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Energy Transfer Reports Strong Fourth Quarter 2022 Results and Announces 2023 Outlook

DALLAS, February 15, 2023--(BUSINESS WIRE)--Energy Transfer LP (NYSE:ET) ("Energy Transfer" or the "Partnership") today reported financial results for the quarter and year ended December 31, 2022.

Energy Transfer reported net income attributable to partners for the three months ended December 31, 2022 of $1.16 billion, an increase of $234 million compared to the same period last year. For the three months ended December 31, 2022, net income per common unit (basic) was $0.34 per unit.

Adjusted EBITDA for the three months ended December 31, 2022 was $3.44 billion compared to $2.81 billion for the same period last year.

Distributable Cash Flow attributable to partners, as adjusted, for the three months ended December 31, 2022 was $1.91 billion compared to $1.60 billion for the same period last year.

The improved results were primarily due to higher volumes across all of our core segments and the impacts of the acquisition of Enable Midstream.

Growth capital expenditures in 2022 were $1.93 billion while maintenance capital expenditures were $743 million.

2023 Outlook

  • Energy Transfer expects its 2023 Adjusted EBITDA to range between $12.9 billion and $13.3 billion.

  • For 2023, the Partnership expects its growth capital expenditures to range from $1.6 billion to $1.8 billion, which includes Fractionator VIII at Mont Belvieu, the Bear processing plant in the Permian Basin, compression and optimization projects on existing pipelines, new treating capacity in the Haynesville, additional gathering and compression buildout in the Permian, and improved efficiencies and emissions reduction work, as well as preliminary spending related to carbon capture projects. A significant amount of our 2023 growth capital will be spent on projects that are expected to be online and contributing cash flow before year-end. Maintenance capital expenditures for 2023 are expected to be between $725 million and $775 million.

Operational Highlights

  • During the fourth quarter of 2022, Energy Transfer’s assets continued to reach new milestones, with volumes increasing across all segments compared to the same period last year.

    • NGL fractionation volumes were up 7% and set a new Partnership record. Single-day fractionation throughput at our Mont Belvieu fractionators reached more than one million barrels for the first time in the Partnership’s history.

    • NGL transportation volumes were up 5%, setting a new Partnership record.

    • Midstream throughput volumes increased 32%, setting a new Partnership record. Excluding the Enable and Woodford Express assets, legacy midstream volumes were up 8%.

    • Intrastate natural gas transportation volumes were up 13%.

    • Interstate natural gas transportation volumes were up 33%. Excluding the Enable assets, legacy interstate volumes were up 7% and reached a new record.

    • Crude transportation and terminal volumes were up 11% and 13%, respectively, driven primarily by higher volumes on our Texas pipeline systems, the impact of the Enable acquisition, and U.S. Strategic Petroleum Reserve releases.

  • NGL exports at our Nederland terminal reached a new record in the fourth quarter.

  • In December 2022, the Partnership placed the Gulf Run pipeline in service. The large diameter pipeline runs from the Haynesville Shale to the Carthage and Perryville natural gas hubs and to key markets along the Gulf Coast.

  • In December 2022, the Partnership placed the Grey Wolf processing plant in service. The 200 MMcf/d plant is located in the Delaware Basin.

  • In the fourth quarter of 2022, the Partnership placed a new three million barrel storage cavern online at our Mont Belvieu storage facilities, increasing total underground NGL storage capacity at Mont Belvieu to approximately 60 million barrels.

  • The Partnership recently completed modernization and de-bottlenecking work on the Oasis Pipeline, which added at least 60,000 Mcf/d of incremental natural gas takeaway capacity out of the Permian Basin.

Strategic Highlights

  • In the fourth quarter of 2022, the Partnership released its Corporate Responsibility Report, which highlights Energy Transfer’s safety and risk management achievements, emissions reduction programs, and community engagement programs.

Financial Highlights

  • In January 2023, Energy Transfer announced a quarterly cash distribution of $0.305 per common unit ($1.22 annualized) for the quarter ended December 31, 2022.

  • In December 2022, the Partnership issued $1.0 billion aggregate principal amount of 5.55% senior notes and $1.5 billion aggregate principal amount of 5.75% senior notes and used the net proceeds to reduce borrowings outstanding under the Partnership’s revolving credit facility.

  • For the full year 2022, Energy Transfer reduced its long-term debt by approximately $800 million.

  • As of December 31, 2022, the Partnership’s revolving credit facility had an aggregate $4.18 billion of available borrowing capacity.

  • For the three months ended December 31, 2022, the Partnership invested approximately $605 million on growth capital expenditures.

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 30% of the Partnership’s consolidated Adjusted EBITDA for the three months or full year ended December 31, 2022. The vast 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 3:30 p.m. Central Time/4:30 p.m. Eastern Time on Wednesday, February 15, 2023 to discuss its fourth quarter 2022 results and provide an update on the Partnership, including its outlook for 2023. 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.

Energy Transfer LP (NYSE: ET) owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with approximately 120,000 miles of pipeline and associated energy infrastructure. Energy Transfer’s strategic network spans 41 states with assets in all of the major U.S. production basins. Energy Transfer 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; and NGL fractionation. Energy Transfer also owns Lake Charles LNG Company, as well as the general partner interests, the incentive distribution rights and approximately 34% of the outstanding common units of Sunoco LP (NYSE: SUN), and the general partner interests and approximately 47% of the outstanding common units of USA Compression Partners, LP (NYSE: USAC). For more information, visit the Energy Transfer LP website at www.energytransfer.com.

Sunoco LP (NYSE: SUN) is a master limited partnership with core operations that include the distribution of motor fuel to approximately 10,000 convenience stores, independent dealers, commercial customers, and distributors located in more than 40 U.S. states and territories, as well as refined product transportation and terminalling assets. For more information, visit the Sunoco LP website at www.sunocolp.com.

USA Compression Partners, LP (NYSE: USAC) is a growth-oriented Delaware limited partnership that is one of the nation’s largest independent providers of natural gas 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.

Forward-Looking Statements

This news release may include certain statements concerning expectations for the future that are forward-looking statements as defined by federal law. Such forward-looking statements are subject to a variety of known and unknown risks, uncertainties, and other factors that are difficult to predict and many of which are beyond management’s control. An extensive list of factors that can affect future results, including future distribution levels and leverage ratio, are discussed in the Partnership’s Annual Report on Form 10-K and other documents filed from time to time with the Securities and Exchange Commission. The Partnership undertakes no obligation to update or revise any forward-looking statement to reflect new information or events.

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

ENERGY TRANSFER LP AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(unaudited)

December 31, 2022

December 31, 2021

ASSETS

Current assets

$

12,081

$

10,537

Property, plant and equipment, net

80,311

81,607

Investments in unconsolidated affiliates

2,893

2,947

Lease right-of-use assets, net

819

838

Other non-current assets, net

1,558

1,645

Intangible assets, net

5,415

5,856

Goodwill

2,566

2,533

Total assets

$

105,643

$

105,963

LIABILITIES AND EQUITY

Current liabilities

$

10,368

$

10,835

Long-term debt, less current maturities

48,260

49,022

Non-current derivative liabilities

23

193

Non-current operating lease liabilities

798

814

Deferred income taxes

3,701

3,648

Other non-current liabilities

1,341

1,323

Commitments and contingencies

Redeemable noncontrolling interests

493

783

Equity:

Limited Partners:

Preferred Unitholders

6,051

6,051

Common Unitholders

26,960

25,230

General Partner

(2

)

(4

)

Accumulated other comprehensive income

16

23

Total partners’ capital

33,025

31,300

Noncontrolling interests

7,634

8,045

Total equity

40,659

39,345

Total liabilities and equity

$

105,643

$

105,963

ENERGY TRANSFER LP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per unit data)

(unaudited)

Three Months Ended

December 31,

Year Ended
December 31,

2022

2021

2022

2021

REVENUES

$

20,501

$

18,657

$

89,876

$

67,417

COSTS AND EXPENSES:

Cost of products sold

16,063

14,754

72,232

50,395

Operating expenses

1,356

989

4,338

3,574

Depreciation, depletion and amortization

1,060

980

4,164

3,817

Selling, general and administrative

216

235

1,018

818

Impairment losses and other

10

386

21

Total costs and expenses

18,695

16,968

82,138

58,625

OPERATING INCOME

1,806

1,689

7,738

8,792

OTHER INCOME (EXPENSE):

Interest expense, net of interest capitalized

(592

)

(554

)

(2,306

)

(2,267

)

Equity in earnings of unconsolidated affiliates

71

55

257

246

Losses on extinguishments of debt

(30

)

(38

)

Gains (losses) on interest rate derivatives

(10

)

(11

)

293

61

Other, net

207

32

90

77

INCOME BEFORE INCOME TAX EXPENSE (BENEFIT)

1,482

1,181

6,072

6,871

Income tax expense (benefit)

45

(50

)

204

184

NET INCOME

1,437

1,231

5,868

6,687

Less: Net income attributable to noncontrolling interest

268

297

1,061

1,167

Less: Net income attributable to redeemable noncontrolling interests

14

13

51

50

NET INCOME ATTRIBUTABLE TO PARTNERS

1,155

921

4,756

5,470

General Partner’s interest in net income

1

1

4

6

Preferred Unitholders’ interest in net income

105

100

422

285

Common Unitholders’ interest in net income

$

1,049

$

820

$

4,330

$

5,179

NET INCOME PER COMMON UNIT:

Basic

$

0.34

$

0.29

$

1.40

$

1.89

Diluted

$

0.34

$

0.29

$

1.40

$

1.89

WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING:

Basic

3,090.3

2,824.5

3,086.8

2,734.4

Diluted

3,103.2

2,830.6

3,097.0

2,739.6

ENERGY TRANSFER LP AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

(Dollars and units in millions)

(unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2022

2021

2022

2021 (a)

Reconciliation of net income to Adjusted EBITDA and Distributable Cash Flow (b):

Net income

$

1,437

$

1,231

$

5,868

$

6,687

Interest expense, net of interest capitalized

592

554

2,306

2,267

Impairment losses and other

10

386

21

Income tax expense (benefit)

45

(50

)

204

184

Depreciation, depletion and amortization

1,060

980

4,164

3,817

Non-cash compensation expense

27

30

115

111

(Gains) losses on interest rate derivatives

10

11

(293

)

(61

)

Unrealized (gains) losses on commodity risk management activities

88

(88

)

(42

)

(162

)

Losses on extinguishments of debt

30

38

Inventory valuation adjustments (Sunoco LP)

76

(22

)

(5

)

(190

)

Equity in earnings of unconsolidated affiliates

(71

)

(55

)

(257

)

(246

)

Adjusted EBITDA related to unconsolidated affiliates

156

123

565

523

Other, net

17

57

82

57

Adjusted EBITDA (consolidated)

3,437

2,811

13,093

13,046

Adjusted EBITDA related to unconsolidated affiliates

(156

)

(123

)

(565

)

(523

)

Distributable Cash Flow from unconsolidated affiliates

89

78

359

346

Interest expense, net of interest capitalized

(592

)

(554

)

(2,306

)

(2,267

)

Preferred unitholders’ distributions

(118

)

(113

)

(471

)

(418

)

Current income tax expense

(17

)

(10

)

(18

)

(44

)

Transaction-related income taxes

(42

)

Maintenance capital expenditures

(294

)

(210

)

(821

)

(581

)

Other, net

3

18

20

68

Distributable Cash Flow (consolidated)

2,352

1,897

9,249

9,627

Distributable Cash Flow attributable to Sunoco LP (100%)

(152

)

(143

)

(648

)

(542

)

Distributions from Sunoco LP

42

41

166

165

Distributable Cash Flow attributable to USAC (100%)

(60

)

(52

)

(221

)

(209

)

Distributions from USAC

24

24

97

97

Distributable Cash Flow attributable to noncontrolling interests in other non-wholly-owned consolidated subsidiaries

(314

)

(327

)

(1,240

)

(1,113

)

Distributable Cash Flow attributable to the partners of Energy Transfer

1,892

1,440

7,403

8,025

Transaction-related adjustments (c)

18

160

44

194

Distributable Cash Flow attributable to the partners of Energy Transfer, as adjusted

$

1,910

$

1,600

$

7,447

$

8,219

Distributions to partners: