Energy Transfer Reports Fourth Quarter 2018 Results with Record Performance and Continued Growth

DALLAS--(BUSINESS WIRE)--

• Net income attributable to partners of $617 million, reflecting an increase over previous periods primarily due to the impact of the Merger.
• Record Adjusted EBITDA of $2.67 billion, up 29 percent from the fourth quarter of 2017.
• Record Distributable Cash Flow attributable to partners of $1.52 billion, up 29 percent from the fourth quarter of 2017.
• Distribution coverage ratio of 1.90x, yielding excess coverage of $716 million of Distributable Cash Flow attributable to partners in excess of distributions.
• Reaffirms 2019 outlook for Adjusted EBITDA of $10.6 billion to $10.8 billion and capital expenditures of approximately $5 billion.

Energy Transfer LP (ET) (“ET” or the “Partnership”) today reported financial results for the quarter and year ended December 31, 2018.

ET reported net income attributable to partners for the three months ended December 31, 2018 of $617 million, an increase of $366 million compared to the three months ended December 31, 2017. For the prior period, net income attributable to partners continues to reflect only the amount of net income attributable to the legacy ETE partners prior to the Merger, as discussed below.

Adjusted EBITDA for the three months ended December 31, 2018 was $2.67 billion, an increase of $592 million compared to the three months ended December 31, 2017. Results were supported by increases in all of the Partnership’s core operations, with record operating performance in ET’s NGL, interstate and intrastate businesses.

On a pro forma basis for the Merger, Distributable Cash Flow attributable to partners, as adjusted, for the three months ended December 31, 2018 was a record $1.52 billion, an increase of $338 million compared to the three months ended December 31, 2017. The increase was primarily due to the increase in Adjusted EBITDA.

Key accomplishments and current developments:

Strategic

• ET and Energy Transfer Operating, L.P. (“ETO”, formerly Energy Transfer Partners, L.P. or “ETP”) completed a simplification merger transaction on October 19, 2018 (the “Merger”) whereby the publicly held common units of ETP were exchanged for 1.28 common units of ET. Consequently, the former common unitholders of ETP, along with the existing common unitholders of ET, now comprise the current common unitholders of ET.

Operational

• Frac VI, a 150,000 barrel per day fractionator at Mont Belvieu, was placed in service in February 2019.
• Bakken Pipeline completed a successful open season in January 2019 to bring the current system capacity to 570,000 barrels per day.
• The North Texas natural gas pipeline 160,000 MMBtu per day expansion was placed in service in January 2019.
• Mariner East 2, a 350-mile NGL pipeline, was placed into service for both intrastate and interstate service in December 2018.
• Construction of a 150,000 barrel per day fractionator (Frac VII) at Mont Belvieu and Lone Star Express 352-mile NGL pipeline expansion were announced in November 2018.

Financial

• In January 2019, ET announced a quarterly distribution of $0.305 per unit ($1.220 annualized) on ET common units for the quarter ended December 31, 2018.
• In January 2019, ETO issued an aggregate $4.00 billion principal amount of senior notes and used the net proceeds to repay in full ET’s outstanding senior secured term loan, redeem certain outstanding senior notes at maturity, repay a portion of the borrowings outstanding under ET’s revolving credit facility and for general partnership purposes.
• As of December 31, 2018, ETO’s $6.00 billion revolving credit facilities had an aggregate $2.24 billion of available capacity, and ETO’s leverage ratio, as defined by its credit agreement, was 3.38x.

Energy Transfer benefits from a portfolio of assets with exceptional product and geographic diversity. The Partnership’s multiple segments generate high-quality, balanced earnings with no single segment contributing more than a quarter of the Partnership’s consolidated Adjusted EBITDA in 2018. The great majority of the Partnership’s segment margins are fee-based and therefore have limited commodity price sensitivity.

Conference call information:

The Partnership has scheduled a conference call for 8:00 a.m. Central Time, Thursday, February 21, 2019 to discuss its fourth quarter 2018 results. The conference call will be broadcast live via an internet webcast, which can be accessed through www.energytransfer.com and will also be available for replay on the Partnership’s website for a limited time.

Subsequent to the Merger, substantially all of the Partnership’s cash flows are derived from distributions related to its investment in ETO, whose cash flows are derived from its subsidiaries, including ETO’s investments in the limited and general partner interests in Sunoco LP and USA Compression Partners LP (“USAC”), as well as its ownership of Lake Charles LNG Company, LLC (“Lake Charles LNG”).

Energy Transfer LP (ET) owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with a strategic footprint in all of the major U.S. production basins, ET is a publicly traded limited partnership with core operations that include complementary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquids (NGL) and refined product transportation and terminalling assets; NGL fractionation; and various acquisition and marketing assets. ET, through its ownership of Energy Transfer Operating, L.P., formerly known as Energy Transfer Partners, L.P., also owns the general partner interests, the incentive distribution rights and 28.5 million common units of Sunoco LP (SUN), and the general partner interests and 39.7 million common units of USA Compression Partners, LP (USAC). For more information, visit the Energy Transfer LP website at www.energytransfer.com.

Sunoco LP (SUN) is a master limited partnership that distributes motor fuel to approximately 10,000 convenience stores, independent dealers, commercial customers and distributors located in more than 30 states. SUN’s general partner is owned by Energy Transfer Operating, L.P., a subsidiary of Energy Transfer LP (ET). For more information, visit the Sunoco LP website at www.sunocolp.com.

USA Compression Partners, LP (USAC) is a growth-oriented Delaware limited partnership that is one of the nation’s largest independent providers of compression services in terms of total compression fleet horsepower. USAC partners with a broad customer base composed of producers, processors, gatherers and transporters of natural gas and crude oil. USAC focuses on providing compression services to infrastructure applications primarily in high-volume gathering systems, processing facilities and transportation applications. For more information, visit the USAC website at www.usacompression.com.

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