Core Viewpoint - Energy Transfer is entering a new growth phase with a significant backlog of attractive projects, which is expected to drive solid growth in the coming years [2][10]. Growth Projects - The company announced a new $5.3 billion natural gas pipeline project, the Desert Southwest pipeline, which will transport 1.5 billion cubic feet per day (Bcf/d) from the Permian to Arizona and New Mexico, expected to be completed by the end of 2029 [3]. - Phase 1 of the Hugh Brinson Pipeline, also with a capacity of 1.5 Bcf/d, is anticipated to come online by the end of 2026, with Phase 2 allowing for 2.2 Bcf/d transport from west to east and 1 Bcf/d from east to west [4]. - The company is making progress on the Lake Charles LNG project, having found a partner in MidOcean Energy and signed several offtake agreements, with plans to own about 25% of the project [4]. Financial Performance - In Q2, Energy Transfer's adjusted EBITDA grew by 3% year over year to $3.87 billion, while distributable cash flow (DCF) to partners fell by 1% to $1.96 billion [6]. - The company experienced volume increases across its systems, including an 11% rise in interstate natural gas volumes and a 10% increase in midstream gathered volumes [7]. Future Outlook - The company expects its full-year EBITDA to be at or slightly below the low end of its guidance range of $16.1 billion to $16.5 billion [8]. - Energy Transfer anticipates a mid-teens return on its growth projects, which are expected to provide a strong runway for growth in the coming years [10]. Distribution and Valuation - The company has a robust coverage ratio of 1.7 times for its Q2 distribution, with plans to grow its distribution by 3% to 5% annually [11]. - Approximately 90% of its 2025 EBITDA is expected to come from fee-based operations, contributing to a stable business model [12]. - The stock trades at a forward enterprise value (EV)-to-EBITDA multiple of 8.1 times, which is low compared to its MLP peers and historical averages [12].

Group 1 - The Retirement Forum aims to provide actionable ideas, a high-yield safe retirement portfolio, and macroeconomic outlooks to help maximize capital and income [1] - Energy Transfer (NYSE: ET) stock has outperformed the S&P 500 by 50% over the past two years, driven by its strong dividend yield [2] - The Value Portfolio employs a fact-based research strategy, including extensive analysis of 10Ks, analyst commentary, market reports, and investor presentations to identify investment opportunities [2] Group 2 - The analyst has a beneficial long position in Energy Transfer shares, indicating confidence in the stock's performance [3] - Seeking Alpha emphasizes that past performance does not guarantee future results, highlighting the importance of thorough research before making investment decisions [4]

Core Viewpoint - Energy Transfer reported solid second-quarter results, with strong midstream operations despite some headwinds, indicating potential for future growth [1][15]. Financial Performance - The company generated nearly $3.9 billion in adjusted EBITDA, a 3% increase year-over-year [3]. - Distributable cash flow (DCF) decreased by 4% to nearly $2 billion, reflecting a slowdown compared to last year's growth rates of 13% in EBITDA and 10% in DCF [3]. Segment Performance - The interstate transportation and storage segments, along with midstream operations, contributed positively to earnings, while crude oil, NGL, and intrastate segments faced challenges due to lower commodity prices and higher expenses [6]. - New partnership records were set in midstream volumes, crude oil transportation (up 9%), NGL transportation (up 4%), and NGL exports (up 5%) [11]. Future Outlook - The company anticipates adjusted EBITDA to be at or slightly below the lower end of its 2025 guidance range of $16.1 billion to $16.5 billion, implying about 4% growth from last year [8]. - Several expansion projects, including the Lenorah II and Badger processing plants, are expected to provide incremental earnings in the coming quarters [9]. - Additional projects planned for 2026 and beyond, such as the Mustang Draw gas processing plant and the Hugh Brinson gas pipeline, are expected to enhance earnings growth momentum [10]. Expansion Projects - Energy Transfer has secured new expansion projects that extend its growth outlook through the end of the decade, including the Hugh Brinson Phase II and the $5.3 billion Transwestern Pipeline [12]. - Proposed projects like the Lake Charles LNG export terminal and the CloudBurst AI data center gas supply project are under development, which could further enhance long-term growth [13]. Strategic Acquisitions - The company has financial flexibility to pursue strategic acquisitions, which could bolster its growth profile [14].

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) The unaudited consolidated financial statements for the six months ended June 30, 2025, show total revenues of **$40.26 billion**, a decrease from **$42.36 billion** in the prior year period. Net income attributable to partners was **$2.49 billion**, slightly down from **$2.55 billion** year-over-year. Total assets stood at **$125.02 billion**, with total liabilities at **$79.17 billion**. The statements reflect the ongoing operations, recent acquisitions, and financial position of the Partnership [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, Energy Transfer's total assets were **$125.02 billion**, a slight decrease from **$125.38 billion** at year-end 2024. The change was primarily driven by a decrease in current assets, offset by an increase in net property, plant, and equipment. Total liabilities increased to **$79.17 billion** from **$78.63 billion**, mainly due to a rise in long-term debt Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $13,671 | $14,202 | | **Property, Plant and Equipment, Net** | $95,531 | $95,212 | | **Total Assets** | **$125,022** | **$125,380** | | **Total Current Liabilities** | $11,849 | $12,656 | | **Long-term Debt, less current maturities** | $60,749 | $59,752 | | **Total Liabilities** | $79,165 | $78,633 | | **Total Equity** | $45,534 | $46,017 | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) For the second quarter of 2025, revenues were **$19.24 billion**, down from **$20.73 billion** in Q2 2024, primarily due to lower refined product and crude sales. Net income attributable to partners was **$1.16 billion**, compared to **$1.31 billion** in the prior-year quarter. For the six-month period, revenues decreased to **$40.26 billion** from **$42.36 billion**, while net income attributable to partners slightly decreased to **$2.49 billion** from **$2.55 billion** Key Operating Results (in millions, except per unit data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $19,242 | $20,729 | $40,262 | $42,358 | | **Operating Income** | $2,309 | $2,298 | $4,800 | $4,678 | | **Net Income** | $1,458 | $1,992 | $3,178 | $3,684 | | **Net Income Attributable to Partners** | $1,163 | $1,314 | $2,486 | $2,554 | | **Basic Net Income per Common Unit** | $0.32 | $0.35 | $0.68 | $0.67 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities was **$5.68 billion**, a decrease from **$6.04 billion** in the prior year period. Net cash used in investing activities increased significantly to **$2.90 billion** from **$1.15 billion**, driven by higher capital expenditures. Net cash used in financing activities was **$2.85 billion**, primarily for distributions to partners and debt management Cash Flow Summary - Six Months Ended June 30 (in millions) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $5,679 | $6,042 | | **Net Cash Used in Investing Activities** | $(2,899) | $(1,151) | | **Net Cash Used in Financing Activities** | $(2,850) | $(4,402) | | **Decrease in Cash and Cash Equivalents** | $(70) | $489 | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed information on the Partnership's accounting policies and financial activities. Key highlights include significant acquisition activity by subsidiary Sunoco LP, details on debt obligations and recent refinancing activities, equity transactions including preferred unit redemptions and common unit distributions, and extensive disclosures on regulatory matters, legal contingencies, and environmental liabilities. The notes also disaggregate revenue and provide segment-level financial data - Sunoco LP, a consolidated subsidiary, announced a definitive agreement to acquire Parkland Corporation for approximately **$9.1 billion** and entered an agreement to acquire TanQuid GmbH & Co. KG for approximately **€500 million**[31](index=31&type=chunk)[34](index=34&type=chunk) - The Partnership issued **$3.0 billion** in new senior notes in March 2025 to refinance existing debt and redeemed **$2.0 billion** of senior notes due in March and May 2025[50](index=50&type=chunk)[51](index=51&type=chunk) - Quarterly cash distributions on common units increased sequentially, reaching **$0.3300 per unit** for the quarter ended June 30, 2025[65](index=65&type=chunk) - As of June 30, 2025, the Partnership had accrued approximately **$305 million** for contingent obligations deemed probable and reasonably estimable, with a potential range of additional losses up to **$42 million** for matters considered reasonably possible[86](index=86&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=41&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management's discussion provides an analysis of the financial results for the three and six months ended June 30, 2025. Consolidated Adjusted EBITDA increased to **$3.87 billion** for the quarter and **$7.96 billion** for the six-month period, driven by strong performance in the Midstream and Investment in Sunoco LP segments. The discussion details segment-level performance, recent acquisitions by Sunoco LP, regulatory updates, liquidity position, capital expenditure plans for 2025, and cash distribution policies Consolidated Adjusted EBITDA (in millions) | Period | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | **Three Months Ended June 30** | $3,866 | $3,760 | $106 | | **Six Months Ended June 30** | $7,964 | $7,640 | $324 | - The increase in Adjusted EBITDA was primarily driven by higher segment margin in the Midstream segment and the Investment in Sunoco LP segment[204](index=204&type=chunk) - The One Big Beautiful Bill Act (OBBBA), signed into law July 4, 2025, permanently reinstates **100% bonus depreciation**, which is expected to defer a significant portion of U.S. federal income taxes for the Partnership's corporate subsidiaries in future periods[185](index=185&type=chunk) [Recent Developments](index=41&type=section&id=Recent%20Developments) Key recent developments include significant acquisition activities by subsidiary Sunoco LP, which agreed to acquire Parkland Corporation for ~**$9.1 billion** and TanQuid for ~**€500 million**. Energy Transfer also announced an increased quarterly cash distribution of **$0.33 per common unit**. Additionally, the report notes the enactment of the One Big Beautiful Bill Act (OBBBA), which reinstates **100% bonus depreciation** and is expected to defer future federal income tax payments - Sunoco LP announced a definitive agreement to acquire Parkland Corporation in a cash and equity transaction valued at approximately **$9.1 billion**, expected to close in Q4 2025[178](index=178&type=chunk) - Sunoco LP also agreed to acquire TanQuid GmbH & Co. KG, which operates fuel terminals in Germany and Poland, for approximately **€500 million**, including assumed debt[181](index=181&type=chunk) - Energy Transfer announced a quarterly distribution of **$0.33 per common unit** (**$1.32 annualized**) for the quarter ended June 30, 2025[184](index=184&type=chunk) [Results of Operations](index=45&type=section&id=Results%20of%20Operations) For Q2 2025, consolidated Adjusted EBITDA increased by **$106 million** YoY to **$3.87 billion**. The Midstream segment's Adjusted EBITDA grew by **$75 million** due to acquired assets and higher Permian volumes. The Investment in Sunoco LP segment saw a **$134 million** increase, largely from the NuStar acquisition. These gains were partially offset by decreases in the Intrastate, NGL & Refined Products, and Crude Oil segments. For the six-month period, Adjusted EBITDA rose **$324 million** to **$7.96 billion**, with the Midstream and Sunoco LP segments again being the primary drivers of growth Segment Adjusted EBITDA - Q2 2025 vs Q2 2024 (in millions) | Segment | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Intrastate transportation and storage | $284 | $328 | $(44) | | Interstate transportation and storage | $470 | $392 | $78 | | Midstream | $768 | $693 | $75 | | NGL and refined products transportation | $1,033 | $1,070 | $(37) | | Crude oil transportation and services | $732 | $801 | $(69) | | Investment in Sunoco LP | $454 | $320 | $134 | | Investment in USAC | $149 | $144 | $5 | | **Total Adjusted EBITDA** | **$3,866** | **$3,760** | **$106** | - The Midstream segment's performance was boosted by recently acquired assets and higher volumes in the Permian region, which increased segment margin by **$176 million** YoY[227](index=227&type=chunk) - The Investment in Sunoco LP segment benefited from the NuStar acquisition (acquired May 2024), contributing to a **$12 million** increase in segment margin and a **$48 million** increase in Adjusted EBITDA from unconsolidated affiliates (ET-S Permian)[235](index=235&type=chunk) [Liquidity and Capital Resources](index=58&type=section&id=Liquidity%20and%20Capital%20Resources) The Partnership maintains a strong liquidity position, funding capital expenditures and distributions primarily with cash from operations. For 2025, total planned capital expenditures are approximately **$6.1 billion**, with **$5.0 billion** allocated to growth projects and **$1.1 billion** for maintenance. As of June 30, 2025, the Partnership had **$2.51 billion** available for future borrowings under its **$5.0 billion** Five-Year Credit Facility. Total consolidated debt stood at **$60.76 billion** 2025 Expected Capital Expenditures (in millions) | Category | Growth | Maintenance | Total | | :--- | :--- | :--- | :--- | | Intrastate transportation and storage | $1,400 | $85 | $1,485 | | Interstate transportation and storage | $170 | $205 | $375 | | Midstream | $1,525 | $375 | $1,900 | | NGL and refined products | $1,375 | $150 | $1,525 | | Crude oil transportation and services | $295 | $180 | $475 | | All other | $235 | $105 | $340 | | **Total** | **$5,000** | **$1,100** | **$6,100** | - As of June 30, 2025, the Partnership's Five-Year Credit Facility had **$2.47 billion** of outstanding borrowings and **$2.51 billion** available for future borrowings[265](index=265&type=chunk) - Total consolidated debt was **$60.76 billion** as of June 30, 2025, up from **$59.76 billion** at year-end 2024[258](index=258&type=chunk) [Cash Distributions](index=62&type=section&id=Cash%20Distributions) Energy Transfer follows a policy of distributing all available cash quarterly. For the quarter ended June 30, 2025, the distribution on common units was set at **$0.3300 per unit**. The report also details distributions for various series of preferred units. Consolidated subsidiaries Sunoco LP and USAC also continued their regular quarterly distributions to their respective unitholders Energy Transfer Common Unit Distributions Declared in 2025 | Quarter Ended | Rate per Unit | | :--- | :--- | | December 31, 2024 | $0.3250 | | March 31, 2025 | $0.3275 | | June 30, 2025 | $0.3300 | [Quantitative and Qualitative Disclosures About Market Risk](index=65&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The Partnership is exposed to market risks from commodity price volatility and interest rate changes. Commodity price risk is managed using various derivative instruments. A hypothetical **10%** change in commodity prices would have a varied impact on the fair value of its derivative portfolio. For interest rate risk, the company had **$4.05 billion** of floating-rate debt outstanding as of June 30, 2025, where a **100-basis-point** change would alter annual interest expense by approximately **$40 million**. There have been no material changes to market risk exposures since year-end 2024 - The company manages commodity price volatility through exchange-traded and OTC financial instruments, including futures, swaps, and options[281](index=281&type=chunk) - As of June 30, 2025, the Partnership had **$4.05 billion** of floating-rate debt. A **100-basis-point** change in interest rates would result in an estimated **$40 million** annual change in interest expense[283](index=283&type=chunk) [Controls and Procedures](index=66&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management, including the Co-Chief Executive Officers and Chief Financial Officer, evaluated the Partnership's disclosure controls and procedures and concluded they were effective as of June 30, 2025. There were no material changes in the company's internal control over financial reporting during the second quarter of 2025 - Based on an evaluation, the Co-Principal Executive Officers and Principal Financial Officer concluded that disclosure controls and procedures were effective as of June 30, 2025[286](index=286&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[287](index=287&type=chunk) [PART II – OTHER INFORMATION](index=67&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=67&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The Partnership is involved in various legal and environmental proceedings. Notable updates include an investigation by the Pennsylvania Attorney General's Office into a refined products release from an SPLP pipeline in January 2025. Additionally, a lawsuit by the State of New Mexico regarding PCB contamination is proceeding to trial, with the state seeking damages of **$50-$60 million** from Transwestern. A consent decree related to a 2014 crude oil release in Ohio was terminated after payments of approximately **$3 million** were made - A January 2025 refined products release from the Twin-Oaks to Newark Pipeline in Pennsylvania is under investigation by the Pennsylvania Attorney General's Office, Environmental Crimes Unit. Potential charges and penalties are unknown[292](index=292&type=chunk) - In a lawsuit concerning PCB contamination, the State of New Mexico is seeking damages of **$50 million** to **$60 million** from subsidiary Transwestern, with a trial tentatively set for October 2025[293](index=293&type=chunk) - A consent decree related to a 2014 crude oil release in Ohio was terminated in May 2025 after SPLP and Mid Valley made total payments of approximately **$3 million** for civil penalties and natural resource damages[294](index=294&type=chunk) [Risk Factors](index=68&type=section&id=ITEM%201A.%20RISK%20FACTORS) There have been no material changes to the risk factors previously disclosed in the Partnership's Annual Report on Form 10-K for the year ended December 31, 2024, and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 - No material changes have been identified from the risk factors described in the 2024 Form 10-K and the Q1 2025 Form 10-Q[298](index=298&type=chunk) [Exhibits](index=69&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed or furnished as part of the quarterly report, including corporate governance documents, certifications by executive officers as required by the Sarbanes-Oxley Act, and interactive data files

Key Takeaways Energy Transfer (ET) reported second-quarter 2025 adjusted earnings of 32 cents per unit, in line with the Zacks Consensus Estimate. The bottom line decreased 8.6% from the year-ago figure of 35 cents. Total Revenues of ET Revenues of $19.24 billion missed the Zacks Consensus Estimate of $25.26 billion by 23.8%. Total revenues also decreased 7.2% from the year-ago figure of $20.73 billion. Highlights of ET's Q2 Results Total costs and expenses were $16.93 billion, down 8.1% year over year. Thi ...

Financial Performance - For the quarter ended June 2025, Energy Transfer LP reported revenue of $19.24 billion, down 7.2% year-over-year, and EPS of $0.32 compared to $0.35 in the same quarter last year [1] - The reported revenue was a surprise of -23.83% compared to the Zacks Consensus Estimate of $25.26 billion, while the EPS met the consensus estimate [1] Key Metrics - Gathered volumes for midstream operations were 21,329.00 BBtu/D, exceeding the average estimate of 20,762.51 BBtu/D [4] - NGLs produced were 1,181 million barrels, surpassing the estimated 1,098.09 million barrels [4] - Adjusted EBITDA for intrastate transportation and storage was $284 million, below the average estimate of $319.2 million, while interstate transportation and storage achieved $470 million, above the estimate of $423.8 million [4] Stock Performance - Shares of Energy Transfer LP returned -0.4% over the past month, while the Zacks S&P 500 composite increased by +0.5% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]

Financial Data and Key Metrics Changes - For Q2 2025, the company generated adjusted EBITDA of $3.9 billion, an increase from $3.8 billion in Q2 2024, indicating a growth in operational performance [6] - The ECF attributable to partners was approximately $2 billion, with $2 billion spent on organic growth capital in the first half of 2025 [6] Business Line Data and Key Metrics Changes - NGL and refined products segment adjusted EBITDA decreased to $1 billion from $1.1 billion in 2024, attributed to lower optimization gains and blending margins [7] - Midstream segment adjusted EBITDA increased to $768 million from $693 million, driven by a 10% increase in legacy volumes in the Permian Basin [8] - Crude oil segment adjusted EBITDA decreased to $732 million from $800 million, impacted by lower transportation revenues on the Bakken pipeline [9] - Interstate natural gas segment adjusted EBITDA rose to $470 million from $392 million, due to higher contracted volumes [10] - Intrastate natural gas segment adjusted EBITDA decreased to $284 million from $328 million, affected by reduced pipeline optimization [10] Market Data and Key Metrics Changes - The company noted strong volumes through its NGL fractionators and natural gas pipelines, with several volume records achieved during the quarter [6] - The Permian Basin processing volumes reached a new record of nearly 5 Bcf per day, reflecting increased operational capacity [16] Company Strategy and Development Direction - The company plans to spend approximately $5 billion on organic growth capital projects in 2025, focusing on NGL transportation and processing expansions [11] - New projects like the Desert Southwest Pipeline and Hugh Branson pipeline are expected to enhance system reliability and meet growing demand for natural gas [12][14] - The company aims to leverage its extensive pipeline network and storage capabilities to support the increasing demand for energy resources [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing significant growth in demand for energy resources and the company's strong positioning in the industry [22] - The company anticipates challenges in the Bakken and dry gas areas but expects recovery and growth in the second half of the year [21][60] Other Important Information - The Desert Southwest Pipeline project is expected to provide 1.5 Bcf per day of transportation capacity and is backed by long-term commitments [12] - The company is in advanced discussions for additional natural gas projects to support power plants and data centers [20] Q&A Session Summary Question: Can you provide more detail on the commercialization efforts related to data centers? - Management highlighted the significant upside potential in data centers and mentioned recent deals signed in Texas, with ongoing discussions for more contracts [27][31] Question: Can you provide color on the expected build multiple for the Desert Southwest project? - Management expressed confidence in selling out the project and mentioned potential for expansion due to high demand [34][35] Question: Where are we with the Lake Charles LNG project? - Management indicated that the EPC quote process is progressing well and they are optimistic about reaching FID soon [41][43] Question: What are the competitive advantages in winning the Desert Southwest project? - Management attributed success to strong negotiation capabilities and a well-integrated pipeline network [50][51] Question: How does the company view construction cost risk sharing? - Management confirmed a traditional structure where the midstream company bears the cost risks, with contingency plans in place [55][46] Question: What is the outlook for Bakken and Permian crude growth? - Management noted a temporary decline in volumes but expressed bullish sentiment for future growth due to upcoming projects and market dynamics [60][62] Question: How will the company approach LNG expansions given existing infrastructure? - Management emphasized the benefits of vertical integration and the existing pipeline routes that support the Lake Charles LNG project [85] Question: What percentage of overall business EBITDA could gas represent in the future? - Management refrained from providing an exact percentage but indicated that gas projects are expected to grow significantly as a portion of the overall business [104][105]

Financial Data and Key Metrics Changes - For Q2 2025, the company generated adjusted EBITDA of $3.9 billion, an increase from $3.8 billion in Q2 2024, indicating a growth in operational performance [5] - The ECF attributable to partners was approximately $2 billion, with $2 billion spent on organic growth capital in the first half of 2025 [5] - The company expects to be at or slightly below the lower end of its guidance range of $16.1 billion to $16.5 billion for 2025 due to weakness in the Bakken and slower recovery in dry gas areas [19][20] Segment Performance Changes - NGL and refined products segment adjusted EBITDA decreased to $1 billion from $1.1 billion in 2024, impacted by lower optimization gains and blending margins [6] - Midstream segment adjusted EBITDA increased to $768 million from $693 million, driven by a 10% increase in legacy volumes in the Permian Basin [6] - Crude oil segment adjusted EBITDA decreased to $732 million from $800 million, affected by lower transportation revenues on the Bakken pipeline [7] - Interstate natural gas segment adjusted EBITDA rose to $470 million from $392 million, attributed to higher contracted volumes [8] - Intrastate natural gas segment adjusted EBITDA decreased to $284 million from $328 million, due to reduced pipeline optimization [8] Market Data and Key Metrics Changes - The company reported strong volumes in midstream gathering, crude transportation, and NGL export volumes, indicating robust market demand [5] - The Permian Basin processing volumes reached a record of nearly 5 Bcf per day, reflecting increased operational capacity [14] Company Strategy and Industry Competition - The company plans to spend approximately $5 billion on organic growth capital projects in 2025, focusing on NGL transportation and pipeline expansions [9] - New projects like the Desert Southwest Pipeline and Hugh Branson pipeline are expected to enhance the company's position in the natural gas market [10][12] - The company aims to leverage its extensive pipeline network and storage capabilities to meet growing energy demands, positioning itself as a leader in the industry [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing significant growth in energy resource demand driven by natural gas and NGLs [20] - The company is confident in its ability to meet future demand with its extensive pipeline network and strategic projects [21] - Management acknowledged challenges in the Bakken and dry gas areas but remains bullish about long-term growth prospects [19][60] Other Important Information - The company has a significant backlog of contracted growth projects expected to generate strong returns and enhance its integrated value chain [23] - The Lake Charles LNG project is progressing, with significant interest from potential customers and ongoing discussions for equity sell-down [17][18] Q&A Session Summary Question: Can you provide more detail on the commercialization efforts related to data centers? - Management highlighted the complexity and time required for data center projects, noting recent significant deals in Texas and ongoing negotiations for additional contracts [26][30][31] Question: Can you provide color on the expected build multiple for the Desert Southwest project? - Management expressed confidence in selling out the project and mentioned potential for expansion due to high demand [34][35] Question: What is the status of the Lake Charles EPC quote process? - Management confirmed that the EPC contract is progressing as expected and is aligned with their financial projections [40][42] Question: How does the company view construction cost risk sharing for the Desert Southwest project? - Management indicated a traditional structure where the midstream company bears the cost risk, with confidence in meeting estimated costs [44][55] Question: What percentage of the overall business could gas represent in the future? - Management refrained from providing an exact percentage but indicated that gas projects are expected to grow significantly as a portion of the overall business [103][104]

Financial Performance - Energy Transfer's Q2 2025 Adjusted EBITDA was $3.87 billion[7] - Distributable Cash Flow attributable to partners in Q2 2025 was $1.96 billion[7] - Year-to-date 2025 Growth Capital Expenditures reached $2.0 billion, while Maintenance Capital Expenditures were $418 million[7] - The company anticipates approximately $5.0 billion in Growth Capital Expenditures for the full year 2025[7] - The quarterly cash distribution increased to $0.33 per unit, a rise of over 3% compared to Q2 2024[7] Operational Highlights - Interstate natural gas transportation volumes increased by 11% compared to Q2 2024[7] - Midstream gathered volumes rose by 10%, setting a new partnership record[7] - Crude oil transportation volumes increased by 9%, also setting a new partnership record[7] - Total NGL exports increased by 5%, establishing another new partnership record[7] Strategic Initiatives - The company announced a 1.5 Bcf/d expansion to the Transwestern Pipeline, named the Desert Southwest expansion project, involving a 516-mile, 42-inch natural gas pipeline connecting the Permian Basin with markets in Arizona and New Mexico[7]

[Q2 2025 Financial & Operational Overview](index=1&type=section&id=Q2%202025%20Financial%20%26%20Operational%20Overview) [Financial Performance Summary](index=1&type=section&id=Financial%20Performance%20Summary) For the second quarter of 2025, Energy Transfer reported a net income attributable to partners of $1.16 billion, a decrease from $1.31 billion in Q2 2024, while Adjusted EBITDA grew to $3.87 billion from $3.76 billion year-over-year, and the partnership announced a quarterly cash distribution of $0.33 per common unit, an increase of over 3% from the prior year's quarter, with full-year 2025 Adjusted EBITDA guidance now expected to be at or slightly below the lower end of the $16.1 billion to $16.5 billion range Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income Attributable to Partners | $1.16 billion | $1.31 billion | | Net Income per Common Unit (basic) | $0.32 | $0.35 | | Adjusted EBITDA | $3.87 billion | $3.76 billion | | Distributable Cash Flow (attributable to partners, as adjusted) | $1.96 billion | $2.04 billion | | Growth Capital Expenditures | $1.04 billion | N/A | | Maintenance Capital Expenditures | $253 million | N/A | - Announced a quarterly cash distribution of **$0.33 per common unit** (**$1.32 annualized**) for Q2 2025, representing a **more than 3% increase** compared to Q2 2024[12](index=12&type=chunk) - The Partnership updated its full-year 2025 guidance, expecting Adjusted EBITDA to be at or slightly below the lower end of the previously stated range of **$16.1 billion to $16.5 billion**, with growth capital expenditure guidance remaining approximately **$5 billion**[12](index=12&type=chunk) [Operational & Strategic Highlights](index=1&type=section&id=Operational%20%26%20Strategic%20Highlights) Energy Transfer reported record volumes across several key areas in Q2 2025, including midstream gathered volumes and crude oil transportation, announced a major 1.5 Bcf/d expansion of its Transwestern Pipeline, and achieved significant milestones in its LNG strategy by signing new SPAs with Chevron and Kyushu Electric Power for its Lake Charles LNG project, while also placing several processing plants and export expansion projects into service - Announced a **1.5 Bcf/d expansion** of the Transwestern Pipeline, a **$5.3 billion project** to connect the Permian Basin with markets in Arizona, New Mexico, and Texas, expected to be in service by Q4 2029[5](index=5&type=chunk) Q2 2025 Volume Growth (vs. Q2 2024) | Category | YoY Growth | Note | | :--- | :--- | :--- | | Interstate natural gas transportation | +11% | - | | Midstream gathered volumes | +10% | New Partnership record | | Crude oil transportation | +9% | New Partnership record | | Intrastate natural gas transportation | +8% | - | | NGL transportation | +4% | New Partnership record | | NGL and refined products terminal | +3% | New Partnership record | | NGL exports | +5% | New Partnership record | - Advanced the Lake Charles LNG project by signing a 20-year SPA with Chevron for an additional **1.0 mtpa** (totaling **3.0 mtpa**) and another 20-year SPA with Kyushu Electric Power for **1.0 mtpa**[12](index=12&type=chunk) - Several key projects were placed into service, including the **200 MMcf/d Lenorah II** and Badger Processing plants, the Nederland Flexport NGL Export Expansion Project, and the second of eight natural gas-fired electric generation facilities[6](index=6&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Energy Transfer's total assets stood at $125.02 billion, a slight decrease from $125.38 billion at year-end 2024, with long-term debt increasing to $60.75 billion from $59.75 billion over the same period, while total partners' capital decreased slightly to $34.78 billion Balance Sheet Summary (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$125,022** | **$125,380** | | Total Current Assets | $13,671 | $14,202 | | Property, Plant and Equipment, net | $95,531 | $95,212 | | **Total Liabilities** | **$79,488** | **$79,363** | | Total Current Liabilities | $11,849 | $12,656 | | Long-term debt, less current maturities | $60,749 | $59,752 | | **Total Equity** | **$45,534** | **$46,017** | | Total Partners' Capital | $34,779 | $35,118 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2025, revenues were $19.24 billion, down from $20.73 billion in the prior-year period, primarily due to lower cost of products sold, with operating income remaining stable at $2.31 billion, and net income attributable to partners decreasing to $1.16 billion from $1.31 billion, resulting in basic net income per common unit of $0.32 compared to $0.35 in Q2 2024 Statement of Operations Summary - Three Months Ended June 30 (in millions, except per unit data) | Account | 2025 | 2024 | | :--- | :--- | :--- | | Revenues | $19,242 | $20,729 | | Cost of products sold | $13,946 | $15,609 | | Operating Income | $2,309 | $2,298 | | Net Income | $1,458 | $1,992 | | Net Income Attributable to Partners | $1,163 | $1,314 | | Net Income per Common Unit (Basic) | $0.32 | $0.35 | [Non-GAAP Financial Measures & Reconciliations](index=6&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) [Reconciliation of Net Income to Adjusted EBITDA and Distributable Cash Flow](index=6&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA%20and%20Distributable%20Cash%20Flow) The reconciliation from Net Income to non-GAAP measures shows that for Q2 2025, Net Income of $1.46 billion was adjusted primarily for depreciation ($1.38 billion) and interest expense ($865 million) to arrive at a consolidated Adjusted EBITDA of $3.87 billion, with further adjustments for interest, taxes, and maintenance capital resulting in Distributable Cash Flow attributable to partners of $1.96 billion Q2 2025 Reconciliation Summary (in millions) | Metric | Amount | | :--- | :--- | | Net income | $1,458 | | (+) Depreciation, depletion and amortization | $1,384 | | (+) Interest expense, net | $865 | | (+) Income tax expense | $79 | | Other adjustments | $180 | | **Adjusted EBITDA (consolidated)** | **$3,866** | | (-) Adjustments for DCF calculation | ($1,330) | | **Distributable Cash Flow (consolidated)** | **$2,536** | | (-) DCF attributable to noncontrolling interests | ($578) | | **Distributable Cash Flow attributable to partners** | **$1,958** | [Definitions of Non-GAAP Measures](index=7&type=section&id=Definitions%20of%20Non-GAAP%20Measures) The company defines Adjusted EBITDA as earnings before interest, taxes, depreciation, amortization, and other non-cash items, while Distributable Cash Flow (DCF) is defined as net income adjusted for non-cash items, less preferred unitholder distributions and maintenance capital expenditures, with management using these measures to assess operating performance and the ability to fund distributions - Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, depletion, amortization, and other specified non-cash items, used by management for assessing operating performance and setting budgets[25](index=25&type=chunk)[27](index=27&type=chunk) - Distributable Cash Flow (DCF) is defined as net income adjusted for certain non-cash items, less distributions to preferred unitholders and maintenance capital expenditures, used to evaluate the ability to fund distributions from operational cash generation[28](index=28&type=chunk)[29](index=29&type=chunk) [Segment Performance Analysis](index=8&type=section&id=Segment%20Performance%20Analysis) [Summary of Segment Adjusted EBITDA](index=8&type=section&id=Summary%20of%20Segment%20Adjusted%20EBITDA) In Q2 2025, the NGL and Refined Products segment was the largest contributor to Adjusted EBITDA at $1.03 billion, despite a slight decrease from the prior year, while the Midstream and Interstate Transportation segments showed strong year-over-year growth, and the Crude Oil and Intrastate segments saw declines, with the Investment in Sunoco LP segment's contribution increasing significantly Segment Adjusted EBITDA - Three Months Ended June 30 (in millions) | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Intrastate transportation and storage | $284 | $328 | | Interstate transportation and storage | $470 | $392 | | Midstream | $768 | $693 | | NGL and refined products transportation and services | $1,033 | $1,070 | | Crude oil transportation and services | $732 | $801 | | Investment in Sunoco LP | $454 | $320 | | Investment in USAC | $149 | $144 | | All other | ($24) | $12 | | **Adjusted EBITDA (consolidated)** | **$3,866** | **$3,760** | [Intrastate Transportation and Storage](index=9&type=section&id=Intrastate%20Transportation%20and%20Storage) The Intrastate segment's Adjusted EBITDA decreased to $284 million from $328 million YoY, despite an increase in transported volumes, with the decline driven by lower realized natural gas sales margins due to narrower price spreads and a decrease in transportation fees compared to a prior period recovery - Segment Adjusted EBITDA decreased by **$44 million** YoY, primarily due to a **$45 million decrease** in realized natural gas sales from lower optimization volumes and narrower price spreads, and an **$11 million decrease** in transportation fees[36](index=36&type=chunk)[37](index=37&type=chunk) - Transported natural gas volumes increased to **14,229 BBtu/d** from **13,143 BBtu/d** in Q2 2024, driven by more third-party transportation[35](index=35&type=chunk) [Interstate Transportation and Storage](index=9&type=section&id=Interstate%20Transportation%20and%20Storage) This segment delivered strong growth, with Adjusted EBITDA increasing to $470 million from $392 million YoY, fueled by a significant rise in transported volumes due to higher capacity sales and utilization on major pipelines, leading to a $70 million increase in segment margin - Segment Adjusted EBITDA increased by **$78 million** YoY, driven by a **$70 million increase** in segment margin from higher contracted volumes and a **$12 million increase** in Adjusted EBITDA from unconsolidated affiliates[38](index=38&type=chunk)[39](index=39&type=chunk) - Transported natural gas volumes rose to **18,153 BBtu/d** from **16,337 BBtu/d** in Q2 2024, due to increased demand and capacity sold on several major pipeline systems[36](index=36&type=chunk) [Midstream](index=10&type=section&id=Midstream) The Midstream segment's Adjusted EBITDA grew to $768 million from $693 million YoY, primarily due to higher volumes and margins from newly acquired assets and plant expansions in the Permian region, which more than offset higher operating expenses - Segment Adjusted EBITDA increased by **$75 million** YoY, driven by a **$176 million increase** in segment margin from acquired assets and higher Permian volumes, partially offset by a **$95 million increase** in operating expenses[39](index=39&type=chunk)[40](index=40&type=chunk) - Gathered volumes increased to **21,329 BBtu/d** from **19,437 BBtu/d**, and NGLs produced rose to **1,181 MBbls/d** from **955 MBbls/d**, primarily due to acquired assets and increased Permian plant utilization[38](index=38&type=chunk) [NGL and Refined Products Transportation and Services](index=11&type=section&id=NGL%20and%20Refined%20Products%20Transportation%20and%20Services) Adjusted EBITDA for this segment decreased slightly to $1.03 billion from $1.07 billion YoY, as transportation and fractionation margins increased due to higher volumes from the Permian, but this was more than offset by a $78 million decrease in marketing margin from lower gains on hedged inventories - Segment Adjusted EBITDA decreased by **$37 million** YoY, mainly due to a **$78 million decrease** in marketing margin, partially offset by a **$33 million increase** in transportation margin and a **$12 million increase** in fractionators margin[42](index=42&type=chunk)[43](index=43&type=chunk) - NGL transportation volumes increased to **2,331 MBbls/d** from **2,235 MBbls/d**, and NGL fractionation volumes grew to **1,150 MBbls/d** from **1,093 MBbls/d**, driven by higher volumes from the Permian region[41](index=41&type=chunk) [Crude Oil Transportation and Services](index=11&type=section&id=Crude%20Oil%20Transportation%20and%20Services) This segment's Adjusted EBITDA declined to $732 million from $801 million YoY, primarily due to a $46 million drop in segment margin, driven by lower transportation revenue from the Bakken Pipeline system, which was not fully offset by contributions from the new ET-S Permian joint venture - Segment Adjusted EBITDA decreased by **$69 million** YoY, caused by a **$46 million decrease** in segment margin (primarily from the Bakken Pipeline) and a **$21 million increase** in operating expenses[44](index=44&type=chunk)[45](index=45&type=chunk) - Crude oil transportation volumes increased to **7,049 MBbls/d** from **6,490 MBbls/d** due to growth on gathering systems and the ET-S Permian JV, but this was offset by lower volumes on the Bakken Pipeline[42](index=42&type=chunk) [Investment in Sunoco LP](index=12&type=section&id=Investment%20in%20Sunoco%20LP) The Investment in Sunoco LP segment saw a significant increase in Adjusted EBITDA to $454 million from $320 million YoY, driven by a decrease of $85 million in SG&A expenses (related to one-time NuStar acquisition costs in 2024) and contributions from the new ET-S Permian joint venture - Segment Adjusted EBITDA increased by **$134 million** YoY, with key drivers including an **$85 million decrease** in SG&A related to prior-year acquisition costs and a **$48 million increase** in Adjusted EBITDA from the ET-S Permian unconsolidated affiliate[45](index=45&type=chunk)[46](index=46&type=chunk) [Investment in USAC](index=13&type=section&id=Investment%20in%20USAC) The Investment in USAC segment reported a modest increase in Adjusted EBITDA to $149 million from $144 million YoY, due to a $10 million increase in segment margin from higher demand and rates for compression services - Segment Adjusted EBITDA increased by **$5 million** YoY, driven by a **$10 million rise** in segment margin from higher revenue-generating horsepower and improved market rates for compression units[48](index=48&type=chunk)[49](index=49&type=chunk) [All Other](index=13&type=section&id=All%20Other) The 'All Other' segment reported an Adjusted EBITDA loss of $24 million, a significant decrease from a positive $12 million in the prior year, primarily due to a $48 million intersegment elimination related to Sunoco LP's share of the ET-S Permian joint venture - Segment Adjusted EBITDA decreased by **$36 million** YoY, primarily due to a **$48 million negative impact** from the intersegment elimination of Sunoco LP's share of the ET-S Permian joint venture[50](index=50&type=chunk) [Supplemental Information](index=14&type=section&id=Supplemental%20Information) [Liquidity and Credit Facility](index=14&type=section&id=Liquidity%20and%20Credit%20Facility) As of June 30, 2025, Energy Transfer had $2.51 billion of available borrowing capacity under its $5.0 billion Five-Year Revolving Credit Facility, which matures in April 2029 Revolving Credit Facility Status (as of June 30, 2025) | Facility | Facility Size | Funds Available | | :--- | :--- | :--- | | Five-Year Revolving Credit Facility | $5,000 million | $2,506 million | [Unconsolidated Affiliates](index=15&type=section&id=Unconsolidated%20Affiliates) For Q2 2025, total equity in earnings from unconsolidated affiliates was $105 million, up from $85 million YoY, with Citrus being the largest contributor, while Adjusted EBITDA from these affiliates increased to $182 million from $170 million, and distributions received decreased to $124 million from $145 million Unconsolidated Affiliates Summary - Three Months Ended June 30 (in millions) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total equity in earnings | $105 | $85 | | Total Adjusted EBITDA | $182 | $170 | | Total distributions received | $124 | $145 | [Non-Wholly Owned Joint Venture Subsidiaries](index=16&type=section&id=Non-Wholly%20Owned%20Joint%20Venture%20Subsidiaries) For Q2 2025, the aggregated Adjusted EBITDA of non-wholly owned joint venture subsidiaries (on a 100% basis) was $566 million, with Energy Transfer's proportionate share being $275 million, representing a decrease from the prior year's figures of $677 million and $329 million, respectively Non-Wholly Owned JVs Summary - Three Months Ended June 30 (in millions) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Adjusted EBITDA (100%) | $566 | $677 | | Our proportionate share of Adjusted EBITDA | $275 | $329 | | Distributable Cash Flow (100%) | $544 | $655 | | Our proportionate share of DCF | $255 | $309 |