Energy Transfer Equity, L.P. (NYSE:ETE) Q3 2018 Earnings Conference Call Transcript
Nov 08, 2018 • 09:00 am ET
Greetings and welcome to the Energy Transfer Third Quarter 2018 Earnings Conference Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.
I would now like to turn the conference over to your host, Tom Long. Thank you, you may begin.
Thank you, operator. Good morning, everyone, and welcome to the Energy Transfer Third Quarter 2018 Earnings Call and thank you for joining us today. I'm also joined today by Kelcy Warren, Mackie McCrea and other members of the senior management team, who are here to help answer your questions after our prepared remarks.
(Forward-Looking Cautionary Statements)
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. Finally, following the completion of the merger of ETE and ETP on October 19th, we now refer to the combined partnership as Energy Transfer LP, or simply ET.
I just want to start by saying that we are extremely pleased with Energy Transfer's third quarter performance. Consolidated adjusted EBITDA was up more than 30% over the third quarter of last year, and pro forma for the merger of ETE and ETP, DCF attributable to the partners of ET as adjusted, increased nearly 30%. We continue to see tremendous growth in all of our major businesses, and reported record operating results in the midstream, crude, NGL and interstate segments.
For Q3 2018, our adjusted EBITDA was $2.6 billion, which equates to an annualized run rate of over $10 billion. Distribution coverage for the quarter was 1.73 times, which resulted in excess cash flow after distributions of nearly $600 million for the quarter. These results demonstrate the strength of our balance sheet and our ability to internally generate a large amount of equity capital, which can fund our excellent backlog of growth projects in a credit-friendly manner.
Now turning to the rest of our call, I'll start today with recent developments, followed by an overview of our new growth project announcements, and the latest developments on our Rover, Mariner East, Permian Express and other projects. Then I'll discuss Energy Transfer's third quarter results with a brief CapEx earnings outlook and liquidity discussion.
Starting with the ETE/ETP merger, on October 18, 2018, ETP unitholders voted to adopt the merger agreement, providing for the merger of ETP with ETE for $27 billion in ETE common units. Based on the results, over 98% of the units have voted, voted in favor of the merger. The merger transaction closed on October 19, and the common units of the combined company, which is now simply Energy Transfer LP, began trading on the New York Stock Exchange under the ticker symbol ET.
Under the terms of the transaction, ETP unitholders received 1.28 ETE common units for each ETP common unit they own. As a result, in the transaction, ET issued approximately 1.46