Energy Transfer Partners Reports First Quarter Results

Energy Transfer Partners Reports First Quarter Results

DALLAS--(BUSINESS WIRE)-- Energy Transfer Partners, L.P. (NYSE: ETP) today reported its financial results for the quarter ended March 31, 2013.

Adjusted EBITDA for Energy Transfer Partners, L.P. ("ETP" or the "Partnership") for the three months ended March 31, 2013 totaled $956 million, an increase of $462 million compared to the same period last year. Distributable Cash Flow for the three months ended March 31, 2013 totaled $622 million, an increase of $351 million compared to the same period last year. Income from continuing operations for the three months ended March 31, 2013 was $402 million, a decrease of $687 million compared to the same period last year that was primarily due to the recognition of a $1.06 billion gain as a result of the contribution of ETP's Propane Business in January 2012. The increases in Adjusted EBITDA and Distributable Cash Flow were primarily due to strategic acquisitions in 2012, including Sunoco, Inc. ("Sunoco") and ownership interests in Citrus Corp ("Citrus"), Sunoco Logistics Partners L.P. ("Sunoco Logistics"), and ETP Holdco Corporation ("Holdco").


The Partnership's key accomplishments to date in 2013 include the following:

  • During the first quarter of 2013, Phase I of the Jackson Plant was completed.
  • On April 30, 2013, the Partnership acquired from Energy Transfer Equity, L.P. ("ETE") its interest in Holdco for approximately 49.5 million newly issued ETP common units and $1.4 billion in cash, less $68 million of estimated closing adjustments.
  • On April 30, 2013, Southern Union Company ("Southern Union") contributed its interest in Southern Union Gathering Company, LLC to Regency Energy Partners LP ("Regency"), a subsidiary of ETE, in exchange for cash and Regency common units.
  • On May 6, 2013, the Partnership's subsidiaries, Sunoco Logistics and Lone Star NGL LLC, announced that long-term, fee-based agreements have been executed with an anchor tenant to move forward with a liquefied petroleum gas (LPG) export/import project.

An analysis of the Partnership's segment results and other supplementary data is provided after the financial tables shown below. The Partnership has scheduled a conference call for 8:30 a.m. Central Time, Thursday, May 9, 2013 to discuss the first quarter 2013 results. The conference call will be broadcast live via an internet web cast which can be accessed through www.energytransfer.com and will also be available for replay on the Partnership's website for a limited time.

Adjusted EBITDA and Distributable Cash Flow are non-GAAP financial measures used by industry analysts, investors, lenders, and rating agencies to assess the financial performance and the operating results of the Partnership's fundamental business activities and should not be considered in isolation or as a substitute for net income, income from operations, cash flows from operating activities, or other GAAP measures. A table reconciling Adjusted EBITDA and Distributable Cash Flow with appropriate GAAP financial measures is included in the summarized financial information included in this release. Beginning with the quarter ended December 31, 2012 and applied retroactively to all periods presented, the Partnership has revised its calculation of Adjusted EBITDA and Distributable Cash Flow. (See notes under "Supplemental Information" for further information.)

Energy Transfer Partners, L.P. (NYSE: ETP) is a master limited partnership owning and operating one of the largest and most diversified portfolios of energy assets in the United States. ETP currently has natural gas operations that include approximately 47,000 miles of gathering and transportation pipelines, treating and processing assets, and storage facilities. ETP owns 100% of ETP Holdco Corporation, which owns Southern Union Company and Sunoco, Inc., and a 70% interest in Lone Star NGL LLC, a joint venture that owns and operates natural gas liquids storage, fractionation and transportation assets. ETP also owns the general partner, 100% of the incentive distribution rights, and approximately 33.5 million common units in Sunoco Logistics Partners L.P. (NYS: SXL) , which operates a geographically diverse portfolio of crude oil and refined products pipelines, terminalling and crude oil acquisition and marketing assets. ETP's general partner is owned by ETE. For more information, visit the Energy Transfer Partners, L.P. website at www.energytransfer.com.

Energy Transfer Equity, L.P. (NYS: 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. (NYS: ETP) and approximately 99.7 million ETP common units; and owns the general partner and 100% of the IDRs of Regency Energy Partners LP (NYS: RGP) and approximately 26.3 million RGP common units. The Energy Transfer family of companies owns more than 71,000 miles of natural gas, natural gas liquids, refined products, and crude pipelines. For more information, visit the Energy Transfer Equity, L.P. website at www.energytransfer.com.

Sunoco Logistics Partners L.P. (NYS: SXL) , headquartered in Philadelphia, is a master limited partnership that owns and operates a logistics business consisting of a geographically diverse portfolio of complementary crude oil and refined product pipeline, terminalling, and acquisition and marketing assets. SXL's general partner is owned by Energy Transfer Partners, L.P. (NYS: ETP) . For more information, visit the Sunoco Logistics Partners, L.P. web site at www.sunocologistics.com.

The information contained in this press release is available on our website at www.energytransfer.com.

 
 

ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in millions)

(unaudited)

 
    March 31,     December 31,
2013 2012

ASSETS

 
CURRENT ASSETS $ 6,359 $ 5,404
 
PROPERTY, PLANT AND EQUIPMENT, net 26,007 25,773
 
NON-CURRENT ASSETS HELD FOR SALE 992 985
ADVANCES TO AND INVESTMENTS IN UNCONSOLIDATED AFFILIATES 3,489 3,502
NON-CURRENT PRICE RISK MANAGEMENT ASSETS 35 42
GOODWILL 5,586 5,606
INTANGIBLE ASSETS, net 1,544 1,561
OTHER NON-CURRENT ASSETS, net   356   357
Total assets $ 44,368 $ 43,230
 

LIABILITIES AND EQUITY

 
CURRENT LIABILITIES $ 5,783 $ 5,548
 
NON-CURRENT LIABILITIES HELD FOR SALE 142 142
LONG-TERM DEBT, less current maturities 16,135 15,442
LONG-TERM NOTES PAYABLE — RELATED PARTY 166 166
NON-CURRENT PRICE RISK MANAGEMENT LIABILITIES 124 129
DEFERRED INCOME TAXES 3,541 3,476
OTHER NON-CURRENT LIABILITIES 1,008 995
 
COMMITMENTS AND CONTINGENCIES
 
EQUITY:
Total partners' capital 9,340 9,201
Noncontrolling interest   8,129   8,131
Total equity   17,469   17,332
Total liabilities and equity $ 44,368 $ 43,230
 
 

ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in millions, except per unit data)

(unaudited)

 
    Three Months Ended March 31,
2013    

2012(1)

REVENUES $ 10,854 $ 1,323
COSTS AND EXPENSES:
Cost of products sold 9,594 781
Operating expenses 304 130
Depreciation and amortization 260 99
Selling, general and administrative   162     104  
Total costs and expenses   10,320     1,114  
OPERATING INCOME 534 209
OTHER INCOME (EXPENSE):
Interest expense, net of interest capitalized (211 ) (141 )
Equity in earnings of unconsolidated affiliates 72 55
Gain on deconsolidation of Propane Business 1,056
Loss on extinguishment of debt (115 )
Gains on interest rate derivatives 7 28
Other, net   3     (1 )
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE 405 1,091
Income tax expense from continuing operations   3     2  
INCOME FROM CONTINUING OPERATIONS 402 1,089
Income (loss) from discontinued operations   22     (1 )
NET INCOME 424 1,088
LESS: NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTEREST   102     (27 )
NET INCOME ATTRIBUTABLE TO PARTNERS 322 1,115
GENERAL PARTNER'S INTEREST IN NET INCOME   128     117  
LIMITED PARTNERS' INTEREST IN NET INCOME $ 194   $ 998  
INCOME FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT:
Basic $ 0.60   $ 4.37  
Diluted $ 0.60   $ 4.36  
NET INCOME PER LIMITED PARTNER UNIT:
Basic $ 0.63   $ 4.36  
Diluted $ 0.63   $ 4.35  
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING:
Basic   300,831,573     226,549,263  
Diluted   301,832,910     227,406,484  

(1)

  In accordance with generally accepted accounting principles, amounts previously reported for interim periods in 2012 have been revised to reflect the retrospective consolidation of Southern Union into ETP as a result of the Holdco Transaction as the transfer of Southern Union into Holdco met the definition of a transaction between entities under common control. Thus, Southern Union is retroactively consolidated beginning March 26, 2012, the date that ETE completed its merger with Southern Union.
 
 

SUPPLEMENTAL INFORMATION

(Dollars in millions)

(unaudited)

 
    Three Months Ended March 31,
2013     2012 (b) (c)
Reconciliation of net income to Adjusted EBITDA and Distributable Cash Flow (a):
Net income $ 424 $ 1,088
Interest expense, net of interest capitalized 211 141
Gain on deconsolidation of Propane Business (1,056 )
Income tax expense 3 2
Depreciation and amortization 260 99
Non-cash compensation expense 14 11
Gains on interest rate derivatives (7 ) (28 )
Unrealized (gains) losses on commodity risk management activities (19 ) 86
LIFO valuation adjustment (38 )
Loss on extinguishment of debt 115
Adjusted EBITDA related to unconsolidated affiliates 165 99
Equity in earnings of unconsolidated affiliates (72 ) (55 )
Other, net   15     (8 )
Adjusted EBITDA 956 494
Adjusted EBITDA related to unconsolidated affiliates (165 ) (99 )
Distributions from unconsolidated affiliates 95 42
Interest expense, net of interest capitalized (211 ) (141 )
Income tax expense (3 ) (2 )
Maintenance capital expenditures (51 ) (24 )
Other, net   1     1  
Distributable Cash Flow $ 622   $ 271  
 
Distributions to be paid to the partners of ETP (d):
Limited Partners:
Common units held by ETE $ 45 $ 45
Common units held by public 241 160
General Partner interest held by ETE 5 5
Incentive Distribution Rights ("IDR") held by ETE   156     114  
447 324
IDR relinquishment related to previous acquisitions   (31 )   (14 )
Total distributions to be paid to the partners of ETP 416 310
 
Distributions to be paid to noncontrolling interests:
Distributions to ETE in respect of Holdco (e) 50
Distributions to Regency in respect of Lone Star (f) 23 11
Distributions to Sunoco Logistics unitholders (common units held by public) (g)   40      
Total distributions to be paid to noncontrolling interests   113     11  
Total distributions to be paid to the partners of ETP and noncontrolling interests $ 529   $ 321  
 
(a) The Partnership has disclosed in this press release Adjusted EBITDA and Distributable Cash Flow, which are non-GAAP financial measures. Management believes Adjusted EBITDA and Distributable Cash Flow provide useful information to investors as measures of comparison with peer companies, including companies that may have different financing and capital structures. The presentation of Adjusted EBITDA and Distributable Cash Flow also allows investors to view our performance in a manner similar to the methods used by management and provides additional insight into our operating results.
 
There are material limitations to using measures such as Adjusted EBITDA and Distributable Cash Flow, including the difficulty associated with using either as the sole measure to compare the results of one company to another, and the inability to analyze certain significant items that directly affect a company's net income or loss or cash flows. In addition, our calculations of Adjusted EBITDA and Distributable Cash Flow may not be consistent with similarly titled measures of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP, such as gross margin, operating income, net income, and cash flow from operating activities.

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