Energy Transfer (NYSE:ET) Q4 2025 Earnings call February 17, 2026 09:00 AM ET Company ParticipantsAdam Mackay - EVP of Crude OilDylan Bramhall - CFOMackie McCrea - Co-CEOThomas Long - CFOConference Call ParticipantsElvira Scotto - Equity Research AnalystGabe Moreen - Equity Research AnalystJason Gabelman - Equity Research AnalystJean Salisbury - Equity Research AnalystJohn Mackay - Equity Research AnalystJulien Dumoulin-Smith - Equity Research AnalystKeith Stanley - Equity Research AnalystManav Gupta - Equi ...

Financial Data and Key Metrics Changes - Adjusted EBITDA for full year 2025 was nearly $16 billion, up 3% from $15.5 billion in 2024, marking a partnership record [3] - Distributable cash flow (DCF) attributable to partners was $8.2 billion, slightly down from $8.4 billion in the previous year [3] - For Q4 2025, adjusted EBITDA was approximately $4.2 billion, compared to $3.9 billion in Q4 2024, while DCF was approximately $2 billion, consistent with Q4 2024 [4] Business Segment Data and Key Metrics Changes - NGL and refined products segment had adjusted EBITDA of $1.1 billion, consistent with Q4 2024, with higher throughput across Gulf Coast and Mariner East pipeline operations [5] - Midstream segment adjusted EBITDA was $720 million, up from $705 million in Q4 2024, driven by volume growth in various regions [6] - Crude oil segment adjusted EBITDA decreased to $722 million from $760 million in Q4 2024, impacted by lower transportation revenues [7] - Interstate natural gas segment adjusted EBITDA increased to $523 million from $493 million in the previous year, due to higher capacity sold [7] - Intrastate natural gas segment adjusted EBITDA rose to $355 million from $263 million, driven by increased pipeline and storage optimization [7] Market Data and Key Metrics Changes - Record volumes were moved across interstate, midstream, NGL, and crude segments for the year ended 2025, with record NGL exports from terminals [4] - The company expects to invest approximately $5 to $5.5 billion in organic growth capital for 2026, focusing on natural gas assets and NGL segments [8] Company Strategy and Development Direction - The company is focused on significant growth projects, including the Desert Southwest Pipeline Project, which has been upsized to a 48-inch diameter to meet customer demand [9] - Expansion projects are expected to generate mid-teen returns and considerable earnings growth over the next decade [8] - The company is committed to capital discipline and targeting projects with the highest returns while balancing project risk [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the future growth driven by new projects and the ramp-up of existing operations [19] - The company anticipates continued demand for natural gas services, particularly for power plants and data centers [21] - Management noted that the operating team performed excellently during recent winter weather events, maintaining service and reliability [40] Other Important Information - The company has a significant backlog of growth opportunities and is actively engaging with stakeholders for project updates [10] - The Lake Charles LNG project has been suspended, with the company exploring alternative uses for the terminal [18] Q&A Session Summary Question: Key drivers behind commercialization momentum in natural gas assets - Management highlighted excitement about the Desert Southwest project and the ongoing expansion of the Florida Gas pipeline system [25] Question: NGL transportation and third-party volumes - Management indicated that over half of the gas transported comes from their own facilities, with expectations for growth in affiliate volumes [32] Question: Performance during winter weather and gas market volatility - Management noted that they maintained service during winter storms and did not see profits as high as previous years but performed well [40] Question: Early volumes on Hugh Brinson Pipeline - Management is confident about bringing on some volumes earlier than expected, which will benefit producers in the Permian Basin [44] Question: Medium-term growth expectations - Management reiterated a long-term distribution growth rate target of 3%-5% annually, indicating a solid foundation for growth [49] Question: Recontracting on the Mariner system - Management expressed confidence in maintaining and growing throughput on the Mariner pipelines despite upcoming contract expirations [50] Question: Storage opportunities for data centers - Management emphasized their capability to provide reliable gas supply and storage solutions for data centers [74]

Energy Transfer (NYSE:ET) Q4 2025 Earnings call February 17, 2026 09:00 AM ET Speaker14Thank you, operator, and good morning, everyone, and welcome to the Energy Transfer fourth quarter 2025 earnings call. I'm also joined today by Mackie McCrea and other members of the senior management team, who are here to help answer your questions after our prepared remarks. Hopefully, you saw the press release we issued earlier this morning. As a reminder, our earnings release contains an update to guidance and a thoro ...

Q4 2025 Earnings February 17, 2026 Forward-looking Statements / Legal Disclaimer Management of Energy Transfer LP (ET) will provide this presentation in conjunction with ET's 4th quarter 2025 earnings conference call. On the call, members of management may make statements about future events, outlook and expectations related to Sunoco LP (SUN), SunocoCorp LLC (SUNC), USA Compression Partners, LP (USAC), and ET (collectively, the Partnerships), and their subsidiaries and this presentation may contain stateme ...

Financial Performance - Energy Transfer reported net income attributable to partners of $928 million for Q4 2025, down from $1.08 billion in Q4 2024[2]. - Adjusted EBITDA for Q4 2025 was $4.18 billion, an increase of 8% compared to $3.88 billion in Q4 2024[3]. - Distributable Cash Flow attributable to partners for Q4 2025 was $2.04 billion, up from $1.98 billion in the same period last year[3]. - Revenues for Q4 2025 reached $25,320 million, a 29.1% increase from $19,541 million in Q4 2024[21]. - Operating income for the year ended December 31, 2025, was $9,027 million, slightly down from $9,138 million in 2024, reflecting a decrease of 1.2%[21]. - Adjusted EBITDA for the year ended December 31, 2025, was $15,984 million, an increase of 3.2% from $15,483 million in 2024[23]. - Distributable Cash Flow (consolidated) for Q4 2025 was $2,681 million, up 4.6% from $2,563 million in Q4 2024[23]. - The company reported a basic net income per common unit of $0.25 for Q4 2025, down from $0.29 in Q4 2024[21]. - Distributions to partners for the year ended December 31, 2025, totaled $4,555 million, an increase from $4,388 million in 2024[23]. Capital Expenditures and Investments - The Partnership plans to invest $5.0 billion to $5.5 billion in growth capital for 2026, focusing on enhancing its natural gas network[13]. - Construction is underway on the Mustang Draw II processing plant, expected to be in service in Q4 2026, with a capacity of 275 MMcf/d[6]. - The FGT Phase IX Project is expected to cost up to $535 million and is anticipated to be in service in Q4 2028[6]. Asset and Revenue Growth - Energy Transfer's total assets increased to $141.286 billion as of December 31, 2025, up from $125.380 billion in 2024[19]. - Common Units outstanding at the end of Q4 2025 were 3,440.0 million, compared to 3,431.1 million in Q4 2024[23]. - Total revenues for the "All Other" segment increased to $1,055 million in Q4 2025, compared to $607 million in Q4 2024, with a segment margin of $33 million[52]. Segment Performance - Intrastate transportation and storage segment Adjusted EBITDA increased to $355 million, up 35% from $263 million year-over-year, driven by higher realized natural gas sales and transportation fees[38][39]. - Interstate transportation and storage segment Adjusted EBITDA rose to $523 million, a 6.1% increase from $493 million, attributed to higher transportation revenue and increased utilization[40][41]. - Midstream segment Adjusted EBITDA was $720 million, slightly up from $705 million, supported by increased gathered volumes in the Permian region[42][43]. - NGL and refined products transportation and services segment Adjusted EBITDA decreased to $1,078 million from $1,108 million, primarily due to a $100 million drop in marketing margin[44][45]. - Crude oil transportation and services segment Adjusted EBITDA fell to $722 million from $760 million, impacted by decreased transportation revenue from the Bakken Pipeline joint venture[46][47]. - Segment Adjusted EBITDA related to the investment in Sunoco LP increased to $646 million for the three months ended December 31, 2025, compared to $439 million in the same period last year, reflecting a significant growth[48]. - Revenues from the investment in USAC rose to $252 million in Q4 2025, up from $245 million in Q4 2024, driven by a $9 million increase in contract operations revenues[49]. - Adjusted EBITDA related to unconsolidated affiliates increased to $184 million in Q4 2025, compared to $170 million in Q4 2024, with notable contributions from Citrus and MEP[56]. Cost and Expense Management - Total costs and expenses for Q4 2025 were $23,244 million, a 34.6% increase from $17,262 million in Q4 2024[21]. - Interest expense for the year ended December 31, 2025, was $3,474 million, an increase of 11.2% from $3,125 million in 2024[21]. - Operating expenses increased by $185 million primarily due to costs associated with Parkland's operations, impacting overall profitability[51]. - Selling, general and administrative expenses rose by $103 million, largely attributed to Parkland's operations and one-time transaction-related expenses[51]. Future Outlook - Energy Transfer expects 2026 Adjusted EBITDA to range between $17.45 billion and $17.85 billion, an increase from the previous estimate of $17.3 billion to $17.7 billion[13]. - The company anticipates recognizing significant gains in the first quarter of 2026 due to the timing of NGL and refined product inventory hedge settlements[45].

Core Viewpoint - Energy Transfer is positioned as a high-yield investment opportunity with strong total return potential, supported by its robust financial health and ongoing expansion projects [1]. Group 1: Financial Performance - Energy Transfer currently offers a distribution yield of approximately 7.5%, significantly higher than the S&P 500's dividend yield of around 1.1%, making it an attractive option for passive income generation [3]. - The company has maintained a strong financial position, distributing about 50% of its annual cash flows to investors over the past three years, with 90% of these cash flows coming from stable fee-based sources [4]. - The leverage ratio is within the target range of 4.0-4.5 times, providing additional financial flexibility for the company [4]. Group 2: Distribution Growth - Energy Transfer has consistently raised its cash distribution, achieving over 3% distribution growth in the past year, aligning with its long-term target of 3% to 5% annual growth [6]. - The company is expected to continue increasing its high-yielding distribution, with earnings projected to rise by 7% to 10% this year due to the ramp-up of several expansion projects [7]. Group 3: Expansion Projects - Energy Transfer is investing between $5 billion and $5.5 billion into organic expansion projects this year, as part of a multi-year capital spending program [7]. - The company is pursuing multiple expansion projects to grow its gas infrastructure platform, driven by strong gas demand from power producers and AI data centers [8]. Group 4: Investment Outlook - The combination of high income and growth potential positions Energy Transfer as a compelling investment, with expectations for powerful total returns over the coming years [9].

Core Insights - Enbridge (ENB) is viewed as a strong player in the midstream sector with significant competitive advantages [1] - The focus is on long-term value investing, particularly in undervalued sectors like Oil & Gas and consumer goods [1] - Energy Transfer is highlighted as a company that has been overlooked but shows potential for substantial returns [1] Investment Strategy - The investment approach emphasizes analyzing companies with strong fundamentals and good cash flows, especially those that are currently disliked or undervalued [1] - There is a tendency to engage in deal arbitrage opportunities, although the primary focus remains on long-term value [1] - The analyst expresses a preference for businesses that are easily understandable, avoiding high-tech and certain consumer goods sectors [1]

Group 1 - Enbridge (ENB) is viewed as a strong player in the midstream sector with significant competitive advantages [1] - The focus is on undervalued companies with strong fundamentals and cash flows, particularly in the Oil & Gas and consumer goods sectors [1] - Energy Transfer is highlighted as a previously overlooked investment opportunity that has shown resilience [1] Group 2 - The analysis emphasizes long-term value investing while also exploring potential deal arbitrage opportunities [1] - There is a preference for businesses that are easily understandable, avoiding high-tech and certain consumer goods sectors [1] - The article aims to foster a community of investors seeking superior returns and informed decision-making [1]

Core Viewpoint - Energy Transfer LP (ET) is showing positive stock performance and is expected to report strong financial results in the upcoming earnings release, indicating potential growth opportunities for investors. Group 1: Stock Performance - Energy Transfer LP's stock closed at $18.75, reflecting a +2.68% change from the previous day's closing price, outperforming the S&P 500's daily gain of 0.05% [1] - Over the past month, the stock has increased by 4.58%, which is below the Oils-Energy sector's gain of 14.04% but better than the S&P 500's loss of 1.99% [1] Group 2: Upcoming Earnings - The company is set to announce its earnings on February 17, 2026, with an anticipated EPS of $0.34, representing a 17.24% increase compared to the same quarter last year [2] - Revenue is forecasted to be $26.02 billion, indicating a 33.16% growth year-over-year [2] Group 3: Annual Estimates - For the annual period, the Zacks Consensus Estimates predict earnings of $1.32 per share and revenue of $86.24 billion, reflecting increases of +3.13% and +4.31% respectively from the previous year [3] - Recent analyst estimate revisions indicate optimism regarding the company's business and profitability [3] Group 4: Valuation Metrics - Energy Transfer LP is currently trading at a Forward P/E ratio of 11.75, which is lower than the industry average Forward P/E of 12.37, suggesting a potential discount [6] - The company has a PEG ratio of 0.94, compared to the industry average PEG ratio of 1.73, indicating favorable growth expectations relative to its valuation [7] Group 5: Industry Context - The Oil and Gas - Production Pipeline - MLB industry, which includes Energy Transfer LP, has a Zacks Industry Rank of 189, placing it in the bottom 23% of over 250 industries [8] - The strength of individual industry groups is measured by the Zacks Industry Rank, with top-rated industries outperforming the bottom half by a factor of 2 to 1 [8]

Core Viewpoint - Energy Transfer LP (ET) is anticipated to show a year-over-year increase in both revenues and earnings for the fourth quarter of 2025, with revenues expected to reach $26.02 billion, reflecting a 33.16% growth compared to the previous year [1][5]. Revenue Estimates - The Zacks Consensus Estimate for ET's fourth-quarter revenues is $26.02 billion, which is a 33.16% increase from the $19.54 billion reported a year ago [2]. - For the next quarter, revenues are estimated at $27.15 billion, indicating a 29.18% growth year-over-year [2]. Earnings Estimates - The consensus estimate for earnings is set at 34 cents per unit, which represents a 5.56% decline in estimates over the past 60 days [3]. - The earnings estimates have shown a downward trend, with a 5.56% decrease in the current quarter's estimate compared to previous months [4]. Performance Factors - Fee-based contracts are projected to account for nearly 90% of Energy Transfer's earnings, providing a stable revenue base that is expected to support fourth-quarter performance [9]. - New long-term natural gas supply agreements and the addition of new processing plants are likely to positively impact earnings [10]. - Robust NGL export volumes and the company's extensive pipeline network are expected to contribute significantly to the fourth-quarter results [11][12]. Valuation Metrics - Energy Transfer is currently trading at an EV/EBITDA of 9.13x, which is lower than the industry average of 10.35x, indicating a relative discount [5][14]. - The stock has gained 5.1% over the past six months, compared to a 9% increase in the Zacks Oil and Gas Production Pipeline industry [16]. Strategic Positioning - Energy Transfer operates a vast network of nearly 140,000 miles of pipelines across 44 states, positioning it well to benefit from rising U.S. production of oil, natural gas, and natural gas liquids [17]. - Continued investments in expanding pipeline and processing capacity are expected to reinforce the company's leadership in the midstream sector [18]. Long-term Outlook - The long-term outlook for Energy Transfer remains favorable, supported by its geographic reach and focus on both organic growth and strategic acquisitions [21]. - However, near-term challenges in the Bakken region may impact storage margins [21].