Energy Transfer LP (ET) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

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

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the Energy Transfer Second Quarter 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. Please note today's event is being recorded.

I now like to turn the conference over to, Tom Long. Please go ahead.

Tom Long

Thank you, operator. Good afternoon, everyone, and welcome to the Energy Transfer’s second 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 June 30, 2023, which we expect to file tomorrow August, the 3. 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 for the second quarter of 2023. We generated adjusted EBITDA of $3.12 billion, compared to $3.23 billion for the second quarter of 2022. In our base business, we had strong performance from our operations, which delivered record volumes across our Intrastate and midstream segments, as well as through our NGL pipelines, and NGL and refined products terminals, including record NGL volumes exported out of our Nederland and Marcus Hook terminals.

Our volume growth was more than offset by significantly lower quarterly average natural gas and NGL prices, which declined 70% and 45% respectively over the second quarter of last year. DCF. Approval to the partners of Energy Transfer as adjusted was $1.55 billion, compared to $1.88 billion for the second quarter of 2022. This resulted in excess cash flow after distributions of $579 million.

On July 25, we announced a quarterly cash distribution of $0.31 per common unit, or $1.24 on an annualized basis. This distribution represents an increase from $0.23 paid in the second quarter of 2022. We continue to target a 3% to 5% annual distribution growth rate, while balancing our leverage reduction, increasing equity returns and maintaining sufficient cash flow to invest and our incredible backlog of growth opportunities. As of June 30, 2023, the total available liquidity under our revolving credit facilities was approximately $2.36 billion.