How is Energy Transfer's debt position and liquidity looking?

As of September 30, 2023, Energy Transfer had total debt of approximately $48.1 billion. The company reported $514 million in cash and cash equivalents and had $2.12 billion of availability under its Five-Year Credit Facility. ET confirmed compliance with all debt covenants during the quarter.

What is the status and expected impact of the Crestwood acquisition?

Energy Transfer announced a definitive agreement to acquire Crestwood Equity Partners LP for an estimated $7.1 billion (including debt) in August 2023. Crestwood unitholders approved the merger in late October, and the transaction is expected to close on November 3, 2023. This acquisition is expected to expand ET's gathering and processing assets in key basins like the Williston, Delaware, and Powder River.

Can you explain the increase in Adjusted EBITDA despite lower revenues and net income?

Adjusted EBITDA increased by $453 million year-over-year to $3.54 billion. This growth was driven by strong performance in the NGL and refined products transportation & services segment ($+442M) and crude oil transportation & services segment ($+245M), benefiting from higher volumes and operational efficiencies. These gains more than offset a decline in the midstream segment's Adjusted EBITDA, which was impacted by lower commodity prices. The litigation loss that impacted net income is excluded from the Adjusted EBITDA calculation.

ET/ET-PI 10-Q Quarterly Report Q3 FY2023 — Revenue, Net Income, EPS

Q: What were the main drivers of the decrease in net income compared to the prior year's quarter?

The significant decrease in net income from $1.32 billion in Q3 2022 to $1.05 billion in Q3 2023 was primarily due to a $625 million non-operating litigation-related loss recognized in the current quarter. Other factors contributing to the decline included higher depreciation, depletion, and amortization, and lower gains on interest rate derivatives.

Summary

Energy Transfer LP (ET) reported third-quarter 2023 results with total revenues of $20.7 billion, a decrease from $22.9 billion in the prior year's comparable quarter, primarily driven by lower refined product, NGL, and natural gas sales, though this was partially offset by higher crude oil sales and gathering/transportation fees. Net income for the quarter was $1.05 billion, down from $1.32 billion in Q3 2022. This decline was significantly impacted by a $625 million non-operating litigation-related loss recognized in the current quarter. Adjusted EBITDA, a key profitability metric, saw an increase to $3.54 billion from $3.09 billion year-over-year, reflecting improved performance in NGL and refined products transportation, crude oil transportation, and USAC segments, despite a decrease in the midstream segment due to lower natural gas and NGL prices. The company continues to expand its operations, announcing the definitive agreement to acquire Crestwood Equity Partners LP (expected to close November 3, 2023) and recently completing the acquisition of Lotus Midstream. These strategic moves aim to enhance ET's midstream footprint, particularly in the Permian Basin. ET maintained its quarterly common unit distribution of $0.3125. The company remains in compliance with its debt covenants, and its liquidity position appears stable, with $2.12 billion available under its Five-Year Credit Facility as of September 30, 2023.

Financial Highlights

40 data points

Beta

Revenue

$20.74B

0.2% Gross Margin

Net Income

$584.00M

0.0% Net Margin

Total Assets

$107.57B

Cash & Equivalents

$514.00M

Free Cash Flow

$2.37B

Financial Statements

Beta

Revenue	$20.74B
Cost of Revenue	$16.06B
Gross Profit	$4.68B
SG&A Expenses	$234.00M
Operating Expenses	$18.51B
Operating Income	$2.23B
Interest Expense	$632.00M
Net Income	$584.00M

Key Highlights

1Total revenues for Q3 2023 decreased to $20.7 billion from $22.9 billion in Q3 2022, impacted by lower commodity sales.
2Net income for Q3 2023 was $1.05 billion, down from $1.32 billion in Q3 2022, significantly affected by a $625 million litigation-related loss.
3Adjusted EBITDA increased by $453 million year-over-year to $3.54 billion, driven by strong performance in NGL/refined products and crude oil segments.
4Announced definitive agreement to acquire Crestwood Equity Partners LP, expected to close in early November 2023, to expand gathering and processing capabilities.
5Completed the acquisition of Lotus Midstream for $1.50 billion, adding crude midstream assets in the Permian Basin.
6Maintained quarterly common unit distribution at $0.3125 ($1.25 annualized).
7Ended the quarter with $514 million in cash and cash equivalents and $2.12 billion available under its Five-Year Credit Facility.

Energy Transfer LP Quarterly Report for Q3 Ended Sep 30, 2023

Summary

Financial Highlights

Key Highlights

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