ETP
$34.45
Energy Transfer Partners
$1.23
3.70%
Earnings Details
3rd Quarter September 2016
Wednesday, November 09, 2016 4:33:01 PM
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Summary

Energy Transfer Partners Misses

Energy Transfer Partners (ETP) reported 3rd Quarter September 2016 earnings of $0.14 per share on revenue of $5.5 billion. The consensus earnings estimate was $0.26 per share. The Earnings Whisper number was $0.27 per share. Revenue fell 16.2% compared to the same quarter a year ago.

Energy Transfer Partners LP is engaged in natural gas operations. Its activities include intrastate transportation & storage, interstate transportation & storage, midstream services, retail marketing and among others.

Results
Reported Earnings
$0.14
Earnings Whisper
$0.27
Consensus Estimate
$0.26
Reported Revenue
$5.53 Bil
Revenue Estimate
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Energy Transfer Equity Reports Third Quarter Results

Energy Transfer Equity, L.P. (ETE) ("ETE" or the "Partnership") today reported financial results for the quarter ended September 30, 2016.

ETE’s net income attributable to partners was $209 million for the three months ended September 30, 2016 compared to $293 million for the three months ended September 30, 2015. Distributable Cash Flow, as adjusted, for the three months ended September 30, 2016 was $281 million compared to $325 million for the three months ended September 30, 2015. The decreases in net income attributable to partners and Distributable Cash Flow, as adjusted, were primarily driven by an $85 million reduction in incentive distributions from ETP. As previously reported, ETE has agreed to a reduction in incentive distributions from ETP in the aggregate amount of $720 million over a period of seven quarters, beginning the quarter ended June 30, 2016.

The Partnership’s recent key accomplishments and other developments include the following:

In October 2016, ETE announced a $0.285 distribution per ETE common unit for the quarter ended September 30, 2016, or $1.14 per unit on an annualized basis.

As of September 30, 2016, ETE’s $1.5 billion revolving credit facility had $885 million of outstanding borrowings and its leverage ratio, as defined by the credit agreement, was 3.08x.

The Partnership has scheduled a conference call for 8:00 a.m. Central Time, Thursday, November 10, 2016 to discuss its third quarter 2016 results. The conference call will be broadcast live via an internet webcast, which can be accessed through www.energytransfer.com and will also be available for replay on the Partnership’s website for a limited time.

The Partnership’s principal sources of cash flow are derived from distributions related to its direct and indirect investments in the limited and general partner interests in Energy Transfer Partners, L.P. ("ETP"), including 100% of ETP’s incentive distribution rights, ETP Common Units, ETP Class I Units, and, through ETP Class H Units, which track 90% of the underlying economics of the general partner interest and IDRs of Sunoco Logistics Partners L.P. ("Sunoco Logistics"), distributions related to its investments in the general partner interests in Sunoco Logistics, limited and general partner interest in Sunoco LP, including Sunoco LP Common Units, as well as the Partnership’s ownership of Lake Charles LNG. The Partnership’s primary cash requirements are for general and administrative expenses, debt service requirements and distributions to its partners.

Energy Transfer Equity, L.P. (ETE) is a master limited partnership that owns the general partner and 100% of the incentive distribution rights (IDRs) of Energy Transfer Partners, L.P. (ETP) and Sunoco LP (SUN). ETE also owns approximately 2.6 million ETP common units and approximately 81.0 million ETP Class H Units, which track 90% of the underlying economics of the general partner interest and IDRs of Sunoco Logistics Partners L.P. (SXL). On a consolidated basis, ETE’s family of companies owns and operates 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. website at www.energytransfer.com.

Energy Transfer Partners, L.P. (ETP) is a master limited partnership that owns and operates one of the largest and most diversified portfolios of energy assets in the United States. ETP’s subsidiaries include Panhandle Eastern Pipe Line Company, LP (the successor of Southern Union Company) and Lone Star NGL LLC, which owns and operates natural gas liquids storage, fractionation and transportation assets. In total, ETP currently owns and operates more than 62,500 miles of natural gas and natural gas liquids pipelines. ETP also owns the general partner, 100% of the incentive distribution rights, and approximately 67.1 million common units of Sunoco Logistics Partners L.P. (SXL), which operates a geographically diverse portfolio of pipelines, terminalling and acquisition and marketing assets. ETP recently acquired the general partner, 100% of the incentive distribution rights, and an approximate 65% limited partnership interest in PennTex Midstream Partners, LP (PTXP), which is a growth-oriented master limited partnership that provides natural gas gathering and processing and residue gas and natural gas liquids transportation services to producers in northern Louisiana. ETP’s general partner is owned by Energy Transfer Equity, L.P. (ETE). For more information, visit the Energy Transfer Partners, L.P. website at www.energytransfer.com.

Sunoco Logistics Partners L.P. (SXL) is a master limited partnership that owns and operates a logistics business consisting of a geographically diverse portfolio of complementary pipeline, terminalling and acquisition and marketing assets which are used to facilitate the purchase and sale of crude oil, natural gas liquids, and refined products. SXL’s general partner is a consolidated subsidiary of Energy Transfer Partners, L.P. (ETP). For more information, visit the Sunoco Logistics Partners L.P. website at www.sunocologistics.com.

Sunoco LP (SUN) is a master limited partnership that operates approximately 1,345 retail fuel sites and convenience stores (including APlus, Stripes, Aloha Island Mart and Tigermarket brands) and distributes motor fuel to convenience stores, independent dealers, commercial customers and distributors located in 30 states at approximately 6,900 sites. SUN’s parent -- Energy Transfer Equity, L.P. (ETE) -- owns SUN’s general partner and incentive distribution rights. For more information, visit the Sunoco LP website at www.sunocolp.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 EQUITY, L.P. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In
millions)
(unaudited)
September 30, 2016
December 31, 2015
ASSETS
Current assets
$
6,467
$
5,410
Property, plant and equipment, net
53,565
48,683
Advances to and investments in unconsolidated affiliates
3,104
3,462
Non-current derivative assets
11
--
Other non-current assets, net
776
730
Intangible assets, net
5,318
5,431
Goodwill
7,598
7,473
Total assets
$ 76,839
$
71,189
LIABILITIES AND EQUITY
Current liabilities
$
7,042
$
4,910
Long-term debt, less current maturities
40,020
36,837
Long-term notes payable to related company
83
--
Non-current derivative liabilities
160
137
Deferred income taxes
5,209
4,590
Other non-current liabilities
1,087
1,069
Commitments and contingencies
Preferred units of subsidiary
33
33
Redeemable noncontrolling interests
15
15
Equity:
Total partners’ deficit
(1,703 )
(932 )
Noncontrolling interest
24,893
24,530
Total equity
23,190
23,598
Total liabilities and equity
$ 76,839
$
71,189
ENERGY TRANSFER EQUITY, L.P. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(In millions, except per unit data)
(unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2016
2015
2016
2015
REVENUES
$
9,675
$
10,616
$
26,701
$
32,590
COSTS AND EXPENSES:
Cost of products sold
7,448
8,581
20,124
26,406
Operating expenses
689
706
2,018
1,997
Depreciation, depletion and amortization
595
524
1,745
1,531
Selling, general and administrative
246
155
589
493
Total costs and expenses
8,978
9,966
24,476
30,427
OPERATING INCOME
697
650
2,225
2,163
OTHER INCOME (EXPENSE):
Interest expense, net of interest capitalized
(481 )
(442 )
(1,358 )
(1,221 )
Equity in earnings of unconsolidated affiliates
49
110
205
284
Impairment of investment in affiliate
(308 )
--
(308 )
--
Losses on extinguishments of debt
--
(10 )
--
(43 )
Losses on interest rate derivatives
(28 )
(64 )
(179 )
(14 )
Other, net
54
31
94
55
INCOME BEFORE INCOME TAX EXPENSE (BENEFIT)
(17 )
275
679
1,224
Income tax expense (benefit)
(58 )
37
(122 )
(7 )
NET INCOME
41
238
801
1,231
Less: Net income (loss) attributable to noncontrolling interest
(168 )
(55 )
39
356
NET INCOME ATTRIBUTABLE TO PARTNERS
209
293
762
875
General Partner’s interest in net income
--
1
2
2
Convertible Unitholders’ interest in income
2
--
3
--
Class D Unitholder’s interest in net income
--
1
--
2
Limited Partners’ interest in net income
$
207
$
291
$
757
$
871
NET INCOME PER LIMITED PARTNER UNIT:
Basic
$
0.20
$
0.28
$
0.72
$
0.81
Diluted
$
0.19
$
0.28
$
0.71
$
0.81
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING:
Basic
1,045.5
1,052.5
1,045.0
1,068.9
Diluted
1,100.7
1,054.1
1,071.3
1,070.5
ENERGY TRANSFER EQUITY, L.P.
SUPPLEMENTAL
INFORMATION
(Dollars in millions)
(unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2016
2015
2016
2015
Cash distributions from ETP associated with:
Limited partner interest
$
3
$
3
$
8
$
51
Class H Units
92
68
263
186
General partner interest
8
8
24
23
Incentive distribution rights
346
320
1,012
937
IDR relinquishments, net of distributions on Class I Units (1)
(127 )
(28 )
(271 )
(83 )
Total cash distributions from ETP
322
371
1,036
1,114
Cash distributions from Sunoco LP (2)
22
8
66
8
Total cash distributions from investments in subsidiaries
344
379
1,102
1,122
Distributable cash flow attributable to Lake Charles LNG:
Revenues
50
54
148
162
Operating expenses
(4 )
(4 )
(13 )
(12 )
Selling, general and administrative expenses
(1 )
(1 )
(2 )
(3 )
Distributable cash flow attributable to Lake Charles LNG
45
49
133
147
Expenses of the Parent Company on a cash basis:
Selling, general and administrative expenses, excluding certain
17
2
72
9
non-cash expenses
Management fee to ETP (3)
24
24
72
72
Interest expense, net of amortization of financing costs, interest
78
78
235
206
income, and realized gains and losses on interest rate swaps
Total Parent Company expenses
119
104
379
287
Cash distributions to be paid to the partners of ETE:
Distributions to be paid to limited partners (4)
$
241
$
296
$
721
$
841
Distributions to be paid to general partner
1
1
2
2
Distributions to be paid to Class D unitholder
--
1
--
2
Total cash distributions to be paid to the partners of ETE
$
242
$
298
$
723
$
845
Common units outstanding -- end of period
1,047.0
1,044.8
1,047.0
1,044.8
_________________
(1)
IDR relinquishments for the three and nine months ended September
30, 2016 include the impact of $85 million and $160 million,
respectively, of incentive distribution reduction with respect to
the second and third quarters 2016 distributions, as agreed to
between ETE and ETP in July 2016.
(2)
Effective July 1, 2015, ETE acquired 100% of the membership
interests of Sunoco GP LLC, the general partner of Sunoco LP, and
all of the IDRs of Sunoco LP from ETP.
(3)
In exchange for management services, ETE has agreed to pay to ETP
fees totaling $95 million per year. For GAAP purposes, ETE has
capitalized fees totaling $3 million for the three months ended
September 30, 2016 and 2015 and $9 million and $10 million for the
nine months ended September 30, 2016 and 2015, respectively.
(4)
Includes distributions of $0.11 per common unit for the three months
ended September 30, 2016, and $0.33 per common unit for the nine
months ended September 30, 2016, to unitholders who elected to
participate in a plan to forgo a portion of their future potential
cash distributions on common units for a period of up to nine fiscal
quarters, commencing with the with distributions for the quarter
ended March 31, 2016, and reinvest those distributions in the
Convertible Units representing limited partner interest in the
Partnership.
SUPPLEMENTAL INFORMATION
RECONCILIATION
OF DISTRIBUTABLE CASH FLOW
(Dollars in millions)
(unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2016
2015
2016
2015
Net income attributable to partners
$
209
$
293
$
762
$
875
Equity in earnings related to investments in ETP and Sunoco LP
(333 )
(365 )
(1,065 )
(1,056 )
Total cash distributions from investments in subsidiaries
344
379
1,102
1,122
Amortization included in interest expense (excluding ETP and Sunoco
3
3
9
7
LP)
Other non-cash (excluding ETP and Sunoco LP)
47
14
48
34
Distributable Cash Flow
270
324
856
982
Transaction-related expenses
11
1
51
5
Bakken Pipeline Transaction -- pro forma interest expense
--
--
--
(6 )
Distributable Cash Flow, as adjusted
$
281
$
325
$
907
$
981
Total cash distributions to be paid to the partners of ETE
$
242
$
298
$
723
$
845
Distribution coverage ratio(1)
1.16 x
1.09 x
1.25 x
1.16 x
_________________
(1)
This press release and accompanying schedules include the
non-generally accepted accounting principle ("non-GAAP") financial
measures of Distributable Cash Flow, Distributable Cash Flow, as
adjusted, and Distributable Cash Flow, as adjusted, per Unit. The
Partnership’s non-GAAP financial measures should not be considered
as alternatives to GAAP financial measures such as net income, cash
flow from operating activities or any other GAAP measure of
liquidity or financial performance.
Distributable Cash Flow and Distributable
Cash Flow, as adjusted. The Partnership defines
Distributable Cash Flow and Distributable Cash Flow, as adjusted,
for a period as cash distributions expected to be received in
respect of such period in connection with the Partnership’s
investments in limited and general partner interests, net of the
Partnership’s cash expenditures for general and administrative
costs and interest expense. The Partnership’s definitions of
Distributable Cash Flow and Distributable Cash Flow, as adjusted,
also include distributable cash flow from Lake Charles LNG to the
Partnership. For Distributable Cash Flow, as adjusted, certain
transaction-related expenses that are included in net income are
excluded.
Distributable Cash Flow is a significant liquidity measure used by
the Partnership’s senior management to compare net cash flows
generated by the Partnership to the distributions the Partnership
expects to pay its unitholders. Due to cash expenses incurred from
time to time in connection with the Partnership’s merger and
acquisition activities and other transactions, Distributable Cash
Flow, as adjusted, is also a significant liquidity measure used by
the Partnership’s senior management to compare net cash flows
generated by the Partnership to the distributions the Partnership
expects to pay its unitholders. Using these measures, the
Partnership’s management can compute the coverage ratio of estimated
cash flows for a period to planned cash distributions for such
period.
Distributable Cash Flow and Distributable Cash Flow, as adjusted,
are also important non-GAAP financial measures for our limited
partners since these indicate to investors whether the Partnership’s
investments are generating cash flows at a level that can sustain or
support an increase in quarterly cash distribution levels. Financial
measures such as Distributable Cash Flow and Distributable Cash
Flow, as adjusted, are quantitative standards used by the investment
community with respect to publicly traded partnerships because the
value of a partnership unit is in part measured by its yield (which
in turn is based on the amount of cash distributions a partnership
can pay to a unitholder). The GAAP measure most directly comparable
to Distributable Cash Flow, and Distributable Cash Flow, as
adjusted, is net income for ETE on a stand-alone basis (the "Parent
Company").
Distributable Cash Flow, as adjusted, per
Unit. The Partnership defines Distributable Cash Flow, as
adjusted, per Unit for a period as the quotient of Distributable
Cash Flow, as adjusted, divided by the weighted average number of
units outstanding. For purposes of this calculation, the number of
units outstanding represents the Partnership’s basic average
common units outstanding plus Class D units outstanding and the
general partner common unit equivalent.
Similar to Distributable Cash Flow, as adjusted, as described above,
Distributable Cash Flow, as adjusted, per Unit is a significant
liquidity measure used by the Partnership’s senior management to
compare net cash flows generated by the Partnership to the
distributions the Partnership expects to pay to its unitholders.
Distribution Coverage Ratio. The
Partnership defines Distribution Coverage Ratio for a period as
Distributable Cash Flow, as adjusted, divided by total cash
distributions expected to be paid to the partners of ETE in
respect of such period.
SUPPLEMENTAL INFORMATION
FINANCIAL STATEMENTS FOR PARENT COMPANY
Following are condensed balance sheets and statements of
operations of the Parent Company on a stand-alone basis.
BALANCE SHEETS
(In millions)
(unaudited)
September 30,
December 31,
2016
2015
ASSETS
Current assets
$
58
$
35
Property, plant and equipment, net
36
20
Advances to and investments in unconsolidated affiliates
5,069
5,764
Intangible assets, net
2
6
Goodwill
9
9
Other non-current assets, net
9
10
Total assets
$
5,183
$
5,844
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities
$
122
$
178
Long-term debt, less current maturities
6,365
6,332
Note payable to related company
396
265
Other non-current liabilities
3
1
Commitments and contingencies
Partners’ capital:
General Partner
(3 )
(2 )
Limited Partners:
Common Unitholders
(1,818 )
(952 )
Class D Units
--
22
Series A Convertible Preferred Units
118
--
Total partners’ deficit
(1,703 )
(932 )
Total liabilities and partners’ deficit
$
5,183
$
5,844
STATEMENTS OF OPERATIONS
(In
millions)
(unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2016
2015
2016
2015
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
$
(75 )
$
(24 )
$
(156 )
$
(81 )
OTHER INCOME (EXPENSE):
Interest expense, net of interest capitalized
(81 )
(81 )
(244 )
(214 )
Equity in earnings of unconsolidated affiliates
367
403
1,166
1,174
Other, net
(2 )
(4 )
(4 )
(3 )
INCOME BEFORE INCOME TAX BENEFIT
209
294
762
876
Income tax benefit
--
1
--
1
NET INCOME
209
293
762
875
General Partner’s interest in net income
--
1
2
2
Convertible Unitholders’ interest in income
2
--
3
--
Class D Unitholder’s interest in net income
--
1
--
2
Limited Partners’ interest in net income
$
207
$
291
$
757
$
871

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SOURCE: Energy Transfer Equity, L.P.

Investor Relations:
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Lyndsay Hannah or Brent Ratliff, 214-981-0795
or
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Cell: 214-498-9272