Energy Transfer Equity, L.P. (NYSE:ETE) Q1 2020 Earnings Conference Call - Final Transcript
May 11, 2020 • 05:00 pm ET
Greetings, and welcome to the Energy Transfer First Quarter Earnings Call.
I would now like to turn the conference over to your host Mr. Tom Long, Chief Financial Officer. Please go ahead, sir.
Thomas E. Long
Thank you, operator, and good afternoon, everyone, and welcome to the Energy Transfer first quarter 2020 earnings call.
And we really want to thank all of 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. Hopefully, all of you have seen our 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 Security 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 quarterly report on Form 10-Q for the first quarter of 2020. I'll also refer to adjusted EBITDA, distributable cash flow or DCF and distribution coverage ratio, all of which are non-GAAP financial measures. You'll find a reconciliation of our non-GAAP measures on our website. And we expect our 10-Q to be filed later today.
The current COVID-19 pandemic has impacted our nation in more ways than one. As we navigate through this uncertainty, we want to start today by thanking our team of more than 12,000 men and women across the country for their remarkable contributions and incredible commitment during this challenging time. We understand and appreciate the tremendous amount of hard work and coordination it requires to keep our assets running safely and efficiently while keeping energy products moving, both for the benefit of our partnership and our country.
Now before addressing the current market conditions brought on by COVID-19 and the OPEC oversupply, I'm going to start with a few of our first quarter 2020 highlights. For the first quarter, we generated adjusted EBITDA of $2.64 billion and DCF attributable to the partners of ET, as adjusted, of $1.42 billion; and our coverage ratio for the quarter was 1.72 times, which resulted in excess cash flow after distributions of $594 million.
Adjusted EBITDA was adversely affected by inventory valuation adjustments of $213 million in the first quarter of 2020, which I will discuss further in the segment reviews. Without these adjustments, first quarter adjusted EBITDA would have been approximately $2.85 billion, and both adjusted EBITDA and DCF results would have been above our expectations.
During the first quarter, we also brought our seventh fractionator at Mont Belvieu online, which brings our total fractionation capacity at Mont Belvieu to over 900,000 barrels per day. Additionally, our 200 million cubic foot per day Panther II processing plant in the Permian Basin was placed into full commercial service in January of 2020.
Finally, in January, we completed dual offerings of debt and perpetual preferred in