Summary
Energy Transfer LP (ET) reported financial results for the second quarter and the first six months of 2020. The company experienced a significant decrease in revenues and net income compared to the prior year, largely attributed to the challenging market conditions stemming from the COVID-19 pandemic and the decline in commodity prices. Adjusted EBITDA also saw a notable decrease, impacted by lower volumes and prices across several operating segments, though partially offset by contributions from recent acquisitions. The company continued its strategic initiatives, including the integration of SemGroup assets and the issuance of preferred units by ETO. ET also took steps to manage its capital structure and operational costs, reducing its 2020 capital expenditure budget and planned operating expenses in response to market volatility. Despite the headwinds, ET emphasized its critical infrastructure status and its commitment to maintaining operations while prioritizing employee safety. The company maintained compliance with its debt covenants and stated it has ample liquidity.
Financial Highlights
41 data points| Revenue | $7.34B |
| Cost of Revenue | $4.12B |
| Gross Profit | $3.22B |
| SG&A Expenses | $175.00M |
| Operating Expenses | $6.00B |
| Operating Income | $1.34B |
| Interest Expense | $579.00M |
| Net Income | $353.00M |
Key Highlights
- 1Total revenues decreased significantly in the second quarter of 2020 to $7.34 billion from $13.88 billion in the prior year's quarter, and for the six months to $18.97 billion from $27.00 billion.
- 2Net income attributable to partners for the second quarter was $353 million, down from $879 million in Q2 2019. For the six months, the company reported a net loss attributable to partners of $501 million, a significant decline from a net income of $1.69 billion in the same period last year.
- 3Adjusted EBITDA (consolidated) decreased by 14% for the second quarter to $2.44 billion and by 9% for the first six months to $5.07 billion, reflecting the impact of lower volumes and market prices.
- 4The company recognized substantial impairment losses totaling $1.33 billion during the six months ended June 30, 2020, primarily related to goodwill impairments in its midstream, interstate transportation and storage, and USAC segments.
- 5Energy Transfer LP adjusted its 2020 capital expenditure budget, reducing growth capital spending by $600 million and planned operating expenses by approximately $400 million in response to market volatility caused by the COVID-19 pandemic.
- 6The company reported strong performance in its NGL and Refined Products segment's transportation margin, which increased by $140 million for the six-month period, driven by higher throughput volumes on key pipeline systems.
- 7Despite operational challenges, Energy Transfer LP stated it had ample liquidity and remained in compliance with all debt covenants as of June 30, 2020.