Energy Transfer LP (ET or the Partnership) has reported financial results for the quarter ended 31 March, 2020.
ET reported an earnings net loss attributable to partners for the three months ended 31 March, 2020 of US$855 million, which included non-cash goodwill impairments of US$1.3 billion recorded during the period as a result of decreases in commodity prices and market demand.
Adjusted EBITDA for the three months ended 31 March, 2020 was US$2.64 billion, a decrease of US$100 million compared to the three months ended 31 March, 2019, primarily due to crude oil, NGL and refined products inventory valuation adjustments totalling US$213 million in 1Q20. Without the inventory adjustments, Adjusted EBITDA would have been US$2.85 billion for the first quarter of 2020.
Distributable Cash Flow attributable to partners, as adjusted, for the three months ended 31 March, 2020 was US$1.42 billion, a decrease of US$177 million compared to the three months ended 31 March, 2019, primarily due to the decrease in Adjusted EBITDA. Distribution coverage ratio for the three months ended 31 March, 2020 was 1.72x, yielding excess coverage of US$594 million of Distributable Cash Flow attributable to partners in excess of distributions.
ET has a fully-integrated midstream franchise which includes natural gas, crude oil, and NGL infrastructure assets serving customers in all of the major producing basins and markets across the US. During 1Q20, the Partnership’s operations performed well, with intrastate natural gas, crude oil and NGL transportation volumes higher compared to the same period in 2019.
Based on the outlook for the current market, ET is reducing its 2020 growth capital outlook by at least US$400 million, to US$3.6 billion, with another US$300 million to US$400 million of capital under evaluation for potential further reductions during the year. In the first quarter, ET spent approximately US$1 billion on growth capital projects. ET expects that approximately 70% of the growth capital in 2020 will be spent on projects that are already 60% or more complete and will be in-service in 2020 or early 2021. ET also continues to review the broader market with lower commodity prices and producer activity and is updating its 2020 outlook for Adjusted EBITDA to range from US$10.6 billion to US$10.8 billion. ET maintains strong liquidity of approximately US$4 billion as of 31 March, 2020 and has significant asset strength and financial flexibility to manage through the current market cycle.
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