10-QPeriod: Q1 FY2018

Energy Transfer LP Quarterly Report for Q1 Ended Mar 31, 2018

Filed May 10, 2018For Securities:ETET-PI

Summary

Energy Transfer LP (ET) reported mixed financial results for the first quarter of 2018. Total revenues increased significantly year-over-year, driven by higher sales in NGLs, crude oil, and refined products, as well as increased gathering, transportation, and other fees. This revenue growth was partially offset by higher costs of products sold and operating expenses, leading to an increase in operating income. However, the company also recognized significant losses on extinguishments of debt and increased interest expenses. Net income attributable to partners saw a substantial increase, reflecting the strong revenue performance. The balance sheet indicates a decrease in total assets from the prior year-end, largely due to a reduction in current assets held for sale and a decrease in long-term debt.

Financial Highlights

43 data points
Beta

Revenue

$11.88B

22.2% Gross Margin

Net Income

$363.00M

3.1% Net Margin

Total Assets

$82.91B

Cash & Equivalents

$547.00M

Free Cash Flow

$2.14B

Financial Statements
Beta
Revenue$11.88B
Cost of Revenue$9.24B
Gross Profit$2.64B
SG&A Expenses$148.00M
Operating Expenses$10.78B
Operating Income$1.10B
Interest Expense$466.00M
Net Income$363.00M

Key Highlights

  • 1Total revenues increased by 22.9% to $11.88 billion compared to $9.66 billion in the prior year period.
  • 2Net income attributable to partners rose to $363 million from $239 million in the first quarter of 2017.
  • 3Operating income improved significantly to $1.10 billion, up from $757 million in the prior year, driven by higher revenues across most segments.
  • 4Long-term debt decreased from $43.67 billion at year-end 2017 to $41.78 billion at the end of the first quarter of 2018.
  • 5The company recognized a loss of $106 million on extinguishments of debt during the quarter.
  • 6Capital expenditures for the quarter totaled $1.74 billion, reflecting ongoing investments in growth projects.
  • 7ETP's Segment Adjusted EBITDA increased by 30.2% to $1.88 billion, indicating strong performance in its transportation and storage operations.

Frequently Asked Questions

The primary driver of the revenue increase was higher sales volumes and prices across NGLs, crude oil, and refined products, coupled with increased gathering, transportation, and other fees, reflecting expanded operational capacity and market demand.

Energy Transfer LP reduced its overall long-term debt from $43.67 billion at the end of 2017 to $41.78 billion at the end of Q1 2018. However, the company also incurred a significant loss of $106 million related to the extinguishment of debt during the quarter.

The adoption of ASC 606 effective January 1, 2018, required adjustments to revenue recognition timing for certain contracts. This resulted in reclassifications between revenue, cost of sales, and operating expenses, and created new contract asset and liability balances, impacting the timing of reported revenue but not the overall profitability in the long term.

Key recent developments include the acquisition of USA Compression GP, LLC, the formation of the Orbit Gulf Coast NGL Exports joint venture, and several acquisitions by Sunoco LP. These activities are expected to shape future revenue streams and operational scope, with the USAC transaction expected to consolidate USAC into ETE's financial statements starting April 2018.