Energy transfer equity lp provides a glimpse at what’s going on behind the scenes — the motley fool electricity per kwh calculator


CEO Kelcy Warren took this one and stated "as you know, we sent a letter offering to acquire NSH. And as you know, the company responded saying that they were not interested in that. And then we followed up to provide some more clarity in a letter." He further stated that "we think the assets fit us extremely well. And we think more money could be made from those assets." However, "we have made it very clear to management of NuStar that we would not do anything hostile. But we did want to strongly express our interest, and we have done so." The company went public with its offer to give NuStar’s investors the opportunity to weigh in on this potential alternative to the company’s current plan, which would see NuStar Energy acquire NuStar GP Holding. However, as much as Energy Transfer would like to buy NuStar, it won’t force the issue, having learned its lesson from an ill-fated hostile attempt to acquire Williams Companies. We’re evaluating some structural changes

NuStar’s decision to simplify its corporate structure is just the latest in a series of similar transactions by other energy infrastructure companies. Energy Transfer has also said that it would likely pursue that path in the future. When asked on the call what that might look like, CEO Kelcy Warren stated "as far as the simplification… it would most certainly be a structure whereby ETE acquires ETP. We’ve looked at every scenario possible to us. And we don’t see any mathematical scenario that makes any sense other than that one." While the company isn’t ready to pull the trigger on that deal just yet, it seems as though it will at some point.

However, he did rule out the possibility that the company would also roll up its other MLP Sunoco LP ( NYSE:SUN). He said that "we’re very pleased with what we’re seeing at SUN as far as the growth that they will be directing that MLP into. And as you know, SUN is younger in the IDR life." Because of that "for the reasonable future, we don’t see that being rolled up."

Earlier this year, Energy Transfer Partners elected to keep its distribution flat even though earnings and cash flow are rising sharply because it wanted to retain cash to help fund expansion projects and pay down debt. Energy Transfer Equity, meanwhile, just pressed pause on its distribution growth plan even though it has ample room to increase the payout. Those decisions led an analyst on the call to ask when the company might restart distribution growth. CFO Tom Long took this one by saying "we always want to say that’s a quarter-by-quarter decision." But, "I can’t highlight enough the fact of preserving cash and deleveraging, how important that is."

One reason the company wants to reduce debt is so that it can maintain an investment-grade credit rating after making a structural change. In fact, the reason the math works best on a scenario where Energy Transfer Equity acquires Energy Transfer Partners is that "going this path, we feel like is probably the most favorable from a rating standpoint." That’s very important to management because they highly value an investment grade rating since it keeps borrowing costs low.