Energy Transfer LP Announces Cash Distributions on Series E and I Preferred Units

Rhea-AI Summary

Energy Transfer LP (ET) announced the redemption of its Series C and D preferred units at specified prices, along with the quarterly cash distributions for its Series E and I preferred units. The cash distribution for the Series E and Series I unitholders will be paid on February 15, 2024, to Series E and Series I unitholders of record as of the close of business on February 1, 2024. Energy Transfer LP is a publicly traded limited partnership with core operations in natural gas midstream, transportation and storage, crude oil, NGL, and refined product transportation and terminalling assets.

Insights

Financial Analyst

The announcement by Energy Transfer LP regarding the quarterly cash distribution for Series E and Series I Preferred Units and the redemption of Series C and D Preferred Units is a significant event for investors and the company's capital structure. The cash distributions represent a direct return on investment for the preferred unitholders, which is an important factor in assessing the attractiveness of these securities. The redemption of the Series C and D units will require a substantial outlay of capital, which Energy Transfer has presumably planned for within its financial strategy.

The redemption prices, slightly above the $25.00 par value, include unpaid distributions, which is a standard approach in these transactions. This action may reflect the company's confidence in its liquidity and capital allocation strategy. The redemption could also suggest a strategic move to simplify the capital structure or reduce the cost of capital by eliminating higher-cost preferred equity. For stakeholders, the short-term impact includes receiving the redemption payment, while the long-term implications may involve changes in the yield and risk profile of their investment in Energy Transfer.

Market Research Analyst

Energy Transfer's extensive network, spanning 44 states with assets in all major U.S. production basins, positions the company as a key player in the energy infrastructure industry. The company's operations, which include natural gas midstream, transportation, storage and NGL fractionation, are critical to the energy supply chain. The announcement of cash distributions and preferred unit redemptions should be viewed in the context of the company's overall financial health and strategic objectives.

Investors may interpret these financial moves as indicators of the company's performance and future outlook. The fact that Energy Transfer can redeem preferred units may be seen as a positive signal regarding its financial stability and operational efficiency. Additionally, Energy Transfer's ownership stakes in Sunoco LP and USA Compression Partners, LP provide diversification benefits and potential synergies that could enhance the company's financial resilience and growth prospects.

Energy Sector Analyst

The energy sector is inherently volatile, with prices and demand influenced by a myriad of factors including geopolitical events, regulatory changes and macroeconomic trends. Energy Transfer LP's announcement must be evaluated against this backdrop. The company's ability to manage cash distributions and redeem preferred units in such an environment may be indicative of its operational strength and financial management.

Moreover, the energy infrastructure industry requires significant capital for maintenance and expansion. Energy Transfer's actions suggest it is managing its capital expenditures and debt obligations effectively, which is crucial for long-term sustainability. The redemption of preferred units could potentially free up capital for reinvestment into strategic growth areas or debt reduction, which can be beneficial in maintaining competitive advantage and financial flexibility in a sector known for its capital intensity.

Series C and D Preferred Units to be Redeemed as Previously Announced

DALLAS--(BUSINESS WIRE)-- Energy Transfer LP (“ET”) today announced the quarterly cash distribution of $0.4750000 per Series E Preferred Unit (NYSE: ETprE) and the quarterly cash distribution of $0.2111 per Series I Preferred Unit (NYSE: ETprI).

On January 10, 2024, Energy Transfer issued a notice to redeem all of its outstanding (i) Series C preferred units at a redemption price per unit of $25.607454, which is equal to $25.00 per unit plus unpaid distributions to, but excluding, February 9, 2024 (the “Redemption Date”), and (ii) Series D preferred units at a redemption price per unit of $25.619877, which is equal to $25.00 per unit plus unpaid distributions to, but excluding, the Redemption Date.

The cash distribution for the Series E and Series I unitholders will be paid on February 15, 2024 to Series E and Series I unitholders of record as of the close of business on February 1, 2024.

Notice of redemption with respect to the Series E preferred units will be issued at a later date and such units will be redeemed once redeemable on May 15, 2024.

Energy Transfer LP (NYSE: ET) owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with more than 125,000 miles of pipeline and associated energy infrastructure. Energy Transfer’s strategic network spans 44 states with assets in all of the major U.S. production basins. Energy Transfer is a publicly traded limited partnership with core operations that include complementary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquids (“NGL”) and refined product transportation and terminalling assets; and NGL fractionation. Energy Transfer also owns Lake Charles LNG Company, as well as the general partner interests, the incentive distribution rights and approximately 34% of the outstanding common units of Sunoco LP (NYSE: SUN), and the general partner interests and approximately 46% of the outstanding common units of USA Compression Partners, LP (NYSE: USAC). For more information, visit the Energy Transfer LP website at www.energytransfer.com.

Forward Looking Statements

This news release may include certain statements concerning expectations for the future that are forward-looking statements as defined by federal law. Such forward-looking statements are subject to a variety of known and unknown risks, uncertainties, and other factors that are difficult to predict and many of which are beyond management’s control. An extensive list of factors that can affect future results, including future distribution levels and leverage ratio, are discussed in the Partnership’s Annual Report on Form 10-K and other documents filed from time to time with the Securities and Exchange Commission. The Partnership undertakes no obligation to update or revise any forward-looking statement to reflect new information or events.

Qualified Notice

This release serves as qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b)(4) and (d). Please note that one hundred percent (100%) of Energy Transfer LP’s distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, all of Energy Transfer LP’s distributions to foreign investors are subject to federal tax withholding at the highest applicable effective tax rate. Nominees, and not Energy Transfer LP, are treated as withholding agents responsible for withholding distributions received by them on behalf of foreign investors. For purposes of Treasury Regulation section 1.1446(f)-4(c)(2)(iii), brokers and nominees should treat one hundred percent (100%) of the distributions as being in excess of cumulative net income for purposes of determining the amount to withhold.

The information contained in this press release is available on our website at www.energytransfer.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240122438942/en/

Investor Relations:

Bill Baerg

Brent Ratliff

Lyndsay Hannah

214-981-0795



Media Relations:

Vicki Granado

214-840-5820

Source: Energy Transfer LP

FAQ

What is the redemption price per unit for the Series C preferred units?

The redemption price per unit for the Series C preferred units is $25.607454.

When will the cash distribution for the Series E and Series I unitholders be paid?

The cash distribution for the Series E and Series I unitholders will be paid on February 15, 2024.

What is the ticker symbol for Energy Transfer LP?

The ticker symbol for Energy Transfer LP is ET.

What are the core operations of Energy Transfer LP?

Energy Transfer LP's core operations include natural gas midstream, transportation and storage, crude oil, NGL, and refined product transportation and terminalling assets.