Energy Transfer Partners Reports Second Quarter Results

Energy Transfer Partners Reports Second Quarter Results

DALLAS--(BUSINESS WIRE)-- Energy Transfer Partners, L.P. (NYSE: ETP) today reported its financial results for the quarter ended June 30, 2013.

Adjusted EBITDA for Energy Transfer Partners, L.P. ("ETP") for the three months ended June 30, 2013 totaled $1.07 billion, an increase of $427 million over the same period last year. Distributable Cash Flow attributable to the partners of ETP for the three months ended June 30, 2013 totaled $442 million, an increase of $126 million over the same period last year. Income from continuing operations for the three months ended June 30, 2013 was $404 million, an increase of $276 million over the same period last year.


Adjusted EBITDA for ETP for the six months ended June 30, 2013 totaled $2.03 billion, an increase of $889 million over the same period last year. Distributable Cash Flow attributable to the partners of ETP for the six months ended June 30, 2013 totaled $841 million, an increase of $265 million over the same period last year. Income from continuing operations for the six months ended June 30, 2013 was $806 million, a decrease of $411 million compared to the same period last year 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"). ETP has also placed more than $2.5 billion in growth projects into service over the last twelve months that are now generating earnings and cash flow.

ETP previously reported Distributable Cash Flow only on a consolidated basis. As a result of ETP's recent acquisition of the 60% interest in Holdco that was owned by Energy Transfer Equity, L.P. ("ETE") in April 2013 and the ETE/ETP exchange transaction announced today, ETP has revised the methodology to calculate Distributable Cash Flow to make it easier to understand and more transparent. Effective June 30, 2013, ETP has revised its non-GAAP measures to include Distributable Cash Flow attributable to the partners of ETP. ETP considers Distributable Cash Flow attributable to the partners of ETP to be a useful measure as it more accurately depicts the cash flows available to be distributed to ETP's partners, whereas Distributable Cash Flow on a consolidated basis includes cash flows for which a portion would be distributable to noncontrolling interests. The supplemental information included herein provides both measures as well as a reconciliation of both measures to the GAAP measure of net income.

ETP's key accomplishments during the second quarter of 2013 include the following:

  • ETP acquired from ETE its 60% interest in Holdco for approximately 49.5 million ETP common units and $1.4 billion in cash, less $68 million of closing adjustments.
  • 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 and Class F units.
  • ETP'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.
  • ETP placed into service a new 200 MMcf/d cryogenic processing plant at its Godley processing facility in Johnson County, Texas.
  • ETP exchanged approximately $1.09 billion of Southern Union's outstanding senior notes for new ETP senior notes in June 2013.

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 8, 2013 to discuss the second 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 ETP's web site 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 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. 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, ETP 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. web site 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. web site 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 web site at www.energytransfer.com.

 
 

ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)
(unaudited)
 
    June 30,
2013
    December 31,
2012

ASSETS

 
CURRENT ASSETS $ 5,858 $ 5,404
 
PROPERTY, PLANT AND EQUIPMENT, net 24,734 25,773
 
NON-CURRENT ASSETS HELD FOR SALE 1,000 985
ADVANCES TO AND INVESTMENTS IN UNCONSOLIDATED AFFILIATES 4,884 3,502
NON-CURRENT PRICE RISK MANAGEMENT ASSETS 20 42
GOODWILL 5,206 5,606
INTANGIBLE ASSETS, net 1,508 1,561
OTHER NON-CURRENT ASSETS, net   441   357
Total assets $ 43,651 $ 43,230
 

LIABILITIES AND EQUITY

 
CURRENT LIABILITIES $ 5,728 $ 5,548
 
NON-CURRENT LIABILITIES HELD FOR SALE 140 142
LONG-TERM DEBT, less current maturities 16,243 15,442
LONG-TERM NOTES PAYABLE — RELATED PARTY 166
NON-CURRENT PRICE RISK MANAGEMENT LIABILITIES 88 129
DEFERRED INCOME TAXES 3,767 3,476
OTHER NON-CURRENT LIABILITIES 902 995
 
COMMITMENTS AND CONTINGENCIES
 
EQUITY:
Total partners' capital 12,098 9,201
Noncontrolling interest   4,685   8,131
Total equity   16,783   17,332
Total liabilities and equity $ 43,651 $ 43,230
 
 

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,
2013    

2012(1)

2013    

2012(1)

REVENUES $ 11,551 $ 1,596 $ 22,405 $ 2,919
COSTS AND EXPENSES:
Cost of products sold 10,229 799 19,823 1,580
Operating expenses 315 196 619 326
Depreciation and amortization 251 158 511 257
Selling, general and administrative   124     86     286     190  
Total costs and expenses   10,919     1,239     21,239     2,353  
OPERATING INCOME 632 357 1,166 566
OTHER INCOME (EXPENSE):
Interest expense, net of interest capitalized (211 ) (191 ) (422 ) (332 )
Equity in earnings of unconsolidated affiliates 37 1 109 56
Gain on deconsolidation of Propane Business 1 1,057
Loss on extinguishment of debt (115 )
Gains (losses) on interest rate derivatives 39 (37 ) 46 (9 )
Other, net   (4 )   4     (1 )   3  
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE 493 135 898 1,226
Income tax expense from continuing operations   89     7     92     9  
INCOME FROM CONTINUING OPERATIONS 404 128 806 1,217
Income from discontinued operations   9     7     31     6  
NET INCOME 413 135 837 1,223
LESS: NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTEREST   93     24     195     (3 )
NET INCOME ATTRIBUTABLE TO PARTNERS 320 111 642 1,226
GENERAL PARTNER'S INTEREST IN NET INCOME   155     109     283     226  
LIMITED PARTNERS' INTEREST IN NET INCOME $ 165   $ 2   $ 359   $ 1,000  
INCOME (LOSS) FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT:
Basic $ 0.52   $ (0.03 ) $ 1.04   $ 4.32  
Diluted $ 0.52   $ (0.03 ) $ 1.04   $ 4.30  
NET INCOME PER LIMITED PARTNER UNIT:
Basic $ 0.53   $ 0.00   $ 1.08   $ 4.35  
Diluted $ 0.53   $ 0.00   $ 1.08   $ 4.33  
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING:
Basic   352.6     229.7     326.9     228.1  
Diluted   353.8     229.7     328.1     229.1  

(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 was retroactively consolidated beginning March 26, 2012, the date that ETE completed its merger with Southern Union.

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SUPPLEMENTAL INFORMATION

(Tabular dollar amounts in millions)

(unaudited)

 
    Three Months Ended June 30,     Six Months Ended June 30,
2013     2012 (b) (c) 2013     2012 (b) (c)
Reconciliation of net income to Adjusted EBITDA and Distributable Cash Flow (a):
Net income $ 413 $ 135 $ 837 $ 1,223
Interest expense, net of interest capitalized 211 191 422 332
Gain on deconsolidation of Propane Business (1 ) (1,057 )
Income tax expense from continuing operations 89 7 92 9
Depreciation and amortization 251 158 511 257
Non-cash compensation expense 10 10 24 21
(Gains) losses on interest rate derivatives (39 ) 37 (46 ) 9
Unrealized (gains) losses on commodity risk management activities (18 ) (15 )
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