Delaware | 1-2921 | 44-0382470 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
5051 Westheimer Road Houston, Texas (Address of principal executive offices) | 77056-5306 (Zip Code) |
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 9.01 | Financial Statements and Exhibits. |
99.1 | Energy Transfer Equity, L.P. Press Release dated February 20, 2013 |
99.2 | Energy Transfer Partners, L.P. Press Release dated February 20, 2013 |
PANHANDLE EASTERN PIPE LINE COMPANY, LP | |||
(Registrant) | |||
Date: February 20, 2013 | By: | /s/ Robert M. Kerrigan, III | |
Robert M. Kerrigan, III | |||
Vice President and Secretary |
99.1 | Energy Transfer Equity, L.P. Press Release dated February 20, 2013 |
99.2 | Energy Transfer Partners, L.P. Press Release dated February 20, 2013 |
• | Sunoco Merger. On October 5, 2012, Energy Transfer Partners, L.P. ("ETP") completed its merger with Sunoco, Inc. ("Sunoco"). Under the terms of the merger agreement, Sunoco shareholders received 54,971,725 ETP Common Units and a total of approximately $2.6 billion in cash. |
• | Holdco Transaction. Immediately following the closing of the Sunoco Merger, ETE contributed its interest in Southern Union Company ("Southern Union") to ETP Holdco Corporation ("Holdco"), an ETP-controlled entity, in exchange for a 60% equity interest in Holdco. In conjunction with ETE's contribution, ETP contributed its interest in Sunoco to Holdco and retained a 40% equity interest in Holdco. Prior to the contribution of Sunoco to Holdco, Sunoco contributed $2.0 billion of cash and its interests in Sunoco Logistics Partners L.P. ("Sunoco Logistics") to ETP in exchange for 90,706,000 Class F Units representing limited partner interests in ETP ("Class F Units"). The Class F Units are entitled to 35% of the quarterly cash distribution generated by ETP and its subsidiaries other than Holdco, subject to a maximum cash distribution of $3.75 per Class F Unit per year, which is the current distribution level. Pursuant to a stockholders agreement between ETE and ETP, ETP controls Holdco. Consequently, ETP consolidated Holdco (including Sunoco and Southern Union) in its financial statements subsequent to consummation of the Holdco Transaction. In connection with this transaction, ETE relinquished its rights to $210 million of incentive distributions from ETP that ETE would otherwise be entitled to receive over 12 consecutive quarters. |
• | Strategic Asset Sale. In December 2012, Southern Union entered into a purchase and sale agreement pursuant to which subsidiaries of Laclede Gas Company, Inc. have agreed to acquire the assets of Southern Union's Missouri Gas Energy and New England Gas Company divisions. Total consideration is expected to be $1.04 billion, subject to customary closing adjustments, less the assumption of $19 million of debt. For the period from March 26, 2012 to December 31, 2012, the distribution operations have been reclassified to discontinued operations. The assets and liabilities of the disposal group have been reclassified and reported as assets and liabilities held for sale as of December 31, 2012. |
December 31, | |||||||
2012 | 2011 | ||||||
ASSETS | |||||||
CURRENT ASSETS | $ | 5,597 | $ | 1,455 | |||
PROPERTY, PLANT AND EQUIPMENT, net | 28,284 | 14,559 | |||||
NON-CURRENT ASSETS HELD FOR SALE | 985 | — | |||||
ADVANCES TO AND INVESTMENTS IN UNCONSOLIDATED AFFILIATES | 4,737 | 1,497 | |||||
NON-CURRENT PRICE RISK MANAGEMENT ASSETS | 43 | 26 | |||||
GOODWILL | 6,434 | 2,039 | |||||
INTANGIBLES ASSETS, net | 2,291 | 1,072 | |||||
OTHER NON-CURRENT ASSETS, net | 533 | 249 | |||||
Total assets | $ | 48,904 | $ | 20,897 | |||
LIABILITIES AND EQUITY | |||||||
CURRENT LIABILITIES | $ | 5,845 | $ | 1,841 | |||
NON-CURRENT LIABILITIES HELD FOR SALE | 142 | — | |||||
LONG-TERM DEBT, less current maturities | 21,440 | 10,947 | |||||
DEFERRED INCOME TAXES | 3,566 | 217 | |||||
NON-CURRENT PRICE RISK MANAGEMENT LIABILITIES | 162 | 81 | |||||
SERIES A CONVERTIBLE PREFERRED UNITS | 331 | 323 | |||||
OTHER NON-CURRENT LIABILITIES | 995 | 29 | |||||
COMMITMENTS AND CONTINGENCIES | |||||||
PREFERRED UNITS OF SUBSIDIARY | 73 | 71 | |||||
EQUITY: | |||||||
Total partners' capital | 2,113 | 53 | |||||
Noncontrolling interest | 14,237 | 7,335 | |||||
Total equity | 16,350 | 7,388 | |||||
Total liabilities and equity | $ | 48,904 | $ | 20,897 |
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
REVENUES: | $ | 11,313 | $ | 2,166 | $ | 16,964 | $ | 8,190 | |||||||
COSTS AND EXPENSES: | |||||||||||||||
Cost of products sold | 9,883 | 1,362 | 13,088 | 5,169 | |||||||||||
Operating expenses | 451 | 239 | 1,065 | 906 | |||||||||||
Depreciation and amortization | 300 | 159 | 871 | 586 | |||||||||||
Selling, general and administrative | 227 | 67 | 580 | 292 | |||||||||||
Total costs and expenses | 10,861 | 1,827 | 15,604 | 6,953 | |||||||||||
OPERATING INCOME | 452 | 339 | 1,360 | 1,237 | |||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Interest expense, net of interest capitalized | (286 | ) | (197 | ) | (1,018 | ) | (740 | ) | |||||||
Bridge loan related fees | — | — | (62 | ) | — | ||||||||||
Equity in earnings of unconsolidated affiliates | 94 | 35 | 212 | 117 | |||||||||||
Gain on deconsolidation of Propane Business | — | — | 1,057 | — | |||||||||||
Losses on extinguishments of debt | — | — | (123 | ) | — | ||||||||||
Gains (losses) on non-hedged interest rate derivatives | 4 | (13 | ) | (19 | ) | (78 | ) | ||||||||
Other, net | 2 | (5 | ) | 30 | 12 | ||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE | 266 | 159 | 1,437 | 548 | |||||||||||
Income tax expense (benefit) | 21 | (2 | ) | 54 | 17 | ||||||||||
INCOME FROM CONTINUING OPERATIONS | 245 | 161 | 1,383 | 531 | |||||||||||
Income (loss) from discontinued operations | 27 | 1 | (109 | ) | (3 | ) | |||||||||
NET INCOME | 272 | 162 | 1,274 | 528 | |||||||||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | 223 | 76 | 970 | 218 | |||||||||||
NET INCOME ATTRIBUTABLE TO PARTNERS | 49 | 86 | 304 | 310 | |||||||||||
GENERAL PARTNER’S INTEREST IN NET INCOME | 1 | — | 2 | 1 | |||||||||||
LIMITED PARTNERS’ INTEREST IN NET INCOME | $ | 48 | $ | 86 | $ | 302 | $ | 309 | |||||||
INCOME FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT: | |||||||||||||||
Basic | $ | 0.05 | $ | 0.37 | $ | 1.87 | $ | 1.42 | |||||||
Diluted | $ | 0.05 | $ | 0.37 | $ | 1.87 | $ | 1.41 | |||||||
NET INCOME PER LIMITED PARTNER UNIT: | |||||||||||||||
Basic | $ | 0.17 | $ | 0.38 | $ | 1.13 | $ | 1.39 | |||||||
Diluted | $ | 0.17 | $ | 0.38 | $ | 1.13 | $ | 1.38 |
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Cash distributions from ETP associated with: (1) | |||||||||||||||
General partner interest | $ | 5 | $ | 5 | $ | 20 | $ | 20 | |||||||
Incentive distribution rights | 148 | 112 | 529 | 422 | |||||||||||
Limited partner interest | 45 | 45 | 180 | 180 | |||||||||||
Total | 198 | 162 | 729 | 622 | |||||||||||
IDR relinquishment related to Citrus Dropdown and Sunoco Merger | (31 | ) | — | (90 | ) | — | |||||||||
Total cash distributions from ETP | 167 | 162 | 639 | 622 | |||||||||||
Cash distributions from Regency associated with: (2) | |||||||||||||||
General partner interest | 1 | 1 | 5 | 5 | |||||||||||
Incentive distribution rights | 2 | 2 | 8 | 6 | |||||||||||
Limited partner interest | 12 | 12 | 48 | 48 | |||||||||||
Total cash distributions from Regency | 15 | 15 | 61 | 59 | |||||||||||
Cash dividends from Holdco (3) | 75 | — | 75 | — | |||||||||||
Total cash distributions and dividends received from ETP, Regency and Holdco | 257 | 177 | 775 | 681 | |||||||||||
Distributable cash flow attributable to Southern Union (including acquisition-related expenses) from March 26, 2012 through October 5, 2012 (4) | — | — | 82 | — | |||||||||||
Deduct expenses of the Parent Company on a stand-alone basis: | |||||||||||||||
Selling, general and administrative expenses, excluding non-cash compensation expense (5) | (4 | ) | (4 | ) | (52 | ) | (30 | ) | |||||||
Interest expense, net of amortization of financing costs, interest income, and realized gains and losses on interest rate swaps (5) | (60 | ) | (41 | ) | (232 | ) | (161 | ) | |||||||
Bridge financing costs | — | — | (62 | ) | — | ||||||||||
Distributable Cash Flow (6) | 193 | 132 | 511 | 490 | |||||||||||
Acquisition-related expenses (5) | — | 3 | 157 | 21 | |||||||||||
Distributable Cash Flow, as adjusted | $ | 193 | $ | 135 | $ | 668 | $ | 511 | |||||||
Cash distributions to be paid to the partners of ETE: (6) | |||||||||||||||
Distributions to be paid to limited partners | $ | 178 | $ | 139 | $ | 703 | $ | 543 | |||||||
Distributions to be paid to general partner | — | — | 1 | 2 | |||||||||||
Total cash distributions to be paid to the partners of ETE | $ | 178 | $ | 139 | $ | 704 | $ | 545 | |||||||
Reconciliation of Non-GAAP “Distributable Cash Flow” and “Distributable Cash Flow, as adjusted,” to GAAP “Net income”: | |||||||||||||||
Net income attributable to partners | $ | 49 | $ | 86 | $ | 304 | $ | 310 | |||||||
Equity in income related to investments in ETP, Regency and Holdco | (114 | ) | (140 | ) | (676 | ) | (509 | ) | |||||||
Total cash distributions and dividends from ETP, Regency and Holdco | 257 | 177 | 775 | 681 | |||||||||||
Amortization included in interest expense (excluding ETP and Regency) | 3 | 1 | 13 | 3 | |||||||||||
Fair value adjustment of ETE Preferred Units | 3 | 8 | 8 | 5 | |||||||||||
Other non-cash (excluding ETP, Regency and Holdco) | (5 | ) | — | 87 | — | ||||||||||
Distributable Cash Flow | 193 | 132 | 511 | 490 | |||||||||||
Acquisition-related expenses (5) | — | 3 | 157 | 21 | |||||||||||
Distributable Cash Flow, as adjusted | $ | 193 | $ | 135 | $ | 668 | $ | 511 |
(1) | For the three months ended December 31, 2012, cash distributions received from ETP consist of cash distributions paid on February 14, 2013 in respect of the quarter ended December 31, 2012. For the three months ended December 31, 2011, cash distributions received from ETP consist of cash distributions paid on February 14, 2012 in respect of the quarter ended December 31, 2011. |
(2) | For the three months ended December 31, 2012, cash distributions received from Regency consist of cash distributions paid on February 14, 2013 in respect of the quarter ended December 31, 2012. For the three months ended December 31, 2011, cash distributions received from Regency consist of cash distributions paid on February 14, 2012 in respect of the quarter ended December 31, 2011. |
(3) | For the three months ended December 31, 2012, cash dividends received from Holdco consist of cash dividends paid on February 13, 2013 in respect of the quarter ended December 31, 2012. |
(4) | Distributable cash flow attributable to Southern Union relates to the period while Southern Union was our wholly-owned subsidiary, from our acquisition on March 26, 2012 to our contribution of Southern Union in connection with the Holdco Transaction on October 5, 2012. Distributable cash flow attributable to Southern Union was calculated as follows (in millions): |
Period from Acquisition (March 26, 2012) to October 5, 2012 | |||||
Net income | $ | 5 | |||
Amortization of finance costs charged to interest | (21 | ) | |||
Depreciation and amortization | 137 | ||||
Deferred income taxes | 18 | ||||
Non-cash equity-based compensation, accretion expense and amortization of regulatory assets | 5 | ||||
Other non-cash gains/revenues or losses/expenses | 24 | ||||
Distributions received from unconsolidated investments | 4 | ||||
Maintenance capital expenditures | (90 | ) | |||
Distributable cash flow attributable to Southern Union | 82 | ||||
Acquisition-related expenses recognized by Southern Union | 57 | ||||
Distributable cash flow, as adjusted, attributable to Southern Union | $ | 139 |
(5) | Transaction costs for the year ended December 31, 2012 related to ETE's acquisition of Southern Union consisted of $62 million bridge financing costs, $38 million of selling, general and administrative expenses incurred by ETE and $57 million of merger-related expenses that were incurred directly by Southern Union. |
(6) | For the three months ended December 31, 2012, cash distributions to be paid by ETE consist of cash distributions paid on February 19, 2013 in respect of the quarter ended December 31, 2012. For the three months ended December 31, 2011, cash |
Period from October 5, 2012 to December 31, 2012 | ||||||||||||||||
Southern Union | Sunoco | Other | Total | |||||||||||||
Net income (loss) | $ | 49 | $ | (14 | ) | $ | (47 | ) | $ | (12 | ) | |||||
Depreciation and amortization | 42 | 32 | — | 74 | ||||||||||||
Depreciation, amortization, interest and income taxes of discontinued operations | 16 | — | — | 16 | ||||||||||||
LIFO valuation reserve | — | — | 75 | — | 75 | |||||||||||
Equity in earnings (losses) from unconsolidated affiliates | 6 | (70 | ) | (2 | ) | (66 | ) | |||||||||
Distributions from unconsolidated affiliates | 2 | 85 | 3 | 90 | ||||||||||||
Maintenance capital expenditures | (60 | ) | (25 | ) | — | (85 | ) | |||||||||
Other, net | 4 | 1 | — | 5 | ||||||||||||
Distributable Cash Flow | 59 | 84 | (46 | ) | 97 | |||||||||||
Acquisition-related expenses | — | 49 | — | 49 | ||||||||||||
Distributable cash flow, as adjusted | $ | 59 | $ | 133 | $ | (46 | ) | $ | 146 |
• | Sunoco Merger. On October 5, 2012, ETP completed its merger with Sunoco, Inc. ("Sunoco"). Under the terms of the merger agreement, Sunoco shareholders received 54,971,725 ETP Common Units and $2.6 billion of cash. Prior to the contribution of Sunoco to Holdco, as discussed below, Sunoco contributed $2.0 billion of cash and its interests in Sunoco Logistics Partners L.P. ("Sunoco Logistics") to ETP in exchange for 90,706,000 Class F Units representing limited partner interests in ETP ("Class F Units"). The Class F Units are entitled to 35% of the quarterly cash distribution generated by ETP and its subsidiaries other than Holdco, subject to a maximum cash distribution of $3.75 per Class F Unit per year, which is the current distribution level. As a result ETP, now owns the general partner interest, 100% of the incentive distribution rights, and 33,350,637 common units of Sunoco Logistics. Due to this ownership, ETP consolidated Sunoco Logistics into its financial statements as of the merger date. |
• | Holdco Transaction. Immediately following the closing of the Sunoco Merger, Energy Transfer Equity, L.P. ("ETE") contributed its interest in Southern Union Company ("Southern Union") to ETP Holdco Corporation ("Holdco"), an ETP-controlled entity, in exchange for a 60% equity interest in Holdco. In conjunction with ETE's contribution, ETP contributed its interest in Sunoco to Holdco and retained a 40% equity interest in Holdco. Pursuant to a stockholders agreement between ETE and ETP, ETP controls Holdco. Consequently, ETP consolidated Holdco (including Sunoco and Southern Union) in its financial statements subsequent to the consummation of the Holdco Transaction. In connection with this transaction, ETE relinquished its rights to $210 million of incentive distributions from ETP that ETE would otherwise be entitled to receive over 12 consecutive quarters. |
• | Strategic Asset Sale. In December 2012, Southern Union entered into a purchase and sale agreement pursuant to which subsidiaries of Laclede Gas Company, Inc. have agreed to acquire the assets of Southern Union's Missouri Gas Energy and New England Gas Company divisions. Total consideration is expected to be $1.04 billion, subject to customary closing adjustments, less the assumption of $19 million of debt. For the period from March 26, 2012 to December 31, 2012, the distribution operations have been reclassified to discontinued operations. The assets and liabilities of the disposal group have been reclassified and reported as assets and liabilities held for sale as of December 31, 2012. |
• | Lone Star Fractionator. In December 2012, we announced that Lone Star's 100,000 Bbls/d NGL fractionation facility at Mont Belvieu, Texas is now in service. We will utilize a substantial amount of this fractionation capacity to handle |
• | Lone Star West Texas Gateway NGL Pipeline. In December 2012, we completed construction of the 570-mile, 209,000 Bbls/d Lone Star West Texas Gateway NGL Pipeline ahead of schedule. |
December 31, | |||||||
2012 | 2011 | ||||||
ASSETS | |||||||
CURRENT ASSETS | $ | 5,404 | $ | 1,275 | |||
PROPERTY, PLANT AND EQUIPMENT, net | 25,773 | 12,306 | |||||
NON-CURRENT ASSETS HELD FOR SALE | 985 | — | |||||
ADVANCES TO AND INVESTMENTS IN UNCONSOLIDATED AFFILIATES | 3,502 | 201 | |||||
NON-CURRENT PRICE RISK MANAGEMENT ASSETS | 42 | 26 | |||||
GOODWILL | 5,606 | 1,220 | |||||
INTANGIBLE ASSETS, net | 1,561 | 331 | |||||
OTHER NON-CURRENT ASSETS, net | 357 | 160 | |||||
Total assets | $ | 43,230 | $ | 15,519 |
LIABILITIES AND EQUITY | |||||||
CURRENT LIABILITIES | $ | 5,548 | $ | 1,586 | |||
NON-CURRENT LIABILITIES HELD FOR SALE | 142 | — | |||||
LONG-TERM DEBT, less current maturities | 15,442 | 7,388 | |||||
LONG-TERM NOTES PAYABLE - RELATED PARTY | 166 | — | |||||
NON-CURRENT PRICE RISK MANAGEMENT LIABILITIES | 129 | 42 | |||||
DEFERRED INCOME TAXES | 3,476 | 126 | |||||
OTHER NON-CURRENT LIABILITIES | 995 | 27 | |||||
COMMITMENTS AND CONTINGENCIES | |||||||
EQUITY: | |||||||
Total partners' capital | 9,201 | 5,721 | |||||
Noncontrolling interest | 8,131 | 629 | |||||
Total equity | 17,332 | 6,350 | |||||
Total liabilities and equity | $ | 43,230 | $ | 15,519 |
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||
2012 | 2011 | 2012 (1) | 2011 | ||||||||||||
REVENUES | $ | 10,981 | $ | 1,805 | $ | 15,702 | $ | 6,799 | |||||||
COSTS AND EXPENSES: | |||||||||||||||
Cost of products sold | 9,660 | 1,108 | 12,266 | 4,175 | |||||||||||
Operating expenses | 407 | 197 | 900 | 760 | |||||||||||
Depreciation and amortization | 237 | 110 | 656 | 405 | |||||||||||
Selling, general and administrative | 214 | 54 | 486 | 212 | |||||||||||
Total costs and expenses | 10,518 | 1,469 | 14,308 | 5,552 | |||||||||||
OPERATING INCOME | 463 | 336 | 1,394 | 1,247 | |||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Interest expense, net of interest capitalized | (186 | ) | (126 | ) | (665 | ) | (474 | ) | |||||||
Equity in earnings of unconsolidated affiliates | 78 | 12 | 142 | 26 | |||||||||||
Gain on deconsolidation of Propane Business | — | — | 1,057 | — | |||||||||||
Loss on extinguishment of debt | — | — | (115 | ) | — | ||||||||||
Gains (losses) on non-hedged interest rate derivatives | 5 | (13 | ) | (4 | ) | (77 | ) | ||||||||
Other, net | 1 | 5 | 11 | (3 | ) | ||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE | 361 | 214 | 1,820 | 719 | |||||||||||
Income tax expense (benefit) | 27 | (2 | ) | 63 | 19 | ||||||||||
INCOME FROM CONTINUING OPERATIONS | 334 | 216 | 1,757 | 700 | |||||||||||
Income (loss) from discontinued operations | 27 | 1 | (109 | ) | (3 | ) | |||||||||
NET INCOME | 361 | 217 | 1,648 | 697 | |||||||||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | 54 | 11 | 79 | 28 | |||||||||||
NET INCOME ATTRIBUTABLE TO PARTNERS | 307 | 206 | 1,569 | 669 | |||||||||||
GENERAL PARTNER’S INTEREST IN NET INCOME | 119 | 115 | 461 | 433 | |||||||||||
LIMITED PARTNERS’ INTEREST IN NET INCOME | $ | 188 | $ | 91 | $ | 1,108 | $ | 236 | |||||||
INCOME FROM CONTINUING OPERATIONS PER LIMITED PARTNER UNIT: | |||||||||||||||
Basic | $ | 0.56 | $ | 0.41 | $ | 4.93 | $ | 1.12 | |||||||
Diluted | $ | 0.56 | $ | 0.41 | $ | 4.91 | $ | 1.12 | |||||||
NET INCOME PER LIMITED PARTNER UNIT: | |||||||||||||||
Basic | $ | 0.62 | $ | 0.41 | $ | 4.43 | $ | 1.10 | |||||||
Diluted | $ | 0.62 | $ | 0.41 | $ | 4.42 | $ | 1.10 |
(1) | In accordance with generally accepted accounting principles, amounts previously reported for interim periods in 2012 have been revised to reflect the retrospective consolidation of Southern Union into ETP as a result of the Holdco Transaction as the transfer of Southern Union into Holdco met the definition of a transaction between entities under common control. Thus, Southern Union is retroactively consolidated beginning March 26, 2012, the date that ETE completed its merger with Southern Union. |
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||
2012 | 2011 | 2012 (a) | 2011 | ||||||||||||
Reconciliation of net income to Adjusted EBITDA and Distributable Cash Flow (b): | (Revised - see (c) below) | (Revised - see (c) below) | (Revised - see (c) below) | ||||||||||||
Net income | $ | 361 | $ | 217 | $ | 1,648 | $ | 697 | |||||||
Interest expense, net of interest capitalized | 186 | 126 | 665 | 474 | |||||||||||
Income tax expense (benefit) | 27 | (2 | ) | 63 | 19 | ||||||||||
Depreciation and amortization | 237 | 110 | 656 | 405 | |||||||||||
Gain on deconsolidation of Propane Business | — | — | (1,057 | ) | — | ||||||||||
Loss on extinguishment of debt | — | — | 115 | — | |||||||||||
Non-cash compensation expense | 11 | 7 | 42 | 38 | |||||||||||
(Gains) losses on non-hedged interest rate derivatives | (5 | ) | 13 | 4 | 77 | ||||||||||
Unrealized (gains) losses on commodity risk management activities | (51 | ) | 13 | 9 | 11 | ||||||||||
LIFO valuation reserve | 75 | — | 75 | — | |||||||||||
Write-down of assets included in loss from discontinued operations | (13 | ) | — | 132 | — | ||||||||||
Equity in earnings of unconsolidated affiliates | (78 | ) | (12 | ) | (142 | ) | (26 | ) | |||||||
Adjusted EBITDA related to unconsolidated affiliates | 178 | 18 | 480 | 56 | |||||||||||
Other, net | 20 | 3 | 54 | 30 | |||||||||||
Adjusted EBITDA | 948 | 493 | 2,744 | 1,781 | |||||||||||
Adjusted EBITDA related to unconsolidated affiliates | (178 | ) | (18 | ) | (480 | ) | (56 | ) | |||||||
Distributions from unconsolidated affiliates | 72 | 19 | 262 | 51 | |||||||||||
Interest expense, net of interest capitalized | (186 | ) | (126 | ) | (665 | ) | (474 | ) | |||||||
Income tax (expense) benefit | (27 | ) | 2 | (63 | ) | (19 | ) | ||||||||
Maintenance capital expenditures | (143 | ) | (54 | ) | (313 | ) | (134 | ) | |||||||
Other, net | 2 | 3 | 3 | 4 | |||||||||||
Distributable Cash Flow | $ | 488 | $ | 319 | $ | 1,488 | $ | 1,153 | |||||||
Distributions to be paid to the partners of ETP (d): | |||||||||||||||
Limited Partners: | |||||||||||||||
Common units held by ETE | $ | 45 | $ | 45 | $ | 180 | $ | 180 | |||||||
Common units held by public | 224 | 157 | 783 | 582 | |||||||||||
General Partner interest held by ETE | 5 | 5 | 20 | 20 | |||||||||||
Incentive Distribution Rights ("IDR") held by ETE | 148 | 112 | 529 | 422 | |||||||||||
422 | 319 | 1,512 | 1,204 | ||||||||||||
IDR relinquishment related to Citrus Dropdown and Sunoco Merger | (31 | ) | — | (90 | ) | — | |||||||||
Total distributions to be paid to the partners of ETP | 391 | 319 | 1,422 | 1,204 | |||||||||||
Distributions to be paid to noncontrolling interests: | |||||||||||||||
Distributions to ETE in respect of Holdco (e) | 75 | — | 75 | — | |||||||||||
Distributions to Regency in respect of Lone Star (f) | 15 | 13 | 60 | 35 | |||||||||||
Distributions to Sunoco Logistics unitholders (common units held by public) (g) | 38 | — | 38 | — | |||||||||||
Total distributions to be paid to noncontrolling interests | 128 | 13 | 173 | 35 | |||||||||||
Total distributions to be paid to the partners of ETP and noncontrolling interests | $ | 519 | $ | 332 | $ | 1,595 | $ | 1,239 |
Three Months Ended December 31, | |||||||
2012 | 2011 | ||||||
Segment Adjusted EBITDA | |||||||
Intrastate transportation and storage | $ | 131 | $ | 153 | |||
Interstate transportation and storage | 306 | 107 | |||||
Midstream | 103 | 115 | |||||
NGL transportation and services | 54 | 48 | |||||
Investment in Sunoco Logistics | 219 | — | |||||
Retail Marketing | 109 | — | |||||
All other | 29 | 72 | |||||
Elimination | (3 | ) | (2 | ) | |||
$ | 948 | $ | 493 |
• | Interstate Transportation and Storage segment now includes Southern Union's transportation and storage operations; |
• | Midstream segment now includes Southern Union's gathering and processing operations; |
• | Investment in Sunoco Logistics segment reflects the consolidated operations of Sunoco Logistics; |
• | Retail Marketing segment reflects the consolidated operations of Sunoco's retail marketing business; and, |
• | All Other now includes the investments and operations identified under the segment table below. |
• | Gross margin, operating expenses, and selling, general and administrative. These amounts represent the amounts included in our consolidated financial statements that are attributable to each segment. |
• | Unrealized gains or losses on commodity risk management activities. These are the unrealized amounts that are included in gross margin. These amounts are not included in Segment Adjusted EBITDA; therefore, the unrealized losses are added back and the unrealized gains are subtracted to calculate the segment measure. |
• | Non-cash compensation expense. These amounts represent the total non-cash compensation recorded in operating expenses and selling, general and administrative. These amounts are not included in Segment Adjusted EBITDA and therefore are added back to calculate the segment measure. |
• | Adjusted EBITDA related to unconsolidated affiliates. These amounts represent our proportionate share of the Adjusted EBITDA of our unconsolidated affiliates. Amounts reflected are calculated consistently with our definition of Adjusted EBITDA above. |
Three Months Ended December 31, | |||||||
2012 | 2011 | ||||||
Natural gas MMBtu/d — transported | 9,426,807 | 11,107,320 | |||||
Revenues | $ | 659 | $ | 579 | |||
Cost of products sold | 445 | 378 | |||||
Gross margin | 214 | 201 | |||||
Unrealized (gains) losses on commodity risk management activities | (35 | ) | 11 | ||||
Operating expenses, excluding non-cash compensation expense | (42 | ) | (47 | ) | |||
Selling, general and administrative expenses, excluding non-cash compensation expense | (9 | ) | (13 | ) | |||
Adjusted EBITDA related to unconsolidated affiliates | 3 | 1 | |||||
Segment Adjusted EBITDA | $ | 131 | $ | 153 | |||
Distributions from unconsolidated affiliates | $ | — | $ | 1 | |||
Maintenance capital expenditures | 8 | 15 |
Three Months Ended December 31, | |||||||
2012 | 2011 | ||||||
Transportation fees | $ | 129 | $ | 151 | |||
Natural gas sales and other | 27 | — | |||||
Retained fuel revenues | 24 | 25 | |||||
Storage margin, including fees | 34 | 24 | |||||
Total gross margin (1) | $ | 214 | $ | 201 |
(1) | Gross margin included unrealized gains and losses on commodity risk management activities, which were excluded from the Segment Adjusted EBITDA calculation, as reflected above. |
Three Months Ended December 31, | |||||||
2012 | 2011 | ||||||
Natural gas transported (MMBtu/d) | |||||||
ETP Legacy Assets | 2,868,070 | 3,071,083 | |||||
Southern Union transportation and storage | 4,094,576 | — | |||||
Natural gas sold (MMBtu/d) | 17,020 | 21,057 | |||||
Revenues | $ | 334 | $ | 117 | |||
Operating expenses, excluding non-cash compensation, amortization and accretion expenses | (74 | ) | (20 | ) | |||
Selling, general and administrative, excluding non-cash compensation, amortization and accretion expenses | (33 | ) | (7 | ) | |||
Adjusted EBITDA related to unconsolidated affiliates | 79 | 17 | |||||
Segment Adjusted EBITDA | $ | 306 | $ | 107 | |||
Distributions from unconsolidated affiliates | $ | 42 | $ | 18 | |||
Maintenance capital expenditures | 45 | 15 |
Three Months Ended December 31, | |||||||
2012 | 2011 | ||||||
Gathered Volumes (MMBtu/d): | |||||||
ETP Legacy Assets | 2,473,878 | 2,259,676 | |||||
Southern Union gathering and processing | 533,548 | — | |||||
NGLs produced (Bbls/d): | |||||||
ETP Legacy Assets | 87,389 | 61,756 | |||||
Southern Union gathering and processing | 42,346 | — | |||||
Equity NGLs produced (Bbls/d): | |||||||
ETP Legacy Assets | 13,538 | 17,107 | |||||
Southern Union gathering and processing | 6,724 | — | |||||
Revenues | $ | 930 | $ | 666 | |||
Cost of products sold | 758 | 529 | |||||
Gross margin | 172 | 137 | |||||
Unrealized (gains) losses on commodity risk management activities | (1 | ) | (1 | ) | |||
Operating expenses, excluding non-cash compensation expense | (46 | ) | (24 | ) | |||
Selling, general and administrative, excluding non-cash compensation expense | (16 | ) | (5 | ) | |||
Adjusted EBITDA related to unconsolidated affiliates | (6 | ) | — | ||||
Adjusted EBITDA attributable to discontinued operations | — | 8 | |||||
Segment Adjusted EBITDA | $ | 103 | $ | 115 | |||
Maintenance capital expenditures | $ | 19 | $ | 14 |
Three Months Ended December 31, | |||||||
2012 | 2011 | ||||||
Gathering and processing fee-based revenues | $ | 101 | $ | 70 | |||
Non fee-based contracts and processing | 73 | 70 | |||||
Other | (2 | ) | (3 | ) | |||
Total gross margin | $ | 172 | $ | 137 |
Three Months Ended December 31, | |||||||
2012 | 2011 | ||||||
NGL transportation volumes (Bbls/d) | 187,821 | 131,297 | |||||
NGL fractionation volumes (Bbls/d) | 18,424 | 19,073 | |||||
Revenues | $ | 154 | $ | 152 | |||
Cost of products sold | 76 | 85 | |||||
Gross margin | 78 | 67 | |||||
Operating expenses, excluding non-cash compensation expense | (17 | ) | (15 | ) | |||
Selling, general and administrative, excluding non-cash compensation expense | (5 | ) | (4 | ) | |||
Adjusted EBITDA related to unconsolidated affiliates | (2 | ) | — | ||||
Segment Adjusted EBITDA | $ | 54 | $ | 48 | |||
Maintenance capital expenditures | $ | 5 | $ | 3 |
Three Months Ended December 31, | |||||||
2012 | 2011 | ||||||
Storage revenues | $ | 32 | $ | 35 | |||
Transportation revenues | 28 | 12 | |||||
Processing and fractionation revenues | 18 | 20 | |||||
Total gross margin | $ | 78 | $ | 67 |
Three Months Ended December 31, | |||||||
2012 | 2011 | ||||||
Revenue | $ | 3,194 | $ | — | |||
Cost of products sold | 2,843 | — | |||||
Gross margin | 351 | — | |||||
Unrealized gains on commodity risk management activities | (15 | ) | — | ||||
Operating expenses, excluding non-cash compensation expense | (95 | ) | — | ||||
Selling, general and administrative, excluding non-cash compensation expense | (32 | ) | — | ||||
Adjusted EBITDA related to unconsolidated affiliates | 10 | — | |||||
Segment Adjusted EBITDA | $ | 219 | $ | — | |||
Distributions from unconsolidated affiliates | $ | 6 | $ | — | |||
Maintenance capital expenditures | 21 | — |
Three Months Ended December 31, | |||||||
2012 | 2011 | ||||||
Total retail gasoline outlets, end of period | 4,988 | — | |||||
Total company-operated outlets, end of period | 437 | — | |||||
Gasoline and diesel throughput per company-operated site (gallons/month) | 198,000 | — | |||||
Revenue | $ | 5,926 | $ | — | |||
Cost of products sold | 5,757 | — | |||||
Gross margin | 169 | — | |||||
Operating expenses, excluding non-cash compensation expense | (119 | ) | — | ||||
Selling, general and administrative, excluding non-cash compensation expense | (17 | ) | — | ||||
LIFO valuation reserve (included in gross margin) | 75 | — | |||||
Adjusted EBITDA related to unconsolidated affiliates | 1 | — | |||||
Segment Adjusted EBITDA | $ | 109 | $ | — | |||
Maintenance capital expenditures | $ | 20 | $ | — |
Three Months Ended December 31, | |||||||
2012 | 2011 | ||||||
Revenue | $ | 88 | $ | 475 | |||
Cost of products sold | 80 | 296 | |||||
Gross margin | 8 | 179 | |||||
Unrealized losses on commodity risk management activities | — | 2 | |||||
Operating expenses, excluding non-cash compensation expense | (15 | ) | (94 | ) | |||
Selling, general and administrative, excluding non-cash compensation expense | (90 | ) | (15 | ) | |||
Adjusted EBITDA related to unconsolidated affiliates | 93 | — | |||||
Adjusted EBITDA related to discontinued operations | 33 | — | |||||
Segment Adjusted EBITDA | $ | 29 | $ | 72 | |||
Distributions from unconsolidated affiliates | $ | 24 | $ | — | |||
Maintenance capital expenditures | 25 | 6 |
• | Our retail propane and other retail propane related operations prior to our contribution of those operations to AmeriGas Partners, L.P. ("AmeriGas") in January 2012. Our investment in AmeriGas was reflected in the other segment subsequent to that transaction; |
• | Southern Union's local distribution operations beginning March 26, 2012; |
• | Our natural gas compression operations; and, |
• | Sunoco's 33% non-operating interest in Philadelphia Energy Solutions ("PES"), a joint venture with The Carlyle Group, L.P. ("The Carlyle Group"), which owns a refinery in Philadelphia. |