Energy Transfer(ET) - 2025 Q2 - Quarterly Results

Q2 2025 Financial & Operational Overview Financial Performance Summary 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] - 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] Operational & Strategic Highlights 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] 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] - 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] Consolidated Financial Statements Condensed Consolidated Balance Sheets 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 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 Reconciliation of Net Income to Adjusted EBITDA and Distributable Cash Flow 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 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][27] - 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][29] Segment Performance Analysis Summary of Segment Adjusted EBITDA 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 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][37] - 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] Interstate Transportation and Storage 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][39] - 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] 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][40] - 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] NGL and Refined Products Transportation and Services 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][43] - 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] Crude Oil Transportation and Services 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][45] - 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] Investment in Sunoco LP 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][46] Investment in USAC 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][49] All Other 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] Supplemental Information Liquidity and Credit Facility 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 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 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 |