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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-32740

ENERGY TRANSFER LP

(Exact name of registrant as specified in its charter)

Delaware	30-0108820
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

8111 Westchester Drive, Suite 600, Dallas, Texas 75225

(Address of principal executive offices) (zip code)

(214) 981-0700

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Units	ET	New York Stock Exchange
7.375% Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units	ETprC	New York Stock Exchange
7.625% Series D Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units	ETprD	New York Stock Exchange
7.600% Series E Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units	ETprE	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	ý	Accelerated filer	☐
Non-accelerated filer	¨	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐     No  ý

At October 28, 2022, the registrant had 3,088,475,132 Common Units outstanding.

Table of Contents

FORM 10-Q

ENERGY TRANSFER LP AND SUBSIDIARIES

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (Unaudited)
Consolidated Balance Sheets	5
Consolidated Statements of Operations	7
Consolidated Statements of Comprehensive Income	8
Consolidated Statements of Equity	9
Consolidated Statements of Cash Flows	11
Notes to Consolidated Financial Statements	12
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	39
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	63
ITEM 4. CONTROLS AND PROCEDURES	64
PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS	65
ITEM 1A. RISK FACTORS	66
ITEM 6. EXHIBITS	66
SIGNATURE	68

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Definitions

References to the “Partnership” or “Energy Transfer” refer to Energy Transfer LP. In addition, the following is a list of certain acronyms and terms used throughout this document:

/d	per day
AOCI	accumulated other comprehensive income
BBtu	billion British thermal units
Citrus	Citrus, LLC, a 50/50 joint venture which owns FGT
Dakota Access	Dakota Access, LLC, a non-wholly-owned subsidiary of Energy Transfer
Enable	Enable Midstream Partners, LP, a Delaware limited partnership
Energy Transfer Canada	Energy Transfer Canada ULC, a non-wholly-owned subsidiary of Energy Transfer until its sale in August 2022
Energy Transfer R&M	Energy Transfer (R&M), LLC (formerly Sunoco (R&M), LLC)
Energy Transfer Preferred Units	Collectively, the Series A Preferred Units, Series B Preferred Units, Series C Preferred Units, Series D Preferred Units, Series E Preferred Units, Series F Preferred Units, Series G Preferred Units and Series H Preferred Units
ETC Tiger	ETC Tiger Pipeline, LLC, a wholly-owned subsidiary of Energy Transfer, which owns the Tiger Pipeline
ETC Sunoco	ETC Sunoco Holdings LLC (formerly Sunoco, Inc.), a wholly-owned subsidiary of Energy Transfer
ETO	Energy Transfer Operating, L.P., formerly a non-wholly-owned subsidiary of Energy Transfer until its merger into the Partnership in April 2021
Exchange Act	Securities Exchange Act of 1934, as amended
Explorer	Explorer Pipeline Company
FERC	Federal Energy Regulatory Commission
FGT	Florida Gas Transmission Company, LLC, a wholly-owned subsidiary of Citrus
GAAP	accounting principles generally accepted in the United States of America
General Partner	LE GP, LLC, the general partner of Energy Transfer
HFOTCO	Houston Fuel Oil Terminal Company, a wholly-owned subsidiary of Energy Transfer, which owns the Houston Terminal
IFERC	Inside FERC’s Gas Market Report
LIBOR	London Interbank Offered Rate
MBbls	thousand barrels
MEP	Midcontinent Express Pipeline LLC
MMcf	million cubic feet
MTBE	methyl tertiary butyl ether
NGL	natural gas liquid, such as propane, butane and natural gasoline
NYMEX	New York Mercantile Exchange
OSHA	Federal Occupational Safety and Health Act
OTC	over-the-counter
Panhandle	Panhandle Eastern Pipe Line Company, LP, a wholly-owned subsidiary of Energy Transfer
Rover	Rover Pipeline LLC, a non-wholly-owned subsidiary of Energy Transfer

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SEC	Securities and Exchange Commission
Series A Preferred Units	6.250% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units
Series B Preferred Units	6.625% Series B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units
Series C Preferred Units	7.375% Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units
Series D Preferred Units	7.625% Series D Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units
Series E Preferred Units	7.600% Series E Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units
Series F Preferred Units	6.750% Series F Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Units
Series G Preferred Units	7.125% Series G Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Units
Series H Preferred Units	6.500% Series H Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Units
SCOOP	South Central Oklahoma Oil Province
SOFR	Secured overnight financing rate
SPLP	Sunoco Pipeline L.P., a wholly-owned subsidiary of Energy Transfer
Transwestern	Transwestern Pipeline Company, LLC, a wholly-owned subsidiary of Energy Transfer
Trunkline	Trunkline Gas Company, LLC, a wholly-owned subsidiary of Panhandle
USAC	USA Compression Partners, LP, a publicly traded partnership and consolidated subsidiary of Energy Transfer
White Cliffs	White Cliffs Pipeline, L.L.C.

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PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ENERGY TRANSFER LP AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in millions)

(unaudited)

	September 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	326	$	336
Accounts receivable, net	8,587		7,654
Accounts receivable from related companies	92		54
Inventories	2,490		2,014
Income taxes receivable	65		32
Derivative assets	19		10
Other current assets	580		437
Total current assets	12,159		10,537
Property, plant and equipment	105,040		103,991
Accumulated depreciation and depletion	(24,779)		(22,384)
Property, plant and equipment, net	80,261		81,607
Investments in unconsolidated affiliates	2,869		2,947
Lease right-of-use assets, net	815		838
Other non-current assets, net	1,573		1,645
Intangible assets, net	5,505		5,856
Goodwill	2,553		2,533
Total assets	$	105,735	$	105,963

The accompanying notes are an integral part of these consolidated financial statements.

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ENERGY TRANSFER LP AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (continued)

(Dollars in million)

(unaudited)

	September 30, 2022		December 31, 2021
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	7,514	$	6,834
Accounts payable to related companies	9		—
Derivative liabilities	60		203
Operating lease current liabilities	43		47
Accrued and other current liabilities	3,615		3,071
Current maturities of long-term debt	2		680
Total current liabilities	11,243		10,835
Long-term debt, less current maturities	47,413		49,022
Non-current derivative liabilities	33		193
Non-current operating lease liabilities	794		814
Deferred income taxes	3,661		3,648
Other non-current liabilities	1,530		1,323
Commitments and contingencies
Redeemable noncontrolling interests	493		783
Equity:
Limited Partners:
Preferred Unitholders	6,077		6,051
Common Unitholders	26,725		25,230
General Partner	(3)		(4)
Accumulated other comprehensive income	32		23
Total partners’ capital	32,831		31,300
Noncontrolling interests	7,737		8,045
Total equity	40,568		39,345
Total liabilities and equity	$	105,735	$	105,963

The accompanying notes are an integral part of these consolidated financial statements.

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ENERGY TRANSFER LP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in millions, except per unit data)

(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
REVENUES:
Refined product sales	$	6,647	$	4,810	$	20,043	$	12,737
Crude sales	5,773		4,021		17,758		10,920
NGL sales	4,823		4,005		15,828		10,275
Gathering, transportation and other fees	2,830		2,276		8,288		6,797
Natural gas sales	2,648		1,376		6,830		7,507
Other	218		176		628		524
Total revenues	22,939		16,664		69,375		48,760
COSTS AND EXPENSES:
Cost of products sold	18,516		13,188		56,169		35,641
Operating expenses	973		898		2,982		2,585
Depreciation, depletion and amortization	1,030		943		3,104		2,837
Selling, general and administrative	361		198		802		583
Impairment losses and other	86		—		386		11
Total costs and expenses	20,966		15,227		63,443		41,657
OPERATING INCOME	1,973		1,437		5,932		7,103
OTHER INCOME (EXPENSE):
Interest expense, net of interest capitalized	(577)		(558)		(1,714)		(1,713)
Equity in earnings of unconsolidated affiliates	68		71		186		191
Losses on extinguishments of debt	—		—		—		(8)
Gains on interest rate derivatives	60		1		303		72
Other, net	(120)		33		(117)		45
INCOME BEFORE INCOME TAX EXPENSE	1,404		984		4,590		5,690
Income tax expense	82		77		159		234
NET INCOME	1,322		907		4,431		5,456
Less: Net income attributable to noncontrolling interests	304		260		793		870
Less: Net income attributable to redeemable noncontrolling interests	12		12		37		37
NET INCOME ATTRIBUTABLE TO PARTNERS	1,006		635		3,601		4,549
General Partner’s interest in net income	1		1		3		5
Preferred Unitholders’ interest in net income	106		99		317		185
Common Unitholders’ interest in net income	$	899	$	535	$	3,281	$	4,359
NET INCOME PER COMMON UNIT:
Basic	$	0.29	$	0.20	$	1.06	$	1.61
Diluted	$	0.29	$	0.20	$	1.06	$	1.60

The accompanying notes are an integral part of these consolidated financial statements.

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ENERGY TRANSFER LP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in millions)

(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income	$	1,322	$	907	$	4,431	$	5,456
Other comprehensive income (loss), net of tax:
Change in value of available-for-sale securities	(4)		2		(13)		5
Actuarial gain related to pension and other postretirement benefit plans	—		1		7		6
Foreign currency translation adjustments	13		(21)		(6)		3
Change in other comprehensive income from unconsolidated affiliates	6		1		24		1
	15		(17)		12		15
Comprehensive income	1,337		890		4,443		5,471
Less: Comprehensive income attributable to noncontrolling interests	307		250		787		872
Less: Comprehensive income attributable to redeemable noncontrolling interests	12		12		37		37
Comprehensive income attributable to partners	$	1,018	$	628	$	3,619	$	4,562

The accompanying notes are an integral part of these consolidated financial statements.

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ENERGY TRANSFER LP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(Dollars in millions)

(unaudited)

	Common Unitholders		Preferred Unitholders		General Partner		AOCI		Noncontrolling Interests		Total
Balance, December 31, 2021	$	25,230	$	6,051	$	(4)	$	23	$	8,045	$	39,345
Distributions to partners	(528)		(80)		—		—		—		(608)
Distributions to noncontrolling interests	—		—		—		—		(307)		(307)
Capital contributions from noncontrolling interests	—		—		—		—		373		373
Other comprehensive income, net of tax	—		—		—		20		5		25
Other, net	17		—		—		—		10		27
Net income, excluding amounts attributable to redeemable noncontrolling interests	1,162		106		1		—		205		1,474
Balance, March 31, 2022	25,881		6,077		(3)		43		8,331		40,329
Distributions to partners	(603)		(131)		(1)		—		—		(735)
Distributions to noncontrolling interests	—		—		—		—		(446)		(446)
Capital contributions from noncontrolling interests	—		—		—		—		24		24
Other comprehensive loss, net of tax	—		—		—		(14)		(14)		(28)
Other, net	9		—		—		—		2		11
Net income, excluding amounts attributable to redeemable noncontrolling interests	1,220		105		1		—		284		1,610
Balance, June 30, 2022	26,507		6,051		(3)		29		8,181		40,765
Distributions to partners	(694)		(80)		(1)		—		—		(775)
Distributions to noncontrolling interests			—		—		—		(424)		(424)
Capital contributions from noncontrolling interests	—		—		—		—		7		7
Energy Transfer Canada sale	—		—		—		(9)		(337)		(346)
Other comprehensive income, net of tax	—		—		—		12		3		15
Other, net	13		—		—		—		3		16
Net income, excluding amounts attributable to redeemable noncontrolling interests	899		106		1		—		304		1,310
Balance, September 30, 2022	$	26,725	$	6,077	$	(3)	$	32	$	7,737	$	40,568

The accompanying notes are an integral part of these consolidated financial statements.

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ENERGY TRANSFER LP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY (continued)

(Dollars in millions)

(unaudited)

	Common Unitholders		Preferred Unitholders		General Partner		AOCI		Noncontrolling Interests		Total
Balance, December 31, 2020	$	18,531	$	—	$	(8)	$	6	$	12,859	$	31,388
Distributions to partners	(406)		—		—		—		—		(406)
Distributions to noncontrolling interests	—		—		—		—		(406)		(406)
Capital contributions from noncontrolling interests	—		—		—		—		20		20
Other comprehensive income, net of tax	—		—		—		2		6		8
Other, net	18		—		—		—		3		21
Net income, excluding amounts attributable to redeemable noncontrolling interests	3,285		—		3		—		341		3,629
Balance, March 31, 2021	21,428		—		(5)		8		12,823		34,254
Preferred units converted in Rollup Mergers	—		4,768		—		—		(4,768)		—
Distributions to partners	(403)		(88)		(1)		—		—		(492)
Distributions to noncontrolling interests	—		—		—		—		(354)		(354)
Units issued	—		889		—		—		—		889
Capital contributions from noncontrolling interests	—		—		—		—		43		43
Other comprehensive income, net of tax	—		—		—		18		6		24
Other, net	15		(1)		—		—		2		16
Net income, excluding amounts attributable to redeemable noncontrolling interests	539		86		1		—		269		895
Balance, June 30, 2021	21,579		5,654		(5)		26		8,021		35,275
Distributions to partners	(404)		(80)		(1)		—		—		(485)
Distributions to noncontrolling interests	—		—		—		—		(389)		(389)
Capital contributions from noncontrolling interests	—		—		—		—		51		51
Other comprehensive loss, net of tax	—		—		—		(7)		(10)		(17)
Other, net	16		(2)		—		—		5		19
Net income, excluding amounts attributable to redeemable noncontrolling interests	535		99		1		—		260		895
Balance, September 30, 2021	$	21,726	$	5,671	$	(5)	$	19	$	7,938	$	35,349

The accompanying notes are an integral part of these consolidated financial statements.

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ENERGY TRANSFER LP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in millions)

(unaudited)

	Nine Months Ended September 30,
	2022		2021
OPERATING ACTIVITIES:
Net income	$	4,431	$	5,456
Reconciliation of net income to net cash provided by operating activities:
Depreciation, depletion and amortization	3,104		2,837
Deferred income taxes	158		199
Inventory valuation adjustments	(