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Explanatory Note
The following is a presentation given by members of management of Energy Transfer Equity, L.P. (ETE) at a conference hosted by Credit Suisse in New York on June 23, 2015.
Forward Looking Statements
This presentation may contain forward©\looking statements, including but not limited to, statements regarding the offer by ETE to acquire The Williams Companies, Inc. (WMB), its expected future performance (including expected results of operations and financial guidance), and the combined company’¡¯s future financial condition, operating results, strategy and plans. Forward©\looking statements may be identified by the use of the words “anticipates,” “expects,” “intends,” “plans,” “should,” “could,” “would,” “may,” “will,” “believes,” “estimates,” “potential,” “target,” “opportunity,” “designed,” “create,” “predict,” “project,” “seek,” “ongoing,” “increases” or “continue” and variations or similar expressions. These statements are based upon the current expectations and beliefs of management and are subject to numerous assumptions, risks and uncertainties that change over time and could cause actual results to differ materially from those described in the forward©\looking statements. These assumptions, risks and uncertainties include, but are not limited to, assumptions, risks and uncertainties discussed in the most recent Annual Report on Form 10©\K and Quarterly Report on Form 10©\Q for each of ETE, Energy Transfer Partners, L.P. (ETP), Sunoco Logistics Partners L.P. (SXL) and Sunoco LP (SUN) filed with the U.S. Securities and Exchange Commission (the “SEC”) and assumptions, risks and uncertainties relating to the proposed transaction, as detailed from time to time in ETE’s, ETP’s, SXL’s and SUN’s filings with the SEC, which factors are incorporated herein by reference. Important factors that could cause actual results to differ materially from the forward©\looking statements we make in this presentation are set forth in other reports or documents that ETE, ETP, SXL and SUN file from time to time with the SEC include, but are not limited to: (1) the ultimate outcome of any potential business combination transaction between ETE, ETE Corp. and WMB including the possibilities that ETE will not pursue a transaction with WMB and that WMB will continue to reject a transaction with ETE and fail to terminate its existing merger agreement with Williams Partners L.P. (WPZ); (2) if a transaction between ETE, ETE Corp. and WMB were to occur, the ultimate outcome and results of integrating the operations of ETE and WMB, the ultimate outcome of ETE’s operating strategy applied to WMB and the ultimate ability to realize cost savings and synergies; (3) the effects of the business combination transaction of ETE, ETE Corp. and WMB, including the combined company’s future financial condition, operating results, strategy and plans; (4) the ability to obtain required regulatory approvals and meet other closing conditions to the transaction, including approval under the Hart©\Scott©\Rodino Antitrust Improvements Act of 1976, as amended, and WMB stockholder approval, on a timely basis or at all; (5) the reaction of the companies’ stockholders, customers, employees and counterparties to the proposed transaction; (6) diversion of management time on transaction©\related issues; (7) unpredictable economic conditions in the United States and other markets, including fluctuations in the market price of ETE common units and ETE Corp. common shares; (8) the ability to obtain the intended tax treatment in connection with the issuance of ETE common shares to WMB stockholders; (9) the ability to maintain WMB’s and WPZ’s current credit ratings and (10) the risks and uncertainties detailed by WMB and WPZ with respect to their respective businesses as described in their respective reports and documents filed with the SEC. All forward©\looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by this cautionary statement. Readers are cautioned not to place undue reliance on any of these forward©\looking statements. These forward©\looking statements speak only as of the date hereof. ETE undertakes no obligation to update any of these forward©\looking statements to reflect events or circumstances after the date of this presentation or to reflect actual outcomes.
Additional Information
This presentation does not constitute an offer to buy or solicitation of an offer to sell any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended. This presentation relates to a proposal that ETE has made for a business combination transaction with WMB. In furtherance of this proposal and subject to future developments, ETE and ETE Corp. (and, if a negotiated transaction is agreed, WMB) may file one or more registration statements, proxy statements or other documents with the SEC. This presentation is not a substitute for any proxy statement, registration statement, prospectus or other document ETE, ETE Corp. or WMB may file with the SEC in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF ETE AND WMB ARE URGED TO READ THE PROXY STATEMENT(S), REGISTRATION
STATEMENT, PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED BUSINESS COMBINATION TRANSACTION. Any definitive proxy statement(s) (if and when available) will be mailed to stockholders of WMB. Investors and security holders will be able to obtain free copies of these documents (if and when available) and other documents filed with the SEC by ETE through the web site maintained by the SEC at http://www.sec.gov. Copies of the documents filed by ETE and ETE Corp. with the SEC will be available free of charge on ETE’¡¯s website at www.energytransfer.com or by contacting Investor Relations at 214©\981©\0700.
ETE and its directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding the directors and officers of ETE’s general partner is contained in ETE’¡¯s Annual Report on Form 10©\K filed with the SEC on March 2, 2015 (as it may be amended from time to time). Additional information regarding the interests of such potential participants will be included in the proxy statement/prospectus and other relevant documents filed with the SEC if and when they become available. Investors should read the proxy statement/prospectus carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from ETE using the sources indicated above.
ETE Exchange Offer
This presentation is not a substitute for any registration statement, prospectus or other document ETE and ETE Corp. may file with the SEC in connection with any offer to ETE unitholders to exchange their ETE common units for common shares in ETE Corp. In connection with any offer to ETE unitholders to exchange their ETE common units for common shares in ETE Corp., ETE and ETE Corp. may file a registration statement and other documents with the SEC. INVESTORS AND SECURITY HOLDERS OF ETE ARE URGED TO READ THE REGISTRATION STATEMENT AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED OFFER TO EXCHANGE. Investors and security holders may obtain free copies of these documents if any when they become available from ETE using the sources indicated above.
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ENERGY TRANSFER EQUITY, L.P.
Credit Suisse Conference
June 23, 2015
Jamie Welch
Group CFO
Filed by Energy Transfer Equity, L.P.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: The Williams Companies, Inc.
Commission File No.: 001-04174
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DISCLAIMER
This presentation relates to a presentation the management of Energy Transfer Equity, L.P. (ETE) will give to investors on
June 23, 2015. At this meeting, members of the Partnerships’ management may make statements about future events, outlook and expectations related to Energy Transfer Partners, L.P. (ETP), Sunoco Logistics Partners L.P. (SXL), Panhandle Eastern Pipe Line Company, LP (PEPL), Sunoco LP (SUN), and ETE (collectively, the Partnerships), and their subsidiaries and this presentation may contain statements about future events, outlook and expectations related to the Partnerships and their subsidiaries all of which statements are forward-looking statements. Any statement made by a member of management of the Partnerships at this meeting and any statement in this presentation that is not a historical fact will be deemed to be a forward-looking statement. These forward-looking statements rely on a number of assumptions concerning future events that members of management of the Partnerships believe to be reasonable, but these statements are subject to a number of risks, uncertainties and other factors, many of which are outside the control of the Partnerships. While the Partnerships believe that the assumptions concerning these future events are reasonable, we caution that there are inherent risks and uncertainties in predicting these future events that could cause the actual results, performance or achievements of the Partnerships and their subsidiaries to be materially different. These risks and uncertainties are discussed in more detail in the filings made by the Partnerships with the Securities and Exchange Commission, copies of which are available to the public. The Partnerships expressly disclaim any intention or obligation to revise or publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise.
All references in this presentation to capacity of a pipeline, processing plant or storage facility relate to maximum capacity under normal operating conditions and with respect to pipeline transportation capacity, is subject to multiple factors (including natural gas injections and withdrawals at various delivery points along the pipeline and the utilization of compression) which may reduce the throughput capacity from specified capacity levels.
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ENERGY TRANSFER GROUP
ENERGY TRANSFER EQUITY, L.P. (NYSE: ETE)
100%(1) Ba2 / BB / BB (Stable) 90% GP / IDRs
(Class H Units)
5% LP Interest,
~1% GP Interest, & IDRs
ENERGY TRANSFER 27% LP Interest, SUNOCO LOGISTICS PARTNERS, L.P. 10% GP / IDRs PARTNERS L.P.
ENERGY TRANSFER LNG 40% Interest (NYSE: ETP) (NYSE: SXL) 44% LP Baa3 / BBB- / BBB- (Stable) Baa3 / BBB / BBB (Stable)
Interest, 60% Interest 100% GP
Interest, &
IDRs Intrastate
Transportation & Product Pipelines Lake Charles Lake Charles Storage LNG SUNOCO LP
LNG (Regas)
Export Co (NYSE: SUN)
Ba2 / BB / BB (Stable) Interstate Crude Oil Transportation & Acquisition & Storage Marketing
Retail Sunoco, Inc.
Terminal Facilities Marketing Retail Marketing
Crude Oil Midstream Pipelines Legend:
Publicly
Pro Forma
Traded MLP Liquids
Operating Transportation and Services
Business
| (1) |
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Owner and operator of LNG facility in Lake Charles, LA and expected nucleus of new stand-alone MLP |
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SIGNIFICANT FINANCIAL SCALE AND DIVERSIFICATION ACROSS THE GROUP
Enterprise value ~$100 billion
Indexed unit price performance since January 1, 2013
ETE: 206%
ETE ETP SXL SUN
SUN: 82% SXL: 55% ETP: 31%
Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Feb-15 Jun-15
ETE ETP SXL SUN
Market cap: $38 billion Market cap: $28 billion Market cap: $9.4 billion Market cap: $1.7 billion Unit price: $69.67 Unit price: $56.19 Unit price: $38.42 Unit price: $45.77 Dist/unit (LQA): $1.96 Dist/unit (LQA): $4.06 Dist/unit (LQA): $1.68 Dist/unit (LQA): $2.58 Yield: 2.81% Yield: 7.23% Yield: 4.37% Yield: 5.64%
Source: Bloomberg as of 06/18/15
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ETE’S PERFORMANCE DRIVEN BY STRONG
FUNDAMENTALS OF ITS OPERATING SUBSIDIARIES
ETE unit price performance since January 1st, 2013
$70.00
$60.00 $69.67 / 206%
$50.00
$40.00
$30.00
$20.00
Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15
ETE has grown its distribution over 52% since January 1st, 2013
$2.00 ETE Annualized Quarterly Distribution ETE Distribution / Unit q-o-q Growth % $1.96 10.0%
Ten consecutive quarters
8.0%
$1.75 of distribution growth
6.0%
$1.50 $1.39 $1.44
$1.31 $1.35 4.0%
$1.29
$1.25 2.0%
$1.00 –
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2013 2014 2015
Source: Bloomberg as of 6/18/15 and split adjusted
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BUSINESS OVERVIEW
ETE, a pure-play GP that receives cash flow from LP interests, GP interests and IDRs in ETP, as well as ~90% of the economics from GP interests and IDRs
in SXL, and its ownership of Lake Charles LNG.
ETP: a large-cap, investment grade SUN: a growth-oriented, MLP engaged in SXL: a large-cap, investment grade Lake Charles LNG: the owner /
MLP with intrastate transportation and the wholesale distribution of motor fuels MLP focused on acquiring, owning operator of a LNG facility in Lake
storage, interstate transportation and and retail marketing operations. Current and operating a diverse mix of crude Charles, LA
storage, midstream; natural gas liquid consolidation of ETP’s retail marketing oil & refined products & NGL
(“NGL”) transportation and services, platform with recently acquired Susser pipelines, terminalling & storage 1Q 2015 Adjusted EBITDA:
and retail marketing operations Holdings facilities, as well as crude oil $49 million
acquisition and marketing assets
KEY ASSETS
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LNG storage tanks |
PF 1Q 2015 Adjusted EBITDA: 1Q 2015 Adjusted EBITDA: 1Q 2015 Adjusted EBITDA: Regasification & discharge peak
$1,365 million(1) $44 million $221 million capacity
Max rate: 2.1 Bcf/d
KEY ASSETS KEY ASSETS KEY ASSETS Run rate: 1.8 Bcf/d
~62,300 miles of natural gas 2,400 sites and 6 terminals in ~5,800 miles of crude oil BG contracted through 2030
and NGL pipelines attractive markets pipelines
Owns subsidiaries including More than 4.9 billion gallons of ~2,400 miles of product pipelines Lake Charles Export
Panhandle Eastern, engaged in annual motor fuel sales 39 active refined products 3 trains: 15 MTPA
natural gas transportation / marketing terminals FTA & non-FTA authorizations
storage; and Lone Star NGL, Interests in 10 product and crude Expected to be online mid 2020
engaged in NGL transportation / oil pipelines and terminal JV’s (train 1) through end 2021 (train 3)
storage BG: construction manager, operator,
~6,700 combined retail locations and customer
with one of the largest Minimum 25yr tolling contract on rate
retail/wholesale footprints in the of return basis (implied tariff is highly
Southwest competitive to LSAs for other US
LNG projects)
Represents ~$6.0 billion of consolidated LTM EBITDA
| (1) |
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Pro forma ETP & Regency |
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A TRULY UNIQUE FRANCHISE
Natural NGLs Crude Gas Oil
3rd largest G&P nd rd
2 largest 3 largest MLP player and 4th largest NGL 2nd largest planned Leading non-refining transporter of transporter of business LNG Export gasoline distributor 3rd largest NGL natural gas in Mont Belvieu crude oil facility in the US in the US in the US in the US producer in the US
Transporting Fractionating 12% Over 4.25 Bcfd volumes equal to of NGL volumes in Transport ~15% Represents 15% of Supply ~5% of processed and 370 more than 20% of Mont Belvieu with of crude oil in current approved US retail gasoline Mbpd of NGL
US natural gas plans to more than the US US LNG exports sales produced production double capacity
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SIGNIFICANT GEOGRAPHIC FOOTPRINT ACROSS THE GROUP
ETP Assets SXL Assets
Crude Production (Mbpd) Natural Gas Production (MMcf/d)
1,499 1,267
9 9
‘03 ‘15 ‘03 ‘15
Bakken
16,737 4,565 2,571
411 114
‘03 ‘15 ‘03 ‘15
Niobrara
6,436
5,279 0 57 1 2,056
7,034 ‘03 ‘15 ‘03 ‘15
897 Marcellus
‘03 ‘15 ‘03 ‘15
Permian 84 Development Projects
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58 |
‘03 ‘15 ‘03 ‘15 Marcus Hook
Haynesville
Combined Sunoco Retail Platform Eagle Point
Company Operated Nederland
Dealer / Distributor Lake Charles LNG Operated
SUN Terminals 7,405 Rover Pipeline
1,643 Dakota Access Pipeline
0 0 Lone Star Express Pipeline ‘03 ‘15 ‘03 ‘15 Crude Conversion Pipeline Eagle Ford Revolution Project
Source: DI Desktop and EIA Drilling Productivity Report; May 2015
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EXCEPTIONALLY WELL POSITIONED TO CAPITALIZE ON U.S. ENERGY EXPORTS
Asset base well-positioned to capture the changing supply and demand dynamics for condensates, natural gas, NGLs and LNG
Canada
Europe
NGLs LNG Natural Gas
Energy Transfer Asset Overview
ETP Assets SXL Assets
Development Projects
Asia
South America Marcus Hook
Eagle Point
Europe Nederland
India Lake Charles LNG Mexico Rover Pipeline Asia Dakota Access Pipeline Europe Lone Star Express Pipeline Crude Conversion Pipeline
Asia South America
Revolution Project
South America Caribbean
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TRANSFORMATION AND CONTINUED GROWTH
Adjusted Propane Midstream Interstate Crude / Refined Products Retail Marketing Liquids Trans. & Svcs. Intrastate Other
EBITDA by Operating
Segment 9% 4%
3% 24%
($ in millions) 16%
11%
(1),(2) 20%
47%
13% 20% ETP 14% 17%
2009: $1,683
LTM: $5,772
Adjusted
EBITDA by Crude Oil Pipelines Terminals Crude Acquisition & Marketing Products Pipeline
Operating Segment
11%
($ in millions) 20%
18%
39% SXL 12% 40% 28% 32%
2009: $372
LTM: $984
| (1) |
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Pro forma ETP & Regency |
| (2) |
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ETP LTM pie chart sums to <100% due to inclusion of announced synergies |
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SUBSTANTIAL OPPORTUNITIES TO
REALIZE VALUE FROM REGENCY MERGER
Value Creation
Low execution risk
$160 – $225 million annual synergies
Most of the synergies to be harvested over balance of 2015
Corporate Systems Field / Capital G&A Operational Efficiency
Commercial synergies are incremental and likely to be material
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ETP – REGENCY MERGER: STRATEGIC HIGHLIGHTS
LEADING POSITIONS IN THE MOST
ATTRACTIVE BASINS IN THE US
WORLD CLASS MIDSTREAM
FOOTPRINT
COMPLEMENTARY ASSETS WITH
SIGNIFICANT GROWTH
OPPORTUNITIES
SIGNIFICANT LONG-
TERM VALUE CREATION
Strong positions in Permian, Eagle Ford, Marcellus and Utica basins
– Active in 9 of the top 10 basins by active rig count (1)
– Top 3 regions by oil production and top 3 regions by gas production (2) Adds diversity and leadership positions in substantially all major basins/plays
Combines strong Permian Basin / Eagle Ford positions to create the premier franchise
Provides additional customer relationships with some of the most active operators in each basin Current combined gathering and processing throughput of approximately 9.4 Bcf/d
Significant organic growth project opportunities
– 2015 pro forma growth capex of ~$5.8 billion
Additional NGL production and volumes to support Lone Star’s(3) leading NGL position in Mont Belvieu Incremental natural gas volumes for ETP’s intrastate natural gas system
Substantial cost savings and efficiencies
In addition, there are anticipated material commercial synergies
Higher long-term distribution growth profile than ETP stand-alone business
The merger takes ETP to the next level
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Source: Baker Hughes (2) Source: EIA |
| (3) |
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Prior to the merger, Lone Star was owned 70% by ETP and 30% by Regency |
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ETP – REGENCY MERGER: KEY TAKEAWAYS
The merger of ETP and Regency creates benefits for ETE
– Immediate increase in overall cash flow and long-term cash flow growth
– Improved pro forma credit profile
ETE is stronger and better positioned for future strategic opportunities
ETP becomes the second largest MLP
– Combined footprint with over 62,300 miles of pipelines and over 60 plants with ~9.4 Bcf/d of gathering and processing throughput
– Operations in major high-growth oil and gas shales and basins, including Eagle Ford, Permian, Panhandle and Marcellus / Utica
ETP benefits from furthe diversified basin exposure major presence in Marcellus / Utica basin increased NGL volumes to Lone Star an greater gas volumes in its intrastate system
Regency benefits from size and strength of ETP’s diversified platform
– Improved access to capital and lower cost of capital
– Better potential for growth in a lower commodity price environment
Regency steps into an investment grade balance sheet and a attractive cost of capita
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ETP BENEFITS FROM DIVERSIFICATION OF REGENCY MERGER WHILE MAINTAINING ATTRACTIVE FEE BASED PROFILE
LTM Adjusted EBITDA by Segment
| (1) |
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Pro Forma(2) |
Other Natural
Midstream Resources Other Intrastate 4% Intrastate 13% 6% 4%
10% NGL Services 9% Midstream 12% 24% Liquids Liquids 11% 13% Contract Interstate 23% Services 13% Gathering & Processing Retail 56% Retail 13% Interstate 16% Transportation 20% 13% SXL
SXL 17% 21%
Stable Fee Based Cash Flow Profile(3)
Non-fee based Non-fee based Non-fee based Hedged ~10-12% ~10-15% 10% commodity Hedged 3% commodity 15%
Fee based Fee based Fee based 75% ~85-87% ~85-90%
(1) Regency G&P segment included in pro forma ETP midstream segment (2) Pie chart sums to <100% due to inclusion of announced synergies (3) Excludes Retail Marketing
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A BALANCE OF ORGANIC DEVELOPMENT AND ACQUISITIONS HAVE DRIVEN AND WILL CONTINUE TO DRIVE STRONG CASH FLOW GROWTH
SXL RGP ETP
Current board approved growth projects of approximately $22 billion
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ETE WILL CONTINUE TO BENEFIT FROM STRONG CASH FLOW GROWTH
Distributions received from underlying operating partnerships(1)
($ i
Lake Charles LNG Class H | SXL $196
GP + IDRs | RGP $196
LP | RGP $261 $224
GP + IDRs | ETP $195 LP | ETP $$ 14 35 $ $ 103 36
$13 $48 $99
$11 $48 $1,210
$7 $48 $1,124
$35 $574 $370 $534 $641 $316 $396 $441 $196 $222 $223 $191 $180 $180 $268 $175 $119 $96 $99
2007 2008 2009 2010 2011 2012 2013 2014 1Q 2015 2015E(2) Annualized
Cash flow contribution to ETE Cash flow contribution by Rating
2014 1Q 2015 Annualized 2014 1Q 2015 Annualized
ETP AA(3)
RGP BBB 11%
16% 12% 12%
9% 14% 16%
SXL 64% BBB- 14%
11% 74% 9% 64%
74%
LC LNG BB
(1) ETP distributions in 2007 are for the fiscal year ended 8/31/07; all successive fiscal years end 12/31. Figures exclude ETE SG&A. 2012 and 2013 ETP GP + IDRs include dividends from Holdco. Class H includes ~50% (~90% after SXL / Bakken transfer) of SXL GP and IDR cash flows, excluding the impact of IDR subsidies and subsidy offsets.
(2) ETP 2015E distributions are based on reported 1Q’15 distributions, as adjusted based on an assumed $0.02 per unit per quarter distribution increase, and based on assumed ETP equity issuances during the remainder of 2015. ETP has not provided guidance related to its cash distributions for 2015 and the assumed $0.02 per unit increase per quarter for the remainder of 2015 is based on the pattern of recent ETP distribution increases. SXL has provided public guidance that it anticipates that it will increase its cash distributions 5% per quarter during 2015. The actual amount of cash distributions by each of ETP and SXL will be subject to the actual performance of their respective businesses and other factors as described in their respective SEC filings as well as approval by their respective boards of directors.
| (3) |
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Assumes AA rating for unencumbered LC LNG cash flows (current Shell rating) |
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KEY INVESTMENT HIGHLIGHTS
Diversified Revenue
Stream
Corporate structure built around strategic and financial optionality
Unique level of insider Continued ownership ~25%
Strong
Preserve Financial
Flexibility + Cost of Performance Capital
Well Positioned for 2016 and Beyond
Lake Charles is a
“Game Changer”
Post 2020
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APPENDIX
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PRO FORMA ETE CREDIT PROFILE
No maturities in the next 4 years
Pro Forma weighted average interest rate is ~5.2%
Pro Forma Capital Structure Pro Forma Maturity Profile ($ millions)
($ millions) 03/31/15 Senior Notes Term Loan C
Cash and Cash Equivalents – Term Loan B Revolving Credit Facility
Revolver ($1.5bn) due 12/2/2018 –
Term Loan B due 12/2/2019 1,336 $2,186 Term Loan C due 12/2/2019 850 Sub-Total $2,186
Senior Notes:
7.50% due 10/15/2020 $1,187
5.88% due 1/15/2024 1,150
5.50% due 06/01/2027 1,000 $1,187
Sub-total $3,337 $1,150
$1,000
ETE Total Debt $5,523
Pro Forma Interest Rate Exposure(1)
Floating 40%
Fixed 60%
2015 … 2018 2019 2020 … 2024 … 2027
Total = $5,523 million
| (1) |
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Term Loans subject to 75bps LIBOR floor |
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NET IDR SUBSIDIES TO ETP FROM ETE
IDR Subsidies
($ millions) 2015 2016 2017 2018 2019
Unadjusted IDR Subsidies ($51) ($72) ($50) ($45) ($35) Susser IDR Subsidy (35) (35) (35) (35) (35) Bakken Adjustment 55 30 – – –
ETP / Regency Merger Adjustment (80) (60) (60) (60) (60)
| (1) |
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Adjusted IDR Subsidies ($111) ($137) ($145) ($140) ($130)
| (1) |
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Includes the IDR subsidy givebacks that ETE will receive through the Class H and Class I distributions |
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ENERGY TRANSFER PARTNERS, L.P. NON-GAAP RECONCILIATIONS
Energy Transfer Partners, L.P.
Reconciliation of Non-GAAP Measures
Twelve Months Ended December 31,
($MM) 2009 2010 2011 2012 2013 2014 1Q15
Net income $ 791 $ 617 $ 697 $ 1,648 $ 768 $ 1,553 $ 308
Interest expense, net of interest capitalized 395 412 474 665 849 860 228
Gain on deconsolidation of Propane Business ——— (1,057) —— -
Gain on sale of AmeriGas common units ——— — (87) (177) -
Income tax expense (benefit) from continuing operations 13 16 19 63 97 355 13
Depreciation and amortization 290 317 405 656 1,032 1,130 322
Non-cash compensation expense 24 27 38 42 47 58 16
(Gains) losses on interest rate derivatives (40) (5) 77 4 (44) 157 77
Unrealized (gains) losses on commodity risk management activities (31) 78 11 9 (51) (23) 66
Impairment Loss — 53 — 132 689 — -
Loss on extinguishment of debt ——— 115 —— -
Inventory valuation adjustments ——— 75 (3) 473 34
Non-operating environmental remediation ——— — 168 — -
Equity in earnings of unconsolidated affiliates (21) (12) (26) (142) (172) (234) (40)
Adjusted EBITDA related to unconsolidated affiliates 43 35 56 480 629 674 127
Other, net 11 3 30 54 31 3 (2)
Adjusted EBITDA (consolidated) 1,475 1,541 1,781 2,744 3,953 4,829 1,149
Adjusted EBITDA related to unconsolidated affiliates (43) (35) (56) (480) (629) (674) (127)
Distributions from unconsolidated affiliates 24 32 51 262 464 348 75
Interest expense, net of interest capitalized (395) (412) (474) (665) (849) (860) (228)
Amortization included in interest expense (9) (10) (10) (35) (80) (61) (13)
Current income tax (expense) benefit from continuing operations (1) (10) (15) (1) (49) (402) 9
Transaction-related income taxes ——— —— 396 -
Maintenance capital expenditures (103) (99) (134) (313) (343) (343) (62)
Other, net 3 (1) 4 3 4 5 4
Distributable Cash Flow (consolidated) 951 1,006 1,147 1,515 2,471 3,238 807
Distributable Cash Flow attributable to Sunoco Logistics (100%) ——— (163) (660) (750) (160)
Distributions from Sunoco Logistics to ETP ——— 41 204 285 90
Distributable Cash Flow attributable to Sunoco LP (100%) ——— —— (56) (33)
Distributions from Sunoco LP to ETP ——— —— 18 12
Distributions to ETE in respect of ETP Holdco ——— (75) (50) — -
Distributions to Regency in respect of Lone Star —— (52) (63) (87) (150) (35)
Distributable Cash Flow attributable to the partners of ETP $ 951 $ 1,006 $ 1,095 $ 1,255 $ 1,878 $ 2,585 $ 681
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ENERGY TRANSFER EQUITY, L.P. NON-GAAP RECONCILIATIONS
($MM) Twelve Months Ended December 31,
2010 2011 2012 2013 2014 1Q15
ETP GP distributions(1) $ 396 $ 441 $ 459 $ 522 $ 525 $ 281
ETP LP distributions 191 180 180 268 119 24
ETP distributions credited to Holdco consideration — — — (68) — -
Class H distributions — — — 105 219 56
RGP GP distributions(1) 7 11 13 14 36 -
RGP LP distributions 35 48 48 48 99 -
Cash dividends from Holdco — — 75 50 — -
Distributable cash flow attributable to SUG — — 82 —— -
Distributable cash flow attributable to Lake Charles LNG — — — — 195 49
SG&A(2) (9) (8) (14) (15) (6) (1)
Management fees — — — (15) (95) (24)
Adjusted EBITDA $ 620 $ 672 $ 843 $ 909 $ 1,092 $ 385
| (1) |
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Includes distributions from both GP and IDR interests, net of relinquishments. |
(2) Excludes transaction-related expenses of $13, $21, $38, $19, $7 and $1 in 2010, 2011, 2012, 2013, 2014 and 1Q15, respectively.
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LAKE CHARLES LNG
NON-GAAP RECONCILIATIONS
Lake Charles LNG
Year ended Three Months Ended
($MM) 31-Dec-14 31-Mar-15
Revenues $ 216 $ 54 Operating expenses (17) (4) Selling, general and administrative expenses (5) (1) Other, net 1 -Distributable cash flow attributable to Lake Charles LNG $ 195 $ 49
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SUNOCO LOGISTICS PARTNERS L.P. NON-GAAP RECONCILIATIONS
Twelve Months Ended December 31,
($MM) 2009 2010 2011 2012 2013 2014 1Q15
Net Income $ 250 $ 348 $ 322 $ 531 $ 474 $ 300 $ 37
Interest expense, net 45 73 89 79 77 67 29
Depreciation and amortization expense 48 64 86 139 265 296 82
Impairment charge — 3 31 9 ———
Provision for income taxes — 8 25 32 30 25 6
Non-cash compensation expense 5 5 6 8 14 16 4
Unrealized losses / (gains) on commodity risk management activities — 2 (2) 3 (1) (17) 15
Proportionate share of unconsolidated affiliates’ interest, depreciation
and provision for income taxes 24 24 16 21 20 24 6
Adjustments to commodity hedges resulting from “push-down” accounting ——— (12) ———
Amortization of excess joint venture interests ——— — 2 2 1
Non-cash accrued liability adjustment ——— — (10) ——
Gain on investments in affiliates — (128) — — ———
Non-cash inventory write down ——— — — 258 41
Adjusted EBITDA 372 399 573 810 871 971 221
Interest expense, net (45) (73) (89) (79) (77) (67) (29)
Provision for current income taxes — (8) (27) (34) (24) (29) (8)
Amortization of fair value adjustments on long-term debt ——— (6) (23) (14) (3)
Distributions versus Adjusted EBITDA of unconsolidated affiliates (31) (36) (17) (28) (27) (35) (8)
Maintenance capital expenditures (32) (37) (42) (50) (53) (76) (15)
Distributable Cash Flow attributable to noncontrolling interests — (3) (10) (11) (16) (12) (1)
Contributions attributable to acquisitions from affiliate ——— — 9 12 3
Distributable Cash Flow (DCF) $ 264 $ 242 $ 388 $ 602 $ 660 $ 750 $ 160
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SUNOCO LP
NON-GAAP RECONCILIATIONS
Sunoco LP Reconciliation of Net Income to Adjusted EBITDA
12 Months Ended 3 Months Ended
December 31 2014 March 31 2015
Net Income 57,786 17,918
Depreciation, amortization and accretion 26,955 17,566
Interest expense, net 14,329 8,197
Income tax expense 2,352 830
EBITDA 101,422 44,511
Non-cash stock based compensation 6,080 195
(Gain) loss on disposal of assets 2,631 (266)
Unrealized loss on commodity derivatives (1,433) 1,174
Inventory fair value adjustment 13,613 (1,955)
Adjusted EBITDA 122,313 43,659
Cash Interest Expense 12,029 7,129
Income tax expense (current) 3,275 133
Maintanence capex 5,196 2,864
MACS acquisition adjustment 8,282 -
Earnings attributable to noncontrolling interest 1,043 3,963
Distributable Cash Flow $92,488 $29,570
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