to period end.
(c) Distributions on the Class H Units for the three and six months
ended June 30, 2014 were calculated as follows:
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
June 30, 2014
|
|
|
June 30, 2014
|
|
General partner distributions and incentive distributions from
Sunoco Logistics
|
|
|
$
|
43
|
|
|
|
$
|
82
|
|
|
|
|
|
|
50.05
|
%
|
|
|
|
50.05
|
%
|
|
Share of Sunoco Logistics general partner and incentive
distributions payable to Class H Unitholder
|
|
|
|
21
|
|
|
|
|
41
|
|
|
Incremental distributions payable to Class H Unitholder
|
|
|
|
32
|
|
|
|
|
62
|
|
|
Total Class H Unit distributions
|
|
|
$
|
53
|
|
|
|
$
|
103
|
|
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) For the six months ended June 30, 2013, net distributions to the
partners of ETP excluded distributions paid in respect of the quarter
ended March 31, 2013 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 received
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) 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
June 30,
|
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
Change
|
|
Segment Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
Midstream
|
|
|
$
|
157
|
|
|
$
|
127
|
|
|
$
|
30
|
|
|
NGL transportation and services
|
|
|
|
141
|
|
|
|
77
|
|
|
|
64
|
|
|
Interstate transportation and storage
|
|
|
|
265
|
|
|
|
361
|
|
|
|
(96
|
)
|
|
Intrastate transportation and storage
|
|
|
|
110
|
|
|
|
112
|
|
|
|
(2
|
)
|
|
Investment in Sunoco Logistics
|
|
|
|
280
|
|
|
|
244
|
|
|
|
36
|
|
|
Retail marketing
|
|
|
|
136
|
|
|
|
97
|
|
|
|
39
|
|
|
All other
|
|
|
|
80
|
|
|
|
51
|
|
|
|
29
|
|
|
|
|
|
$
|
1,169
|
|
|
$
|
1,069
|
|
|
$
|
100
|
|
|
|
|
|
|
Midstream
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
|
2013
|
|
|
|
Change
|
|
Gathered volumes (MMBtu/d):
|
|
|
|
|
|
|
|
|
|
|
ETP legacy assets
|
|
|
|
2,851,414
|
|
|
|
|
2,531,076
|
|
|
|
|
320,338
|
|
|
Southern Union gathering and processing(1)
|
|
|
|
—
|
|
|
|
|
529,327
|
|
|
|
|
(529,327
|
)
|
|
NGLs produced (Bbls/d):
|
|
|
|
|
|
|
|
|
|
|
ETP legacy assets
|
|
|
|
163,780
|
|
|
|
|
112,951
|
|
|
|
|
50,829
|
|
|
Southern Union gathering and processing(1)
|
|
|
|
—
|
|
|
|
|
43,777
|
|
|
|
|
(43,777
|
)
|
|
Equity NGLs produced (Bbls/d):
|
|
|
|
|
|
|
|
|
|
|
ETP legacy assets
|
|
|
|
14,968
|
|
|
|
|
14,854
|
|
|
|
|
114
|
|
|
Southern Union gathering and processing(1)
|
|
|
|
—
|
|
|
|
|
8,216
|
|
|
|
|
(8,216
|
)
|
|
Revenues
|
|
|
$
|
720
|
|
|
|
$
|
577
|
|
|
|
$
|
143
|
|
|
Cost of products sold
|
|
|
|
530
|
|
|
|
|
402
|
|
|
|
|
128
|
|
|
Gross margin
|
|
|
|
190
|
|
|
|
|
175
|
|
|
|
|
15
|
|
|
Unrealized gains on commodity risk management activities
|
|
|
|
—
|
|
|
|
|
(2
|
)
|
|
|
|
2
|
|
|
Operating expenses, excluding non-cash compensation expense
|
|
|
|
(29
|
)
|
|
|
|
(41
|
)
|
|
|
|
12
|
|
|
Selling, general and administrative expenses, excluding non-cash
compensation expense
|
|
|
|
(4
|
)
|
|
|
|
(5
|
)
|
|
|
|
1
|
|
|
Segment Adjusted EBITDA
|
|
|
$
|
157
|
|
|
|
$
|
127
|
|
|
|
$
|
30
|
|
(1) Southern Union contributed its gathering and processing
operations to Regency, resulting in the deconsolidation of those
operations on April 30, 2013.
For the ETP legacy assets, the increases in gathered volumes, NGLs
produced and equity NGLs produced during the three months ended June 30,
2014 compared to the same period last year were primarily due to
increased production by our customers in the Eagle Ford Shale and a 400
MMcf/d increase in processing capacity. Volumes from Southern Union’s
gathering and processing operations reflected the deconsolidation of
those operations on April 30, 2013.
Segment Adjusted EBITDA for the midstream segment reflected an increase
in gross margin as follows:
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
|
2013
|
|
|
|
Change
|
|
Gathering and processing fee-based revenues
|
|
|
$
|
134
|
|
|
|
$
|
114
|
|
|
|
$
|
20
|
|
|
Non fee-based contracts and processing
|
|
|
|
59
|
|
|
|
|
64
|
|
|
|
|
(5
|
)
|
|
Other
|
|
|
|
(3
|
)
|
|
|
|
(3
|
)
|
|
|
|
—
|
|
|
Total gross margin
|
|
|
$
|
190
|
|
|
|
$
|
175
|
|
|
|
$
|
15
|
|
Midstream gross margin for the three months ended June 30, 2014 compared
to the same period last year reflected increases in fee-based revenues
of $20 million primarily due to increased production in the Eagle Ford
Shale propelled mainly by a 400 MMcf/d increase in processing capacity
from the same period last year. Excluding a $13 million reduction from
the deconsolidation of Southern Union’s gathering and processing
operations, non fee-based gross margin increased by $8 million due to
operational efficiencies and a slightly better commodity price
environment.
Segment Adjusted EBITDA for the midstream segment also was favorably
impacted by lower operating expenses primarily due to the
deconsolidation of Southern Union’s gathering and processing operations.
|
|
|
|
|
NGL Transportation and Services
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
|
2013
|
|
|
|
Change
|
|
NGL transportation volumes (Bbls/d)
|
|
|
|
367,564
|
|
|
|
|
274,022
|
|
|
|
|
93,542
|
|
|
NGL fractionation volumes (Bbls/d)
|
|
|
|
191,255
|
|
|
|
|
98,915
|
|
|
|
|
92,340
|
|
|
Revenues
|
|
|
$
|
903
|
|
|
|
$
|
438
|
|
|
|
$
|
465
|
|
|
Cost of products sold
|
|
|
|
731
|
|
|
|
|
329
|
|
|
|
|
402
|
|
|
Gross margin
|
|
|
|
172
|
|
|
|
|
109
|
|
|
|
|
63
|
|
|
Unrealized gains on commodity risk management activities
|
|
|
|
—
|
|
|
|
|
(2
|
)
|
|
|
|
2
|
|
|
Operating expenses, excluding non-cash compensation expense
|
|
|
|
(29
|
)
|
|
|
|
(28
|
)
|
|
|
|
(1
|
)
|
|
Selling, general and administrative expenses, excluding non-cash
compensation expense
|
|
|
|
(4
|
)
|
|
|
|
(3
|
)
|
|
|
|
(1
|
)
|
|
Adjusted EBITDA related to unconsolidated affiliates
|
|
|
|
2
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
Segment Adjusted EBITDA
|
|
|
$
|
141
|
|
|
|
$
|
77
|
|
|
|
$
|
64
|
|
The increase in NGL transportation volumes for the three months ended
June 30, 2014 compared to the same period last year reflected an
increase of approximately 55,600 Bbls/d in volumes transported out of
west Texas and the Eagle Ford Shale on our Lone Star NGL pipeline
system. The remainder of the increase in volumes transported was
primarily due to increases in NGL production from our Jackson processing
plant and volumes destined for Mont Belvieu, Texas via our Justice
pipeline. Average daily fractionated volumes increased for the three
months ended June 30, 2014 compared to the same period last year due to
the recent commissioning of our second 100,000 Bbls/d fractionator at
Mont Belvieu, Texas in October 2013. These volumes include all physical
and contractual volumes where we collected a fractionation fee.
Segment Adjusted EBITDA for the NGL transportation and services segment
reflected an increase in gross margin as follows:
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
Change
|
|
Transportation margin
|
|
|
$
|
69
|
|
|
$
|
45
|
|
|
$
|
24
|
|
Processing and fractionation margin
|
|
|
|
57
|
|
|
|
30
|
|
|
|
27
|
|
Storage margin
|
|
|
|
37
|
|
|
|
34
|
|
|
|
3
|
|
Other margin
|
|
|
|
9
|
|
|
|
—
|
|
|
|
9
|
|
Total gross margin
|
|
|
$
|
172
|
|
|
$
|
109
|
|
|
$
|
63
|
Transportation margin increased as a result of higher volumes
transported from west Texas and the Eagle Ford Shale on our Lone Star
pipeline system. This resulted in increased margin of $14 million for
the three months ended June 30, 2014. An increase in NGL production, as
discussed above, accounted for the remainder of the increase in
transportation margin.
Processing and fractionation margin increased primarily due to higher
volumes resulting from the startup of Lone Star’s second fractionator at
Mont Belvieu, Texas in October 2013.
Other margin increased as a result of increased commercial optimization
activities related to our fractionators, primarily due to the recent
commissioning of the second fractionator at Mont Belvieu.
|
|
|
|
|
Interstate Transportation and Storage
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
|
2013
|
|
|
|
Change
|
|
Natural gas transported (MMBtu/d)
|
|
|
|
5,594,099
|
|
|
|
|
6,204,788
|
|
|
|
|
(610,689
|
)
|
|
Natural gas sold (MMBtu/d)
|
|
|
|
15,733
|
|
|
|
|
16,795
|
|
|
|
|
(1,062
|
)
|
|
Revenues
|
|
|
$
|
249
|
|
|
|
$
|
357
|
|
|
|
$
|
(108
|
)
|
|
Operating expenses, excluding non-cash compensation, amortization
and accretion expenses
|
|
|
|
(67
|
)
|
|
|
|
(75
|
)
|
|
|
|
8
|
|
|
Selling, general and administrative expenses, excluding non-cash
compensation, amortization and accretion expenses
|
|
|
|
(16
|
)
|
|
|
|
(19
|
)
|
|
|
|
3
|
|
|
Adjusted EBITDA related to unconsolidated affiliates
|
|
|
|
99
|
|
|
|
|
98
|
|
|
|
|
1
|
|
|
Segment Adjusted EBITDA
|
|
|
$
|
265
|
|
|
|
$
|
361
|
|
|
|
$
|
(96
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from unconsolidated affiliates
|
|
|
$
|
58
|
|
|
|
$
|
55
|
|
|
|
$
|
3
|
|
For the three months ended June 30, 2014 compared to the same period
last year, transported volumes decreased due to declines in supply on
the Tiger pipeline, lower contracted capacity on the Trunkline pipeline,
and lower contract utilization on the Transwestern pipeline.
Segment Adjusted EBITDA for the interstate transportation and storage
segment decreased for the three months ended June 30, 2014 compared to
the same period last year due to the deconsolidation of Trunkline LNG
effective January 1, 2014, which reduced Segment Adjusted EBITDA by $47
million, and the recognition in the second quarter of 2013 of
$52 million received in connection with the buyout of a customer
contract.
|
|
|
|
|
Intrastate Transportation and Storage
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
|
2013
|
|
|
|
Change
|
|
Natural gas transported (MMBtu/d)
|
|
|
|
9,069,215
|
|
|
|
|
9,654,524
|
|
|
|
|
(585,309
|
)
|
|
Revenues
|
|
|
$
|
712
|
|
|
|
$
|
623
|
|
|
|
$
|
89
|
|
|
Cost of products sold
|
|
|
|
551
|
|
|
|
|
447
|
|
|
|
|
104
|
|
|
Gross margin
|
|
|
|
161
|
|
|
|
|
176
|
|
|
|
|
(15
|
)
|
|
Unrealized gains on commodity risk management activities
|
|
|
|
(3
|
)
|
|
|
|
(12
|
)
|
|
|
|
9
|
|
|
Operating expenses, excluding non-cash compensation expense
|
|
|
|
(43
|
)
|
|
|
|
(47
|
)
|
|
|
|
4
|
|
|
Selling, general and administrative expenses, excluding non-cash
compensation expense
|
|
|
|
(5
|
)
|
|
|
|
(5
|
)
|
|
|
|
—
|
|
|
Segment Adjusted EBITDA
|
|
|
$
|
110
|
|
|
|
$
|
112
|
|
|
|
$
|
(2
|
)
|
Transported volumes decreased for the three months ended June 30, 2014
compared to the same period last year primarily due to the reduction of
volumes under certain long-term transportation contracts offset by
increased volumes due to a more favorable pricing environment.
Segment Adjusted EBITDA for the intrastate transportation and storage
segment decreased primarily due to a decrease in margin from lower
transportation fees as a result of the reduction of volumes under
certain long-term contracts. In addition, storage margin decreased due
to a less favorable storage environment leading to a decline in the
spreads between the spot and forward prices on natural gas we own in the
Bammel storage facility.
|
|
|
|
|
Investment in Sunoco Logistics
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
|
2013
|
|
|
|
Change
|
|
Revenues
|
|
|
$
|
4,821
|
|
|
|
$
|
4,311
|
|
|
|
$
|
510
|
|
Cost of products sold
|
|
|
|
4,517
|
|
|
|
|
4,023
|
|
|
|
|
494
|
|
Gross margin
|
|
|
|
304
|
|
|
|
|
288
|
|
|
|
|
16
|
|
Unrealized (gains) losses on commodity risk management activities
|
|
|
|
8
|
|
|
|
|
(1
|
)
|
|
|
|
9
|
|
Operating expenses, excluding non-cash compensation expense
|
|
|
|
(21
|
)
|
|
|
|
(25
|
)
|
|
|
|
4
|
|
Selling, general and administrative expenses, excluding non-cash
compensation expense
|
|
|
|
(25
|
)
|
|
|
|
(29
|
)
|
|
|
|
4
|
|
Adjusted EBITDA related to unconsolidated affiliates
|
|
|
|
14
|
|
|
|
|
11
|
|
|
|
|
3
|
|
Segment Adjusted EBITDA
|
|
|
$
|
280
|
|
|
|
$
|
244
|
|
|
|
$
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from unconsolidated affiliates
|
|
|
$
|
4
|
|
|
|
$
|
4
|
|
|
|
$
|
—
|
For the three months ended June 30, 2014 compared to the same period
last year, Segment Adjusted EBITDA related to Sunoco Logistics increased
due to the net impacts of the following:
-
An increase of $16 million from crude oil pipelines, primarily due to
higher throughput;
-
An increase of $27 million from terminal facilities, primarily due to
higher volumes and increased margins from refined products acquisition
and marketing activities; and
-
An increase of $10 million from refined products pipelines, primarily
due to operating results from Sunoco Logistics’ Mariner West project;
partially offset by
-
A decrease of $17 million from crude oil acquisition and marketing
activities, primarily due to lower crude margins, the impact from
which was partially offset by $5 million from increased crude volumes
resulting from higher market demand and expansion in the crude oil
trucking fleet.
|
|
|
|
|
Retail Marketing
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
|
2013
|
|
|
|
Change
|
|
Total retail gasoline outlets, end of period
|
|
|
|
5,152
|
|
|
|
|
4,974
|
|
|
|
|
178
|
|
|
Total company-operated outlets, end of period
|
|
|
|
568
|
|
|
|
|
440
|
|
|
|
|
128
|
|
|
Gasoline and diesel throughput per company-operated site
(gallons/month)
|
|
|
|
197,824
|
|
|
|
|
204,320
|
|
|
|
|
(6,496
|
)
|
|
Revenues
|
|
|
$
|
5,568
|
|
|
|
$
|
5,291
|
|
|
|
$
|
277
|
|
|
Cost of products sold
|
|
|
|
5,260
|
|
|
|
|
5,087
|
|
|
|
|
173
|
|
|
Gross margin
|
|
|
|
308
|
|
|
|
|
204
|
|
|
|
|
104
|
|
|
Unrealized gains on commodity risk management activities
|
|
|
|
(1
|
)
|
|
|
|
—
|
|
|
|
|
(1
|
)
|
|
Operating expenses, excluding non-cash compensation expense
|
|
|
|
(124
|
)
|
|
|
|
(106
|
)
|
|
|
|
(18
|
)
|
|
Selling, general and administrative expenses, excluding non-cash
compensation expense
|
|
|
|
(28
|
)
|
|
|
|
(23
|
)
|
|
|
|
(5
|
)
|
|
LIFO valuation adjustment
|
|
|
|
(20
|
)
|
|
|
|
22
|
|
|
|
|
(42
|
)
|
|
Adjusted EBITDA related to unconsolidated affiliates
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
—
|
|
|
Other
|
|
|
|
—
|
|
|
|
|
(1
|
)
|
|
|
|
1
|
|
|
Segment Adjusted EBITDA
|
|
|
$
|
136
|
|
|
|
$
|
97
|
|
|
|
$
|
39
|
|
Segment Adjusted EBITDA for the retail marketing segment increased for
the three months ended June 30, 2014 compared to the same period last
year primarily due to recent acquisitions and a favorable impact from
increased fuel margins.
|
|
|
|
|
All Other
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
|
2013
|
|
|
|
Change
|
|
Revenues
|
|
|
$
|
721
|
|
|
|
$
|
485
|
|
|
|
$
|
236
|
|
|
Cost of products sold
|
|
|
|
710
|
|
|
|
|
466
|
|
|
|
|
244
|
|
|
Gross margin
|
|
|
|
11
|
|
|
|
|
19
|
|
|
|
|
(8
|
)
|
|
Unrealized gains on commodity risk management activities
|
|
|
|
(3
|
)
|
|
|
|
(1
|
)
|
|
|
|
(2
|
)
|
|
Operating expenses, excluding non-cash compensation expense
|
|
|
|
3
|
|
|
|
|
(5
|
)
|
|
|
|
8
|
|
|
Selling, general and administrative expenses, excluding non-cash
compensation expense
|
|
|
|
(2
|
)
|
|
|
|
(20
|
)
|
|
|
|
18
|
|
|
Adjusted EBITDA related to discontinued operations
|
|
|
|
—
|
|
|
|
|
23
|
|
|
|
|
(23
|
)
|
|
Adjusted EBITDA related to unconsolidated affiliates
|
|
|
|
55
|
|
|
|
|
49
|
|
|
|
|
6
|
|
|
Other
|
|
|
|
19
|
|
|
|
|
(11
|
)
|
|
|
|
30
|
|
|
Elimination
|
|
|
|
(3
|
)
|
|
|
|
(3
|
)
|
|
|
|
—
|
|
|
Segment Adjusted EBITDA
|
|
|
$
|
80
|
|
|
|
$
|
51
|
|
|
|
$
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from unconsolidated affiliates
|
|
|
$
|
28
|
|
|
|
$
|
40
|
|
|
|
$
|
(12
|
)
|
Amounts reflected in our all other segment 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 in Southern Union Gathering Company, LLC to Regency on
April 30, 2013; and
-
our natural gas marketing operations.
For the three months ended June 30, 2014 compared to the same period
last year, Segment Adjusted EBITDA increased due to the net impact of
the following:
-
an increase of $19 million in management fees, as further described
below;
-
a favorable impact of approximately $10 million due to costs
associated with certain Sunoco activities that were included in the
all other Segment Adjusted EBITDA in the prior year;
-
favorable results from our commodity marketing business of $5 million;
-
an increase of $6 million in Adjusted EBITDA related to unconsolidated
affiliates, primarily due to higher earnings from our investments in
PES and Regency, including the impact of only recording a partial
period of earnings from Regency beginning on April 30, 2013;
-
a refund of insurance premiums of $6 million included in the three
months ended June 30, 2014;
-
Southern Union corporate expenses of $3 million that were no longer
included in the all other segment subsequent to the merger of Southern
Union, PEPL Holdings and Panhandle in January 2014; offset by
-
Adjusted EBITDA related to discontinued operations of $23 million in
the prior period related to Southern Union’s local distribution
operations that were sold in 2013.
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 December 31, 2014 and 2015. These fees were
reflected in “Other” in the “All other” segment and for the three months
ended June 30, 2014 were reflected as an offset to operating expenses of
$7 million and selling, general and administrative expenses of
$12 million in the consolidated statements of operations.
The decrease in cash distributions from unconsolidated affiliates was
primarily due to a decrease in cash distributions from our ownership in
AmeriGas of $13 million as a result of selling a portion of these
interests in 2013 and 2014.
|
|
|
|
|
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 six months ended June 30, 2014:
|
|
|
|
Growth
|
|
|
Maintenance
|
|
|
Total
|
|
Midstream
|
|
|
$
|
297
|
|
|
$
|
9
|
|
|
|
$
|
306
|
|
|
NGL transportation and services(1)
|
|
|
|
175
|
|
|
|
8
|
|
|
|
|
183
|
|
|
Interstate transportation and storage
|
|
|
|
20
|
|
|
|
27
|
|
|
|
|
47
|
|
|
Intrastate transportation and storage
|
|
|
|
67
|
|
|
|
14
|
|
|
|
|
81
|
|
|
Investment in Sunoco Logistics
|
|
|
|
1,092
|
|
|
|
31
|
|
|
|
|
1,123
|
|
|
Retail marketing
|
|
|
|
34
|
|
|
|
18
|
|
|
|
|
52
|
|
|
All other (including eliminations)
|
|
|
|
5
|
|
|
|
(9
|
)
|
|
|
|
(4
|
)
|
|
Total capital expenditures
|
|
|
$
|
1,690
|
|
|
$
|
98
|
|
|
|
$
|
1,788
|
|
(1) Includes 100% of Lone Star’s capital expenditures, a
portion of which are funded through capital contributions from Regency
related to its 30% interest in Lone Star.
We currently expect capital expenditures (net of contributions in aid of
construction costs) for the full year 2014 to be within the following
ranges:
|
|
|
|
Growth
|
|
|
Maintenance
|
|
|
|
|
Low
|
|
|
High
|
|
|
Low
|
|
|
High
|
|
Midstream
|
|
|
$
|
600
|
|
|
$
|
650
|
|
|
$
|
10
|
|
|
$
|
15
|
|
NGL transportation and services(1)
|
|
|
|
360
|
|
|
|
380
|
|
|
|
20
|
|
|
|
25
|
|
Interstate transportation and storage
|
|
|
|
80
|
|
|
|
100
|
|
|
|
100
|
|
|
|
110
|
|
Intrastate transportation and storage
|
|
|
|
150
|
|
|
|
160
|
|
|
|
25
|
|
|
|
30
|
|
Investment in Sunoco Logistics
|
|
|
|
1,900
|
|
|
|
2,100
|
|
|
|
65
|
|
|
|
75
|
|
Retail marketing
|
|
|
|
130
|
|
|
|
150
|
|
|
|
50
|
|
|
|
60
|
|
All other (including eliminations)
|
|
|
|
110
|
|
|
|
120
|
|
|
|
10
|
|
|
|
20
|
|
Total capital expenditures
|
|
|
$
|
3,330
|
|
|
$
|
3,660
|
|
|
$
|
280
|
|
|
$
|
335
|
(1) Includes 100% of Lone Star’s capital expenditures. We
expect to receive capital contributions from Regency related to its 30%
interest in Lone Star of between $85 million and $110 million.
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SUPPLEMENTAL INFORMATION ON
UNCONSOLIDATED AFFILIATES
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(In millions)
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(unaudited)
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|
Three Months Ended
June 30,
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2014
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2013
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Change
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Equity in earnings (losses) of unconsolidated affiliates:
|
|
|
|
|
|
|
|
|
|
|
AmeriGas
|
|
|
$
|
(8
|
)
|
|
|
$
|
(20
|
)
|
|
|
$
|
12
|
|
|
Citrus
|
|
|
|
26
|
|
|
|
|
24
|
|
|
|
|
2
|
|
|
FEP
|
|
|
|
13
|
|
|
|
|
14
|
|
|
|
|
(1
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)
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|
Regency
|
|
|
|
1
|
|
|
|
|
2
|
|
|
|
|
(1
|
)
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|
PES
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|
|
|
18
|
|
|
|
|
13
|
|
|
|
|
5
|
|
|
Other
|
|
|
|
7
|
|
|
|
|
4
|
|
|
|
|
3
|
|
|
Total equity in earnings of unconsolidated affiliates
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|
|
$
|
57
|
|
|
|
$
|
37
|
|
|
|
$
|
20
|
|
|
|
|
|
|
|
|
|
|
|
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Proportionate share of interest, depreciation, amortization,
non-cash items and taxes:
|
|
|
|
|
|
|
|
|
|
|
AmeriGas
|
|
|
$
|
13
|
|
|
|
$
|
36
|
|
|
|
$
|
(23
|
)
|
|
Citrus
|
|
|
|
55
|
|
|
|
|
55
|
|
|
|
|
—
|
|
|
FEP
|
|
|
|
5
|
|
|
|
|
5
|
|
|
|
|
—
|
|
|
Regency
|
|
|
|
24
|
|
|
|
|
14
|
|
|
|
|
10
|
|
|
PES
|
|
|
|
7
|
|
|
|
|
5
|
|
|
|
|
2
|
|
|
Other
|
|
|
|
9
|
|
|
|
|
6
|
|
|
|
|
3
|
|
|
Total proportionate share of interest, depreciation, amortization,
non-cash items and taxes
|
|
|
$
|
113
|
|
|
|
$
|
121
|
|
|
|
$
|
(8
|
)
|
|
|
|
|
|
|
|
|
|
|
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|
Adjusted EBITDA related to unconsolidated affiliates:
|
|
|
|
|
|
|
|
|
|
|
AmeriGas
|
|
|
$
|
5
|
|
|
|
$
|
16
|
|
|
|
$
|
(11
|
)
|
|
Citrus
|
|
|
|
81
|
|
|
|
|
79
|
|
|
|
|
2
|
|
|
FEP
|
|
|
|
18
|
|
|
|
|
19
|
|
|
|
|
(1
|
)
|
|
Regency
|
|
|
|
25
|
|
|
|
|
16
|
|
|
|
|
9
|
|
|
PES
|
|
|
|
25
|
|
|
|
|
18
|
|
|
|
|
7
|
|
|
Other
|
|
|
|
16
|
|
|
|
|
10
|
|
|
|
|
6
|
|
|
Total Adjusted EBITDA related to unconsolidated affiliates
|
|
|
$
|
170
|
|
|
|
$
|
158
|
|
|
|
$
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions received from unconsolidated affiliates:
|
|
|
|
|
|
|
|
|
|
|
AmeriGas
|
|
|
$
|
11
|
|
|
|
$
|
24
|
|
|
|
$
|
(13
|
)
|
|
Citrus
|
|
|
|
41
|
|
|
|
|
39
|
|
|
|
|
2
|
|
|
FEP
|
|
|
|
16
|
|
|
|
|
16
|
|
|
|
|
—
|
|
|
Regency
|
|
|
|
15
|
|
|
|
|
15
|
|
|
|
|
—
|
|
|
Other
|
|
|
|
9
|
|
|
|
|
8
|
|
|
|
|
1
|
|
|
Total distributions received from unconsolidated affiliates
|
|
|
$
|
92
|
|
|
|
$
|
102
|
|
|
|
$
|
(10
|
)
|
Copyright Business Wire 2014