Energy Transfer LP Q1 FY2025 earnings call

• Financial results: Generated adjusted EBITDA of $4.1 billion in Q1 2025 vs $3.9 billion in Q1 2024; DCF attributable to partners was $2.3 billion; spent approx $955 million on organic growth capital in Q1 2025.
• Organic growth capital: Expect $5 billion on organic growth capital projects in 2025, projects expected to achieve mid-teen returns, majority online in 2025 - 2026. Commenced construction on Phase 1 of Hugh Brinson pipeline, nearing completion of Flexport expansion project at Nederland Terminal, updates on Permian processing expansions.
• Lake Charles LNG: Making progress towards commercialization, signed heads of agreement with MidOcean Energy, binding SPA with Japanese utility company, HOA with German energy company, targeting FID by year end.
• Power generation opportunities: Strong activity from demand pull customers, advanced discussions with facilities near footprint, entered long-term agreement with CloudBurst data centers, construction of 8 10-megawatt natural gas fired electric generation facilities ongoing.

For the first quarter of 2025:

• NGL and refined products: Adjusted EBITDA was $978 million compared to $989 million in Q1 2024. Primarily due to higher throughput across NGL export terminals and Permian and Mariner East pipeline operations, offset by higher operating expenses and lower blending margins.
• Midstream: Adjusted EBITDA was $925 million compared to $696 million in Q1 2024. Increase due to higher legacy volumes in Permian Basin (up 8%) and addition of WTG assets in July 2024, plus $160 million non-recurring recognition related to Winter Storm Uri 2021. Approximately $285 million excluding interest still in litigation from intrastate segment.
• Crude oil: Adjusted EBITDA was $742 million compared to $848 million in Q1 2024. Growth across crude gathering systems and Permian joint venture contributions offset by lower transportation revenues, higher expenses, and lower optimization gains.
• Interstate natural gas: Adjusted EBITDA was $512 million compared to $483 million in Q1 2024. Record volumes driven by higher throughput on Panhandle, Gulf Run, and Trunkline, including backhaul project for Gulf Coast demand, and increased rates on several pipelines.
• Intrastate natural gas: Adjusted EBITDA was $344 million compared to $438 million in Q1 2024. Increased gains from storage optimization opportunities offset by reduced pipeline optimization due to lower natural gas price volatility.

• Expect 2025 adjusted EBITDA to be between $16.1 billion and $16.5 billion.
• Executing on solid backlog of well-contracted growth projects with strong counterparties, expecting contributions from projects this year with more benefits ramping up in 2026 - 2027.

Q: Theresa Chen at Barclays asked about Lake Charles progress and U.S. LNG situation.

A: Marshall McCrea said they continue to gain momentum, signed up another 1 million tons from an international energy company, still have work to do to reach FID, feel good about pricing and focus on their own work.

Q: Theresa Chen asked about Energy Transfer having a C Corp presence related to SUN's acquisition.

A: Tom Long said they've always had it as an option, continue to evaluate, and currently no more plans than before the transaction.

Q: Jeremy Tonet with JPMorgan asked about production outlook given commodity price volatility.

A: Marshall McCrea said they're well-positioned, seen cycles, diversified, and even with slowdowns in some areas, other parts of the partnership will even things out, and remain bullish on future, especially NGLs and natural gas transportation.

Q: Jean Ann Salisbury with Bank of America asked about LPG export market and ramp of Nederland Flexport expansion.

A: Marshall McCrea said they expect ethane service to start end of this month, propane in July, ethylene by end of year, feel good about selling out terminal, and have little concern about challenges selling LPG.

Q: Spiro Dounis with Citi asked about Hugh Brinson, CapEx, and NGL export contracting.

A: Marshall McCrea talked about Hugh Brinson having more demand than Phase II expansion, Tom Long said less than half of $5 billion CapEx is sanctioned currently, Marshall McCrea said Flexport is 90% contracted for 3 - 5 years with fixed fees.

Q: Michael Blum with Wells Fargo asked about Hugh Brinson expansion options and pricing power.

A: Marshall McCrea said they can look at adding pipe or compression, feel good about value of capacity on Hugh Brinson.

Q: Manav Gupta with UBS asked about permitting support from new administration for Energy Transfer.

A: Marshall McCrea said things are more positive, permitting process is more supportive, and they feel good about getting extensions for LNG projects.

Q: John Mackay with Wells Fargo asked about WTG asset update.

A: Marshall McCrea said it's a great acquisition, working on addressing issues, sees growth in NGLs and gathering, and Dylan Bramhall added volumes are ahead of acquisition plan.

Q: Gabe Moreen with Mizuho asked about upstream opportunities related to Lake Charles LNG.

A: Marshall McCrea said it's a huge opportunity, will source gas from multiple areas using extensive pipeline network, and still working on finalizing additional upstream pipelines.