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Energy Transfer Partners Merged with Sunoco Logistics: Now What?

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Part 2
Energy Transfer Partners Merged with Sunoco Logistics: Now What? PART 2 OF 9

Energy Transfer Partners Expects Huge EBITDA Growth in 2017

1Q17 earnings

Energy Transfer Partners’ (ETP) pro forma net income was $364 million in 1Q17 compared to $376 million in 1Q16—a YoY (year-over-year) decline of 3.2%. The decline in the partnership’s net income is reportedly due to an income tax benefit in 1Q16.

Energy Transfer Partners Expects Huge EBITDA Growth in 2017

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Energy Transfer Partners’ 1Q17 pro forma adjusted EBITDA rose to $1.414 billion from $1.412 billion in 1Q16—a marginal YoY increase of 0.14%. The YoY increase in Energy Transfer Partners’ 1Q17 EBITDA was mainly driven by a strong performance from its liquids transportation and services and midstream segments. The strong performance was offset by the decline in legacy Sunoco Logistics’ crude oil acquisition and marketing business. For details on Energy Transfer Partners’ segment-wise performance, read Why ETP’s Midstream Segment Was Its Top Performer in 1Q17.

EBITDA projections

According to the S-4 filing, Energy Transfer Partners projects 2017 EBITDA to be $6.56 billion—a 17.0% YoY increase compared to 2016. The partnership expects 14% YoY and 9% YoY EBITDA growth in 2018 and 2019, respectively.

Huge EBITDA growth in 2017 is expected to be driven by a number of major organic projects that will likely come online in 2017 including the Rover pipeline, Bakken pipeline project, phase 2 of the Bayou Bridge pipeline project, and Mariner East 2 project. Later in this series, we’ll discuss recent updates on these projects.

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