Energy Transfer LP (ET) Q1 2023 Earnings Call Transcript

For the period ending March 31, 2023

May 2, 2023 4:30 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Hello, and welcome to the Energy Transfer Q1 2023 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note today's event is being recorded.

And now, I'd like to turn the conference over to your host today, Tom Long. Sir, please go ahead.

Tom Long

Thank you, operator. Good afternoon, everyone, and welcome to the Energy Transfer first quarter 2023 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 afternoon as well as the slides posted to our website.

As a reminder, we will be making forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. These statements are based upon our current beliefs as well as certain assumptions and information currently available to us and are discussed in more detail in our Form 10-Q for the quarter ended March 31, 2023, which we expect to file this Thursday, May 4. I'll also refer to adjusted EBITDA and distributable cash flow or DCF, both of which are non-GAAP financial measures. You'll find a reconciliation of our non-GAAP measures on our website.

I'd like to start today by going over our financial results. We were pleased with our results for the first quarter of 2023, during which we generated adjusted EBITDA of $3.43 billion, which was up from $3.34 billion for the first quarter of 2022. Results for the first quarter benefited from record volumes across our interstate and midstream segments, as well as through our NGL pipelines and NGL and refined products terminals, which included a record amount of LPGs exported out of our Nederland terminal and a record amount of ethane exported out of both Netherlands and Marcus Hook terminals during the quarter.

DCF attributable to the partners of Energy Transfer, as adjusted, was $2.01 billion compared to $2.08 billion for the first quarter of 2022. This resulted in excess cash flow after distributions of $1.04 billion. On an incurred basis, we had excess DCF of $640 million after distributions of $967 million and growth capital of $407 million.

On April 26, we announced a quarterly cash distribution of $0.3075 per common unit or $1.23 on an annualized basis. This distribution represents an increase from $0.3050 per common unit paid for the fourth quarter of 2022. Although we cannot guarantee future performance, we expect to make ongoing quarterly increases to our common unit distribution of a $0.0025 on a quarterly basis or $0.01 on an annualized basis and we are now targeting 3% to 5% annual distribution growth rate.