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Energy Transfer Reports Second Quarter 2019 Results

BusinessWire - Wed Aug 7, 4:05PM CDT

Energy Transfer LP (NYSE:ET) ("ET" or the "Partnership") today reported financial results for the quarter ended June 30, 2019.

ET reported net income attributable to partners for the three months ended June 30, 2019 of $878 million, an increase of $523 million compared to the three months ended June 30, 2018. For the prior period, net income attributable to partners continues to reflect only the amount of net income attributable to the legacy Energy Transfer LP partners prior to the simplification merger transaction of ET and Energy Transfer Operating, L.P. ("ETO") on October 19, 2018 (the "Merger").

Adjusted EBITDA for the three months ended June 30, 2019 was $2.82 billion, an increase of $562 million compared to the three months ended June 30, 2018. Results were supported by significant increases in four of the Partnership's five core segments, with record operating performance in the Partnership's NGL and refined products segment.

Distributable Cash Flow attributable to partners, as adjusted, for the three months ended June 30, 2019 was $1.60 billion, an increase of $301 million compared to the three months ended June 30, 2018. The increase was primarily due to the increase in Adjusted EBITDA.

Key accomplishments and current developments:

Operational

ET announces its eighth natural gas liquids (NGL) fractionation facility at Mont Belvieu, Texas. Fractionator VIII will be a 150,000 barrel per day fractionator that is scheduled to be in service in the second quarter of 2021. With the addition of Fractionator VIII, ET will have more than one million barrels per day of fractionation capacity at Mont Belvieu.ET announced a binding supplemental open season in July 2019 to solicit additional shipper commitments that would further support a capacity optimization on the Bakken pipeline system.The Permian Express 4 expansion is ongoing, and ET expects to have the project, which adds 120,000 barrels per day of capacity from the Permian Basin to Gulf Coast markets, in-service by the end of the third quarter of 2019.ET and Sunoco LP closed on the JC Nolan Pipeline joint venture in July 2019 and successfully commissioned the diesel fuel pipeline in West Texas this week.Construction is ongoing at ET's ethane storage tank and chilling facilities in Nederland, Texas with an expected in-service date in the fourth quarter of 2020.

Strategic

ET opened an office in Beijing in April and continues to expand its international marketing efforts to meet growing demand for LNG and NGL products.

Financial

In July 2019, ET announced a quarterly distribution of $0.305 per unit ($1.220 annualized) on ET common units for the quarter ended June 30, 2019. The distribution coverage ratio for the second quarter of 2019 is 2.00x.As of June 30, 2019, ETO's $6.00 billion revolving credit facilities had an aggregate $3.56 billion of available capacity, and ETO's leverage ratio, as defined by its credit agreement, was 3.61x.

ET 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 percent of the Partnership's consolidated Adjusted EBITDA for the three months ended June 30, 2019. 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, August 8, 2019 to discuss its second quarter 2019 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.

Energy Transfer LP (NYSE: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 domestic 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, 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., also owns Lake Charles LNG Company, as well as the general partner interests, the incentive distribution rights and 28.5 million common units of Sunoco LP (NYSE:SUN), and the general partner interests and 46.1 million 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 30 states, as well as refined product transportation and terminalling assets. SUN's general partner is owned by Energy Transfer Operating, L.P., a subsidiary of Energy Transfer LP (NYSE:ET). 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 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 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)
------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           
                                          June 30, 2019               June 30, 2019                       December 31, 2018
                                                         -------------------- --------------------------------                        ----------------------------------
                         ASSETS                                               
Current assets                                                              $      $  7,198           $   6,750  
                                                           
Property, plant and equipment, net                                     68,187        68,187              66,963  
                                                           
Advances to and investments in unconsolidated affiliates                2,838         2,838               2,642  
Lease right-of-use assets, net (a)                                        853           853      --  
Other non-current assets, net                                           1,026         1,026               1,006  
Intangible assets, net                                                  5,827         5,827               6,000  
Goodwill                                                                4,883         4,883               4,885  
                                                         -------------------- ------------  --------------------                      --------------  --------------------
                                                                            $      $ 90,812           $  88,246  
    Total assets
                                                         ==================== ====== ====== ====================                      ======= ======= ====================
                 LIABILITIES AND EQUITY                                       
Current liabilities                                                         $      $  6,429           $   9,310  
                                                           
Long-term debt, less current maturities                                46,499        46,499              43,373  
Non-current derivative liabilities                                        354           354                 104  
Non-current operating lease liabilities (a)                               803           803      --  
Deferred income taxes                                                   3,071         3,071               2,926  
Other non-current liabilities                                           1,139         1,139               1,184  
                                                           
Commitments and contingencies                                                 
Redeemable noncontrolling interests                                       500           500                 499  
                                                           
Equity:                                                                       
                                                                       20,834        20,834              20,559  
    Total partners' capital
                                                                       11,183        11,183              10,291  
    Noncontrolling interests
                                                         -------------------- ------------  --------------------                      --------------  --------------------
                                                                       32,017        32,017              30,850  
        Total equity
                                                         -------------------- ------------  --------------------                      --------------  --------------------
                                                                            $      $ 90,812           $  88,246  
            Total liabilities and equity
                                                         ==================== ====== ====== ====================                      ======= ======= ====================
(a) Lease-related balances as of June 30, 2019 were recorded in connection with the required adoption of the new lease accounting principles (referred to as ASC 842) on January 1, 2019. Lease-related balances as of June 30, 2019 were recorded in connection with the required adoption of the new lease accounting principles (referred to as ASC 842) on January 1, 2019.
ENERGY TRANSFER LP AND SUBSIDIARIES
                                                                                                                                                      CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                                                                                                            (In millions, except per unit data)
                                                                                                                                                                        (unaudited)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                    
                                                                        Three Months Ended                                              Three Months Ended                                                                                            Six Months Ended
                                                                                                June 30,                                                        June 30,                                                                                                                        June 30,
                                                                                          -------------------- ----------------------------------------------------------------------------------------------------                            ----------------------------------------------------------------------------------------------------
                                                                               2019                            2019                                         2018                                         2019                                         2018
                                                                                          -------------------- ----------------------------------------                        ----------------------------------------                        ----------------------------------------                        ----------------------------------------
REVENUES                                                                                                     $          $     13,877              $     14,118              $     26,998              $     26,000  
COSTS AND EXPENSES:                                                                                                                                                        
                                                                                                        10,302                10,302                    11,343                    19,717                    20,588  
    Cost of products sold
                                                                                                           792                   792                       772                     1,600                     1,496  
    Operating expenses
                                                                                                           785                   785                       694                     1,559                     1,359  
    Depreciation, depletion and amortization
                                                                                                           179                   179                       183                       326                       331  
    Selling, general and administrative
                                                                                                --        --            --                        50            --  
    Impairment losses
                                                                                          -------------------- --------------------  --------------------                      --------------------  --------------------                      --------------------  --------------------                      --------------------  --------------------
                                                                                                        12,058                12,058                    12,992                    23,252                    23,774  
        Total costs and expenses
                                                                                          -------------------- --------------------  --------------------                      --------------------  --------------------                      --------------------  --------------------                      --------------------  --------------------
OPERATING INCOME                                                                                         1,819                 1,819                     1,126                     3,746                     2,226  
OTHER INCOME (EXPENSE):                                                                                                                                                    
                                                                                                          (578                  (578 )                                       (510 )                                     (1,168 )                                       (976 )
    Interest expense, net of interest capitalized
                                                                                                            77                    77                        92                       142                       171  
    Equity in earnings of unconsolidated affiliates
                                                                                                --        --            --                       (18 )                                       (106 )
    Losses on extinguishments of debt
                                                                                                          (122                  (122 )                                         20                      (196 )                                         72  
    Gains (losses) on interest rate derivatives
                                                                                                            46                    46                        (1 )                                         42                        56  
    Other, net
                                                                                          -------------------- --------------------  --------------------                      --------------------  --------------------                      --------------------  --------------------                      --------------------  --------------------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE                                              1,242                 1,242                       727                     2,548                     1,443  
                                                                                                            34                    34                        68                       160                        58  
    Income tax expense from continuing operations
                                                                                          -------------------- --------------------  --------------------                      --------------------  --------------------                      --------------------  --------------------                      --------------------  --------------------
INCOME FROM CONTINUING OPERATIONS                                                                        1,208                 1,208                       659                     2,388                     1,385  
                                                                                                --        --                       (26 )                             --                      (263 )
    Loss from discontinued operations, net of income taxes
                                                                                          -------------------- --------------------  --------------------                      --------------------  --------------------                      --------------------  --------------------                      --------------------  --------------------
NET INCOME                                                                                               1,208                 1,208                       633                     2,388                     1,122  
                                                                                                  
                                                                                                           317                   317                       278                       614                       404  
    Less: Net income attributable to noncontrolling interests
                                                                                                            13                    13            --                        26            --  
    Less: Net income attributable to redeemable noncontrolling interests
                                                                                          -------------------- --------------------  --------------------                      --------------------  --------------------                      --------------------  --------------------                      --------------------  --------------------
NET INCOME ATTRIBUTABLE TO PARTNERS                                                                        878                   878                       355                     1,748                       718  
Series A Convertible Preferred Unitholders' interest in income       --        --                        12            --                        33  
General Partner's interest in net income                                          1                     1                         1                         2                         2  
                                                                                          -------------------- --------------------  --------------------                      --------------------  --------------------                      --------------------  --------------------                      --------------------  --------------------
Limited Partners' interest in net income                                          $          $        877              $        342              $      1,746              $        683  
                                                                                          ==================== ========== ========== ====================                      ========== ========== ====================                      ========== ========== ====================                      ========== ========== ====================
NET INCOME PER LIMITED PARTNER UNIT:                                                                                                                                       
                                                                                                             $          $       0.33              $       0.31              $       0.67              $       0.62  
    Basic
                                                                                                             $          $       0.33              $       0.31              $       0.66              $       0.62  
    Diluted
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING:                                                                                                                              
                                                                                                       2,621.2               2,621.2                   1,114.8                   2,620.3                   1,097.1  
    Basic
                                                                                                       2,631.0               2,631.0                   1,158.2                   2,630.1                   1,158.2
    Diluted
ENERGY TRANSFER LP AND SUBSIDIARIES
                                                                                                                                                                                              SUPPLEMENTAL INFORMATION
                                                                                                                                                                                           (Dollars and units in millions)
                                                                                                                                                                                                     (unaudited)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                
                                                                                                      Three Months Ended                                                     Three Months Ended                                                                                                          Six Months Ended
                                                                                                                              June 30,                                                               June 30,                                                                                                                                      June 30,
                                                                                                                        -------------------- ------------------------------------------------------------------------------------------------------------------                            ------------------------------------------------------------------------------------------------------------------
                                                                                                             2019                                2019                                                2018                                                2019                                                2018
                                                                                                                        -------------------- -----------------------------------------------                        -----------------------------------------------                        -----------------------------------------------                        -----------------------------------------------
Reconciliation of net income to Adjusted EBITDA and Distributable Cash Flow (b):                                                                                                                                              
Net income                                                                                                                                 $                    $   1,208                        $     633                        $   2,388                        $   1,122  
Loss from discontinued operations                                                                                             --               --                               26                   --                              263  
Interest expense, net of capitalized interest                                                                                            578                          578                              510                            1,168                              976  
Impairment losses                                                                                                             --               --                   --                               50                   --  
Income tax expense from continuing operations                                                                                             34                           34                               68                              160                               58  
Depreciation, depletion and amortization                                                                                                 785                          785                              694                            1,559                            1,359  
Non-cash compensation expense                                                                                                             29                           29                               32                               58                               55  
Losses (gains) on interest rate derivatives                                                                                              122                          122                              (20 )                                               196                              (72 )
Unrealized losses (gains) on commodity risk management activities                                                                         23                           23                              265                              (26 )                                               352  
Losses on extinguishments of debt                                                                                             --               --                   --                               18                              106  
Inventory valuation adjustments                                                                                                           (4                           (4 )                                               (32 )                                               (97 )                                               (57 )
Equity in earnings of unconsolidated affiliates                                                                                          (77                          (77 )                                               (92 )                                              (142 )                                              (171 )
Adjusted EBITDA related to unconsolidated affiliates                                                                                     163                          163                              168                              309                              324  
Adjusted EBITDA from discontinued operations                                                                                  --               --                               (5 )                                    --                              (25 )
Other, net                                                                                                                               (37                          (37 )                                                15                              (20 )                                               (26 )
                                                                                                                        -------------------- ---------------------------  --------------------                      ---------------------------  --------------------                      ---------------------------  --------------------                      ---------------------------  --------------------
                                                                                                                                       2,824                        2,824                            2,262                            5,621                            4,264  
    Adjusted EBITDA (consolidated)
Adjusted EBITDA related to unconsolidated affiliates                                                                                    (163                         (163 )                                              (168 )                                              (309 )                                              (324 )
Distributable cash flow from unconsolidated affiliates                                                                                   107                          107                               99                              200                              203  
Interest expense, net of capitalized interest                                                                                           (578                         (578 )                                              (510 )                                            (1,168 )                                              (978 )
Preferred unitholders' distributions                                                                          (64                          (64 )                                               (41 )                                              (117 )                                               (65 )
Current income tax (expense) benefit                                                                                                       7                            7                               27                              (21 )                                              (441 )
Transaction-related income taxes                                                                                              --               --                              (10 )                                    --                              470  
Maintenance capital expenditures                                                                                                        (170                         (170 )                                              (126 )                                              (262 )                                              (217 )
Other, net                                                                                                                                19                           19                                7                               37                               14  
                                                                                                                        -------------------- ---------------------------  --------------------                      ---------------------------  --------------------                      ---------------------------  --------------------                      ---------------------------  --------------------
                                                                                                                                       1,982                        1,982                            1,540                            3,981                            2,926  
    Distributable Cash Flow (consolidated)
Distributable Cash Flow attributable to Sunoco LP (100%)                                                                                (101                         (101 )                                               (99 )                                              (198 )                                              (183 )
Distributions from Sunoco LP                                                                                                              41                           41                               41                               82                               82  
Distributable Cash Flow attributable to USAC (100%)                                                                                      (54                          (54 )                                               (46 )                                              (109 )                                               (46 )
Distributions from USAC                                                                                                                   21                           21                               31                               42                               31  
Distributable Cash Flow attributable to noncontrolling interests in other non-wholly-owned consolidated subsidiaries                    (293                         (293 )                                              (181 )                                              (544 )                                              (328 )
                                                                                                                        -------------------- ---------------------------  --------------------                      ---------------------------  --------------------                      ---------------------------  --------------------                      ---------------------------  --------------------
                                                                                                                                       1,596                        1,596                            1,286                            3,254                            2,482  
    Distributable Cash Flow attributable to the partners of ET - pro forma for the Merger (a)
Transaction-related adjustments                                                                                                            5                            5                               14                                3                               13  
                                                                                                                        -------------------- ---------------------------  --------------------                      ---------------------------  --------------------                      ---------------------------  --------------------                      ---------------------------  --------------------
                                                                                                                                           $                    $   1,601                        $   1,300                        $   3,257                        $   2,495  
    Distributable Cash Flow attributable to the partners of ET, as adjusted - pro forma for the Merger (a)
                                                                                                                        ==================== ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================
Distributions to partners - pro forma for the Merger (a):                                                                                                                                                        
                                                                                                                                           $                    $     800                        $     798                        $   1,599                        $   1,507  
    Limited Partners (c)
                                                                                                                                           1                            1                                1                                2                                2  
    General Partner
                                                                                                                        -------------------- ---------------------------  --------------------                      ---------------------------  --------------------                      ---------------------------  --------------------                      ---------------------------  --------------------
                                                                                                                                           $                    $     801                        $     799                        $   1,601                        $   1,509  
        Total distributions to be paid to partners
                                                                                                                        ==================== ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================
Common Units outstanding - end of period - pro forma for the Merger (a)                                    2,623.2                      2,623.2                          2,616.0                          2,623.2                          2,616.0  
                                                                                                                        ==================== ===========================  ====================                      ===========================  ====================                      ===========================  ====================                      ===========================  ====================
Distribution coverage ratio - pro forma for the Merger (a)                                                       2.00x         1.63x         2.03x         1.65x  
                                                                                                                        ==================== ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================                      ==================== ======= ====================
(a)                  The closing of the Merger has impacted the Partnership's calculation of Distributable Cash Flow attributable to partners, as well as the number of ET Common Units outstanding and the amount of distributions to be paid to partners for the three and six months ended June 30, 2018. In order to provide information on a comparable basis for pre-Merger and post-Merger periods, the Partnership has included certain pro forma information for the three and six months ended June 30, 2018.                                                                                                                                                                                                                                     The closing of the Merger has impacted the Partnership's calculation of Distributable Cash Flow attributable to partners, as well as the number of ET Common Units outstanding and the amount of distributions to be paid to partners for the three and six months ended June 30, 2018. In order to provide information on a comparable basis for pre-Merger and post-Merger periods, the Partnership has included certain pro forma information for the three and six months ended June 30, 2018.
                                                                                                                                                                                                                                         
  Pro forma Distributable Cash Flow attributable to partners reflects the following merger related impacts:                                                                                                                                                                                                                                     Pro forma Distributable Cash Flow attributable to partners reflects the following merger related impacts:
  ETO is reflected as a wholly-owned subsidiary and pro forma Distributable Cash Flow attributable to partners reflects ETO's consolidated Distributable Cash Flow (less certain other adjustments);                                                                                                                                                                                                                                     ETO is reflected as a wholly-owned subsidiary and pro forma Distributable Cash Flow attributable to partners reflects ETO's consolidated Distributable Cash Flow (less certain other adjustments);
                     Distributions from Sunoco LP and USAC include distributions to both ET and ETO; and                                                                                                                                                                                                                                     Distributions from Sunoco LP and USAC include distributions to both ET and ETO; and
                     Distributable Cash Flow attributable to noncontrolling interests in our other non-wholly-owned subsidiaries is subtracted from consolidated Distributable Cash Flow to calculate Distributable Cash Flow attributable to partners.                                                                                                                                                                                                                                     Distributable Cash Flow attributable to noncontrolling interests in our other non-wholly-owned subsidiaries is subtracted from consolidated Distributable Cash Flow to calculate Distributable Cash Flow attributable to partners.
  Pro forma distributions to partners include actual distributions to legacy ET partners, as well as pro forma distributions to legacy ETO partners. Pro forma distributions to ETO partners are calculated assuming (i) historical ETO common units converted under the terms of the Merger and (ii) distributions on such converted common units were paid at the historical rate paid on ET Common Units.                                                                                                                                                                                                                                     Pro forma distributions to partners include actual distributions to legacy ET partners, as well as pro forma distributions to legacy ETO partners. Pro forma distributions to ETO partners are calculated assuming (i) historical ETO common units converted under the terms of the Merger and (ii) distributions on such converted common units were paid at the historical rate paid on ET Common Units.
                                                                                                                                                                                                                                         
  Pro forma Common Units outstanding include actual Common Units outstanding, in addition to Common Units assumed to be issued in the Merger, which are based on historical ETO common units converted under the terms of the Merger.                                                                                                                                                                                                                                     Pro forma Common Units outstanding include actual Common Units outstanding, in addition to Common Units assumed to be issued in the Merger, which are based on historical ETO common units converted under the terms of the Merger.
                                                                                                                                                                                                                                         
(b)                  Adjusted EBITDA, Distributable Cash Flow and distribution coverage ratio are non-GAAP financial measures used by industry analysts, investors, lenders and rating agencies to assess the financial performance and the operating results of ET'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.                                                                                                                                                                                                                                     Adjusted EBITDA, Distributable Cash Flow and distribution coverage ratio are non-GAAP financial measures used by industry analysts, investors, lenders and rating agencies to assess the financial performance and the operating results of ET'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.
                                                                                                                                                                                                                                         
  There are material limitations to using measures such as Adjusted EBITDA, Distributable Cash Flow and distribution coverage ratio, including the difficulty associated with using either as the sole measure to compare the results of one company to another, and the inability to analyze certain significant items that directly affect a company's net income or loss or cash flows. In addition, our calculations of Adjusted EBITDA, Distributable Cash Flow and distribution coverage ratio may not be consistent with similarly titled measures of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP, such as segment margin, operating income, net income and cash flow from operating activities.                        There are material limitations to using measures such as Adjusted EBITDA, Distributable Cash Flow and distribution coverage ratio, including the difficulty associated with using either as the sole measure to compare the results of one company to another, and the inability to analyze certain significant items that directly affect a company's net income or loss or cash flows. In addition, our calculations of Adjusted EBITDA, Distributable Cash Flow and distribution coverage ratio may not be consistent with similarly titled measures of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP, such as segment margin, operating income, net income and cash flow from operating activities.
                                                                                                                                                                                                                                         
  Definition of Adjusted EBITDA                                                                                                                                                                                                                                     Definition of Adjusted EBITDA
                                                                                                                                                                                                                                         
  We define Adjusted EBITDA as total partnership earnings before interest, taxes, depreciation, depletion, amortization and other non-cash items, such as non-cash compensation expense, gains and losses on disposals of assets, the allowance for equity funds used during construction, unrealized gains and losses on commodity risk management activities, inventory valuation adjustments, non-cash impairment charges, losses on extinguishments of debt and other non-operating income or expense items. Adjusted EBITDA reflects amounts for less than wholly-owned subsidiaries based on 100% of the subsidiaries' results of operations and for unconsolidated affiliates based on our proportionate ownership.                                                                         We define Adjusted EBITDA as total partnership earnings before interest, taxes, depreciation, depletion, amortization and other non-cash items, such as non-cash compensation expense, gains and losses on disposals of assets, the allowance for equity funds used during construction, unrealized gains and losses on commodity risk management activities, inventory valuation adjustments, non-cash impairment charges, losses on extinguishments of debt and other non-operating income or expense items. Adjusted EBITDA reflects amounts for less than wholly-owned subsidiaries based on 100% of the subsidiaries' results of operations and for unconsolidated affiliates based on our proportionate ownership.
                                                                                                                                                                                                                                         
  Adjusted EBITDA is used by management to determine our operating performance and, along with other financial and volumetric data, as internal measures for setting annual operating budgets, assessing financial performance of our numerous business locations, as a measure for evaluating targeted businesses for acquisition and as a measurement component of incentive compensation.                                                                                                                                                                                                                                     Adjusted EBITDA is used by management to determine our operating performance and, along with other financial and volumetric data, as internal measures for setting annual operating budgets, assessing financial performance of our numerous business locations, as a measure for evaluating targeted businesses for acquisition and as a measurement component of incentive compensation.
                                                                                                                                                                                                                                         
  Definition of Distributable Cash Flow                                                                                                                                                                                                                                     Definition of Distributable Cash Flow
                                                                                                                                                                                                                                         
  We define Distributable Cash Flow as net income, adjusted for certain non-cash items, less distributions to preferred unitholders and maintenance capital expenditures. Non-cash items include depreciation, depletion and amortization, non-cash compensation expense, amortization included in interest expense, gains and losses on disposals of assets, the allowance for equity funds used during construction, unrealized gains and losses on commodity risk management activities, inventory valuation adjustments, non-cash impairment charges, losses on extinguishments of debt and deferred income taxes. For unconsolidated affiliates, Distributable Cash Flow reflects the Partnership's proportionate share of the investee's distributable cash flow. We define Distributable Cash Flow as net income, adjusted for certain non-cash items, less distributions to preferred unitholders and maintenance capital expenditures. Non-cash items include depreciation, depletion and amortization, non-cash compensation expense, amortization included in interest expense, gains and losses on disposals of assets, the allowance for equity funds used during construction, unrealized gains and losses on commodity risk management activities, inventory valuation adjustments, non-cash impairment charges, losses on extinguishments of debt and deferred income taxes. For unconsolidated affiliates, Distributable Cash Flow reflects the Partnership's proportionate share of the investee's distributable cash flow.
                                                                                                                                                                                                                                         
  Distributable Cash Flow is used by management to evaluate our overall performance. Our partnership agreement requires us to distribute all available cash, and Distributable Cash Flow is calculated to evaluate our ability to fund distributions through cash generated by our operations.                                                                                                                                                                                                                                     Distributable Cash Flow is used by management to evaluate our overall performance. Our partnership agreement requires us to distribute all available cash, and Distributable Cash Flow is calculated to evaluate our ability to fund distributions through cash generated by our operations.
                                                                                                                                                                                                                                         
  On a consolidated basis, Distributable Cash Flow includes 100% of the Distributable Cash Flow of ET's consolidated subsidiaries. However, to the extent that noncontrolling interests exist among our subsidiaries, the Distributable Cash Flow generated by our subsidiaries may not be available to be distributed to our partners. In order to reflect the cash flows available for distributions to our partners, we have reported Distributable Cash Flow attributable to partners, which is calculated by adjusting Distributable Cash Flow (consolidated), as follows:                                                                                                                                                                                                                    On a consolidated basis, Distributable Cash Flow includes 100% of the Distributable Cash Flow of ET's consolidated subsidiaries. However, to the extent that noncontrolling interests exist among our subsidiaries, the Distributable Cash Flow generated by our subsidiaries may not be available to be distributed to our partners. In order to reflect the cash flows available for distributions to our partners, we have reported Distributable Cash Flow attributable to partners, which is calculated by adjusting Distributable Cash Flow (consolidated), as follows:
  For subsidiaries with publicly traded equity interests, other than ETO, Distributable Cash Flow (consolidated) includes 100% of Distributable Cash Flow attributable to such subsidiary, and Distributable Cash Flow attributable to our partners includes distributions to be received by the parent company with respect to the periods presented.                                                                                                                                                                                                                                     For subsidiaries with publicly traded equity interests, other than ETO, Distributable Cash Flow (consolidated) includes 100% of Distributable Cash Flow attributable to such subsidiary, and Distributable Cash Flow attributable to our partners includes distributions to be received by the parent company with respect to the periods presented.
                     For consolidated joint ventures or similar entities, where the noncontrolling interest is not publicly traded, Distributable Cash Flow (consolidated) includes 100% of Distributable Cash Flow attributable to such subsidiaries, but Distributable Cash Flow attributable to partners reflects only the amount of Distributable Cash Flow of such subsidiaries that is attributable to our ownership interest.                                                                                                                                                                                                                                     For consolidated joint ventures or similar entities, where the noncontrolling interest is not publicly traded, Distributable Cash Flow (consolidated) includes 100% of Distributable Cash Flow attributable to such subsidiaries, but Distributable Cash Flow attributable to partners reflects only the amount of Distributable Cash Flow of such subsidiaries that is attributable to our ownership interest.
  For Distributable Cash Flow attributable to partners, as adjusted, certain transaction-related adjustments and non-recurring expenses that are included in net income are excluded.                                                                                                                                                                                                                                     For Distributable Cash Flow attributable to partners, as adjusted, certain transaction-related adjustments and non-recurring expenses that are included in net income are excluded.
                                                                                                                                                                                                                                         
  Definition of Distribution Coverage Ratio                                                                                                                                                                                                                                     Definition of Distribution Coverage Ratio
                                                                                                                                                                                                                                         
  Distribution coverage ratio for a period is calculated as Distributable Cash Flow attributable to partners, as adjusted, divided by distributions expected to be paid to the partners of ET in respect of such period.                                                                                                                                                                                                                                     Distribution coverage ratio for a period is calculated as Distributable Cash Flow attributable to partners, as adjusted, divided by distributions expected to be paid to the partners of ET in respect of such period.
                                                                                                                                                                                                                                         
(c)                  The amounts reflected for the six months ended June 30, 2018 includes distributions to unitholders who elected to participate in a plan to forgo a portion of their future potential cash distributions on common units and reinvest those distributions in ETE Series A convertible preferred units representing limited partner interests in the Partnership for the six months ended June 30, 2018. The quarter ended March 31, 2018 was the final quarter of participation in the plan.                                                                                                                                                                                                                                     The amounts reflected for the six months ended June 30, 2018 includes distributions to unitholders who elected to participate in a plan to forgo a portion of their future potential cash distributions on common units and reinvest those distributions in ETE Series A convertible preferred units representing limited partner interests in the Partnership for the six months ended June 30, 2018. The quarter ended March 31, 2018 was the final quarter of participation in the plan.
ENERGY TRANSFER LP AND SUBSIDIARIES
                                                                                 SUMMARY ANALYSIS OF QUARTERLY RESULTS BY SEGMENT
                                                                                       (Tabular dollar amounts in millions)
                                                                                                    (unaudited)
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                       
As a result of the Merger in October 2018, our reportable segments were reevaluated during the quarter ended December 31, 2018 and currently reflect the following segments.
                                       
                                                                                                          Three Months Ended
                                                                                                                                  June 30,
                                                         ---------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     2019                                                                 2018
                                                         ---------------------------------------------------------------                         ---------------------------------------------------------------
Segment Adjusted EBITDA:                                                                                    
                                                                             $                   290                           $                   208  
    Intrastate transportation and storage
                                                                                                 460                                               375  
    Interstate transportation and storage
                                                                                                 412                                               414  
    Midstream
                                                                                                 644                                               461  
    NGL and refined products transportation and services
                                                                                                 751                                               548  
    Crude oil transportation and services
                                                                                                 152                                               140  
    Investment in Sunoco LP
                                                                                                 105                                                95  
    Investment in USAC
                                                                                                  10                                                21  
    All other
                                                         ------------------------------------------  ---------------------                       ------------------------------------------  ---------------------
                                                                             $                 2,824                           $                 2,262  
        Total Segment Adjusted EBITDA
                                                         ===================== ===================== =====================                       ===================== ===================== =====================

In the following analysis of segment operating results, a measure of segment margin is reported for segments with sales revenues. Segment margin is a non-GAAP financial measure and is presented herein to assist in the analysis of segment operating results and particularly to facilitate an understanding of the impacts that changes in sales revenues have on the segment performance measure of Segment Adjusted EBITDA. Segment margin is similar to the GAAP measure of gross margin, except that segment margin excludes charges for depreciation, depletion and amortization.

Following is a reconciliation of our segment margin to operating income, as reported in the Partnership's consolidated statements of operations:

Three Months Ended
                                                                                                                              June 30,
                                                         --------------------------------------------------------------------------------------------------------------------------------------------
                                                                   2019                                                             2018
                                                         ------------------------------------------------------------                        ------------------------------------------------------------
Segment Margin:                                                                                         
                                                                            $                  365                        $                  267  
    Intrastate transportation and storage
                                                                                               493                                           378  
    Interstate transportation and storage
                                                                                               614                                           593  
    Midstream
                                                                                               764                                           587  
    NGL and refined products transportation and services
                                                                                               909                                           442  
    Crude oil transportation and services
                                                                                               269                                           310  
    Investment in Sunoco LP
                                                                                               150                                           147  
    Investment in USAC
                                                                                                48                                            57  
    All other
                                                                                               (37 )                                                             (6 )
    Intersegment eliminations
                                                         ----------------------------------------  --------------------                      ----------------------------------------  --------------------
                                                                                             3,575                                         2,775  
        Total segment margin
                                                                                                        
     
                                                                                                        
    Less:
                                                                                               792                                           772  
        Operating expenses
                                                                                               785                                           694  
        Depreciation, depletion and amortization
                                                                                               179                                           183  
        Selling, general and administrative
                                                         ----------------------------------------  --------------------                      ----------------------------------------  --------------------
                                                                            $                1,819                        $                1,126  
            Operating income
                                                         ==================== ==================== ====================                      ==================== ==================== ====================

Intrastate Transportation and Storage

Three Months Ended
                                                                                                                         June 30,
                                                                                      ------------------------------------------------------------------------
                                                                               2019                           2018
                                                                                      --------------------------                        --------------------------
Natural gas transported (BBtu/d)                                                       12,115      10,327  
Revenues                                                                                $ 765       $ 813  
Cost of products sold                                                                     400         546  
                                                                                      ------  --------------------                      ------  --------------------
                                                                                          365         267  
    Segment margin
Unrealized gains on commodity risk management activities                                  (26 )                           (8 )
Operating expenses, excluding non-cash compensation expense                               (47 )                          (51 )
Selling, general and administrative expenses, excluding non-cash compensation expense      (7 )                           (7 )
Adjusted EBITDA related to unconsolidated affiliates                                        5           7  
                                                                                      ------  --------------------                      ------  --------------------
                                                                                        $ 290       $ 208  
    Segment Adjusted EBITDA
                                                                                      === === ====================                      === === ====================

Transported volumes increased primarily due to the impact of the Red Bluff Express pipeline coming online in May 2018, as well as the impact of favorable market pricing spreads.

Segment Adjusted EBITDA. For the three months ended June 30, 2019 compared to the same period last year, Segment Adjusted EBITDA related to our intrastate transportation and storage segment increased due to the net impacts of the following:

an increase of $65 million in realized natural gas sales and other due to higher realized gains from pipeline optimization activity; andan increase of $14 million in transportation fees primarily due to new contracts, as well as the impact of the Red Bluff Express pipeline coming online in May 2018.

Interstate Transportation and Storage

Three Months Ended
                                                                                                                                                      June 30,
                                                                                                                   -----------------------------------------------------------------------
                                                                                                            2019                           2018
                                                                                                                   --------------------------                        -------------------------
Natural gas transported (BBtu/d)                                                                                    10,825      8,707  
Natural gas sold (BBtu/d)                                                                                               17         17  
Revenues                                                                                                             $ 493      $ 378  
Operating expenses, excluding non-cash compensation, amortization and accretion expenses                              (138 )                        (110 )
Selling, general and administrative expenses, excluding non-cash compensation, amortization and accretion expenses     (18 )                         (17 )
Adjusted EBITDA related to unconsolidated affiliates                                                                   125        123  
Other                                                                                                                   (2 )                           1  
                                                                                                                   ------  --------------------                      -----  --------------------
                                                                                                                     $ 460      $ 375  
   Segment Adjusted EBITDA
                                                                                                                   === === ====================                      == === ====================

Transported volumes reflected an increase of 2,118 BBtu/d as a result of the following: the Rover pipeline being placed fully in-service in November 2018; production increases in the Haynesville Shale and deliveries to intrastate markets resulting in increased deliveries off of our Tiger pipeline; and increased utilization of higher contracted capacity on the Panhandle and Trunkline pipelines.

Segment Adjusted EBITDA. For the three months ended June 30, 2019 compared to the same period last year, Segment Adjusted EBITDA related to our interstate transportation and storage segment increased due to the net impacts of the following:

an increase of $69 million from placing the Rover pipeline fully in-service, resulting in an increase of $101 million in revenues, partially offset by an increase of $32 million in operating expenses;increases of $5 million and $3 million from higher utilization of our Transwestern and Trunkline pipeline systems, respectively;an increase of $3 million for additional gas processing revenues on our Panhandle system;an increase of $3 million from additional volume delivered from our Sea Robin pipeline as a result of fewer third-party supply interruptions; andan increase of $2 million in Adjusted EBITDA from unconsolidated affiliates primarily due to new fixed transportation contracts on Citrus.

Midstream

Three Months Ended
                                                                                                                           June 30,
                                                                                      ----------------------------------------------------------------------------
                                                                                2019                             2018
                                                                                      ----------------------------                        ----------------------------
Gathered volumes (BBtu/d)                                                                13,148        11,576  
NGLs produced (MBbls/d)                                                                     565           513  
Equity NGLs (MBbls/d)                                                                        30            31  
Revenues                                                                                $ 1,198       $ 1,874  
Cost of products sold                                                                       584         1,281  
                                                                                      --------  --------------------                      --------  --------------------
                                                                                            614           593  
    Segment margin
Operating expenses, excluding non-cash compensation expense                                (189 )                           (169 )
Selling, general and administrative expenses, excluding non-cash compensation expense       (23 )                            (20 )
Adjusted EBITDA related to unconsolidated affiliates                                          9             9  
Other                                                                                         1             1  
                                                                                      --------  --------------------                      --------  --------------------
                                                                                        $   412       $   414  
    Segment Adjusted EBITDA
                                                                                      === ===== ====================                      === ===== ====================

Gathered volumes and NGL production increased primarily due to increases in the Northeast, North Texas, South Texas, Permian and Ark-La-Tex regions, partially offset by smaller declines in the Mid-Continent/Panhandle regions.

Segment Adjusted EBITDA. For the three months ended June 30, 2019 compared to the same period last year, Segment Adjusted EBITDA related to our midstream segment decreased slightly due to the net effects of the following:

a decrease of $30 million in non-fee-based margin due to lower NGL prices of $35 million and lower gas prices of $15 million, partially offset by the impact of increased throughput volume in the Permian region of $20 million;an increase of $20 million in operating expenses due to an increase of $10 million in outside services, $7 million in maintenance project costs, and $3 million in employee costs; andan increase of $3 million in selling, general and administrative expenses due to an increase in allocated overhead and an insurance payment received in the second quarter of 2018; partially offset byan increase of $51 million in fee-based margin due to volume growth in the Northeast, Permian, Ark-La-Tex, North Texas and South Texas regions, offset by declines in the Mid-Continent/Panhandle regions.

NGL and Refined Products Transportation and Services

Three Months Ended
                                                                                                                              June 30,
                                                                                      ---------------------------------------------------------------------------------
                                                                                2019                               2018
                                                                                      ---------------------------                        ----------------------------------
NGL transportation volumes (MBbls/d)                                                     1,305                 967  
Refined products transportation volumes (MBbls/d)                                          628                 637  
NGL and refined products terminal volumes (MBbls/d)                                        988                 789  
NGL fractionation volumes (MBbls/d)                                                        701                 473  
Revenues                                                                               $ 2,612           $   2,568  
Cost of products sold                                                                    1,848               1,981  
                                                                                      -------  --------------------                      --------------  --------------------
                                                                                           764                 587  
    Segment margin
Unrealized losses on commodity risk management activities                                   39                  13  
Operating expenses, excluding non-cash compensation expense                               (155 )                                 (141 )
Selling, general and administrative expenses, excluding non-cash compensation expense      (26 )                                  (17 )
Adjusted EBITDA related to unconsolidated affiliates                                        21                  19  
Other                                                                                        1      --  
                                                                                      -------  --------------------                      --------------  --------------------
                                                                                       $   644           $     461  
    Segment Adjusted EBITDA
                                                                                      == ===== ====================                      ======= ======= ====================

NGL transportation volumes increased as a result of placing Mariner East 2 pipeline in service and higher throughput volumes on our Texas NGL pipeline system resulting primarily from increased production in the Permian and North Texas regions.

Refined products transportation volumes decreased slightly primarily due to refinery turnarounds in the Northeast and Midwest regions.

NGL and refined products terminal volumes increased primarily at Marcus Hook due to the initiation of service on our Mariner East 2 pipeline which commenced operations in the fourth quarter of 2018, an increase in volumes loaded at our Nederland terminal due to increased export demand and higher throughput volumes at our refined product terminals in the Northeast.

Average fractionated volumes at our Mont Belvieu, Texas fractionation facility increased primarily due to the commissioning of our fifth and sixth fractionators in July 2018 and February 2019, respectively.

Segment Adjusted EBITDA. For the three months ended June 30, 2019 compared to the same period last year, Segment Adjusted EBITDA related to our NGL and refined products transportation and services segment increased due to net impacts of the following:

an increase of $132 million in transportation margin primarily due to a $67 million increase resulting from the initiation of service on our Mariner East 2 pipeline in the fourth quarter of 2018, a $55 million increase resulting from higher throughput volumes received from the Permian region on our Texas NGL pipelines, a $7 million increase due to higher throughput volumes received from the Barnett region and a $3 million increase due to higher throughput volumes received from the Eagle Ford region;an increase of $55 million in terminal services margin primarily due to a $51 million increase at Marcus Hook resulting from the initiation of service on our Mariner East 2 pipeline in the fourth quarter of 2018 and a $3 million increase due to higher throughput at our refined product terminals in the Northeast;an increase of $46 million in fractionation and refinery services margin primarily due to a $50 million increase resulting from the commissioning of our fifth and sixth fractionators in July 2018 and February 2019, respectively, and higher NGL volumes from the Permian region feeding our Mont Belvieu fractionation facility. This increase was partially offset by a $3 million decrease primarily resulting from a reclassification between our fractionation and storage margins; andan increase of $5 million in storage margin primarily due to a $3 million increase resulting from a reclassification between our storage and fractionation margins and a $2 million increase from throughput pipeline fees collected at our Mont Belvieu storage facility; partially offset bya decrease of $35 million in marketing margin primarily due to a decrease of $16 million from the write down of the value of stored NGL inventory, as well as lower optimization gains due to less favorable market conditions;an increase of $14 million in operating expenses primarily due to a $4 million increase resulting from to the commissioning of our fifth and sixth fractionators in July 2018 and February 2019, respectively, an aggregate increase of $7 million in ad valorem and employee expenses on our terminal and fractionation assets, and a $2 million increase in allocated costs; andan increase of $9 million in selling, general and administrative expenses primarily due to a $4 million increase in allocated overhead costs, a $2 million increase in legal fees, a $1 million increase in employee costs and a $1 million increase in insurance expenses.

Crude Oil Transportation and Services

Three Months Ended
                                                                                                                          June 30,
                                                                                      --------------------------------------------------------------------------
                                                                                2019                            2018
                                                                                      ---------------------------                        ---------------------------
Crude transportation volumes (MBbls/d)                                                   4,728        4,242  
Crude terminals volumes (MBbls/d)                                                        2,383        2,103  
Revenues                                                                               $ 5,046      $ 4,803  
Cost of products sold                                                                    4,137        4,361  
                                                                                      -------  --------------------                      -------  --------------------
                                                                                           909          442  
   Segment margin
Unrealized losses on commodity risk management activities                                   11          262  
Operating expenses, excluding non-cash compensation expense                               (150 )                          (144 )
Selling, general and administrative expenses, excluding non-cash compensation expense      (20 )                           (20 )
Adjusted EBITDA related to unconsolidated affiliates                                         1            8  
                                                                                      -------  --------------------                      -------  --------------------
                                                                                       $   751      $   548  
   Segment Adjusted EBITDA
                                                                                      == ===== ====================                      == ===== ====================

Crude transportation and terminal volumes benefited from an increase in barrels through our existing Texas pipelines and our Bakken pipeline.

Segment Adjusted EBITDA. For the three months ended June 30, 2019 compared to the same period last year, Segment Adjusted EBITDA related to our crude oil transportation and services segment increased due to the net impacts of the following:

an increase of $216 million in segment margin (excluding unrealized gains and losses on commodity risk management activities) primarily due to a $142 million increase from higher throughput on our Texas crude pipeline system primarily due to increased production from the Permian region, a $75 million increase from higher throughput on the Bakken pipeline, and a $9 million increase from higher throughput, ship loading and tank rental fees at our Nederland terminal; partially offset by a $10 million decrease (excluding a net change of $251 million in unrealized gains and losses on commodity risk management activities) from our crude oil acquisition and marketing business primarily resulting from non-cash inventory valuation adjustments; partially offset byan increase of $6 million in operating expenses primarily due to a $14 million increase in throughput-related costs on existing assets, partially offset by an $8 million decrease in ad valorem taxes and management fees; anda decrease of $7 million in Adjusted EBITDA related to unconsolidated affiliates due to lower margin from jet fuel sales by our joint ventures.

Investment in Sunoco LP

Three Months Ended
                                                                                                                                 June 30,
                                                                                      ----------------------------------------------------------------------------------------
                                                                                   2019                                   2018
                                                                                      ----------------------------------                        ----------------------------------
Revenues                                                                                    $   4,475           $   4,607  
Cost of products sold                                                                           4,206               4,297  
                                                                                      --------------  --------------------                      --------------  --------------------
                                                                                                  269                 310  
    Segment margin
Unrealized losses on commodity risk management activities                                           3      --  
Operating expenses, excluding non-cash compensation expense                                       (89 )                                 (105 )
Selling, general and administrative expenses, excluding non-cash compensation expense             (31 )                                  (31 )
Inventory valuation adjustments                                                                    (4 )                                  (32 )
Adjusted EBITDA related to discontinued operations                                     --                  (5 )
Other                                                                                               4                   3  
                                                                                      --------------  --------------------                      --------------  --------------------
                                                                                            $     152           $     140  
    Segment Adjusted EBITDA
                                                                                      ======= ======= ====================                      ======= ======= ====================

The Investment in Sunoco LP segment reflects the consolidated results of Sunoco LP.

Segment Adjusted EBITDA. For the three months ended June 30, 2019 compared to the same period last year, Segment Adjusted EBITDA related to our investment in Sunoco LP segment increased due to the net impacts of the following:

a decrease of $16 million in operating expenses primarily as a result of lower salaries and benefits, maintenance, utilities, property tax, and environmental expenses as well as $7 million of acquisition costs in the prior periods; andan increase of $5 million in Adjusted EBITDA from discontinued operations due to Sunoco LP's retail divestment in January 2018; partially offset bya decrease of $10 million in segment margin, excluding inventory valuation adjustments and unrealized gains and losses on commodity risk management activities, primarily due to a decrease in gross profit per gallon sold primarily as a result of an $8 million one-time charge related to a reserve for an open contractual dispute.

Investment in USAC

Three Months Ended
                                                                                                                             June 30,
                                                                                      -------------------------------------------------------------------------------
                                                                                   2019                               2018
                                                                                      ----------------------------------                        -------------------------
Revenues                                                                                    $     174      $ 167  
Cost of products sold                                                                              24         20  
                                                                                      --------------  --------------------                      -----  --------------------
                                                                                                  150        147  
    Segment margin
Operating expenses, excluding non-cash compensation expense                                       (32 )                         (38 )
Selling, general and administrative expenses, excluding non-cash compensation expense             (13 )                         (19 )
Other                                                                                  --          5  
                                                                                      --------------  --------------------                      -----  --------------------
                                                                                            $     105      $  95  
    Segment Adjusted EBITDA
                                                                                      ======= ======= ====================                      == === ====================

The Investment in USAC segment reflects the consolidated results of USAC.

Segment Adjusted EBITDA. For the three months ended June 30, 2019 compared to the same period last year, Segment Adjusted EBITDA related to our investment in USAC segment increased due to the net impacts of the following:

a decrease of $6 million in operating expenses primarily due to a decrease of ad valorem taxes as well as refunds received related to prior period ad valorem taxes;a decrease of $6 million in selling, general administrative expenses primarily related to decreases of $4 million in transaction-related expenses and $2 million in employee expenses; andan increase of $3 million in segment margin primarily due to an increase in demand for compression services resulting in an increase in average revenue generating horsepower.

All Other

Three Months Ended
                                                                                                                        June 30,
                                                                                      ----------------------------------------------------------------------
                                                                               2019                          2018
                                                                                      -------------------------                        -------------------------
Revenues                                                                               $ 391      $ 502  
Cost of products sold                                                                    343        445  
                                                                                      -----  --------------------                      -----  --------------------
                                                                                          48         57  
    Segment margin
Unrealized gains on commodity risk management activities                                  (4 )                          (2 )
Operating expenses, excluding non-cash compensation expense                               (6 )                         (10 )
Selling, general and administrative expenses, excluding non-cash compensation expense    (23 )                         (28 )
Adjusted EBITDA related to unconsolidated affiliates                                       2          2  
Other and eliminations                                                                    (7 )                           2  
                                                                                      -----  --------------------                      -----  --------------------
                                                                                       $  10      $  21  
    Segment Adjusted EBITDA
                                                                                      == === ====================                      == === ====================

Segment Adjusted EBITDA. For the three months ended June 30, 2019 compared to the same period last year, Segment Adjusted EBITDA related to our all other segment decreased due to the net impacts of the following:

a decrease of $7 million from power trading activities;a decrease of $10 million due to lower revenue from our compressor equipment business;a decrease of $4 million in optimized gains on residue gas sales; anda decrease of $2 million from settled derivatives; partially offset byan increase of $13 million in storage optimization gains.

ENERGY TRANSFER LP AND SUBSIDIARIES
                                                                                                     SUPPLEMENTAL INFORMATION ON LIQUIDITY
                                                                                                                 (In millions)
                                                                                                                  (unaudited)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                          
The following table is a summary of ETO's revolving credit facilities. We also have other consolidated subsidiaries with revolving credit facilities which are not included in this table.
                                                                                                                          
                                                Facility Size                                              Funds Available at June 30, 2019                         Maturity Date
                                        ---------------------------------------------------------------                         ---------------------------------------------------------------                         ---------------------
ETO Five-Year Revolving Credit Facility                     $                 5,000                           $                 2,555            December 1, 2023
ETO 364-Day Revolving Credit Facility                                         1,000                                             1,000           November 29, 2019
                                        ------------------------------------------  ---------------------                       ------------------------------------------  ---------------------
                                         $                 6,000                           $                 3,555        
                                        ===================== ===================== =====================                       ===================== ===================== =====================
ENERGY TRANSFER LP AND SUBSIDIARIES
                                                                                                                        SUPPLEMENTAL INFORMATION ON UNCONSOLIDATED AFFILIATES
                                                                                                                                            (In millions)
                                                                                                                                             (unaudited)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           
The table below provides information on an aggregated basis for our unconsolidated affiliates, which are accounted for as equity method investments in the Partnership's financial statements for the periods presented.
                                                           
                                                      Three Months Ended                                                                                              Three Months Ended
                                                                              June 30,                                                                                                        June 30,
                                                                    --------------------------- ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             2019                                                    2019                                                                                         2018
                                                                    --------------------------- ---------------------------------------------------------------------------------                               ---------------------------------------------------------------------------------
Equity in earnings of unconsolidated affiliates:                                                                                                        
                                                                                              $                           $                          39                                             $                          33  
    Citrus
                                                                                             14                                                      14                                                                        13  
    FEP
                                                                                              7                                                       7                                                                         8  
    MEP
                                                                                             17                                                      17                                                                        38  
    Other
                                                                    --------------------------- ------------------------------------------------------  ---------------------------                             ------------------------------------------------------  ---------------------------
                                                                                              $                           $                          77                                             $                          92  
        Total equity in earnings of unconsolidated affiliates
                                                                    =========================== =========================== =========================== ===========================                             =========================== =========================== ===========================
                                                                                                                                     
Adjusted EBITDA related to unconsolidated affiliates:                                                                                                   
                                                                                              $                           $                          87                                             $                          85  
    Citrus
                                                                                             18                                                      18                                                                        18  
    FEP
                                                                                             20                                                      20                                                                        20  
    MEP
                                                                                             38                                                      38                                                                        45  
    Other
                                                                    --------------------------- ------------------------------------------------------  ---------------------------                             ------------------------------------------------------  ---------------------------
                                                                                              $                           $                         163                                             $                         168  
        Total Adjusted EBITDA related to unconsolidated affiliates
                                                                    =========================== =========================== =========================== ===========================                             =========================== =========================== ===========================
                                                                                                                                     
Distributions received from unconsolidated affiliates:                                                                                                  
                                                                                              $                           $                          39                                             $                          27  
    Citrus
                                                                                             16                                                      16                                                                        15  
    FEP
                                                                                             15                                                      15                                                                        18  
    MEP
                                                                                             42                                                      42                                                                        21  
    Other
                                                                    --------------------------- ------------------------------------------------------  ---------------------------                             ------------------------------------------------------  ---------------------------
                                                                                              $                           $                         112                                             $                          81  
        Total distributions received from unconsolidated affiliates
                                                                    =========================== =========================== =========================== ===========================                             =========================== =========================== ===========================
ENERGY TRANSFER LP AND SUBSIDIARIES
                                                                                                                SUPPLEMENTAL INFORMATION ON NON-WHOLLY-OWNED JOINT VENTURE SUBSIDIARIES
                                                                                                                                         (Dollars in millions)
                                                                                                                                              (unaudited)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    
The table below provides information on an aggregated basis for our non-wholly-owned joint venture subsidiaries, which are reflected on a consolidated basis in our financial statements. The table below excludes Sunoco LP and USAC, our non-wholly-owned subsidiaries that are publicly traded.
                                                                                    
                                                                            Three Months Ended                                                                                     Three Months Ended
                                                                                                    June 30,                                                                                               June 30,
                                                                                        -------------------------------- ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                   2019                                                2019                                                                                2018
                                                                                        -------------------------------- -------------------------------------------------------------------                                    -------------------------------------------------------------------
Adjusted EBITDA of non-wholly-owned subsidiaries (100%) (a)                                                            $                                $ 695                                                            $ 432  
Our proportionate share of Adjusted EBITDA of non-wholly-owned subsidiaries (b)                                      380                                  380                                                              233  
                                                                                                                                                     
Distributable Cash Flow of non-wholly-owned subsidiaries (100%) (c)                                                    $                                $ 657                                                            $ 399  
Our proportionate share of Distributable Cash Flow of non-wholly-owned subsidiaries (d)                              364                                  364                                                              219
Below is our current ownership percentage of certain non-wholly-owned subsidiaries:
                    
Non-wholly-owned subsidiary:  ET Percentage Ownership (e)        ET Percentage Ownership (e)
                             --------------------------- ----------------------------------------
                                                    36.4                 36.4 %
    Bakken Pipeline
                                                    60.0                 60.0 %
    Bayou Bridge
                                                    75.0                 75.0 %
    Ohio River System
                                                    87.7                 87.7 %
    Permian Express Partners
                                                    70.0                 70.0 %
    Red Bluff Express
                                                    32.6                 32.6 %
    Rover
                                                 various              various  
    Others
(a)                  Adjusted EBITDA of non-wholly-owned subsidiaries reflects the total Adjusted EBITDA of our non-wholly-owned subsidiaries on an aggregated basis. This is the amount of Adjusted EBITDA included in our consolidated non-GAAP measure of Adjusted EBITDA.                                                                                                                                    Adjusted EBITDA of non-wholly-owned subsidiaries reflects the total Adjusted EBITDA of our non-wholly-owned subsidiaries on an aggregated basis. This is the amount of Adjusted EBITDA included in our consolidated non-GAAP measure of Adjusted EBITDA.
                                                                                                                                                                                                                                         
(b)                  Our proportionate share of Adjusted EBITDA of non-wholly-owned subsidiaries reflects the amount of Adjusted EBITDA of such subsidiaries (on an aggregated basis) that is attributable to our ownership interest.                                                                                                                                                                            Our proportionate share of Adjusted EBITDA of non-wholly-owned subsidiaries reflects the amount of Adjusted EBITDA of such subsidiaries (on an aggregated basis) that is attributable to our ownership interest.
                                                                                                                                                                                                                                         
(c)                  Distributable Cash Flow of non-wholly-owned subsidiaries reflects the total Distributable Cash Flow of our non-wholly-owned subsidiaries on an aggregated basis.                                                                                                                                                                                                                            Distributable Cash Flow of non-wholly-owned subsidiaries reflects the total Distributable Cash Flow of our non-wholly-owned subsidiaries on an aggregated basis.
                                                                                                                                                                                                                                         
(d)                  Our proportionate share of Distributable Cash Flow of non-wholly-owned subsidiaries reflects the amount of Distributable Cash Flow of such subsidiaries (on an aggregated basis) that is attributable to our ownership interest. This is the amount of Distributable Cash Flow included in our consolidated non-GAAP measure of Distributable Cash Flow attributable to the partners of ET. Our proportionate share of Distributable Cash Flow of non-wholly-owned subsidiaries reflects the amount of Distributable Cash Flow of such subsidiaries (on an aggregated basis) that is attributable to our ownership interest. This is the amount of Distributable Cash Flow included in our consolidated non-GAAP measure of Distributable Cash Flow attributable to the partners of ET.
                                                                                                                                                                                                                                         
(e)                  Our ownership reflects the total economic interest held by us and our subsidiaries. In some cases, this percentage comprises ownership interests held in (or by) multiple entities.                                                                                                                                                                                                         Our ownership reflects the total economic interest held by us and our subsidiaries. In some cases, this percentage comprises ownership interests held in (or by) multiple entities.

View source version on businesswire.com: https://www.businesswire.com/news/home/20190807005843/en/

SOURCE: Energy Transfer LP

Energy Transfer
Investor Relations: 
Bill Baerg, Brent Ratliff, Lyndsay Hannah, 214-981-0795
or
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