Energy Transfer LP (NYSE:ET) (“Energy Transfer” or the
“Partnership”) today reported financial results for the quarter and
year ended December 31, 2023.
Energy Transfer reported net income attributable to partners for
the three months ended December 31, 2023 of $1.33 billion, an
increase of $172 million compared to the same period last year. For
the three months ended December 31, 2023, net income per common
unit (basic) was $0.37.
Adjusted EBITDA for the three months ended December 31, 2023 was
$3.60 billion compared to $3.44 billion for the same period last
year, an increase of $165 million.
Distributable Cash Flow attributable to partners, as adjusted,
for the three months ended December 31, 2023 was $2.03 billion
compared to $1.91 billion for the same period last year.
Growth capital expenditures in 2023 were $1.59 billion while
maintenance capital expenditures were $762 million.
2024 Outlook
- Energy Transfer expects its 2024 Adjusted EBITDA to range
between $14.5 billion and $14.8 billion.
- The midpoint of this range represents a 7% increase from 2023
Adjusted EBITDA of $13.7 billion, which was $100 million above the
high end of Energy Transfer 2023 estimates.
- For 2024, the Partnership expects its growth capital
expenditures to range from $2.4 billion to $2.6 billion, including
approximately $300 million of spending that was deferred from
Energy Transfer's previous 2023 growth capital guidance.
Maintenance capital expenditures for 2024 are expected to be
between $835 million and $865 million.
Fourth Quarter 2023 Operational Highlights
- With the addition of new growth projects and acquisitions,
Energy Transfer’s assets continued to reach new milestones during
the fourth quarter of 2023.
- NGL fractionation volumes were up 16%, setting a new
Partnership record.
- NGL transportation volumes were up 10%, setting a new
Partnership record.
- NGL exports were up more than 13%.
- Interstate natural gas transportation volumes were up 5%.
- Midstream gathered volumes increased 5%.
- Crude oil transportation and terminal volumes were up 39% and
16%, respectively.
Fourth Quarter 2023 Strategic Highlights
- In November 2023, Energy Transfer completed its previously
announced merger with Crestwood Equity Partners LP (“Crestwood”)
and integration of the combined operations is ongoing. The merger
is now expected to generate $80 million of annual cost synergies by
2026 with $65 million in 2024, before additional anticipated
benefits from financial and commercial synergies.
- In November 2023, Energy Transfer announced its entry into a
non-binding Heads of Agreement (“HOA”) with TotalEnergies related
to term crude oil offtake from its proposed Blue Marlin Offshore
Port for four million barrels per month.
Financial Highlights
- In January 2024, Energy Transfer announced a quarterly cash
distribution of $0.3150 per common unit ($1.26 annualized) for the
quarter ended December 31, 2023, which is an increase of 3.3%
compared to the fourth quarter of 2022.
- In January 2024, the Partnership issued $1.25 billion aggregate
principal amount of 5.55% senior notes due 2034, $1.75 billion
aggregate principal amount of 5.95% senior notes due 2054 and $800
million aggregate principal amount of 8.00% fixed-to-fixed reset
rate junior subordinated notes due 2054. The Partnership used the
net proceeds to refinance existing indebtedness, to redeem certain
of its outstanding preferred units (as detailed below) and for
general partnership purposes.
- In February 2024, the Partnership redeemed all of its
outstanding Series C preferred units and Series D preferred units.
The Partnership also intends to redeem all of its outstanding
Series E preferred units in May 2024.
- As of December 31, 2023, the Partnership’s revolving credit
facility had an aggregate $3.56 billion of available borrowing
capacity.
- For the three months ended December 31, 2023, the Partnership
invested approximately $379 million on growth capital
expenditures.
Energy Transfer benefits from a portfolio of assets with
exceptional product and geographic diversity. The Partnership’s
multiple segments generate high-quality, balanced earnings with no
single segment contributing more than one-third of the
Partnership’s consolidated Adjusted EBITDA for the three months or
full year ended December 31, 2023. The vast majority of the
Partnership’s segment margins are fee-based and therefore have
limited commodity price sensitivity.
Conference call information:
The Partnership has scheduled a conference call for 3:30 p.m.
Central Time/4:30 p.m. Eastern Time on Wednesday, February 14, 2024
to discuss its fourth quarter 2023 results and provide an update on
the Partnership, including its outlook for 2024. 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.
Energy Transfer LP (NYSE: ET) owns and operates one of
the largest and most diversified portfolios of energy assets in the
United States, with more than 125,000 miles of pipeline and
associated energy infrastructure. Energy Transfer’s strategic
network spans 44 states with assets in all of the major U.S.
production basins. Energy Transfer is a publicly traded limited
partnership with core operations that include complementary natural
gas midstream, intrastate and interstate transportation and storage
assets; crude oil, natural gas liquids (“NGL”) and refined product
transportation and terminalling assets; and NGL fractionation.
Energy Transfer also owns Lake Charles LNG Company, as well as the
general partner interests, the incentive distribution rights and
approximately 34% of the outstanding common units of Sunoco LP
(NYSE: SUN), and the general partner interests and approximately
45% of the outstanding common units of USA Compression Partners, LP
(NYSE: USAC). For more information, visit the Energy Transfer LP
website at www.energytransfer.com.
Sunoco LP (NYSE: SUN) is a master limited partnership
with core operations that include the distribution of motor fuel to
approximately 10,000 convenience stores, independent dealers,
commercial customers and distributors located in more than 40 U.S.
states and territories as well as refined product transportation
and terminalling assets. For more information, visit the Sunoco LP
website at www.sunocolp.com.
USA Compression Partners, LP (NYSE: USAC) is one of the
nation’s largest independent providers of natural gas compression
services in terms of total compression fleet horsepower. USAC
partners with a broad customer base composed of producers,
processors, gatherers, and transporters of natural gas and crude
oil. USAC focuses on providing midstream natural gas compression
services to infrastructure applications primarily in high-volume
gathering systems, processing facilities, and transportation
applications. For more information, visit the USAC website at
www.usacompression.com.
Forward-Looking Statements
This news release may include certain statements concerning
expectations for the future that are forward-looking statements as
defined by federal law. Such forward-looking statements are subject
to a variety of known and unknown risks, uncertainties, and other
factors that are difficult to predict and many of which are beyond
management’s control. An extensive list of factors that can affect
future results, including future distribution levels and leverage
ratio, are discussed in the Partnership’s Annual Report 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 website at www.energytransfer.com.
ENERGY
TRANSFER LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(unaudited)
December 31, 2023
December 31, 2022
ASSETS
Current assets
$
12,433
$
12,081
Property, plant and equipment, net
85,351
80,311
Investments in unconsolidated
affiliates
3,097
2,893
Lease right-of-use assets, net
826
819
Other non-current assets, net
1,733
1,558
Intangible assets, net
6,239
5,415
Goodwill
4,019
2,566
Total assets
$
113,698
$
105,643
LIABILITIES AND EQUITY
Current liabilities (1)
$
11,277
$
10,368
Long-term debt, less current
maturities
51,380
48,260
Non-current derivative liabilities
4
23
Non-current operating lease
liabilities
778
798
Deferred income taxes
3,931
3,701
Other non-current liabilities
1,611
1,341
Commitments and contingencies
Redeemable noncontrolling interests
778
493
Equity:
Limited Partners:
Preferred Unitholders
6,459
6,051
Common Unitholders
30,197
26,960
General Partner
(2
)
(2
)
Accumulated other comprehensive income
28
16
Total partners’ capital
36,682
33,025
Noncontrolling interests
7,257
7,634
Total equity
43,939
40,659
Total liabilities and equity
$
113,698
$
105,643
(1)
As of December 31, 2023, current
liabilities includes $1.00 billion of senior notes issued by the
Bakken Pipeline entities, which mature in April 2024. The
Partnership’s proportional ownership in the Bakken Pipeline
entities is 36.4%.
ENERGY
TRANSFER LP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(In millions, except per unit
data)
(unaudited)
Three Months Ended December
31,
Year Ended December 31,
2023
2022
2023
2022
REVENUES
$
20,532
$
20,501
$
78,586
$
89,876
COSTS AND EXPENSES:
Cost of products sold
15,780
16,063
60,541
72,232
Operating expenses
1,144
1,356
4,368
4,338
Depreciation, depletion and
amortization
1,158
1,060
4,385
4,164
Selling, general and administrative
285
216
985
1,018
Impairment losses and other
—
—
12
386
Total costs and expenses
18,367
18,695
70,291
82,138
OPERATING INCOME
2,165
1,806
8,295
7,738
OTHER INCOME (EXPENSE):
Interest expense, net of interest
capitalized
(686
)
(592
)
(2,578
)
(2,306
)
Equity in earnings of unconsolidated
affiliates
97
71
383
257
Gains on extinguishments of debt
2
—
2
—
Gains (losses) on interest rate
derivatives
(11
)
(10
)
36
293
Non-operating litigation related loss
(2
)
—
(627
)
—
Other, net
49
207
86
90
INCOME BEFORE INCOME TAX EXPENSE
1,614
1,482
5,597
6,072
Income tax expense
47
45
303
204
NET INCOME
1,567
1,437
5,294
5,868
Less: Net income attributable to
noncontrolling interest
219
268
1,299
1,061
Less: Net income attributable to
redeemable noncontrolling interests
21
14
60
51
NET INCOME ATTRIBUTABLE TO PARTNERS
1,327
1,155
3,935
4,756
General Partner’s interest in net
income
1
1
3
4
Preferred Unitholders’ interest in net
income
123
105
463
422
Common Unitholders’ interest in net
income
$
1,203
$
1,049
$
3,469
$
4,330
NET INCOME PER COMMON UNIT:
Basic
$
0.37
$
0.34
$
1.10
$
1.40
Diluted
$
0.37
$
0.34
$
1.09
$
1.40
WEIGHTED AVERAGE NUMBER OF UNITS
OUTSTANDING:
Basic
3,278.6
3,090.3
3,161.7
3,086.8
Diluted
3,295.3
3,103.2
3,177.2
3,097.0
ENERGY
TRANSFER LP AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
(Dollars and units in
millions)
(unaudited)
Three Months Ended December
31,
Year Ended December 31,
2023
2022
2023
2022
Reconciliation of net income to
Adjusted EBITDA and Distributable Cash Flow (a):
Net income
$
1,567
$
1,437
$
5,294
$
5,868
Interest expense, net of interest
capitalized
686
592
2,578
2,306
Impairment losses and other
—
—
12
386
Income tax expense
47
45
303
204
Depreciation, depletion and
amortization
1,158
1,060
4,385
4,164
Non-cash compensation expense
31
27
130
115
(Gains) losses on interest rate
derivatives
11
10
(36
)
(293
)
Unrealized (gains) losses on commodity
risk management activities
(185
)
88
(3
)
(42
)
Gains on extinguishments of debt
(2
)
—
(2
)
—
Inventory valuation adjustments (Sunoco
LP)
227
76
114
(5
)
Equity in earnings of unconsolidated
affiliates
(97
)
(71
)
(383
)
(257
)
Adjusted EBITDA related to unconsolidated
affiliates
177
156
691
565
Non-operating litigation related loss
2
—
627
—
Other, net
(20
)
17
(12
)
82
Adjusted EBITDA (consolidated)
3,602
3,437
13,698
13,093
Adjusted EBITDA related to unconsolidated
affiliates
(177
)
(156
)
(691
)
(565
)
Distributable Cash Flow from
unconsolidated affiliates
121
89
485
359
Interest expense, net of interest
capitalized
(686
)
(592
)
(2,578
)
(2,306
)
Preferred unitholders’ distributions
(135
)
(118
)
(511
)
(471
)
Current income tax expense
(31
)
(17
)
(100
)
(18
)
Transaction-related income taxes
—
—
—
(42
)
Maintenance capital expenditures
(259
)
(294
)
(860
)
(821
)
Other, net
20
3
41
20
Distributable Cash Flow (consolidated)
2,455
2,352
9,484
9,249
Distributable Cash Flow attributable to
Sunoco LP (100%)
(145
)
(152
)
(659
)
(648
)
Distributions from Sunoco LP
43
42
173
166
Distributable Cash Flow attributable to
USAC (100%)
(80
)
(60
)
(281
)
(221
)
Distributions from USAC
24
24
97
97
Distributable Cash Flow attributable to
noncontrolling interests in other non-wholly owned consolidated
subsidiaries
(369
)
(314
)
(1,352
)
(1,240
)
Distributable Cash Flow attributable to
the partners of Energy Transfer
1,928
1,892
7,462
7,403
Transaction-related adjustments (b)
102
18
116
44
Distributable Cash Flow attributable to
the partners of Energy Transfer, as adjusted
$
2,030
$
1,910
$
7,578
$
7,447
Distributions to partners:
Limited Partners
$
1,061
$
944
$
3,984
$
3,089
General Partner
1
1
3
3
Total distributions to be paid to
partners
$
1,062
$
945
$
3,987
$
3,092
Common Units outstanding – end of
period
3,367.5
3,094.4
3,367.5
3,094.4
(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 Energy Transfer’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 any such measure 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 measures
that are computed in accordance with GAAP, such as operating
income, net income and cash flows from operating activities.
Definition of Adjusted EBITDA
We define Adjusted EBITDA as
total partnership earnings before interest, taxes, depreciation,
depletion, 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, inventory
valuation adjustments, non-cash impairment charges, losses on
extinguishments of debt and other non-operating income or expense
items. Inventory adjustments that are excluded from the calculation
of Adjusted EBITDA represent only the changes in lower of cost or
market reserves on inventory that is carried at last-in, first-out
(“LIFO”). These amounts are unrealized valuation adjustments
applied to Sunoco LP’s fuel volumes remaining in inventory at the
end of the period.
Adjusted EBITDA reflects amounts
for unconsolidated affiliates based on the same recognition and
measurement methods used to record equity in earnings of
unconsolidated affiliates. Adjusted EBITDA related to
unconsolidated affiliates excludes the same items with respect to
the unconsolidated affiliate as those excluded from the calculation
of Adjusted EBITDA, such as interest, taxes, depreciation,
depletion, amortization and other non-cash items. Although these
amounts are excluded from Adjusted EBITDA related to unconsolidated
affiliates, such exclusion should not be understood to imply that
we have control over the operations and resulting revenues and
expenses of such affiliates. We do not control our unconsolidated
affiliates; therefore, we do not control the earnings or cash flows
of such affiliates. The use of Adjusted EBITDA or Adjusted EBITDA
related to unconsolidated affiliates as an analytical tool should
be limited accordingly.
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
We define Distributable Cash Flow
as net income, adjusted for certain non-cash items, less
distributions to preferred unitholders and maintenance capital
expenditures. Non-cash items include depreciation, depletion and
amortization, non-cash compensation expense, amortization included
in interest 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, inventory
valuation adjustments, non-cash impairment charges, losses on
extinguishments of debt and deferred income taxes. For
unconsolidated affiliates, Distributable Cash Flow reflects the
Partnership’s proportionate share of the investees’ distributable
cash flow.
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 Energy Transfer’s consolidated subsidiaries. However, to
the extent that noncontrolling interests exist among our
subsidiaries, the Distributable Cash Flow generated by our
subsidiaries may not be available to be distributed to our
partners. In order to reflect the cash flows available for
distributions to our partners, we have reported Distributable Cash
Flow attributable to partners, 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 our partners includes
distributions to be received by the parent company with respect to
the periods presented.
- 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 subsidiaries, but Distributable Cash Flow
attributable to partners reflects only the amount of Distributable
Cash Flow of such subsidiaries that is attributable to our
ownership interest.
For Distributable Cash Flow attributable
to partners, as adjusted, certain transaction-related adjustments
and non-recurring expenses that are included in net income are
excluded.
(b)
For the three months and year ended
December 31, 2023, transaction-related adjustments includes $49
million of Distributable Cash Flow attributable to the operations
of Crestwood for October 1, 2023 through the acquisition date,
which represents amounts distributable to Energy Transfer’s common
unitholders (including the holders of the common units issued in
the Crestwood acquisition) with respect to the fourth quarter 2023
distribution.
ENERGY
TRANSFER LP AND SUBSIDIARIES
SUMMARY
ANALYSIS OF QUARTERLY RESULTS BY SEGMENT
(Tabular dollar amounts in
millions)
(unaudited)
Three Months Ended December
31,
2023
2022
Segment Adjusted EBITDA:
Intrastate transportation and storage
$
242
$
433
Interstate transportation and storage
541
494
Midstream
674
632
NGL and refined products transportation
and services
1,042
928
Crude oil transportation and services
775
571
Investment in Sunoco LP
236
238
Investment in USAC
139
113
All other
(47
)
28
Adjusted EBITDA (consolidated)
$
3,602
$
3,437
The following analysis of segment operating results, includes a
measure of segment margin. Segment margin is a non-GAAP financial
measure and is presented herein to assist in the analysis of
segment operating results and particularly to facilitate an
understanding of the impacts that changes in sales revenues have on
the segment performance measure of Segment Adjusted EBITDA. Segment
margin is similar to the GAAP measure of gross margin, except that
segment margin excludes charges for depreciation, depletion and
amortization. Among the GAAP measures reported by the Partnership,
the most directly comparable measure to segment margin is Segment
Adjusted EBITDA; a reconciliation of segment margin to Segment
Adjusted EBITDA is included in the following tables for each
segment where segment margin is presented.
Intrastate Transportation and
Storage
Three Months Ended December
31,
2023
2022
Natural gas transported (BBtu/d)
14,229
14,295
Withdrawals from storage natural gas
inventory (BBtu)
6,440
5,425
Revenues
$
892
$
1,600
Cost of products sold
497
992
Segment margin
395
608
Unrealized gains on commodity risk
management activities
(78
)
(84
)
Operating expenses, excluding non-cash
compensation expense
(72
)
(83
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(13
)
(16
)
Adjusted EBITDA related to unconsolidated
affiliates
6
8
Other
4
—
Segment Adjusted EBITDA
$
242
$
433
Transported volumes decreased primarily due to decreased
production from our Haynesville assets.
Segment Adjusted EBITDA. For the three months ended December 31,
2023 compared to the same period last year, Segment Adjusted EBITDA
related to our intrastate transportation and storage segment
decreased due to the net impacts of the following:
- a decrease of $134 million in realized natural gas sales and
other primarily due to lower pipeline optimization from both
physical sales and settled derivatives;
- a decrease of $53 million in storage margin primarily due to
lower storage optimization from hedged inventory activity; and
- a decrease of $20 million in retained fuel revenues related to
lower natural gas prices; partially offset by
- a decrease of $11 million in operating expenses related to a
decrease in cost of fuel consumption from lower natural gas
prices.
Interstate Transportation and
Storage
Three Months Ended December
31,
2023
2022
Natural gas transported (BBtu/d)
16,651
15,821
Natural gas sold (BBtu/d)
31
26
Revenues
$
620
$
606
Cost of products sold
1
1
Segment margin
619
605
Operating expenses, excluding non-cash
compensation, amortization, accretion and other non-cash
expenses
(179
)
(201
)
Selling, general and administrative
expenses, excluding non-cash compensation, amortization and
accretion expenses
(26
)
(31
)
Adjusted EBITDA related to unconsolidated
affiliates
122
115
Other
5
6
Segment Adjusted EBITDA
$
541
$
494
Transported volumes increased primarily due to our Gulf Run
system going in service in December 2022, as well as more capacity
sold and higher utilization on our Transwestern, Rover and
Trunkline systems.
Segment Adjusted EBITDA. For the three months ended December 31,
2023 compared to the same period last year, Segment Adjusted EBITDA
related to our interstate transportation and storage segment
increased due to the net impacts of the following:
- an increase of $14 million in segment margin primarily due to a
$44 million increase resulting from our Gulf Run system being
placed in service in December 2022, an $8 million increase in
transportation revenue from several of our interstate pipeline
systems due to higher contracted volumes and higher rates, and a $6
million increase due to higher parking and storage. These increases
were partially offset by a $34 million decrease due to lower
operational gas sales resulting from lower prices and a $6 million
decrease due to lower rates on our Panhandle system resulting from
a FERC rate case;
- a decrease of $22 million in operating expenses primarily due
to a $15 million decrease from the revaluation of system gas and an
aggregate $11 million decrease in various other operating costs.
These decreases were partially offset by $4 million of incremental
expenses from our Gulf Run system being placed in service in
December 2022;
- a decrease of $5 million in selling, general and administrative
expenses primarily due to lower M&A costs; and
- an increase of $7 million in Adjusted EBITDA related to
unconsolidated affiliates primarily due to a $4 million increase
from our Citrus joint venture as a result of revenue from new
projects and lower operating expenses and a $3 million increase
from our Southeast Supply Header joint venture due to increased
capacity sold at higher rates.
Midstream
Three Months Ended December
31,
2023
2022
Gathered volumes (BBtu/d)
20,322
19,434
NGLs produced (MBbls/d)
976
813
Equity NGLs (MBbls/d)
49
43
Revenues
$
2,407
$
3,255
Cost of products sold
1,379
2,264
Segment margin
1,028
991
Operating expenses, excluding non-cash
compensation expense
(314
)
(319
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(47
)
(46
)
Adjusted EBITDA related to unconsolidated
affiliates
6
5
Other
1
1
Segment Adjusted EBITDA
$
674
$
632
Gathered volumes and NGL production increased primarily due to
newly acquired assets and higher volumes from existing
customers.
Segment Adjusted EBITDA. For the three months ended December 31,
2023 compared to the same period last year, Segment Adjusted EBITDA
related to our midstream segment increased due to the net impacts
of the following:
- an increase of $95 million due to newly acquired assets and
increased processing volumes in the Permian, South Texas and
Midcontinent/Panhandle regions; and
- a decrease of $5 million in operating expenses primarily due to
a $12 million decrease in environmental reserve adjustments and a
$14 million decrease due to lower maintenance project costs,
partially offset by a $21 million increase due to newly acquired
assets; partially offset by
- a decrease of $58 million due to lower natural gas prices of
$45 million and lower NGL prices of $13 million.
NGL and Refined Products Transportation and Services
Three Months Ended December
31,
2023
2022
NGL transportation volumes (MBbls/d)
2,162
1,970
Refined products transportation volumes
(MBbls/d)
552
520
NGL and refined products terminal volumes
(MBbls/d)
1,446
1,316
NGL fractionation volumes (MBbls/d)
1,137
982
Revenues
$
6,039
$
5,748
Cost of products sold
4,684
4,735
Segment margin
1,355
1,013
Unrealized (gains) losses on commodity
risk management activities
(72
)
174
Operating expenses, excluding non-cash
compensation expense
(225
)
(254
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(51
)
(31
)
Adjusted EBITDA related to unconsolidated
affiliates
34
26
Other
1
—
Segment Adjusted EBITDA
$
1,042
$
928
NGL transportation and terminal volumes increased primarily due
to higher volumes from the Permian region, on our Mariner East
pipeline system and on our Gulf Coast export pipelines. The
increase in transportation volumes and the commissioning of our
eighth fractionator in August 2023 also led to higher fractionated
volumes at our Mont Belvieu, Texas fractionation facility.
Segment Adjusted EBITDA. For the three months ended December 31,
2023 compared to the same period last year, Segment Adjusted EBITDA
related to our NGL and refined products transportation and services
segment increased due to the net impacts of the following:
- an increase of $50 million in terminal services margin
primarily due to a $31 million increase from our Marcus Hook
Terminal due to contractual rate escalations and higher throughput,
an increase of $17 million from higher export volumes loaded at our
Nederland Terminal and a $2 million increase due to increased tank
leases and throughput at our Eagle Point Terminal;
- an increase of $47 million in transportation margin primarily
due to a $25 million increase resulting from higher throughput and
contractual rate escalations on our Mariner East pipeline system, a
$19 million increase resulting from higher throughput and
contractual rate escalations on our Texas y-grade pipeline system,
an $11 million increase from higher throughput and contractual rate
escalations on our refined product pipelines and an $8 million
increase from higher exported volumes feeding into our Nederland
Terminal. These increases were partially offset by intrasegment
charges of $10 million and $5 million which were fully offset
within our marketing and fractionation margins, respectively;
- a decrease of $29 million in operating expenses primarily due
to a $17 million decrease in gas and power utility costs, a $3
million decrease in office expenses and decreases totaling $7
million from various other operating expenses;
- an increase of $18 million in fractionators and refinery
services margin primarily due to a $10 million increase resulting
from higher volumes, $5 million in intrasegment margin which was
fully offset within our transportation margin and a $3 million
increase from a more favorable pricing environment impacting our
refinery services business;
- an increase of $13 million in storage margin primarily due to a
$7 million increase in fees generated from export related activity,
a $4 million increase in throughput fees and a $2 million increase
in blending activity; and
- an increase of $8 million in adjusted EBITDA related to
unconsolidated affiliates due to higher volumes on certain joint
venture pipelines; partially offset by
- a decrease of $32 million in marketing margin (excluding
unrealized gains and losses on commodity risk management
activities) primarily due to a $42 million decrease in gains from
the optimization of hedged NGL and refined product inventories.
This decrease was partially offset by intrasegment margin of $10
million which was fully offset within our transportation margin;
and
- an increase of $20 million in selling, general and
administrative expenses primarily due to a $13 million increase
resulting from a one-time charge related to regulatory expenses, a
$3 million increase in insurance costs and a $2 million increase in
overhead expenses.
Crude Oil Transportation and
Services
Three Months Ended December
31,
2023
2022
Crude oil transportation volumes
(MBbls/d)
5,949
4,272
Crude oil terminal volumes (MBbls/d)
3,430
2,954
Revenues
$
7,214
$
6,340
Cost of products sold
6,213
5,570
Segment margin
1,001
770
Unrealized gains on commodity risk
management activities
(13
)
(10
)
Operating expenses, excluding non-cash
compensation expense
(191
)
(178
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(30
)
(12
)
Adjusted EBITDA related to unconsolidated
affiliates
7
1
Other
1
—
Segment Adjusted EBITDA
$
775
$
571
Crude oil transportation volumes were higher on our Texas
pipeline system due to higher Permian crude oil production, higher
gathered volumes and contributions from assets acquired in 2023.
Bakken Pipeline volumes were also higher. Volumes on our Bayou
Bridge Pipeline were higher due to continuing strong Gulf Coast
refinery demand. Midcontinent systems were higher, driven by
contributions from assets acquired in 2023. We also realized higher
Bakken gathering volumes. Crude terminal volumes were higher due to
growth in Permian and Bakken volumes, stronger Gulf Coast refinery
utilization and contributions from assets acquired in 2023.
Adjusted EBITDA. For the three months ended December 31, 2023
compared to the same period last year, Segment Adjusted EBITDA
related to our crude oil transportation and services segment
increased due to the net impacts of the following:
- an increase of $228 million in segment margin (excluding
unrealized gains and losses on commodity risk management
activities) primarily due to a $144 million increase from recently
acquired assets, a $72 million increase from higher volumes on our
Bakken Pipeline, a $25 million increase from higher throughput and
exports at our Gulf Coast terminals as well as the recognition of a
customer deficiency, a $12 million increase from higher volumes on
our Midcontinent gathering systems, a $5 million increase from
higher volumes on our Texas crude pipeline system and a $3 million
increase from our Bayou Bridge Pipeline, partially offset by a $35
million decrease from our crude oil acquisition and marketing
business primarily due to less favorable pricing and higher
affiliate fees from higher volumes; and
- an increase of $6 million in Adjusted EBITDA related to
unconsolidated affiliates due to assets acquired and higher volumes
on our White Cliffs crude pipeline; partially offset by
- an increase of $18 million in selling, general and
administrative expenses primarily due to a settlement related to a
legal matter in the prior period; and
- an increase of $13 million in operating expenses primarily due
to a $30 million increase from assets acquired, partially offset by
a $5 million decrease in volume-driven expenses and an $11 million
decrease in maintenance project expenses.
Investment in Sunoco LP
Three Months Ended December
31,
2023
2022
Revenues
$
5,641
$
5,918
Cost of products sold
5,492
5,647
Segment margin
149
271
Unrealized (gains) losses on commodity
risk management activities
(10
)
18
Operating expenses, excluding non-cash
compensation expense
(110
)
(103
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(30
)
(33
)
Adjusted EBITDA related to unconsolidated
affiliates
2
3
Inventory fair value adjustments
227
76
Other, net
8
6
Segment Adjusted EBITDA
$
236
$
238
The Investment in Sunoco LP segment reflects the consolidated
results of Sunoco LP.
Segment Adjusted EBITDA. For the three months ended December 31,
2023 compared to the same period last year, Segment Adjusted EBITDA
related to our investment in Sunoco LP decreased primarily due to
an increase in operating expenses.
In January 2024, Sunoco LP announced a definitive agreement to
acquire NuStar Energy L.P. in an all-equity unit-for-unit exchange.
The transaction is expected to close in the second quarter of 2024,
subject to customary closing conditions.
Investment in USAC
Three Months Ended December
31,
2023
2022
Revenues
$
225
$
191
Cost of products sold
33
33
Segment margin
192
158
Operating expenses, excluding non-cash
compensation expense
(40
)
(33
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(14
)
(12
)
Other, net
1
—
Segment Adjusted EBITDA
$
139
$
113
The Investment in USAC segment reflects the consolidated results
of USAC.
Segment Adjusted EBITDA. For the three months ended December 31,
2023 compared to the same period last year, Segment Adjusted EBITDA
related to our investment in USAC increased primarily due to higher
revenue-generating horsepower as a result of increased demand for
compression services, higher market-based rates on newly deployed
and redeployed compression units and higher average rates on
existing customer contracts.
All Other
Three Months Ended December
31,
2023
2022
Revenues
$
411
$
813
Cost of products sold
386
780
Segment margin
25
33
Unrealized gains on commodity risk
management activities
(11
)
(10
)
Operating expenses, excluding non-cash
compensation expense
(22
)
(5
)
Selling, general and administrative
expenses, excluding non-cash compensation expense
(52
)
(16
)
Adjusted EBITDA related to unconsolidated
affiliates
1
1
Other and eliminations
12
25
Segment Adjusted EBITDA
$
(47
)
$
28
Segment Adjusted EBITDA. For the three months ended December 31,
2023 compared to the same period last year, Segment Adjusted EBITDA
related to our all other segment decreased primarily due to:
- a decrease of $40 million due to higher M&A related
expenses;
- a decrease of $12 million in storage gains;
- a decrease of $6 million from our dual drive compression
business due to lower gas prices and increased electricity costs;
and
- a decrease of $5 million from our power trading business;
partially offset by
- an increase of $7 million due to increased sales in our
compressor business.
ENERGY
TRANSFER LP AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION ON LIQUIDITY
(In millions)
(unaudited)
The table below provides information on
our revolving credit facility. We also have consolidated
subsidiaries with revolving credit facilities which are not
included in this table.
Facility Size
Funds Available at December 31,
2023
Maturity Date
Five-Year Revolving Credit Facility
$
5,000
$
3,559
April 11, 2027
ENERGY
TRANSFER LP AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION ON UNCONSOLIDATED
AFFILIATES
(In millions)
(unaudited)
The table below provides information on an
aggregated basis for our unconsolidated affiliates, which are
accounted for as equity method investments in the Partnership’s
financial statements for the periods presented.
Three Months Ended December
31,
2023
2022
Equity in earnings (losses) of
unconsolidated affiliates:
Citrus
$
36
$
32
MEP
19
17
White Cliffs
5
(9
)
Explorer
10
8
Other
27
23
Total equity in earnings of unconsolidated
affiliates
$
97
$
71
Adjusted EBITDA related to
unconsolidated affiliates:
Citrus
$
85
$
81
MEP
27
26
White Cliffs
10
5
Explorer
15
13
Other
40
31
Total Adjusted EBITDA related to
unconsolidated affiliates
$
177
$
156
Distributions received from
unconsolidated affiliates:
Citrus
$
12
$
—
MEP
26
13
White Cliffs
7
4
Explorer
9
7
Other
31
22
Total distributions received from
unconsolidated affiliates
$
85
$
46
ENERGY
TRANSFER LP AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION ON NON-WHOLLY OWNED JOINT
VENTURE SUBSIDIARIES
(In millions)
(unaudited)
The table below provides information on an
aggregated basis for our non-wholly owned joint venture
subsidiaries, which are reflected on a consolidated basis in our
financial statements. The table below excludes Sunoco LP and USAC,
which are non-wholly owned subsidiaries that are publicly
traded.
Three Months Ended December
31,
2023
2022
Adjusted EBITDA of non-wholly owned
subsidiaries (100%) (a)
$
709
$
613
Our proportionate share of Adjusted EBITDA
of non-wholly owned subsidiaries (b)
334
294
Distributable Cash Flow of non-wholly
owned subsidiaries (100%) (c)
$
682
$
593
Our proportionate share of Distributable
Cash Flow of non-wholly owned subsidiaries (d)
313
279
Below is our ownership percentage of
certain non-wholly owned subsidiaries:
Non-wholly owned subsidiary:
Energy Transfer Percentage
Ownership (e)
Bakken Pipeline
36.4 %
Bayou Bridge
60.0 %
Maurepas
51.0 %
Ohio River System
75.0 %
Permian Express Partners
87.7 %
Red Bluff Express
70.0 %
Rover
32.6 %
Others
various
(a)
Adjusted EBITDA of non-wholly owned
subsidiaries reflects the total Adjusted EBITDA of our non-wholly
owned subsidiaries on an aggregated basis. This is the amount
included in our consolidated non-GAAP measure of Adjusted
EBITDA.
(b)
Our proportionate share of Adjusted EBITDA
of non-wholly owned subsidiaries reflects the amount of Adjusted
EBITDA of such subsidiaries (on an aggregated basis) that is
attributable to our ownership interest.
(c)
Distributable Cash Flow of non-wholly
owned subsidiaries reflects the total Distributable Cash Flow of
our non-wholly owned subsidiaries on an aggregated basis.
(d)
Our proportionate share of Distributable
Cash Flow of non-wholly owned subsidiaries reflects the amount of
Distributable Cash Flow of such subsidiaries (on an aggregated
basis) that is attributable to our ownership interest. This is the
amount included in our consolidated non-GAAP measure of
Distributable Cash Flow attributable to the partners of Energy
Transfer.
(e)
Our ownership reflects the total economic
interest held by us and our subsidiaries. In some cases, this
percentage comprises ownership interests held in (or by) multiple
entities. In addition to the ownership reflected in the table
above, the Partnership also owned a 51% interest in Energy Transfer
Canada until August 2022.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240214068077/en/
Investor Relations: Bill Baerg, Brent Ratliff, Lyndsay
Hannah, 214-981-0795 Media Relations: Vicki Granado,
214-840-5820
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