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Energy Transfer LP 8-K Report, Financial Results (Aug 7, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed August 7, 2024
Period End
August 7, 2024
Securities
ETET-PI
In the record · 2016–202610-K1210-Q328-K198

ET filed 12 annual reports (10-K), 32 quarterly reports (10-Q) and 198 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Apr ’18Apr ’18
  2. Leadership change8-K · Jan ’20Jan ’20
  3. Material agreement8-K · Apr ’22Apr ’22
  4. Material agreement8-K · Jul ’26Jul ’26

01—Abstract

Summary

Summary of the 8-K filed August 7, 2024. Cited figures are marked; the original filing is the authoritative source.

Energy Transfer LP reported second-quarter 2024 net income attributable to partners of $1.31 billiona, or $0.35 per common unit (basic), versus $911 million in the prior-year quarter.

Adjusted EBITDA rose about 20% to $3.76 billionb from $3.12 billion, though it includes more than $80 million of transaction-related expenses at the Partnership and Sunoco LP. Distributable Cash Flow attributable to partners, as adjusted, increased $485 million to $2.04 billion, and the company's coverage of its $0.32 quarterly distribution (an increase of 3.2% year over year) looks comfortable. Growth capex was $549 million and maintenance capex was $223 million in the quarter.

Management raised full-year 2024 Adjusted EBITDA guidance to $15.3c–$15.5 billion from $15.0–$15.3 billion, reflecting the July 2024 closing of the WTG Midstream acquisition and base-business outperformance, net of more than $100 million of full-year transaction costs. Full-year growth capex guidance rose to approximately $3.1 billion, driven mainly by WTG and quicker-returning crude projects tied to the Crestwood acquisition. Volumes grew across most segments, with record crude transportation (up 23%), NGL export, NGL transportation and terminal volumes.

Balance sheet and credit trends were favorable. Moody's upgraded senior unsecured debt to Baa2 in June 2024, following Fitch and S&P upgrades to BBB.

The Partnership issued roughly $3.9 billiond of senior notes and junior subordinated notes in June 2024, redeemed all Series A and Series E preferred units, and reported no borrowings under its $5.0 billion revolver. Investors should weigh the rise in long-term debt (to $57.4 billion from $51.4 billion at year-end 2023) and total assets (to $121.3 billion) against the strong earnings growth, as leverage has increased with acquisitions.

02—Key points

Key Highlights

  1. Net income attributable to partners rose to $1.31 billion ($0.35 per common unit) in Q2 2024 from $911 million in Q2 2023.
  2. Adjusted EBITDA increased roughly 20% year over year to $3.76 billion, including over $80 million of transaction-related expenses.
  3. Distributable Cash Flow attributable to partners, as adjusted, grew $485 million to $2.04 billion, supporting the $0.32 per unit quarterly distribution (up 3.2%).
  4. Full-year 2024 Adjusted EBITDA guidance raised to $15.3–$15.5 billion; growth capex guidance increased to about $3.1 billion.
  5. Record volumes in crude oil transportation (up 23%), NGL exports (up ~3%), NGL transportation (up 4%), and NGL/refined products terminals (up 4%).
  6. Moody's upgraded senior unsecured debt to Baa2 in June 2024, and the Partnership issued about $3.9 billion of notes and redeemed all Series A and Series E preferred units.
  7. Long-term debt rose to $57.4 billion from $51.4 billion at year-end 2023, reflecting acquisition financing and new issuance.

03—Questions

Frequently Asked Questions

  1. How did Energy Transfer perform in Q2 2024 compared with Q2 2023?

    Net income attributable to partners rose to $1.31 billion from $911 million, and Adjusted EBITDA increased to $3.76 billion from $3.12 billion. Distributable Cash Flow attributable to partners, as adjusted, reached $2.04 billion versus $1.55 billion. Growth was driven by acquisitions (including Crestwood and NuStar-related assets at Sunoco LP) and higher volumes in crude, NGL and refined products.

  2. Why did management raise 2024 guidance, and what does it include?

    The Adjusted EBITDA range was raised to $15.3–$15.5 billion from $15.0–$15.3 billion. The increase reflects the WTG Midstream acquisition, which closed July 15, 2024, and outperformance in the base business. The guidance also absorbs more than $100 million of transaction costs, and growth capex guidance rose to about $3.1 billion.

  3. Is the distribution well covered, and has it changed?

    The Partnership declared a $0.32 per common unit distribution for Q2 2024, up 3.2% from Q2 2023. Q2 Distributable Cash Flow attributable to partners, as adjusted, of $2.04 billion comfortably exceeded total distributions to be paid to partners of $1.10 billion, which suggests solid coverage. Note that the DCF figure is non-GAAP and is calculated before certain items.

  4. What are the main balance sheet and credit developments?

    Moody's upgraded senior unsecured debt to Baa2, following Fitch and S&P upgrades to BBB. The Partnership issued $3.9 billion of notes in June 2024 and redeemed its Series A and Series E preferred units. Long-term debt rose to $57.4 billion, and the $5.0 billion revolver had no borrowings outstanding at June 30, 2024. Investors should monitor leverage as acquisitions are integrated.

  5. What were the main operational drivers this quarter?

    Crude oil transportation volumes rose 23% to a Partnership record, driven by gathering growth and recent acquisitions. NGL exports, NGL transportation and NGL/refined products terminal volumes also set records. The NGL and refined products segment and the crude segment each posted higher Segment Adjusted EBITDA, with the midstream segment benefiting from Permian volumes and acquired assets.

04—Continue

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