Energy Transfer(US:ET)2024-11-07 17:13PART I — FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS (Unaudited) This section presents the unaudited consolidated financial statements for Energy Transfer LP, detailing financial position, operational results, and cash flows for the period ended September 30, 2024 Consolidated Balance Sheets Total assets grew to $124.4 billion, driven by increased Property, Plant, and Equipment, while liabilities rose due to higher long-term debt Consolidated Balance Sheet Highlights (in millions) | Account | September 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | $124,429 | $113,698 | | Total Current Assets | $13,336 | $12,433 | | Property, Plant, and Equipment, net | $95,012 | $85,351 | | Total Liabilities | $77,811 | $64,981 | | Total Current Liabilities | $12,371 | $11,277 | | Long-term Debt, less current maturities | $58,995 | $51,380 | | Total Equity | $46,180 | $43,939 | Consolidated Statements of Operations Revenues and net income attributable to partners increased significantly for the nine months ended September 30, 2024, compared to the prior year Statement of Operations Summary (in millions, except per unit data) | Metric | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Total Revenues | $63,130 | $58,054 | | Operating Income | $6,859 | $6,130 | | Net Income | $5,118 | $3,727 | | Net Income Attributable to Partners | $3,737 | $2,608 | | Diluted Net Income per Common Unit | $0.99 | $0.72 | Consolidated Statements of Cash Flows Net cash from operating activities increased, while investing activities cash use grew due to acquisitions, and financing activities reflected debt and equity transactions Cash Flow Summary (in millions) | Activity | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $8,916 | $8,259 | | Net Cash Used in Investing Activities | ($4,435) | ($3,361) | | Net Cash Used in Financing Activities | ($4,343) | ($4,641) | | Increase in Cash and Cash Equivalents | $138 | $257 | Notes to Consolidated Financial Statements The notes detail significant accounting policies, major acquisitions like WTG Midstream, debt refinancing, and segment performance ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management discusses strategic acquisitions, operational results showing significant Adjusted EBITDA growth, liquidity, and capital expenditure plans for 2024 Recent Developments The company completed major acquisitions of WTG Midstream and NuStar, formed a Permian joint venture, and increased its quarterly distribution - Completed the acquisition of WTG Midstream for $2.28 billion in cash and approximately 50.8 million ET common units, adding 6,000 miles of gas gathering pipelines and 1.3 Bcf/d of processing capacity in the Midland Basin205206 - Subsidiary Sunoco LP completed its acquisition of NuStar Energy L.P., adding approximately 9,500 miles of pipeline and 63 terminal and storage facilities207 - Formed a joint venture with Sunoco LP, combining their respective crude oil and produced water gathering assets in the Permian Basin, with Energy Transfer holding a 67.5% interest212213 - Announced a quarterly cash distribution of $0.3225 per common unit for the quarter ended September 30, 2024, an annualized rate of $1.29214 Results of Operations Consolidated Adjusted EBITDA grew by $1.5 billion to $11.6 billion, propelled by acquisitions and volume growth across key segments Consolidated Adjusted EBITDA by Segment (in millions) | Segment | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | Change | | :--- | :--- | :--- | :--- | | Intrastate transportation and storage | $1,095 | $869 | $226 | | Interstate transportation and storage | $1,335 | $1,468 | ($133) | | Midstream | $2,205 | $1,851 | $354 | | NGL and refined products | $3,071 | $2,852 | $219 | | Crude oil transportation and services | $2,417 | $1,906 | $511 | | Investment in Sunoco LP | $1,018 | $728 | $290 | | Investment in USAC | $429 | $373 | $56 | | Total Adjusted EBITDA | $11,599 | $10,096 | $1,503 | - Net income for the nine months ended Sep 30, 2024, increased by $1.39 billion year-over-year, primarily due to a $598 million gain on Sunoco LP's sale of West Texas assets and the absence of a $625 million litigation loss recorded in the prior year235 Liquidity and Capital Resources The company projects up to $4.0 billion in 2024 capital expenditures and maintains significant borrowing capacity under its credit facility 2024 Expected Capital Expenditures (in millions) | Category | Low Estimate | High Estimate | | :--- | :--- | :--- | | Growth Capital | $2,800 | $3,000 | | Maintenance Capital | $970 | $1,000 | | Total | $3,770 | $4,000 | - As of September 30, 2024, the Partnership had $1.63 billion of borrowings outstanding under its $5.0 billion Five-Year Credit Facility, with $3.34 billion available for future borrowings317 - Total consolidated debt increased to $59.3 billion as of September 30, 2024, from $52.4 billion at December 31, 2023, primarily to fund acquisitions and capital projects305 Cash Distributions Energy Transfer announced a continued sequential increase in its quarterly common unit distribution for Q3 2024, alongside distributions for preferred units Energy Transfer Common Unit Distributions per Unit | Quarter Ended | Payment Date | Rate | | :--- | :--- | :--- | | Dec 31, 2023 | Feb 20, 2024 | $0.3150 | | Mar 31, 2024 | May 20, 2024 | $0.3175 | | Jun 30, 2024 | Aug 19, 2024 | $0.3200 | | Sep 30, 2024 | Nov 19, 2024 | $0.3225 | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The company manages commodity price risk through derivatives and is exposed to interest rate risk on its $3.09 billion of floating rate debt - The company utilizes exchange-traded and OTC commodity financial instruments (futures, swaps, options) to manage volatility in commodity prices174 - As of September 30, 2024, the company had $3.09 billion of floating rate debt, where a hypothetical 100 basis point change in interest rates would change annual interest expense by approximately $31 million340 ITEM 4. CONTROLS AND PROCEDURES Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the third quarter of 2024 - Based on an evaluation, the Co-Principal Executive Officers and Principal Financial Officer concluded that disclosure controls and procedures were effective as of September 30, 2024343 - No material changes were made to the company's internal control over financial reporting during the three months ended September 30, 2024344 PART II — OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS This section details updates on legal matters, including the resolution of a case related to a 2014 oil release and a challenge to a new PHMSA penalty - A Consent Decree was entered in September 2024 to resolve a civil penalty and natural resource damages claim from a 2014 crude oil release, with payments totaling approximately $2.5 million348 - The Partnership is challenging a Notice of Probable Violation from PHMSA related to a 2020 incident, which includes a proposed civil penalty of approximately $2.5 million350 ITEM 1A. RISK FACTORS There have been no material changes to the risk factors previously disclosed in the company's 2023 Annual Report and Q1 2024 Quarterly Report - No material changes from the risk factors described in the Annual Report on Form 10-K for the year ended December 31, 2023, and the Q1 2024 Form 10-Q have occurred353 ITEM 6. EXHIBITS This section lists the exhibits filed with the report, including Sarbanes-Oxley certifications and interactive data files