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ETP, EEP, BPL, and SUN: A Leverage Analysis


Mar. 19 2018, Updated 7:33 a.m. ET

ETP’s leverage

Energy Transfer Partners (ETP) had a huge debt, of more than $32 billion, at the end of 2017, with a debt-to-equity ratio of 1.3x and a debt-to-adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) ratio of 5.9x. ETP’s ratio was marginally lower than its ratio at the end of 2016.

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EEP’s leverage

Enbridge Energy Partners’ (EEP) net debt-to-equity ratio is ~1.0x, considering noncontrolling interests’ capital. Enbridge Energy Partners’ debt-to-adjusted EBITDA ratio was 5.1x at the end of 2017. EEP’s distribution cut in 2017 and other initiatives such as structure simplification and the sale of Midcoast Energy were aimed at strengthening its balance sheet.

BPL’s leverage

Buckeye Partners’ (BPL) net debt-to-equity ratio is ~1.1x. BPL’s debt-to-adjusted EBITDA ratio was 4.4x at the end of 2017. The above graph compares ETP’s, EEP’s, BPL’s, and Sunoco’s debt-to-adjusted EBITDA ratios over the last five years.

SUN’s leverage

Sunoco’s (SUN) net debt-to-equity ratio is ~1.9x. SUN’s debt-to-adjusted EBITDA ratio was 5.6x at the end of 2017. Sunoco divested a vast majority of its convenience stores to 7-Eleven for $3.2 billion in 2017, which helped reduce its debt burden and brought down its debt-to-EBITDA ratio, as the above graph shows. Let’s take a look at changes in short interest in the four stocks next.


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