Energy Transfer Partners, L.P. ( NYSE:ETP ) today reported its financial results for the first quarter ended March 31, 2012.
Adjusted EBITDA for the three months ended March 31, 2012 totaled $536.1 million, an increase of $64.8 million over the three months ended March 31, 2011. Distributable Cash Flow for the three months ended March 31, 2012 totaled $320.5 million, a decrease of $16.7 million from the three months ended March 31, 2011. Net income for the three months ended March 31, 2012 totaled $1.13 billion, an increase of $878.9 million from the three months ended March 31, 2011. ETP's net income for the three months ended March 31, 2012 included a gain on deconsolidation and a loss on debt extinguishment which had a net favorable impact of $941 million on net income; neither of these were reflected in ETP's Adjusted EBITDA and Distributable Cash Flow for the period.
As of and during the quarter ended March 31, 2012, ETP's financial position and operating results were impacted by the following transactions:
- Citrus Dropdown. ETP acquired a 50% interest in Citrus Corp. (“Citrus”) in exchange for approximately $1.9 billion in cash and $105 million of ETP common units. Citrus was reflected as an equity method investment on ETP's consolidated financial statements from the date of acquisition, March 26, 2012. In connection with this transaction, ETE also relinquished its rights to $220 million of the incentive distributions from ETP that it would otherwise be entitled to receive over 16 consecutive quarters.
- Propane Contribution. On January 12, 2012, ETP completed the contribution of its retail propane operations to AmeriGas Partners, L.P. (“AmeriGas”) in exchange for approximately $2.7 billion, consisting of cash and AmeriGas common units, which resulted in the recognition of a $1.1 billion gain on deconsolidation in ETP's consolidated financial statements during the three months ended March 31, 2012, and ETP's consolidated financial statements now reflect ETP's equity method investment in AmeriGas.
- Tender Offer. ETP used the cash proceeds from the Propane Contribution discussed above to repay borrowings under its existing revolving credit facility and to extinguish approximately $750 million in senior notes outstanding through a tender offer. As a result of the tender offer, a loss on extinguishment of debt of $115.0 million was recorded during the three months ended March 31, 2012.
An analysis of the Partnership's segment results and other supplementary data is provided after the financial tables shown below. The Partnership has scheduled a conference call for 8:30 a.m. Central Time, Wednesday May 9, 2012 to discuss the first quarter 2012 results. The conference call will be broadcast live via an internet web cast which can be accessed through www.energytransfer.com and will also be available for replay on the Partnership's website for a limited time.Adjusted EBITDA and Distributable Cash Flow are non-GAAP financial measures used by industry analysts, investors, lenders, and rating agencies to assess the financial performance and the operating results of the Partnership's fundamental business activities and should not be considered in isolation or as a substitute for net income, income from operations, cash flows from operating activities, or other GAAP measures. A table reconciling Adjusted EBITDA and Distributable Cash Flow with appropriate GAAP financial measures is included in the summarized financial information included in this release.