10-QPeriod: Q3 FY2013

Energy Transfer LP Quarterly Report for Q3 Ended Sep 30, 2013

Filed November 7, 2013For Securities:ETET-PI

Summary

Energy Transfer Equity, L.P. (ET) reported revenues of $12.49 billion for the third quarter of 2013, a significant increase from $2.10 billion in the prior year's quarter, driven by substantial contributions from newly acquired operations, particularly in crude and refined product sales. Net income attributable to partners was $151 million, or $0.54 per limited partner unit, a notable improvement from $35 million ($0.13 per unit) in the same quarter of 2012. The company's balance sheet shows total assets of $50.04 billion as of September 30, 2013, up from $48.90 billion at the end of 2012. Long-term debt remains substantial at $22.01 billion. The company successfully executed several strategic transactions during the nine months ended September 30, 2013, including acquisitions and debt refinancing, indicating an active approach to portfolio management and financial structuring. Cash flow from operations remained robust, providing significant funds for investing activities and debt management.

Financial Highlights

44 data points
Beta

Revenue

$12.49B

11.4% Gross Margin

Net Income

$151.00M

1.2% Net Margin

Total Assets

$50.04B

Cash & Equivalents

$1.18B

Free Cash Flow

$720.00M

Financial Statements
Beta
Revenue$12.49B
Cost of Revenue$11.06B
Gross Profit$1.42B
SG&A Expenses$142.00M
Operating Expenses$11.96B
Operating Income$529.00M
Interest Expense$298.00M
Net Income$151.00M

Key Highlights

  • 1Total revenues for Q3 2013 significantly increased to $12.49 billion compared to $2.10 billion in Q3 2012, primarily due to the inclusion of Sunoco and Sunoco Logistics operations.
  • 2Net income attributable to partners for Q3 2013 was $151 million ($0.54 per unit), a substantial improvement from $35 million ($0.13 per unit) in Q3 2012.
  • 3Total assets grew to $50.04 billion as of September 30, 2013, from $48.90 billion at the end of 2012, reflecting ongoing business development.
  • 4Long-term debt remained a significant component of the capital structure, totaling $22.01 billion as of September 30, 2013.
  • 5The company reported strong operating cash flow of $1.85 billion for the nine months ended September 30, 2013, up from $897 million in the prior year period.
  • 6Significant strategic activities included the sale of MGE assets, the contribution of SUGS to Regency, and the acquisition of ETE's interest in Holdco by ETP, demonstrating active portfolio management.
  • 7Regency announced a merger agreement to acquire PVR Partners, L.P. for approximately $5.6 billion, expected to close in Q1 2014.

Frequently Asked Questions

Revenue growth was primarily driven by the consolidation of Sunoco and Sunoco Logistics operations, which significantly expanded the company's presence in crude oil, refined products, and NGLs. The increase in natural gas and NGL sales, along with gathering, transportation, and other fees, also contributed to the overall revenue surge.

Long-term debt remains substantial at $22.01 billion as of September 30, 2013. While the company actively managed its debt through refinancing activities, such as issuing new senior notes and repaying existing debt, the high level of leverage implies ongoing interest expense and a need for consistent cash flow generation to service this debt. Investors should monitor the company's ability to manage its debt obligations and its leverage ratios.

Key strategic activities included the sale of Southern Union's MGE assets, the contribution of Southern Union's Gathering Company (SUGS) to Regency, and ETP's acquisition of ETE's 60% interest in Holdco. Additionally, Regency announced its intention to acquire PVR Partners, L.P., signaling continued strategic expansion and consolidation efforts within the energy infrastructure sector.

Energy Transfer Equity, L.P. and its subsidiaries utilize various exchange-traded and over-the-counter commodity financial instrument contracts, including futures, swaps, and options, to manage exposure to commodity price volatility. These derivatives are recorded at fair value, and the company employs hedging strategies for both trading and non-trading activities, as detailed in Note 15.