Summary
Energy Transfer Equity, L.P. (ETE) reported a significant increase in net income for the first quarter of 2012, largely driven by the acquisition of Southern Union Company. Total revenues decreased compared to the prior year, primarily due to lower natural gas sales and retail propane sales, but this was more than offset by a substantial gain on the deconsolidation of the propane business and strong performance from ETP's NGL segment. The company's balance sheet shows a substantial increase in assets, driven by the Southern Union acquisition, with corresponding increases in property, plant, and equipment, goodwill, and long-term debt. Key financial movements include a significant increase in long-term debt, largely to finance the Southern Union acquisition. Operating cash flow experienced a notable decrease year-over-year, primarily due to the timing of the Southern Union acquisition and the impact of large non-cash gains/losses. Investors should note the substantial debt taken on for the acquisition and monitor its impact on future interest coverage and financial flexibility. The company also announced a pending merger between ETP and Sunoco, which, if completed, will further expand its asset base and operational scale.
Financial Highlights
44 data points| Revenue | $1.67B |
| Cost of Revenue | $1.01B |
| Gross Profit | $654.00M |
| SG&A Expenses | $147.00M |
| Operating Expenses | $1.49B |
| Operating Income | $183.00M |
| Interest Expense | $213.00M |
| Net Income | $166.00M |
Key Highlights
- 1Net income attributable to partners surged to $166.4 million in Q1 2012, up from $88.6 million in Q1 2011, largely due to the acquisition of Southern Union and the deconsolidation of the propane business.
- 2Total revenues decreased by approximately 15% to $1.69 billion from $1.99 billion in the prior year's quarter, mainly due to lower natural gas and retail propane sales.
- 3A significant gain of $1.06 billion was recognized on the deconsolidation of the Propane Business through its contribution to AmeriGas.
- 4Total assets grew substantially to $32.8 billion from $20.9 billion, primarily driven by the acquisition of Southern Union Company for approximately $3.01 billion in cash and ETE Common Units.
- 5Long-term debt increased significantly to $17.39 billion from $10.95 billion, reflecting new borrowings to finance the Southern Union acquisition.
- 6Operating cash flow decreased to $79.4 million from $358.1 million in the prior year, impacted by the Southern Union acquisition's timing and significant non-cash items.
- 7ETP announced a pending merger with Sunoco for approximately $5.3 billion, which, if completed, will significantly expand the company's scale.