ET - Earnings call transcript Q2 2020

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Operator

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. CFO. Long, Tom Thanks sir.

begin. may You

Tom Long

management are well issued by and second we website. everyone the to and quarter us joined after for operator afternoon other help McCrea, the as questions members the thank welcome here Energy joining today also I'm Transfer XXXX today. earlier answer Warren, slides good you Mackie our release senior and and of afternoon to you Kelcy Thank earnings prepared our remarks. press to your as posted our Hopefully, team who you saw this call

certain and will in As EBITDA, based and discussed a are the for Act refer quarter to are available report reminder, quarterly within detail cash making information financial of we our Securities measures. distributable Form XXXX. flow, coverage to more XXE of be on on Section I'll our meaning currently of XX-Q our Exchange DCF, assumptions which the and the are of as us distribution of also current statements adjusted statements beliefs These forward-looking ratio well non-GAAP XXXX. all second in or as

reconciliation a And expect tomorrow, non-GAAP XX-Q measures of on we filed our August to website. be our our X. find You'll

business with how regarding is impact COVID-XX pandemic conducted. how Let a continues short me and our start to daily our we today update operations. lives The go about

This continued these on operations employees pleased efficient However, a our times. the assets uninterrupted. have am to to I is our during and operations the date say of safe to focused work field testament that remain who of stressful hard our

times, second ET coverage resulted million. and attributable EBITDA in $XXX cash of billion. as the after to the X.XX quarter the flow excess which our highlights. XXXX Now, adjusted billion of of We DCF for was And of distributions adjusted $X.XX quarter partners ratio $X.XX turning generated to

throughout volume led oil During associated the many regions in drop the crude significant COVID-XX the quarter, producing to in of the shut-ins second prices the country. pandemic and

natural Bakken reduction We as set Coast. to from have a segment the also NGL with to new Permian the primarily the on our year. Frac due East records seen to by of well our this reached and the our Coast across spreads record Texas as VII driven second NGL during earlier transportation in on the to as quarter headwinds during volumes fractionation as from another continued pipelines. crude the Gulf our strong our reaching highs, addition gas these Offsetting pipelines crude spreads well And volumes our Mariner system record volumes volumes the quarter Gulf

In system addition volumes new our the reached Basin on end gathering highs processing near and of the Midland second quarter. also

to our XXXX turning outlook. Now,

face destruction pace uncertainty to the than our $XX.X recovery, are and slower the a demand unprecedented industry revising pandemic $XX.X to including As we billion. energy of continues our associated billion COVID-XX reflects initially the guidance expectations these other recovery due during times adjusted the XXXX forecasted. latest EBITDA This with to to challenges of range

a more the we ramp-up our bottom revised reflects conservative expectations. quarter, believe reached that we during our Although than guidance the previous second

currently recovery volumes plants, by through our through complex, Texas and across Basin all the experiencing as East volumes the pre-COVID volumes that the above fractionation of levels. Midland production are NGL encouraged We current signs processing are assets we Mariner in are our

and II, with expect certain we SemGroup extensive to optimize as to to narrower lower As as leverage our addition along operational of integrated projects basins, possible. of seek Mariner related in commodity diversified drive the our lower XXXX to VII, infrastructure fully impacts the assets, Operationally, and that and help asset prices. where to contributions base out of East, from some to went efficiencies Panther in into continue we well Frac offset opportunities the our spreads, look ahead, assets volumes service we the continue the ramp-up

cost we in And in have and on approximately we last for year already reduction measures we call, $XXX approximately field to both $XXX operations. relative cost Year-to-date, have our savings. our G&A mentioned well recognized million to now OpEx corporate we million achieve savings budget. XXXX As undertaken expect as offices our full of as our

growth also We evaluate our to carefully continue expenditures. capital

the a the capital capital million growth of reduction guidance delaying a original spend. primarily of XX% from our other projects be new billion reduction of will on at spend of the XXXX is Nederland. assets of the has fully includes midstream now in $XXX state ever Express highest growth in billion. $XXX from across projects of current XXXX. million guidance and NGL delaying expenditures space number the represents $X.X XXXX process completion XXXX the very be growth been. spend previous Given today that export related Mariner This expected and utilized to returns to evaluation to is particular our That or Star being the This our stringent expansion dates Approximately it are are Lone further threshold our for projects, East to not review and early the total projects and that is projects capital be impact our or of service spent and for date in Orbit of we our some economic and $X.X said upon approximately expect industry

growth still capital for we now cash be committed to capital positive range As equity of free We billion in flow be XXXX $XXX distributions. million to we we to in capital $X.X currently our the and growth cash $XXX and year. expenditures XXXX be million capital and spend, think after growth flow approximately about per to and XXXX expect XXXX free expect our future expect to remain generating

Looking now you more closely at developments. our growth projects, walk through recent I'll

by volume additional initial in with Bakken to in per during current accommodate We The above made the the of seasons. barrels forward quarter move to commitments pipe's be capacity the shippers pipeline XXXX. continue optimization will service open third of capacity the expect recent of We optimization. XXX,XXX capacity this now day phase the

to our assets utilization us providing market Ted while efficient connectivity way Collins up expected crude terminal from Houston to the allow to existing oil increase Nederland barrels Next, transport our the It is day fourth in and XXX,XXX Texas between Houston Nederland ultimately be link of terminals. to in service and and West to will an of is of the per quarter XXXX.

amounts the we the the to XXXX Moving say East through first pleased butane pipelines. transported increase, system, saw I Mariner yet Utilization nearly for Mariner XX% half through of average propane volumes our East quarterly to of pipelines terminal with Marcus our of over with and am pipeline the volumes record the XXXX. Mariner half Hook of that up and continues first to highest

to market by grow ethane, the We and ethane upcoming into system are butane. this multiple connections fourth Hook this continues which propane taking placing Customers season is advantage markets. utilization seeing with barrels are year. winter of also demonstrate for flexible to the at currently for shippers local in Marcus The local expected quarter optionality flexibility strong for of

has of domestic to Mariner strong because our all blending has Additionally, consumption gas local for system to Hook XXXX. gasoline ability remained early the by and bring COVID-XX. natural liquids motor demand international waned Both demand and Marcus will even while fuel gasoline for have natural

system The East markets in way to Mariner of continues now Marcus Hook their service East quarter provides awaiting of in chilling completed will the liquids by be XXXX. capacity and to this the the XXXX. phase the provide service are expect in phase of the in to significant expansion in final barrels the first terminal quarter end in terminal is the Mariner which the storage second system most of best expected We eagerly terminal with route efficient year XXXX. we Mariner with of in conjunction The additional to be next service will the the conjunction quarter project is XX,XXX transportation first product. and with storage Marcus additional reach Also, Hook provide customers, the the the and day and per Hook in the Northeast capacity in provide Marcus at and for be our for to chilling expected East optimal

final per placed day XX-inch, barrels began over construction All this XXX-mile Star looking quarter NGL today. full our of at Express on Star of to will the which stages Lone capacity – the XXX,XXX It of at up. and fracs add in Star first Permian moving south seven XX-inch from service Fort of running our Express and the of We're Frac was into VII. the pipeline are Now expansion, Lone year Worth ramping Lone looking Texas. pipeline to in Basin

LPG Satellite strong the capacity allow Mont underground expect bring in to diesel of to to quarter demand have the storage converted and contango expansion fourth Nederland expansion XXXX. we projects at continue gasoline the of service significant will to in Belvieu in be profitable the our in of to completion. some storage of barrels will quarter remained amounts year our Also, of facilities our LPG export great export of XXX,XXX Orbit is commercial has total assets. commissioning. venture day November in barrel ethane our the Belvieu approximately nearing XXXX, partner is with first This this of project end of fourth who per for the our be arriving Nederland Construction XXX,XXX further ships ready for integrating a Petrochemical, by assets with day service per joint natural advantage the take opportunities. and our Mont We with

paid July for announced our second to Consolidated as an second at the due due distribution per compared adjusted billion several on volumes quarter the for for annualized compared $X.XXX to primarily $X.XX attributable billion The adjusted Distribution first to will lower to August basis. $X.X record of decrease prices or business of quarter This of XXXX. common quarter XX second of for of from with EBITDA Transfer coverage distribution to change results. and period let's billion $X.XX XXXX. the the quarter a Now XXXX quarter second segments. operating of closer EBITDA. ratio take the quarter as of second was $X.XX among adjusted the is August primarily In partners and the look the was unitholders common on times. was the unit X. of the be the unit to our billion This Energy impact was per in of is X.XX DCF close $X.XX core quarter second for a prior consistent

by results segment. our at Looking

million to and EBITDA decrease fractionation X.X well $XXX barrels our as transportation last terminal to day joint wholly day and increased volumes partially period result were record services on was the system to owned wholly from For increase year. offset on was was volumes of primarily same NGL last pipelines year. This out products, NGL Basin NGL This refined venture as compared a period on the $XXX third-party million Mariner volumes, compared which our and per higher throughput a gas for Permian to to the increased North for same X.X liquids owned per million margin. by adjusted of pipelines and as transportation due due Texas plants. million record production East both our increase barrels and primarily in pipeline regions

Second barrels quarter to increased to XXXX. per compared quarter second day the of day average per barrels fractionated XXX,XXX for XXX,XXX volumes

pricing million Now the producer second assets, pipelines crude well business $XX compared supply segment. as our and Adjusted Texas inventory valuation decrease primarily shut-ins lower crude year. offset unprecedented the unfulfilled as These quarter to positive a as of same and items well result XXXX. was from as on conditions. acquisition as the to were the contributions Bakken shut-ins million to marketing oil $XXX $XXX unfavorable SemGroup volumes compared to million to This crude for related our last commitments partially a in period primarily of oil of a due for pipeline EBITDA our was and well by adjustment leading

of adjusted in to $XX million same as per day year. offset expenses. on million West the gas Northeast primarily addition lower our the to the In a as period $XXX for Mid-Continent million the additional South were segment, partially prices, to XX $XXX in partially on was increased were we and reduction of Transwestern NGL on million million, per adjusted quarter XX.X for North volume million of by offset assets gas offset $XXX was was million from midstream, system compared of firm last result transportation. capacity by the the which of were volumes EBITDA impacted due the for a $XXX nearly region. Texas revenue well Panhandle and quarter our in day lower shut-ins MMBtus to These in compared which MMBtus to and well second For This second million volumes second operating due in were Lower sold $XX growth by South compared results Texas, quarter and interstate as was related XXXX. decrease recognized less mentioned EBITDA XXXX, Panhandle This increased and rates demand XXXX. last systems. in our the in to primarily, LNG margin by as call SemGroup volume the and that Trunkline Gathered

of for $XXX due of second third to million result quarter million have locked EBITDA from was contracts long-term as in under less Beginning As spreads year, spreads. to we intrastate significant in to the volumes adjusted to a the primarily we our drop segment, in lower activities the exposure pipeline optimization in with as $XXX last revenue have expect XXXX, parties. additional compared

update. on a Moving CapEx to

on growth Energy spent refined XX, products USAC approximately be currently be midstream expect and CapEx. XXXX billion segments, organic growth year. primarily expected spend June ended be mentioned to or segments, between approximately of projects, approximately earlier in growth, excluding XXXX XXXX refined billion growth organic And I and to billion and to million full we NGL $X.X midstream months per on early in and and for year six SUN And XXXX the projects primarily now $XXX $XXX XXXX, and the NGL our service XXXX. XX% $X.X CapEx XXXX as be will to million in capital and we and in products expenditures approximately $X.X which expect For the in Transfer on

position. Looking liquidity briefly our at

As June and X.XX total credit the available billion approximately XXXX liquidity our under $X.X our for facility. leverage facilities revolving ratio XX, of was was credit

have maturities of additional billion very reminder, we in we a a As have maturities no And XXXX. $X.X XXXX. manageable ahead, in looking

We pipeline across volumes and the new in and our expect positioned this look Mariner of leverage agency some conclusion continue momentum to are Throughout picking footprint we enter highs, second saw to as number as half times. up challenges. four with four efficiencies recovery. we year. reaching In second positive target remainder fully and assets half to across opportunities to well East continue and multiproduct of quarter, we of a works ratio optimization our integrated But a a the our assets to our the continue our rating recently XXXX, we for of the will industry

value. additional our we contribute In ramp-up recent anticipate to further addition, of projects near long-term and

is comes However, capital and we impressed leverage improving and project to to And our our is to continue our capital navigate disciplined and resilience to are these know imperative investment-grade disruption. remain our committed that spending. we the stringent. times. continually growth when demonstrate, as through it it as reductions increasingly remain our above rating And all, dedication safety metrics expenditure approval process execution during emphasize we by challenging we employees' and market current We

Tom Mason

to I from decision of our This motions stay Transfer. received is to Appeals. And of you just wanted we that, General to Tom Mason, Energy the the related Counsel Court inform the

empty the The of the pipeline it of the district of also We but the our Appeals that Lake reviewing of district the Court down pipeline court of stay order to oil. order decision, Access Appeals the part denied and of portion the for Oahe. the a which the other easement at vacated of Dakota that this granted stay required is Court still news good are shut court

The also the Army really and expedited Corps Environmental operation pipeline, no further as result, an by Court district expected the schedule Access light the of proceedings continuing whether regarding a Army in easement Access the the As Court the appeal the determinations Dakota the of Appeals court This will to court regulations Corps, to The at the of of order contemplates its following required. determining from an for of Impact the under operate stops end continued the Dakota pipeline. by be merits being ordered Statement vacated. of by is Appeals year.

and are run With believe this operate. I we of to substance continue we are this court We will pipeline over operator first review the the today's confident our positions question. to need litigation. open that strong our to course legal turn We to to will the the decision with continue will it and

Operator

Shneur Please Instructions] UBS. Thank first Our with question. from proceed [Operator Gershuni with you. question your is

Shneur Gershuni

DAPL and Hi, very your the is everyone. there. realize sounded pretty good update fresh I like news afternoon straightforward it was

What moving belabor to little be what's the color on and the basically DAPL won't Maybe send release. press And bit as us it. if button down? provided I are were in, the I the hitting So can was bit guidance a pivot came this? puts of realize I part give decision you was here, there little update a you on that as more today, DAPL to related just guidance the the Tom takes? wondering anything you

Tom Long

bet. You

Let's start of last part Shneur. with your question the

the related you the or really was drove that, basically I out. -- out the the to the guidance had. First - what -- that nothing look looking when pertaining off were updated really volumes guidance DAPL to and at probably really we spreads. you what we will and were look assumptions when reduction curve was forward the at the We caused what say

that I'd as probably much it drove say as any. So

the from can primary were as segments. the crude intrastate really You well see as two oil,

Shneur Gershuni

maybe the goal about question, talk Can get just we about investment-grade hit in interested go-forward on the to your thoughts distribution crossroad, you'll if to basis? credit a kind there there overall year -- OPEC a of that with thinking was versus this COVID of you're both? you were a Okay. kind and the follow-up how How think the as rating respect heading path you into that. path was enough. X.Xx. Fair for your derailed And have Obviously to deleveraging,

Tom Long

work levers reductions CapEx the important But it's the rating and that. have down. toward our leverage a get to investment-grade continue pull topic continue And the important. with also to down. leverage work We're clearly big to highlight rating the very that I bringing think a when to bet. announced various We're going Clearly discuss obviously to to going part how distributions the are we today were we we to You of agencies. is the

Shneur Gershuni

And one very down CapEx. today Fair you for 'XX question of for then 'XX step commentary just CapEx I put you 'XX. up the last brought was a in enough. material mean, out and since maybe into and the

year. ahead And further? there CapEx so is labor lot -- II of bit your cut more actually already costs that's are you've this Is Mariner in sort than was expected. faster You've any coming cut thinking moving I in And like I of realize and a to million $XXX it equipment could opportunities sounds go the prepared is East there but far CapEx? costs along are of lower costs -- accomplished, that lines to remarks and a lower be Or still terms down? little contracting there

Tom Long

but lower We're any guide going But as lower to the to through continue year, wouldn't numbers. you we'll we time. not this now we the continue update right amounts to But I of evaluate to rest you go. at I as it, guide would clearly

Shneur Gershuni

Perfect. We’ll day. have and obviously safe a the have step appreciate thoughts into queue. lot today more questions, but your back I’ll Really a

Operator

Jeremy your JPMorgan. Our Tonet comes question. next Please proceed question with from with

Jeremy Tonet

Hi. Good afternoon here.

credit into that. better follow-up of color how to to you get side. leverage you wanted to curious kind what long of the the on is on it a path of kind And And rating your want basis. with agency get calculate just Just takes

Tom Long

in a at We're know, agency know you has own you look use for but CapEx calculate we're we're XXXX to agency year, highlight they the that. flow -- Well, next year. not into they announced. that We continue each which number. metrics and how going for fact for with cash to to five we're on out you for free this around running I their as depending period as And look the that going just

can depending depending over that's that leverage toward the we're X that looking So any to debt you're bring it, calibrate I allocated range I on -- would agency at. and dollars at, looking on think be then left what when which down. five-ish you which will paydown, you look are will which at X.X But to see you that

Jeremy Tonet

of think then Got you And That's or we're opportunistic as kind purposes. to helpful. they might of gains want it. Thanks. for booked. show contango did up well? that how recognized to in make in have When modeling the trying the just think as about they of sure could year about quarter, thinking be you the might Just up XQ? it Or all over other balance show

Mackie McCrea

Jeremy. Yes, of did We the recognize contango the No. Mackie. in quarter. second This some is

-- more that advantage there's in the of substantially those at of will there's Belvieu May contango half take contango Tom remarks those advantage we're as -- of also mentioned However, facilities year. quarter new the year year. of the first some those take his arises. Mont this advantage next second that around of taking we'll around in opportunity And some later recognize if this storage will we Otherwise,

Jeremy Tonet

Great. That's very helpful. Thank you very much.

Operator

comes Ujjwal with question with next question. Bank Please Our of your proceed from America. Pradhan

Ujjwal Pradhan

This guys. taking Ujjwal, afternoon my America. for Good is of Thanks Bank question.

to wanted touch on cost savings. one First

that savings realize in million $XXX approximately noted XXXX. in you expect You to

of Just much sense would be is much just volume-driven Really at get of that how a lower forward? a trying of wanted ratable expenses. to function get going that of to how

Tom Long

expenses. at G&A You of you look operational really combination as well a as it's bet. both When it,

go what I of is be would they've I But it being the operation as all But a this. team as clearly, to bring able well able what that's to assets commend that. as with to blend as able Transfer to along expense. both But I these plans the down to say and said, that, far that like, want to G&A be Energy look as done continue costs. next with operational continue is into our the expenses we look ramp As will et up to at cetera, are year,

Ujjwal Pradhan

at on this for to delevering. thoughts Got And trying point asset of question second the one as it. get levers your monetizations

pipelines in and this Would see market thoughts you in to your what Assets under consideration recently level nat of today are gas that you the and comment tool? using have interest your have how able of keep which the like been past on Rover, does be treated. profile the

Tom Long

We pretty will units, we open evaluate our to in as as to evaluating But continue that but general specific USA that We're would like the goes that comment we've list have not overall, Compression. harm say, not about the is value on will been ever investment -- that. do I the assets of anything that compression going something we're we well long far hold that But we partner. position units working as assets as that that really the on standpoint. from we're of a don't other that

Ujjwal Pradhan

Understood. Thanks and very helpful.

Operator

question Simmons comes Hammond question. from proceed next with Our Pearce with Energy. your Please

Pearce Hammond

Good you throwing taking want thanks COVID question. of question. to I environment a follow-up wet transaction, Is the more is see to Hathaway, do for divest prior an of afternoon Dominion on or Berkshire there interest, more attractive in and kind blanket But on my assets? that? specifically just the light

Tom Long

has of I prior the interest impact assets. to various was that the around levels that tell in that came It's with But lot clearly we've interesting downturn calls of because COVID will that experienced, we've slowed. there a had you

think I as they down at for from we're seeing. come trade have multiples what assets and least what far as

Pearce Hammond

they a then And like what's you are blend for you. so your And that? extend from to Thank Okay. follow-up, and looking the environment contracts? hearing customers? as actively Are

Mackie McCrea

because ending last there we took That it of over There doing some away us aggressive hit this This is year, been we've or that. public of years. the out pretty we've on those a extended that two year that little bit and revenue and Mackie. are of in right year made or that the those for a extended we're say would this two or contracts were next bit as now. year eight in out I the But that focused not little seven

in is in from filling all possible. the commercial as right Our these getting quickly up Nederland and primary a them and as focus assets standpoint Northeast online now

really lot not the we're time. extend So at looking of point at in and this a blend

Pearce Hammond

Thank you, Mackie.

Operator

from Our Bernstein. proceed Jean comes Salisbury next with your question. with Please question

Jean Salisbury

almost in contracted. DAPL $XXX But crude to that release the were segment The fully pay a the impression Bakken the under guess to valid referenced due Is well Hi. or reduction I reason Or that the million on impression pay? a quarter take in the I shut-ins was was not of wrong? pipeline.

Mackie McCrea

correct. No, day again. that impression barrels have We is XXX,XXX we your Mackie sold the is a This out. --

However, a a the it our an that from to has does of it. of then And capacity. it use flex foundation volume lot different component have the is they component. have And impact has And flow. for then, on also has shippers. capacity, it It flex customers it that MVC revenues walk-up course, components on our quarter-to-quarter how the way actually impacts depending some the depending our does -- of amount it

Jean Salisbury

they flex the is more Are a you for component hook Or pay the on that to Okay. sale eventually? of guess? spot I

Mackie McCrea

to that what Yes, or an they they're in can we're regardless in. But they is there ability it whether have us an volume they to on pay annual flex a that guaranteed pay of they're MVC month -- quarter required and flow. it the have to amount they flow not. But they or a flow quarter set it that yeah the past basis a

Jean Salisbury

see. I

Okay.

couple of come flex should hopefully some quarters. next that back So of in the

Mackie McCrea

That's correct.

Jean Salisbury

customer then that. that volumes like -- still your Satellite you. also building just then you confirm commentary next That's they're Okay. you And one over how sounded to and expect the I on but track understanding from the just see project was helpful. that year this on side, the to My wanted And year. ethane know Thank one is from of the ramp it crackers their time side. I

ethane but confirm wanted on kind ramp So it'd that. to the slow of, be, a side,

Tom Long

our projects. excited ethane so We're Yeah. about

or of You ethane. here saw VLEC three up Hook our we days almost probably XXX,XXX first ago, loaded four barrels at facility our Marcus

ordered built, Nederland is getting their job, facilities everything in goes track. Satellite They've a as on far go. tremendous ready As and their to done getting ships

excited project. cracker year. very that on have of this we're end about by will the They a So

expectations. a first their of heard earlier, the our is be in on. second coming second of the ship you And cracker's will then, yeah, theirs first I our latter part As of believe we facility with quarter, commissioning or November quarter part

everything done of They've time, them. what pleasure say great Nederland said to They've at be barrels time we primarily on as with. the XXX,XXX do. they per we'll And day partners. So capacity for now bringing for a been every they would first deal ethane

a other We everything to as However, facility what basis. a we'll depending basis daily are selling fully actually pulls that to on chasing on ethane the do Satellite parties first we we third And next anticipate other markets. quarter year. can on utilize early of as do daily

Jean Salisbury

Perfect. Thanks lot. a

Operator

Our your question. comes with Suisse. Spiro Please next proceed Crédit from question Dounis with

Spiro Dounis

Good afternoon, guys.

really describe capital are part Is want through multiyear to get there's XXXX-plus a if least trying full larger Or you is that EBITDA those the it question CapEx? scale projects Or system your Just of more can to of that or spending? actually First system at the base? blocking-and-tackling-type spending. grow flowing that – Wondering something can how of just go something it years? keep the back nature EBITDA is to that flat? that

Mackie McCrea

Yes. This is Mackie again.

there. there's range As see a you

projects So in are there the building and works are be those. we that will

But that opportunities see synergistic back with have that opportunities to there out also we have some already very We we cushion there, contracts them. have gives already the with some a we us assets grow that ability that built.

deals. contracts that deals are $XXX $XXX and range of to already are expectations of a new So backed hence million. combination the of It's done by that million

Spiro Dounis

guys I how forward? Got is that NGL that pulling you was able impressive, you especially guess some versus volumes Are the going circumstances. And then how down quantify would of ratable inventory? it. recovery strong under to pretty say ethane And much

Mackie McCrea

is again. Yes. Mackie This

Northeast segment as on Hook Mariner Marcus We at in well our there as up going so franchise the NGL what's and Nederland. with are about excited both

our more ethane As the system. certainly recovered far ethane as have increased and ethane, benefits prices goes, as NGL it we've

been So the arm. in that a doubt no shot has

transportation over much and full go where so on We where from and marketing to depending residue that's reject we pipelines. have to can sense recovery what of and the this But both it the products year most it's makes those of also prices ethane our into fractionation we is can that our and where tailgate to of capability ethane lot a also and benefit we'll the fracs. made the go those do products a of of benefits sense receive

Spiro Dounis

it That’s Mackie. Thanks, me. for

Operator

Keith with with question. from Please Wolfe Stanley comes question Our your Research. next proceed

Keith Stanley

Hi, thank you.

end to DAPL. at remarks I the prepared First on just clarify remarks of the wanted the

Or So to I for need I Second, on think And the say, are assuming confirm, the the be it now district heard at time the meantime could on decision to allows would of you on just Army then pause that expect by in easement, pipeline Corps the year. challenged they of done said just Environmental want you getting the process? you by the third kind the the next Army Corps of the with continue goal appeals work without decision by EIS an does Impact Statement of pending year? operating line, on the an middle still court? the I the environmentalists a the end

Tom Mason

kind but done that certain As before Corps' we've that's have waiting have to on started could the I There's far been preparation whether for – again. Mason, as Access, not. we're It's do prep Army of kind that really the not EIS work work. that. Tom this this of as process to pressing as is And at decisions been bailiwick – certain or of amount that point, these a they think Dakota

we'll So EIS process appeal that I required. won't still we're be think an then confident in win and the

on on top terms been from hadn't really it pushing So of in that of burner our the perspective. the

I itself And that schedule the the as the the by far the the may – As decision it of year. contemplates briefing of well appeal, think be year, heard was think I that's end before the order in pretty being quickly. the end

certain. that's think pretty I probably So

far everything the a or think almost as a Army wins decisions, as whoever I all on Corps' the decision. gets motion litigation As challenge with challenged, of

what's are part So in of process. happen But just terms of to the next. everything kind appeals normal going of I is in flux think

that does questions? your answer So

Keith Stanley

helpful. That Thank does. very That's you.

question. I MLP. pretty And Second multiple today and guess low in years giving emphasized and the the Kelcy coming have company as out an importance CapEx you're growth numbers. of of particular

tougher of going organically capital it's a to So budget. to grow be lot that with type

importantly, the then leverage. And what are you in one the your guess reduce balance criteria if potential So to about for sheet I do acquisition at guess, acquisitions of key levers for are how candidate? I'm would would that? And I think look you strategy you interested most a look

can levered synergies a or buy generate that's business less to company were a that? you from If and

Kelcy Warren

This Yes. is Kelcy.

to as are need our large do what to are right. credit mean, but I numbers to time we to frustrating that's the at do. those -- CapEx due we the You're me, And as that's right growth It's low. thing this metrics.

However, into is I that's and of that part growth NGLs, And are the that early want to brought follow coming of but to there's others dollars Mackie likewise quarter with as in going of remind it's been fourth to are be on in up some huge. everyone XXXX the the backlog and huge. these but addressed the discussions, that going the well.

we because went through lasted But it's than growth we painful, expected it's over we cost aggressive very than longer and we're relieved So it about expected. that is. it's and now, been spurt more a and

very our As us is trading contemplate consolidation hard so this are M&A, difficult It it's just sector to far units to really as most I believe even people in necessary. think because for that do. is anything poorly,

,it I would quarter said deleveraging. would would or certainly be not. contemplated was any I the in However, ultimately not -- guess to that we M&A did need undertake anything last as We that

Keith Stanley

you. Thank

Kelcy Warren

you. Thank

Operator

Michael comes proceed Please Our question next from your question. Sachs. with Goldman with Lapides

Michael Lapides

guys. Hi,

cash question. flow a Just

the about, how you growth assuming in way And down reduction think how CapEx, of right I the down you optimal 'XX $X balance EBITDA mean, actually how the is, and do next another of side that's the EBITDA remain deploy were With What's 'XX in balance to it? the chunk billion it? use plays what it about debt in big use XXXX on most do big somewhere where lower if you sheet a the the way of year where sheet? the the or that terms to is to of debt cash? think trajectory Like -- do side you step CapEx out, actually deploy dramatic on in

Tom Long

free you Michael, that cash tell free answer various you very, earmarked year. very status question? your bet. referred I And will you for buckets to just in to good I'm and when That's the have next reduction to earmarked debt. tell flow the excited flow flow. is in We're that cash question. be a that a you You that toward actually that for that cash it's free did trying

Michael Lapides

the same you But give but free are realm and thinking multiyear I to not now. know multiyear we're that next is flow of you're where let's But guidance, we in right going in just XXXX about XXXX, a deleveraging are year. it within you're say -- not EBITDA cash the meaning process EBITDA assuming

scenario after you EBITDA, years with as let's Or of cash? of three then see? two think of paydown and are in If you a event you it's had that it flattish or and your free debt continuous XXXX wait do a

Tom Long

goes look so got I target with, see what the But continuing. maturities credit balance next we've we manageable year. that XXXX Remind drawn that multiyear question for next will back you of bring to of that to come X down. of facility, out that the year the again, would as XXXX see on you ratio But A it's likewise XXXX, when maturities billion. leverage like that X.Xx. you that I at lot this the some up meaning have as as do more very of started we on $X.X once

Michael Lapides

Got it. appreciate Tom. Much Thank you, it.

Tom Long

bet. You

Operator

proceed comes your question U.S. with from next with Becca Followill question. Please Capital Advisors. Our

Becca Followill

view underrate the on of the an an EIS potential required, administration? guys decision Back you maintains afternoon. how Good kind of development court by that is do that DAPL, assuming EIS the the handicap or

Tom Mason

really opinions speculate that. everybody hard probably It's on This -- might is Tom different Mason to what on again. happen. has It's

it's hard speculate. just So to

Becca Followill

you. Thank Okay.

Operator

to At over closing like I this comments. Mr. back the Tom would to call Long turn time, for

Tom Long

today all look answering and again, to so of your -- thank forward after Once much. call. Thanks questions for follow-up we really joining we you us questions this

Operator

This you. Thank does conclude today's teleconference.

you time. great participation and lines at And your have You thank day. a may your for this disconnect

Energy Transfer (ET) 5 Aug 202020 Q2 Earnings call transcript