Energy Transfer Partners Reports Fourth Quarter and Annual Results

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Energy Transfer Partners Reports Fourth Quarter and Annual Results

DALLAS--(BUSINESS WIRE)-- Energy Transfer Partners, L.P. (NYSE: ETP) today reported its financial results for the fourth quarter ended December 31, 2012.

Adjusted EBITDA for the three months ended December 31, 2012 totaled $948 million, an increase of $455 million over the three months ended December 31, 2011. Distributable Cash Flow for the three months ended December 31, 2012 totaled $488 million, an increase of $169 million over the three months ended December 31, 2011. Income from continuing operations for the three months ended December 31, 2012 totaled $334 million, an increase of $118 million from the three months ended December 31, 2011.


Adjusted EBITDA for the year ended December 31, 2012 totaled $2.74 billion, an increase of $963 million over the year ended December 31, 2011. Distributable Cash Flow for the year ended December 31, 2012 totaled $1.49 billion, an increase of $335 million over the year ended December 31, 2011. Income from continuing operations for the year ended December 31, 2012 totaled $1.76 billion, an increase of $1.06 billion over the year ended December 31, 2011.

The quarter ended December 31, 2012 included the following significant achievements:

  • Sunoco Merger. On October 5, 2012, ETP completed its merger with Sunoco, Inc. ("Sunoco"). Under the terms of the merger agreement, Sunoco shareholders received 54,971,725 ETP Common Units and $2.6 billion of cash. Prior to the contribution of Sunoco to Holdco, as discussed below, Sunoco contributed $2.0 billion of cash and its interests in Sunoco Logistics Partners L.P. ("Sunoco Logistics") to ETP in exchange for 90,706,000 Class F Units representing limited partner interests in ETP ("Class F Units"). The Class F Units are entitled to 35% of the quarterly cash distribution generated by ETP and its subsidiaries other than Holdco, subject to a maximum cash distribution of $3.75 per Class F Unit per year, which is the current distribution level. As a result ETP, now owns the general partner interest, 100% of the incentive distribution rights, and 33,350,637 common units of Sunoco Logistics. Due to this ownership, ETP consolidated Sunoco Logistics into its financial statements as of the merger date.
  • Holdco Transaction. Immediately following the closing of the Sunoco Merger, Energy Transfer Equity, L.P. ("ETE") contributed its interest in Southern Union Company ("Southern Union") to ETP Holdco Corporation ("Holdco"), an ETP-controlled entity, in exchange for a 60% equity interest in Holdco. In conjunction with ETE's contribution, ETP contributed its interest in Sunoco to Holdco and retained a 40% equity interest in Holdco. Pursuant to a stockholders agreement between ETE and ETP, ETP controls Holdco. Consequently, ETP consolidated Holdco (including Sunoco and Southern Union) in its financial statements subsequent to the consummation of the Holdco Transaction. In connection with this transaction, ETE relinquished its rights to $210 million of incentive distributions from ETP that ETE would otherwise be entitled to receive over 12 consecutive quarters.
  • Strategic Asset Sale. In December 2012, Southern Union entered into a purchase and sale agreement pursuant to which subsidiaries of Laclede Gas Company, Inc. have agreed to acquire the assets of Southern Union's Missouri Gas Energy and New England Gas Company divisions. Total consideration is expected to be $1.04 billion, subject to customary closing adjustments, less the assumption of $19 million of debt. For the period from March 26, 2012 to December 31, 2012, the distribution operations have been reclassified to discontinued operations. The assets and liabilities of the disposal group have been reclassified and reported as assets and liabilities held for sale as of December 31, 2012.
  • Lone Star Fractionator. In December 2012, we announced that Lone Star's 100,000 Bbls/d NGL fractionation facility at Mont Belvieu, Texas is now in service. We will utilize a substantial amount of this fractionation capacity to handle NGL barrels we will deliver from the new processing facility we plan to build in Jackson County, Texas, a facility supported by multiple 10-year contracts with producers as part of our Eagle Ford Shale projects.
  • Lone Star West Texas Gateway NGL Pipeline. In December 2012, we completed construction of the 570-mile, 209,000 Bbls/d Lone Star West Texas Gateway NGL Pipeline ahead of schedule.

An analysis of the Partnership's segment results and other supplementary data is provided after the financial tables shown below. The Partnership has scheduled a conference call for 8:30 a.m. Central Time, Thursday, February 21, 2013 to discuss the 2012 results. The conference call will be broadcast live via an internet web cast which can be accessed through www.energytransfer.com and will also be available for replay on the Partnership's website for a limited time.

Adjusted EBITDA and Distributable Cash Flow are non-GAAP financial measures used by industry analysts, investors, lenders, and rating agencies to assess the financial performance and the operating results of the Partnership's fundamental business activities and should not be considered in isolation or as a substitute for net income, income from operations, cash flows from operating activities, or other GAAP measures. A table reconciling Adjusted EBITDA and Distributable Cash Flow with appropriate GAAP financial measures is included in the summarized financial information included in this release. Beginning with the quarter ended December 31, 2012 and applied retroactively to all periods presented, the Partnership has revised its calculation of Adjusted EBITDA and Distributable Cash Flow. (See notes under "Supplemental Information" for further information.)

Energy Transfer Partners, L.P. (NYSE: ETP) is a master limited partnership owning and operating one of the largest and most diversified portfolios of energy assets in the United States. ETP currently has natural gas operations that include approximately 24,000 miles of gathering and transportation pipelines, treating and processing assets, and storage facilities. ETP also owns the general partner interests, 100% of the incentive distribution rights, and a 32.4% limited partnership interest in Sunoco Logistics Partners L.P.  (NYS: SXL) , which operates a geographically diverse portfolio of crude oil and refined products pipelines, terminalling and crude oil acquisition and marketing assets. ETP also holds a 70% interest in Lone Star NGL, a joint venture that owns and operates natural gas liquids storage, fractionation and transportation assets in Texas, Louisiana and Mississippi. In addition, ETP holds controlling interest in a corporation (ETP Holdco Corporation) that owns Southern Union Company and Sunoco, Inc. ETP's general partner is owned by Energy Transfer Equity, L.P. (NYS: ETE) . For more information, visit the Energy Transfer Partners, L.P. website at www.energytransfer.com.

Energy Transfer Equity, L.P. is a master limited partnership, which owns the general partner and 100% of the incentive distribution rights of Energy Transfer Partners, L.P.  (NYS: ETP) and approximately 50.2 million ETP limited partner units; and owns the general partner and 100% of the IDRs of Regency Energy Partners LP  (NYS: RGP) and approximately 26.3 million RGP limited partner units. ETE also owns a non-controlling interest in a corporation (ETP Holdco Corporation) that owns Southern Union Company and Sunoco, Inc. The ETE family of companies owns approximately 69,000 miles of natural gas, natural gas liquids, refined products, and crude pipelines. For more information, visit the Energy Transfer Equity, L.P. website at www.energytransfer.com.

Sunoco Logistics Partners L.P. (NYSE: SXL), headquartered in Philadelphia, is a master limited partnership that owns and operates a logistics business consisting of a geographically diverse portfolio of complementary crude oil & refined product pipeline, terminalling, and acquisition & marketing assets. SXL's general partner is owned by Energy Transfer Partners, L.P. (NYS: ETP) . For more information, visit the Sunoco Logistics Partners L.P. web site atwww.sunocologistics.com.

The information contained in this press release is available on our website at www.energytransfer.com.

 

ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in millions)

(unaudited)

 
December 31,
2012  2011

ASSETS

 
CURRENT ASSETS$5,404$1,275
 
PROPERTY, PLANT AND EQUIPMENT, net25,77312,306
 
NON-CURRENT ASSETS HELD FOR SALE985
ADVANCES TO AND INVESTMENTS IN UNCONSOLIDATED AFFILIATES3,502201
NON-CURRENT PRICE RISK MANAGEMENT ASSETS4226
GOODWILL5,6061,220
INTANGIBLE ASSETS, net1,561331
OTHER NON-CURRENT ASSETS, net 357 160
Total assets$43,230$15,519
 
 

LIABILITIES AND EQUITY

 
CURRENT LIABILITIES$5,548$1,586
 
NON-CURRENT LIABILITIES HELD FOR SALE142
LONG-TERM DEBT, less current maturities15,4427,388
LONG-TERM NOTES PAYABLE - RELATED PARTY166
NON-CURRENT PRICE RISK MANAGEMENT LIABILITIES12942
DEFERRED INCOME TAXES3,476126
OTHER NON-CURRENT LIABILITIES99527
 
COMMITMENTS AND CONTINGENCIES
 
EQUITY:
Total partners' capital9,2015,721
Noncontrolling interest 8,131 629
Total equity 17,332 6,350
Total liabilities and equity$43,230$15,519
 
     

ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in millions, except per unit data)

(unaudited)

 

Three Months Ended
December 31,

Years Ended
December 31,
2012  2011

2012 (1)

  2011
REVENUES$10,981$1,805$15,702$6,799
COSTS AND EXPENSES:
Cost of products sold9,6601,10812,2664,175
Operating expenses407197900760
Depreciation and amortization237110656405
Selling, general and administrative 214  54  486  212 
Total costs and expenses 10,518  1,469  14,308  5,552 
OPERATING INCOME4633361,3941,247
OTHER INCOME (EXPENSE):
Interest expense, net of interest capitalized(186)(126)(665)(474)
Equity in earnings of unconsolidated affiliates781214226
Gain on deconsolidation of Propane Business1,057
Loss on extinguishment of debt(115)
Gains (losses) on non-hedged interest rate derivatives5(13)(4)(77)
Other, net 1  5  11  (3)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE3612141,820719
Income tax expense (benefit) 27  (2) 63  19 
INCOME FROM CONTINUING OPERATIONS3342161,757700
Income (loss) from discontinued operations 27  1  (109) (3)
NET INCOME3612171,648697
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST 54  11  79  28 
NET INCOME ATTRIBUTABLE TO PARTNERS3072061,569669
GENERAL PARTNER'S INTEREST IN NET INCOME 119  115  461  433 
LIMITED PARTNERS' INTEREST IN NET INCOME$188 $91 $1,108 $236 
INCOME FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT:
Basic$0.56 $0.41 $4.93 $1.12 
Diluted$0.56 $0.41 $4.91 $1.12 
NET INCOME PER LIMITED PARTNER UNIT:
Basic$0.62 $0.41 $4.43 $1.10 
Diluted$0.62 $0.41 $4.42 $1.10 

(1) In accordance with generally accepted accounting principles, amounts previously reported for interim periods in 2012 have been revised to reflect the retrospective consolidation of Southern Union into ETP as a result of the Holdco Transaction as the transfer of Southern Union into Holdco met the definition of a transaction between entities under common control. Thus, Southern Union is retroactively consolidated beginning March 26, 2012, the date that ETE completed its merger with Southern Union.

     

SUPPLEMENTAL INFORMATION

(Dollars in millions)

(unaudited)

 

Three Months Ended
December 31,

Years Ended
December 31,
2012  20112012 (a)  2011
Reconciliation of net income to Adjusted EBITDA and Distributable Cash Flow (b):(Revised - see (c) below)(Revised - see (c) below)(Revised - see (c) below)
Net income$361$217$1,648$697
Interest expense, net of interest capitalized186126665474
Income tax expense (benefit)27(2)6319
Depreciation and amortization237110656405
Gain on deconsolidation of Propane Business(1,057)
Loss on extinguishment of debt115
Non-cash compensation expense1174238
(Gains) losses on non-hedged interest rate derivatives(5)13477
Unreali
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