Date of Report (Date of earliest event reported) | ||
PANHANDLE EASTERN PIPE LINE COMPANY, LP | ||
(Exact name of Registrant as specified in its charter) | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
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 7.01 | Regulation FD Disclosure. |
Item 9.01 | Financial Statements and Exhibits. |
Exhibit Number | Description of the Exhibit |
99.1 | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
PANHANDLE EASTERN PIPE LINE COMPANY, LP | |||
(Registrant) | |||
August 5, 2020 | /s/ Thomas E. Long | ||
Thomas E. Long | |||
Chief Financial Officer (duly authorized to sign on behalf of the registrant) |
• | As the COVID-19 pandemic continues, our field operations have continued uninterrupted, and remote work and other COVID-19 related conditions have not significantly impacted our ability to maintain operations nor caused us to incur significant additional expenses. |
• | For the second quarter of 2020, ET achieved record high transportation and fractionation volumes in its NGL and refined products transportation and services segment. |
• | The Partnership also achieved record high gathering and processing volumes in the Midland Basin near the end of the second quarter of 2020. |
• | During the second quarter of 2020, the Partnership made significant progress on capital projects throughout the U.S., with many such projects to be placed in service by year-end. |
• | The Partnership exited the second quarter of 2020 with an upward trend in volumes on the majority of its oil, natural gas and NGL assets. |
• | During the second quarter of 2020, the Partnership continued to implement cost reduction measures among both its corporate offices and field operations, achieving approximately $200 million in savings on operating expenses and selling, general and administrative expenses to date in 2020. |
• | ET lowered 2020 expected capital spending to $3.4 billion, a reduction of at least $600 million from original guidance in February 2020. |
• | In July 2020, ET announced a quarterly distribution of $0.305 per unit ($1.220 annualized) on ET common units for the quarter ended June 30, 2020. The distribution coverage ratio for the second quarter of 2020 was 1.54x. |
• | As of June 30, 2020, Energy Transfer Operating, L.P.’s (“ETO”) $6.00 billion revolving credit facilities had an aggregate $2.90 billion of available capacity, and the leverage ratio, as defined by the credit agreement, was 4.29x. |
June 30, 2020 | December 31, 2019 | ||||||
ASSETS | |||||||
Current assets (1) | $ | 5,156 | $ | 7,464 | |||
Property, plant and equipment, net | 74,941 | 74,193 | |||||
Advances to and investments in unconsolidated affiliates | 3,311 | 3,460 | |||||
Lease right-of-use assets, net | 1,112 | 964 | |||||
Other non-current assets, net (1) | 1,512 | 1,571 | |||||
Intangible assets, net | 6,007 | 6,154 | |||||
Goodwill | 3,868 | 5,167 | |||||
Total assets | $ | 95,907 | $ | 98,973 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities | $ | 5,003 | $ | 7,724 | |||
Long-term debt, less current maturities | 51,251 | 51,028 | |||||
Non-current derivative liabilities | 577 | 273 | |||||
Non-current operating lease liabilities | 903 | 901 | |||||
Deferred income taxes | 3,313 | 3,208 | |||||
Other non-current liabilities | 1,218 | 1,162 | |||||
Commitments and contingencies | |||||||
Redeemable noncontrolling interests | 750 | 739 | |||||
Equity: | |||||||
Total partners’ capital | 19,815 | 21,920 | |||||
Noncontrolling interests | 13,077 | 12,018 | |||||
Total equity | 32,892 | 33,938 | |||||
Total liabilities and equity | $ | 95,907 | $ | 98,973 |
(1) | Effective January 1, 2020, the Partnership elected to change its accounting policy related to certain barrels of crude oil that were previously accounted for as inventory. Under the revised accounting policy, certain amounts of crude oil that are not available for sale have been reclassified from inventory to non-current assets. The balances as of December 31, 2019 have been adjusted to reflect this change in accounting policy. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019(1) | 2020 | 2019(1) | ||||||||||||
REVENUES | $ | 7,338 | $ | 13,877 | $ | 18,965 | $ | 26,998 | |||||||
COSTS AND EXPENSES: | |||||||||||||||
Cost of products sold | 4,117 | 10,301 | 12,408 | 19,778 | |||||||||||
Operating expenses | 770 | 792 | 1,649 | 1,600 | |||||||||||
Depreciation, depletion and amortization | 936 | 785 | 1,803 | 1,559 | |||||||||||
Selling, general and administrative | 175 | 179 | 379 | 326 | |||||||||||
Impairment losses | 4 | — | 1,329 | 50 | |||||||||||
Total costs and expenses | 6,002 | 12,057 | 17,568 | 23,313 | |||||||||||
OPERATING INCOME | 1,336 | 1,820 | 1,397 | 3,685 | |||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Interest expense, net of interest capitalized | (579 | ) | (578 | ) | (1,181 | ) | (1,168 | ) | |||||||
Equity in earnings of unconsolidated affiliates | 85 | 77 | 78 | 142 | |||||||||||
Losses on extinguishments of debt | — | — | (62 | ) | (18 | ) | |||||||||
Losses on interest rate derivatives | (3 | ) | (122 | ) | (332 | ) | (196 | ) | |||||||
Other, net | (68 | ) | 46 | (65 | ) | 42 | |||||||||
INCOME (LOSS) BEFORE INCOME TAX EXPENSE | 771 | 1,243 | (165 | ) | 2,487 | ||||||||||
Income tax expense from continuing operations | 99 | 34 | 127 | 160 | |||||||||||
NET INCOME (LOSS) | 672 | 1,209 | (292 | ) | 2,327 | ||||||||||
Less: Net income attributable to noncontrolling interests | 306 | 317 | 185 | 614 | |||||||||||
Less: Net income attributable to redeemable noncontrolling interests | 13 | 13 | 25 | 26 | |||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO PARTNERS | 353 | 879 | (502 | ) | 1,687 | ||||||||||
General Partner’s interest in net income (loss) | — | 1 | (1 | ) | 2 | ||||||||||
Limited Partners’ interest in net income (loss) | $ | 353 | $ | 878 | $ | (501 | ) | $ | 1,685 | ||||||
NET INCOME (LOSS) PER LIMITED PARTNER UNIT: | |||||||||||||||
Basic | $ | 0.13 | $ | 0.33 | $ | (0.19 | ) | $ | 0.64 | ||||||
Diluted | $ | 0.13 | $ | 0.33 | $ | (0.19 | ) | $ | 0.64 | ||||||
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING: | |||||||||||||||
Basic | 2,694.9 | 2,621.2 | 2,693.3 | 2,620.3 | |||||||||||
Diluted | 2,695.8 | 2,631.0 | 2,693.3 | 2,630.1 |
(1) | Effective January 1, 2020, the Partnership elected to change its accounting policy related to certain barrels of crude oil that were previously accounted for as inventory. Under the revised accounting policy, certain amounts of crude oil that are not available for sale have been reclassified from inventory to non-current assets. The condensed consolidated statement of operations for the three and six months ended June 30, 2019 has been adjusted to reflect this change in accounting policy. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019(a) | 2020 | 2019(a) | ||||||||||||
Reconciliation of net income (loss) to Adjusted EBITDA and Distributable Cash Flow(b): | |||||||||||||||
Net income (loss) | $ | 672 | $ | 1,209 | $ | (292 | ) | $ | 2,327 | ||||||
Interest expense, net of interest capitalized | 579 | 578 | 1,181 | 1,168 | |||||||||||
Impairment losses | 4 | — | 1,329 | 50 | |||||||||||
Income tax expense | 99 | 34 | 127 | 160 | |||||||||||
Depreciation, depletion and amortization | 936 | 785 | 1,803 | 1,559 | |||||||||||
Non-cash compensation expense | 41 | 29 | 63 | 58 | |||||||||||
Losses on interest rate derivatives | 3 | 122 | 332 | 196 | |||||||||||
Unrealized (gains) losses on commodity risk management activities | 48 | 23 | (3 | ) | (26 | ) | |||||||||
Losses on extinguishments of debt | — | — | 62 | 18 | |||||||||||
Inventory valuation adjustments (Sunoco LP) | (90 | ) | (4 | ) | 137 | (97 | ) | ||||||||
Equity in earnings of unconsolidated affiliates | (85 | ) | (77 | ) | (78 | ) | (142 | ) | |||||||
Adjusted EBITDA related to unconsolidated affiliates | 157 | 163 | 311 | 309 | |||||||||||
Other, net | 74 | (37 | ) | 101 | (20 | ) | |||||||||
Adjusted EBITDA (consolidated) | 2,438 | 2,825 | 5,073 | 5,560 | |||||||||||
Adjusted EBITDA related to unconsolidated affiliates | (157 | ) | (163 | ) | (311 | ) | (309 | ) | |||||||
Distributable cash flow from unconsolidated affiliates | 112 | 107 | 225 | 200 | |||||||||||
Interest expense, net of interest capitalized | (579 | ) | (578 | ) | (1,181 | ) | (1,168 | ) | |||||||
Preferred unitholders’ distributions | (96 | ) | (64 | ) | (185 | ) | (117 | ) | |||||||
Current income tax (expense) benefit | (15 | ) | 7 | (1 | ) | (21 | ) | ||||||||
Maintenance capital expenditures | (136 | ) | (170 | ) | (239 | ) | (262 | ) | |||||||
Other, net | 18 | 19 | 40 | 37 | |||||||||||
Distributable Cash Flow (consolidated) | 1,585 | 1,983 | 3,421 | 3,920 | |||||||||||
Distributable Cash Flow attributable to Sunoco LP (100%) | (122 | ) | (101 | ) | (281 | ) | (198 | ) | |||||||
Distributions from Sunoco LP | 41 | 41 | 82 | 82 | |||||||||||
Distributable Cash Flow attributable to USAC (100%) | (58 | ) | (54 | ) | (113 | ) | (109 | ) | |||||||
Distributions from USAC | 24 | 21 | 48 | 42 | |||||||||||
Distributable Cash Flow attributable to noncontrolling interests in other non-wholly-owned consolidated subsidiaries | (209 | ) | (293 | ) | (499 | ) | (544 | ) | |||||||
Distributable Cash Flow attributable to the partners of ET | 1,261 | 1,597 | 2,658 | 3,193 | |||||||||||
Transaction-related adjustments | 10 | 5 | 30 | 3 | |||||||||||
Distributable Cash Flow attributable to the partners of ET, as adjusted | $ | 1,271 | $ | 1,602 | $ | 2,688 | $ | 3,196 | |||||||
Distributions to partners: | |||||||||||||||
Limited Partners | $ | 822 | $ | 800 | $ | 1,644 | $ | 1,599 | |||||||
General Partner | 1 | 1 | 2 | 2 | |||||||||||
Total distributions to be paid to partners | $ | 823 | $ | 801 | $ | 1,646 | $ | 1,601 | |||||||
Common Units outstanding – end of period | 2,695.6 | 2,623.2 | 2,695.6 | 2,623.2 | |||||||||||
Distribution coverage ratio | 1.54x | 2.00x | 1.63x | 2.00x |
(a) | Effective January 1, 2020, the Partnership elected to change its accounting policy related to certain barrels of crude oil that were previously accounted for as inventory. Under the revised accounting policy, certain amounts of crude oil that are not available for sale have been reclassified from inventory to non-current assets. The results for the three and six months ended June 30, 2019 have been adjusted to reflect this change in accounting policy. |
(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. |
• | 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. |
Three Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Segment Adjusted EBITDA: | |||||||
Intrastate transportation and storage | $ | 187 | $ | 290 | |||
Interstate transportation and storage | 403 | 460 | |||||
Midstream | 367 | 412 | |||||
NGL and refined products transportation and services | 674 | 644 | |||||
Crude oil transportation and services | 519 | 752 | |||||
Investment in Sunoco LP | 182 | 152 | |||||
Investment in USAC | 105 | 105 | |||||
All other | 1 | 10 | |||||
Total Segment Adjusted EBITDA | $ | 2,438 | $ | 2,825 |
Three Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Natural gas transported (BBtu/d) | 12,921 | 12,115 | |||||
Withdrawals from storage natural gas inventory (BBtu) | (1,910 | ) | — | ||||
Revenues | $ | 516 | $ | 765 | |||
Cost of products sold | 248 | 400 | |||||
Segment margin | 268 | 365 | |||||
Unrealized gains on commodity risk management activities | (33 | ) | (26 | ) | |||
Operating expenses, excluding non-cash compensation expense | (48 | ) | (47 | ) | |||
Selling, general and administrative expenses, excluding non-cash compensation expense | (6 | ) | (7 | ) | |||
Adjusted EBITDA related to unconsolidated affiliates | 6 | 5 | |||||
Segment Adjusted EBITDA | $ | 187 | $ | 290 |
• | a decrease of $105 million in realized natural gas sales and other primarily due to lower realized gains from pipeline optimization activity; and |
• | an increase of $1 million in operating expenses primarily due to higher maintenance project costs and higher cost of fuel consumption; partially offset by |
• | an increase of $3 million in realized storage margin primarily due to higher storage optimization and fees. |
Three Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Natural gas transported (BBtu/d) | 10,152 | 10,825 | |||||
Natural gas sold (BBtu/d) | 17 | 17 | |||||
Revenues | $ | 445 | $ | 493 | |||
Operating expenses, excluding non-cash compensation, amortization and accretion expenses | (139 | ) | (138 | ) | |||
Selling, general and administrative expenses, excluding non-cash compensation, amortization and accretion expenses | (16 | ) | (18 | ) | |||
Adjusted EBITDA related to unconsolidated affiliates | 115 | 125 | |||||
Other | (2 | ) | (2 | ) | |||
Segment Adjusted EBITDA | $ | 403 | $ | 460 |
• | a decrease of $43 million in reservation fees primarily due to a decrease of $18 million from additional revenue recognized in 2019 associated with a shipper bankruptcy, a decrease of $16 million from lower rates on Lake Charles LNG effective January 2020 and a decrease of $12 million due to less capacity sold on our Panhandle and Trunkline systems as well as lower rates on the sale of uncommitted capacity on our Rover pipeline. These decreases were partially offset by increased margin from our Transwestern system due to increased demand in firm transportation; |
• | a decrease of $4 million in interruptible transportation due to lower rates and lower short-term customer demand on our Sea Robin and Transwestern systems; and |
• | a decrease of $10 million in Adjusted EBITDA related to unconsolidated affiliates primarily due to lower earnings of $12 million from our Midcontinent Express Pipeline joint venture as a result of less capacity sold and lower rates received following the expiration of certain contracts, partially offset by a $2 million increase from Citrus primarily due to higher margins and lower operating expenses. |
Three Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Gathered volumes (BBtu/d) | 12,964 | 13,148 | |||||
NGLs produced (MBbls/d) | 602 | 565 | |||||
Equity NGLs (MBbls/d) | 37 | 30 | |||||
Revenues | $ | 1,018 | $ | 1,198 | |||
Cost of products sold | 473 | 584 | |||||
Segment margin | 545 | 614 | |||||
Operating expenses, excluding non-cash compensation expense | (166 | ) | (189 | ) | |||
Selling, general and administrative expenses, excluding non-cash compensation expense | (20 | ) | (23 | ) | |||
Adjusted EBITDA related to unconsolidated affiliates | 7 | 9 | |||||
Other | 1 | 1 | |||||
Segment Adjusted EBITDA | $ | 367 | $ | 412 |
• | a decrease $39 million in non fee-based margin due to lower NGL prices; |
• | a decrease of $3 million in non-fee based margin due to decreased throughput volume in the South Texas region; and |
• | a decrease of $27 million in fee-based margin due to volume declines in the South Texas and North Texas regions; partially offset by |
• | a decrease of $23 million in operating expenses due to decreases of $11 million in outside services, $8 million in employee costs and $3 million in materials; and |
• | a decrease of $3 million in selling, general and administrative expenses due to a decrease in allocated overhead costs. |
Three Months Ended June 30, | |||||||
2020 | 2019 | ||||||
NGL transportation volumes (MBbls/d) | 1,401 | 1,305 | |||||
Refined products transportation volumes (MBbls/d) | 377 | 628 | |||||
NGL and refined products terminal volumes (MBbls/d) | 748 | 885 | |||||
NGL fractionation volumes (MBbls/d) | 836 | 701 | |||||
Revenues | $ | 2,119 | $ | 2,612 | |||
Cost of products sold | 1,368 | 1,848 | |||||
Segment margin | 751 | 764 | |||||
Unrealized losses on commodity risk management activities | 78 | 39 | |||||
Operating expenses, excluding non-cash compensation expense | (154 | ) | (155 | ) | |||
Selling, general and administrative expenses, excluding non-cash compensation expense | (19 | ) | (26 | ) | |||
Adjusted EBITDA related to unconsolidated affiliates | 18 | 21 | |||||
Other | — | 1 | |||||
Segment Adjusted EBITDA | $ | 674 | $ | 644 |
• | an increase of $27 million in transportation margin primarily due to a $28 million increase from higher throughput volumes on our Mariner East pipeline system, an $11 million increase from higher throughput volumes received from the Permian region on our Texas NGL pipelines, a $6 million increase due to the initiation of service on our JC Nolan diesel fuel pipeline in the third quarter of 2019, and a $4 million increase due to higher throughput volumes from the Southeast Texas region. These increases were partially offset by an $8 million decrease due to a reclassification between our transportation and fractionators margins, a $7 million decrease due to less domestic demand for jet fuel and other refined products, a $5 million decrease resulting from the closure of a third-party refinery during the third quarter of 2019, and a $2 million decrease due to lower third-party volumes on our Mariner West pipeline; |
• | an increase of $15 million in marketing margin primarily due to a $50 million increase due to higher optimization gains from the sale of NGL component products at our Mont Belvieu facility and a $10 million increase due to write-downs of NGL inventory in the second quarter of 2019. These increases were partially offset by lower gains from our butane blending business during the second quarter of 2020 due to unfavorable market conditions; and |
• | an increase of $19 million in fractionators and refinery services margin primarily due to a $15 million increase resulting from the commissioning of our seventh fractionator in February 2020 and higher NGL volumes from the Permian and Barnett regions feeding our Mont Belvieu fractionation facility, and an increase of $8 million due to a reclassification between our |
• | a decrease of $37 million in terminal services margin primarily due to a $25 million decrease resulting from the expiration of a third party contract at our Nederland export facility in the second quarter of 2020, a $9 million decrease due to lower third-party and intercompany volumes feeding our Marcus Hook Industrial Complex, a $6 million decrease due to less domestic demand for jet fuel and other refined products, and a $4 million decrease due to the closure of a third-party refinery. These decreases were partially offset by a $6 million increase due to higher throughput on our Mariner East system. |
Three Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Crude transportation volumes (MBbls/d) | 3,590 | 4,266 | |||||
Crude terminals volumes (MBbls/d) | 2,716 | 2,846 | |||||
Revenues | $ | 1,839 | $ | 5,046 | |||
Cost of products sold | 1,175 | 4,136 | |||||
Segment margin | 664 | 910 | |||||
Unrealized losses on commodity risk management activities | — | 11 | |||||
Operating expenses, excluding non-cash compensation expense | (131 | ) | (150 | ) | |||
Selling, general and administrative expenses, excluding non-cash compensation expense | (26 | ) | (20 | ) | |||
Adjusted EBITDA related to unconsolidated affiliates | 11 | 1 | |||||
Other | 1 | — | |||||
Segment Adjusted EBITDA | $ | 519 | $ | 752 |
• | a decrease of $257 million in segment margin (excluding unrealized gains and losses on commodity risk management activities) primarily due to a $62 million decrease (excluding a net change of $11 million in unrealized gains and losses on commodity risk management activities) from our crude oil acquisition and marketing business due to well shut-ins resulting in unfulfilled producer supply commitments, as well as unfavorable pricing conditions impacting our Permian to Gulf Coast and Bakken to Gulf Coast trading operations, a $123 million decrease from our Texas crude pipeline system due to lower utilization due in part to well shut-ins, as well as lower average tariff rates realized, a $117 million decrease due to lower volumes on our Bakken Pipeline resulting from well shut-ins, a $10 million decrease in marine throughput at our crude terminals, and a $7 million decrease due to lower volumes on our Bayou Bridge Pipeline, partially offset by an increase of $74 million related to assets acquired in 2019; and |
• | an increase of $6 million in selling, general and administrative expenses primarily due to a $3 million increase in legal expenses, and a $2 million increase in insurance expenses, partially offset by a $1 million decrease in allocated overhead costs; offset by |
• | a decrease of $19 million in operating expenses primarily due to lower volume-driven pipeline expenses, partially offset by increased costs related to assets acquired in 2019; and |
• | an increase of $10 million in Adjusted EBITDA related to unconsolidated affiliates due to assets acquired in 2019. |
Three Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Revenues | $ | 2,080 | $ | 4,475 | |||
Cost of products sold | 1,722 | 4,206 | |||||
Segment margin | 358 | 269 | |||||
Unrealized losses on commodity risk management activities | — | 3 | |||||
Operating expenses, excluding non-cash compensation expense | (72 | ) | (89 | ) | |||
Selling, general and administrative expenses, excluding non-cash compensation expense | (22 | ) | (31 | ) | |||
Adjusted EBITDA related to unconsolidated affiliates | 3 | — | |||||
Inventory valuation adjustments | (90 | ) | (4 | ) | |||
Other | 5 | 4 | |||||
Segment Adjusted EBITDA | $ | 182 | $ | 152 |
• | an increase of $16 million in motor fuel sales as a result of an increase in gross profit per gallon sold, partially offset by a decrease in gallons sold; |
• | a decrease of $26 million in operating expenses and selling, general and administrative expenses, excluding non-cash compensation expense, primarily attributable to lower employee costs, maintenance, advertising, credit card fees and utilities; and |
• | an increase of $3 million in Adjusted EBITDA related to unconsolidated affiliates which was attributable to the JC Nolan joint venture entered into in 2019; partially offset by |
• | a decrease of $15 million in non-motor fuel sales gross margin as a result of reduced credit card transactions related to the COVID-19 pandemic. |
Three Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Revenues | $ | 169 | $ | 174 | |||
Cost of products sold | 18 | 24 | |||||
Segment margin | 151 | 150 | |||||
Operating expenses, excluding non-cash compensation expense | (30 | ) | (32 | ) | |||
Selling, general and administrative expenses, excluding non-cash compensation expense | (16 | ) | (13 | ) | |||
Segment Adjusted EBITDA | $ | 105 | $ | 105 |
• | an increase of $3 million in selling, general and administrative expenses primarily due to an increase in the provision for expected credit losses; offset by |
• | a decrease of $2 million in operating expenses, as well as an increase of $1 million in segment margin primarily due to a decrease in cost of products sold offset by a decrease in revenues as a result of a decrease in average revenue generating horsepower. |
Three Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Revenues | $ | 492 | $ | 391 | |||
Cost of products sold | 377 | 343 | |||||
Segment margin | 115 | 48 | |||||
Unrealized (gains) losses on commodity risk management activities | 2 | (4 | ) | ||||
Operating expenses, excluding non-cash compensation expense | (27 | ) | (6 | ) | |||
Selling, general and administrative expenses, excluding non-cash compensation expense | (22 | ) | (23 | ) | |||
Adjusted EBITDA related to unconsolidated affiliates | — | 2 | |||||
Other and eliminations | (67 | ) | (7 | ) | |||
Segment Adjusted EBITDA | $ | 1 | $ | 10 |
• | a decrease of $7 million due to lower sales of residue gas; |
• | a decrease of $11 million due to lower revenues from our compression equipment business; |
• | a decrease of $7 million due to power trading activities; |
• | a decrease of $5 million due to lower demand and operator production at our natural resources business; |
• | a decrease of $4 million due to storage gains; and |
• | a decrease of $3 million from increased power costs at our compression services business; partially offset by |
• | an increase of $25 million from the acquisition of SemCAMS; and |
• | an increase of $6 million in settled derivatives. |
Facility Size | Funds Available at June 30, 2020 | Maturity Date | |||||||
ETO Five-Year Revolving Credit Facility | $ | 5,000 | $ | 1,904 | December 1, 2023 | ||||
ETO 364-Day Revolving Credit Facility | 1,000 | 1,000 | November 27, 2020 | ||||||
$ | 6,000 | $ | 2,904 |
Three Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Equity in earnings (losses) of unconsolidated affiliates: | |||||||
Citrus | $ | 42 | $ | 39 | |||
FEP | 18 | 14 | |||||
MEP | (2 | ) | 7 | ||||
White Cliffs | 9 | — | |||||
Other | 18 | 17 | |||||
Total equity in earnings (losses) of unconsolidated affiliates | $ | 85 | $ | 77 | |||
Adjusted EBITDA related to unconsolidated affiliates: | |||||||
Citrus | $ | 89 | $ | 87 | |||
FEP | 19 | 18 | |||||
MEP | 7 | 20 | |||||
White Cliffs | 13 | — | |||||
Other | 29 | 38 | |||||
Total Adjusted EBITDA related to unconsolidated affiliates | $ | 157 | $ | 163 | |||
Distributions received from unconsolidated affiliates: | |||||||
Citrus | $ | 58 | $ | 39 | |||
FEP | 17 | 16 | |||||
MEP | 7 | 15 | |||||
White Cliffs | 10 | — | |||||
Other | 20 | 42 | |||||
Total distributions received from unconsolidated affiliates | $ | 112 | $ | 112 |
Three Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Adjusted EBITDA of non-wholly-owned subsidiaries (100%) (a) | $ | 494 | $ | 695 | |||
Our proportionate share of Adjusted EBITDA of non-wholly-owned subsidiaries (b) | 264 | 380 | |||||
Distributable Cash Flow of non-wholly-owned subsidiaries (100%) (c) | $ | 456 | $ | 657 | |||
Our proportionate share of Distributable Cash Flow of non-wholly-owned subsidiaries (d) | 247 | 364 |
Non-wholly-owned subsidiary: | ET Percentage Ownership (e) | |
Bakken Pipeline | 36.4 | % |
Bayou Bridge | 60.0 | % |
Maurepas | 51.0 | % |
Ohio River System | 75.0 | % |
Permian Express Partners | 87.7 | % |
Red Bluff Express | 70.0 | % |
Rover | 32.6 | % |
SemCAMS | 51.0 | % |
Others | various |
(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. |
(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. |
(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. |
(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. |
(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. |
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