Energy Transfer LP (NYSE:ET) Q2 2020 Earnings Conference Call - Final Transcript

Aug 05, 2020 • 05:00 pm ET


Energy Transfer LP (NYSE:ET) Q2 2020 Earnings Conference Call - Final Transcript


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Greetings and welcome to Energy Transfer's Second Quarter Earnings Call. At this time, all participants are in a listen-only mode. A 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 today to Mr. Tom Long, CFO. Thanks sir. You may begin.

Thomas E. Long

Thank you operator and good afternoon everyone and welcome to the Energy Transfer second quarter 2020 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. Hopefully, you saw 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 Securities Exchange Act of 1934. These statements are based on 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 our Form 10-Q for the second 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 tomorrow, August 6.

Let me start today with a short update regarding our operations. The COVID-19 pandemic continues to impact how we go about our daily lives and how business is conducted. However, I am pleased to say that to date our field operations have continued uninterrupted. This is a testament to the hard work of our employees who remain focused on the safe and efficient operations of our assets during these stressful times.

Now, turning to the second quarter 2020 highlights. We generated adjusted EBITDA of $2.44 billion and DCF attributable to the partners of ET as adjusted of $1.27 billion. And our coverage ratio for the quarter was 1.54 times, which resulted in excess cash flow after distributions of $448 million. During the second quarter, the COVID-19 pandemic and the associated drop in crude oil prices led to significant volume shut-ins throughout many of the producing regions in the country. We have also seen a reduction in spreads on our crude and natural gas pipelines from the Permian to the Gulf Coast as well as crude spreads from the Bakken to the Gulf Coast.

Offsetting these headwinds our NGL segment continued to set records during the second quarter with our transportation volumes reaching new highs, primarily driven by record volumes on our Mariner East system as well as strong volumes across our Texas NGL pipelines. And our fractionation volumes reached another record during the quarter due to the addition of Frac 7 earlier this year. In addition gathering and processing volumes on our Midland Basin system also reached new highs near the end of