Energy Transfer LP (ET) Earnings

Management highlights

Overall Financial Performance - Total revenue in Q2 2026 was ~$5.1 billion, up from ~$3.9 billion in Q2 2025 - Adjusted DCF attributable to partners was ~$2.6 billion in Q2 2026, up from ~$2.0 billion in Q2 2025 - All segments delivered strong performance, with record volumes across midstream gathering, NGL transportation, NGL exports, and crude oil transportation - Organic growth capital spending totaled ~$2.6 billion in H1 2026 across core segments Completed and In-Progress Natural Gas Growth Projects - The Hugh Brinson pipeline is now in commercial service, with full 1.5 Bcf/day phase 1 capacity expected online by September 1, 2026 (ahead of original schedule). Phase 2 (additional downstream compression) is on track for Q1 2027 in-service and is expected to come in under budget. A 14-mile lateral off Hugh Brinson in Abilene, Texas was completed and is ready for service - The Desert Southwest Pipeline (DSW) project is progressing ahead of internal expectations, with completed stakeholder scoping meetings across Texas, New Mexico, and Arizona, and positive ongoing engagement with all stakeholders. All steel and compression has been pre-ordered, with in-service targeted for late 2029 - The 120-mile Springville Lateral extension of TransWestern Pipeline is on track for Q4 2029 in-service, with all pipe and compression costs locked in and stakeholder outreach underway. The pipeline will deliver 625 million cubic feet per day of natural gas to replace retiring coal-fired power generation - In Oklahoma, one of four new power plant connections is already in service, two more are ready for service, and the final connection is targeted for Q4 2028, adding 300 million cubic feet per day of new demand. The company is in final negotiations for an additional 250 million cubic feet per day of new power plant demand - Two Texas customers recently added a combined 100 million cubic feet per day to existing natural gas contracts for data center and power generation loads, and the company sees this trend growing in scale - The Mustang Draw 1 processing plant in the Permian Basin entered service in June 2026 and is already running near full capacity. Mustang Draw 2 is on track for Q4 2026 in-service Completed and In-Progress NGL/Liquids Growth Projects - A 240,000 barrel per day ethane export expansion at the Nederland terminal was announced in June 2026, with an incremental 55,000 barrels per day of LPG capacity. Upgrades to the Mont Bellevue to Nederland pipeline and two new ship docks will be added, with in-service starting in 2028 and docks operational by mid-2029. 100% of the ethane export capacity is locked in under long-term contracts through the 2040s, with 80% of volumes going to Asian markets outside of China. Total project capital is slightly over $1 billion, already included in 2026 guidance - Upgrades to the Lone Star Express NGL pipeline were completed in Q2 2026, adding 90,000 barrels per day of incremental Permian NGL takeaway capacity, leading to record Y-grade volumes for the quarter. Total deliverability to Montbellevue is now over 1.3 million barrels per day, with Permian takeaway pipelines currently 95% utilized - The company signed long-term transportation/fractionation agreements for ~300,000 barrels per day of Y-grade capacity extending into the 2030s. Montbellevue fractionators are fully utilized, with the new Fract 9 unit expected online late 2026 Strategic Priorities - The company maintains a top priority of safe, on-time, on-budget project execution, demonstrated by the early completion of Hugh Brinson - Capital discipline is a core focus, with a target long-term annual distribution growth rate of 3-5% and a target leverage ratio of 4.0x to 4.5x EBITDA - The company's unmatched connected asset base enables it to deliver energy from all major U.S. supply basins to domestic and international end markets, positioning it to capture value from market volatility and demand growth

Guidance

- Full-year 2026 adjusted EBITDA guidance is revised upward to a range of $18.8 billion to $19.1 billion, representing a $500 million increase at the midpoint compared to prior guidance - 2026 organic growth capital expenditure guidance (excluding Sun and USAC) is maintained at a range of $5.6 billion to $5.9 billion - The majority of growth projects are contracted under long-term commitments with expected mid-teen returns, and the base business is expected to remain strong through the second half of 2026 - Management's updated guidance does not include any assumption of continued market volatility in the second half of 2026; if volatility persists, the company is likely to exceed the high end of the new adjusted EBITDA range - Hugh Brinson Phase 1 full capacity will be fully contracted by January 1, 2027, with limited full earnings contribution in 2026. Mustang Draw 2 and Fract 9 are also expected to have limited 2026 earnings impact, with most contribution coming in 2027 - Management expects the current $5 billion to $5.9 billion annual organic growth capital run rate to be sustained through the end of the 2020s, while maintaining or increasing current return thresholds for new projects

Segment performance

1. NGL and refined products: Adjusted EBITDA of $1.3 billion in Q2 2026, up from $1.0 billion in Q2 2025. Revenue contribution was ~27% of total Q2 2026 adjusted EBITDA. Gains were driven by record NGL exports, record NGL pipeline throughput, higher NGL sale premiums, increased optimization margins, and inventory hedge gains. 2. Midstream: Adjusted EBITDA of $884 million in Q2 2026, up from $768 million in Q2 2025. Revenue contribution was ~18% of total Q2 2026 adjusted EBITDA. Growth came from record 5% higher Permian Basin volumes from new processing capacity and improved utilization, plus an $88 million increase from higher NGL prices. 3. Crude oil segment: Adjusted EBITDA of $834 million in Q2 2026, up from $732 million in Q2 2025. Revenue contribution was ~17% of total Q2 2026 adjusted EBITDA. Growth was supported by volume growth across pipeline, terminal and gathering assets, plus a $106 million increase from favorable market conditions including arbitrage opportunities, higher crude prices, and strategic petroleum reserve activity at the Nederland terminal. 4. Interstate natural gas segment: Adjusted EBITDA of $481 million in Q2 2026, up from $470 million in Q2 2025. Revenue contribution was ~10% of total Q2 2026 adjusted EBITDA. The increase stemmed from higher parking, storage and liquids revenue, plus higher contracted volumes and utilization on major pipelines including Panhandle Eastern, TransWestern and Florida Gas Transmission. 5. Intrastate natural gas segment: Adjusted EBITDA of $377 million in Q2 2026, up from $284 million in Q2 2025. Revenue contribution was ~8% of total Q2 2026 adjusted EBITDA. Growth was driven by an $113 million increase from wider basis differentials, plus a $17 million contribution from early commissioning volumes on the Hugh Brinson pipeline.

Risks & headwinds

- Project permitting and regulatory delays for new pipeline and energy infrastructure projects, particularly from environmental activist opposition, can delay project timelines. The Green Chile data center pipeline has already faced minor delays from opposition focused on data center development, though management remains confident it will ultimately be completed - Market volatility and commodity price disruptions are unpredictable, and continued upside to earnings is dependent on the duration of these disruptions, which cannot be forecasted with certainty - Permian production growth after the opening of new egress capacity could be slower than currently expected, limiting near-term volume growth across midstream and natural gas segments - Project execution risks, including cost overruns and delivery delays for major construction components, could impact the timeline and economics of large-scale projects like Desert Southwest - Grid interconnection delays and regulatory changes for power generation and data center projects in Texas could slow near-term demand growth, though management notes most of its current data center projects are behind the meter and not exposed to these delays

Analyst Q&A

• Q: Theresa Chen (Barclays) asked to elaborate on Q2 volumetric outperformance drivers, what variables management monitors for forecasting the impact of market disruptions for the rest of 2026, and if the revised guidance is achievable without continued volatility. /

  A: Dylan Bramhall explained that the majority of the guidance increase came from segment beats: midstream, intrastate, and crude each beat expectations by ~$100 million, while NGL beat by over $200 million driven by strong exports, domestic sales, fees, and blending margins. Management expects the base business to remain strong in H2 2026, with volume growth from new projects coming online, but did not build continued market volatility into the current guidance. If volatility persists, the company will easily hit the high end of the guidance range. Mack McCree added that the first half of 2026 demonstrated the value of Energy Transfer's diverse asset base, which allows the company to pivot and capture benefits from any domestic or international market disruption.

• Q: Theresa Chen (Barclays) also asked for an update on the permitting and progress of the Desert Southwest project, and what incremental growth opportunities exist along the DSW corridor. /

  A: Mack McCree responded that DSW is progressing ahead of internal expectations for surveying and permitting, with all steel and compression ordered long in advance, and the same successful project team that delivered Hugh Brinson early will execute DSW. Stakeholder engagement with all groups including indigenous communities and government agencies is going well, and there is already unanticipated new demand interest from utilities in southern New Mexico. The project is on track for in-service in late 2029, and there is significant incremental demand potential from power generation and data center connections along the route.

• Q: Jean Ann Salisbury (Bank of America) asked if management was surprised by how quickly Waha basis differentials narrowed after Hugh Brinson came online, and how much stranded gas remains to be unleashed in the Permian. /

  A: Mack McCree said that while the narrowing happened faster than expected, it was not surprising. Hugh Brinson and other new pipelines are adding up to 4.5 Bcf/day of new Permian egress capacity by Q1 2027, which has immediately relieved the bottleneck that depressed Waha pricing for years. There is a large amount of pent-up, stranded production that producers have held back, and the new egress capacity will unleash significant exponential growth in oil, gas, and NGL volumes in the Permian.

• Q: Jackie Cortis (Goldman Sachs) asked about NGL recontracting exposure through the end of the decade, and if rate pressure has impacted pricing dynamics. /

  A: Adam noted that the company recently signed 300,000 barrels per day of new long-term Y-grade contracts out of the Permian extending into the 2030s, which puts the company in a strong position for the rest of the decade. While new capacity has brought market rates down from previous levels, management believes the market has hit the bottom for rates, and all future contracting is expected to be at higher current market rates.

• Q: Andrew (for Julian DeMille Smith) asked how Energy Transfer is positioned to compete for Texas data center natural gas projects, and if rising competition will erode project returns. /

  A: Mack McCree explained that Energy Transfer has a unique advantage because its existing large-diameter pipeline network already covers most areas where data centers are being developed in the South. The company can backstop firm supply with 237 Bcf of storage across six states, which provides reliability critical for data center operations. Most of the company's current data center projects are behind-the-meter, so they are not exposed to Texas ERCOT grid interconnection delays that have impacted other projects. Dylan Bramhall added that the strong opportunity set means the company is not lowering return thresholds, and returns for new projects are actually holding steady or increasing.