10-QPeriod: Q2 FY2015

Energy Transfer LP Quarterly Report for Q2 Ended Jun 30, 2015

Filed August 7, 2015For Securities:ETET-PI

Summary

Energy Transfer LP (ET) reported its financial results for the second quarter and first six months of 2015. The company demonstrated growth in Segment Adjusted EBITDA, reaching $1.51 billion for the quarter and $2.90 billion for the six-month period, an increase from the prior year. This growth was driven primarily by stronger performance in the 'Investment in ETP' segment, notably from retail marketing and Sunoco Logistics operations. The balance sheet shows total assets of $69.1 billion as of June 30, 2015, an increase from $64.5 billion at the end of 2014, largely due to property, plant, and equipment additions. Long-term debt also increased to $34.8 billion from $29.7 billion, reflecting significant debt issuances to fund growth and acquisitions. The company reported net income attributable to partners of $298 million for the quarter, a significant increase from $163 million in the prior year quarter. This filing also highlights significant strategic developments, including a proposal to merge with WMB and the completion of the Regency Merger. Investors should note the substantial capital expenditures and ongoing debt management as key factors influencing future performance.

Financial Highlights

43 data points
Beta

Revenue

$9.43B

0.9% Gross Margin

Net Income

$298.00M

3.2% Net Margin

Total Assets

$69.14B

Cash & Equivalents

$1.62B

Free Cash Flow

$538.00M

Financial Statements
Beta
Revenue$9.43B
Cost of Revenue$9.34B
Gross Profit$89.00M
SG&A Expenses$183.00M
Operating Expenses$10.70B
Operating Income$743.00M
Interest Expense$408.00M
Net Income$298.00M

Key Highlights

  • 1Segment Adjusted EBITDA increased to $1.51 billion for Q2 2015 and $2.90 billion for the first six months of 2015, up from $1.44 billion and $2.82 billion respectively in the prior year periods.
  • 2Net income attributable to partners for the second quarter of 2015 was $298 million, a substantial increase from $163 million in the same quarter of 2014.
  • 3Total assets grew to $69.1 billion at June 30, 2015, from $64.5 billion at December 31, 2014, primarily due to investments in property, plant, and equipment.
  • 4Long-term debt increased to $34.8 billion from $29.7 billion, reflecting significant debt issuances to fund acquisitions and capital expenditures.
  • 5The company announced a proposal to merge with WMB in June 2015.
  • 6ETP completed the merger with Regency on April 30, 2015.
  • 7ETI repurchased approximately $294 million of its common units during the second quarter of 2015 under its buyback program.

Frequently Asked Questions

The increase in net income attributable to partners to $298 million from $163 million in the prior year quarter was primarily driven by the strong performance in the 'Investment in ETP' segment, which benefited from improved retail marketing gross margins (including contributions from the Susser acquisition) and higher results from Sunoco Logistics operations.

Long-term debt increased significantly to $34.8 billion at June 30, 2015, from $29.7 billion at December 31, 2014. This increase is attributed to substantial debt issuances by both the parent company and its subsidiaries (ETP, Sunoco LP) to fund growth capital expenditures and acquisitions. The company's substantial debt load requires careful monitoring of its ability to service this debt and manage financial covenants.

The most significant announcements include a proposal by ETE to merge with WMB, made in June 2015, and the completion of the merger with Regency by ETP on April 30, 2015. These strategic moves indicate an active approach to portfolio management and potential future consolidation within the energy infrastructure sector.

ETP expects total capital expenditures for the full year 2015 to be in the range of $8.06 billion to $8.71 billion for growth and $465 million to $555 million for maintenance. These significant investments are aimed at funding expansion projects and integrating recent acquisitions.