How ETE’s Distribution Coverage Trended in 2018
Energy Transfer Equity (ETE) reported distributable cash flows of $263 million in 4Q17 compared to $299 million in the same quarter in the prior year, a YoY decline of 12.0%. The decline was mainly due to the IDR (incentive distribution rights) subsidies from ETE to Energy Transfer Partners (ETP). IDRs entitle ETE to a higher share of incremental cash flows, which results in higher cost of equity capital at the limited partnership.