Self-Funding Business Model Achieved through Cash Cost Reductions and Equity Method Inflection

Noble Midstream Partners LP (NASDAQ: NBLX) (“Noble Midstream” or the “Partnership”) today reported second-quarter 2020 financial and operational results. The Partnership’s results are consolidated to include Noble Midstream’s 54.4% ownership of Black Diamond Gathering, LLC (“Black Diamond Gathering”).

Certain results are shown as “attributable to the Partnership,” which exclude the non-controlling interests in Black Diamond Gathering retained by Greenfield Midstream. Noble Midstream believes the results “attributable to the Partnership” provide the best representation of the ongoing operations from which the Partnership’s unitholders will benefit.

Second-Quarter 2020 Highlights

  • Generated $48 million Net Income attributable to the Partnership, $95 million Adjusted Net EBITDA1 and $101 million Cash Flow from Operations attributable to the Partnership
  • Self-funded quarterly operations with operating cash flow exceeding investing cash flow by $34 million
  • Invested $5 million in organic capital projects, down nearly 90% sequentially, highlighting the Partnership's cost management and agility in this volatile commodity environment
  • Reduced total debt by $15 million in the quarter and ended the quarter with Net Debt to EBITDA1 of 4.0x
  • Gathered 324,000 barrels of gross oil and gas equivalent per day (Boe/d), down 3% sequentially, and 189,000 barrels of produced water per day (Bw/d), down 7% sequentially
  • Recognized increasing Equity Investment EBITDA, resulting from the commencement of full service from the EPIC Crude Pipeline (30% interest) in April and EPIC Y-Grade Pipeline (15% interest) in July
  • EPIC Y-Grade commissioned its first greenfield fractionator in Robstown, Texas, with 110,000 Bbl/d of NGL fractionation capacity added in early June

1 Adjusted EBITDA, Distributable Cash Flow (DCF) and Distribution Coverage Ratio are not Generally Accepted Accounting Principles (GAAP) measures. Definitions and reconciliations of these non-GAAP measures to their most directly comparable GAAP reporting measures appear in Schedule 4 of the financial tables which follow.

Brent J. Smolik, Chief Executive Officer of the general partner of Noble Midstream, stated, “In the second quarter, Noble Midstream generated operating cash flows in excess of our capital and equity investments. This provided ample liquidity to fund the quarterly distribution and reduce debt, thus strengthening our balance sheet. We were able to accomplish this by materially lowering our organic capital spend and cutting operating costs. With our gathering infrastructure backbone largely built across both the DJ and Delaware basins, and our joint venture pipelines in service, we are well-positioned to deliver volume expansion in a highly capital-efficient manner as activity increases. Our teams remain focused on minimizing spend and lowering our sustaining capital requirements, while safely executing projects and delivering operational excellence for our customers.”

Financial Results Highlighted by Resilient Cash Flows

Second-quarter 2020 revenues totaled $146 million, down 35% sequentially, due to lower oil sales revenues and lower volume from gathering and fresh water delivery related to customer activity reductions and short-term producer curtailments. Third-party crude oil sales revenue of $29 million declined 65% sequentially due to the impact of lower crude oil prices during the quarter. Total expenses were $85 million with $20 million in direct operating expenses, down 25% sequentially, as a result of continued cost-reduction measures and temporary reductions in customer activity levels. The Partnership reported second-quarter 2020 Adjusted Net EBITDA1 of $95 million, a sequential decline of 12%. Maintenance capital expenditures and cash interest expense attributable to the Partnership totaled $7.4 million and $7.1 million, respectively, leading to Distributable Cash Flow1 attributable to the Partnership of $80 million.

Noble Midstream invested $5 million in second-quarter organic capital expenditures, primarily focused on connecting 107 wells across both basins. Prior-capital invested, continued cost reductions and the utilization of existing infrastructure allowed the Partnership to reduce capital requirements. Equity investments during second-quarter 2020 totaled $25 million, including $3 million for EPIC Propane and a $22 million loan to EPIC Y-Grade.

Producer Curtailments Impacted Second-Quarter Volumes

In the Partnership's wholly-owned DJ Basin assets, Noble Midstream connected 16 wells in April on Noble Energy's Mustang acreage and 24 PDC Energy wells. Oil and gas gathering throughput was 161,000 Boe/d and average produced water volumes were 41,000 Bw/d. Second-quarter volumes were impacted on average by 24,000 Boew/d of curtailments. Freshwater delivery averaged 30,000 Bw/d and the Partnership delivered water to 13 third-party wells. Net DJ Basin capital expenditures totaled $2.0 million.

Black Diamond oil gathering throughput volumes averaged 79,000 Bo/d, down 14% sequentially, and oil sales volumes were 13,000 Bo/d. Second-quarter volumes were impacted on average by 9,000 Bo/d of curtailments. The Partnership connected 60 wells on Black Diamond's gathering system with 19 wells connected in June. Black Diamond capital expenditures, net to the Partnership, totaled $0.4 million.

In the Delaware Basin, quarterly oil and gas gathering throughput was 83,000 Boe/d, up slightly sequentially, and produced water gathering volumes were 148,000 Bw/d, down 9% on a sequential basis. These volumes were impacted by 18,000 Boew/d in curtailments during the quarter. The Partnership connected 7 wells, including one third-party well. Delaware Basin net capital expenditures totaled $2.5 million. With the reduced activity, Noble Midstream plans to optimize utilization of its Central Gathering Facility super-system, further reducing operating expenses.

In July, approximately two-thirds of curtailed producer volumes across both basins returned to production with the vast majority expected to be on line by August 2020.

Equity Investment Pipelines In Service

The Partnership’s equity investment income and cash flow generation increased during the quarter, boosted by the commencements of the EPIC pipeline projects, Delaware Crossing, and a full quarter of ownership of the Saddlehorn Pipeline Company, LLC (“Saddlehorn”), acquired in first-quarter 2020.

Interim crude service on the EPIC Y-Grade mainline ended in March and crude volumes transitioned to the Crude mainline in April. EPIC Y-Grade began transition to NGL service in early May and the first greenfield fractionator was commissioned in June, bringing total fractionation nameplate capacity to 180,000 Bo/d. The pipeline commenced full service in early July.

Second-quarter 2020 volumes on Saddlehorn averaged approximately 166,000 Bo/d, down 7% sequentially, highlighting its resilient contract structure and committed shippers on the pipeline. Volumes on the Advantage Pipeline system averaged 72,000 Bo/d, compared to 93,000 Bo/d during the first-quarter 2020, and generated $7.6 million in gross second-quarter distributions to the joint venture partners.

Delaware Crossing began transportation of crude volumes from the southern Delaware Basin to Wink, Texas in early April and averaged 20,000 Bo/d in gathering and transportation volumes during the second-quarter 2020. Delaware Crossing was impacted by 3,000 Bo/d of curtailments during the quarter with a majority of third-party curtailments back online in July. The Partnership does not anticipate any additional equity investment contributions for Delaware Crossing.

Protecting the Balance Sheet

As of June 30, 2020, the Partnership had $428 million in liquidity and $1.6 billion in total debt. During the quarter, Noble Midstream paid down $15 million of its revolving credit facility with available cash flow after capital expenditures and distributions.

On July 24, 2020, the Board of Directors of Noble Midstream’s general partner, Noble Midstream GP LLC, declared a second-quarter cash distribution of $0.1875 per unit, flat versus first-quarter 2020.

2020 Outlook Unchanged

Noble Midstream 2020 organic capital expenditures expectations remain unchanged at $60 to $80 million with $20 to $40 million remaining in the second half of 2020. The Partnership has maintained its expected 2020 equity investment range of $240 to $260 million. The EPIC Y-Grade consortium is deferring the investment decision on the second greenfield fractionator until better line of sight to continued improvement in commodity prices. Second-half 2020 investment is planned for the expansion of the east dock at the EPIC Crude terminal to support larger vessels and funding the remaining EPIC Y-Grade construction payments.

Noble Midstream expects minimal sponsor activity in the third-quarter 2020 and anticipates the resumption of Noble Energy well completions in the fourth quarter. The Partnership anticipates continued activity from third-party operators in the DJ Basin and now estimates more than 150 well connections this year at Black Diamond with 20 to 30 connections planned in the second half of 2020. With uncertainty around additional producer curtailments and the rate at which activity increases, Noble Midstream will not reinstate 2020 volume guidance at this time.

Based on the existing curtailment and activity scenarios outlined in first-quarter 2020, Noble Midstream maintains its 2020 net Adjusted EBITDA1 expected range of $370 to $410 million and a Distributable Cash Flow1 range of $280 to $310 million for the year. Distribution coverage1 and leverage expectations remain unchanged as well.

 

2Q20

Gross Volumes

Actuals

Oil and Gas Gathered (MBoe/d)

324

Produced Water Gathered (MBw/d)

189

Fresh Water Delivered (MBw/d)

30

 

 

Financials (in millions)

 

Net Income Attributable to the Partnership

$48

Net Adjusted EBITDA1

$95

Distributable Cash Flow1

$80

Distribution Coverage Ratio1

4.7x

 

 

Net Capital, Excluding Equity Investments

$5

(1)  

Adjusted EBITDA, DCF, and Distribution Coverage Ratio are not financial measures calculated in accordance with Generally Accepted Accounting Principles (“GAAP”). For definitions of these non-GAAP measures, see “Non-GAAP Financial Measures” below.

 

 

2020 Guidance

Financials (in millions)

 

 

 

 

Net Adjusted EBITDA (1)

 

$370

-

$410

Distributable Cash Flow (1)

 

$280

-

$310

Net Debt to TTM EBITDA

 

3.9x

-

4.3x

Distribution Coverage Ratio (1)

 

4.0x

-

4.5x

 

 

 

 

 

2020 Organic Capital

 

$60

-

$80

Equity Investment Capital

 

$240

-

$260

(1)  

Adjusted EBITDA, DCF, and Distribution Coverage Ratio are not financial measures calculated in accordance with Generally Accepted Accounting Principles (“GAAP”). For definitions of these non-GAAP measures, see “Non-GAAP Financial Measures” below.

About Noble Midstream

Noble Midstream is a growth-oriented master limited partnership formed by Noble Energy, Inc. to own, operate, develop and acquire domestic midstream infrastructure assets. Noble Midstream currently provides crude oil, natural gas, and water-related midstream services in the DJ Basin in Colorado and the Delaware Basin in Texas. For more information, please visit www.nblmidstream.com.

Forward Looking Statements

This news release contains forward-looking statements within the meaning of the federal securities laws. Forward looking statements are predictive in nature, depend upon or refer to future events or conditions or include the words “estimate,” “believe,” “budget,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,” “will,” “would,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target,” “on schedule,” “strategy” and other similar expressions that are predictions of or indicate future events and trends and that do not relate to historical matters. Our forward-looking statements may include statements about our business strategy, our industry, our future profitability, our expected capital expenditures and the impact of such expenditures on our performance, the costs of being a publicly traded partnership and our capital programs. In addition, our forward-looking statements address the various risks and uncertainties associated with the extraordinary market environment and impacts resulting from the COVID-19 pandemic and the actions of foreign oil producers (most notably Saudi Arabia and Russia) to increase crude oil production and the expected impact on our businesses, operations, earnings and results.

Forward-looking statements are not guarantees of future performance and are based on certain assumptions and bases, and subject to certain risks, uncertainties and other factors, many of which are beyond our control and difficult to predict, and not all of which can be disclosed in advance. We believe that we have chosen these assumptions or bases in good faith and that they are reasonable. You are cautioned not to place undue reliance on any forward-looking statements. You should also understand that it is not possible to predict or identify all such factors and should not consider the following list to be a complete statement of all potential risks and uncertainties.

Non-GAAP Financial Measures

This news release also contains certain non-GAAP measures of financial performance that management believes are good tools for internal use and the investment community in evaluating Noble Midstream’s overall financial performance. Please see the attached schedules for reconciliations of the non-GAAP financial measures used in this news release to the most directly comparable GAAP financial measures.

Schedule 1

Noble Midstream Partners LP

Revenue and Throughput Volume Statistics

(unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2020

 

2019

 

2020

 

2019

DJ Basin

 

 

 

 

 

 

 

Crude Oil Sales Volumes (Bbl/d)

13,025

 

 

9,750

 

 

16,346

 

 

8,401

 

Crude Oil Gathering Volumes (Bbl/d)

176,184

 

 

174,485

 

 

179,645

 

 

178,328

 

Natural Gas Gathering Volumes (MMBtu/d)

468,971

 

 

458,961

 

 

484,088

 

 

438,695

 

Natural Gas Processing Volumes (MMBtu/d)

42,566

 

 

51,167

 

 

42,617

 

 

51,755

 

Produced Water Gathering Volumes (Bbl/d)

40,819

 

 

41,830

 

 

41,457

 

 

39,948

 

Fresh Water Delivery Volumes (Bbl/d)

30,335

 

 

179,289

 

 

128,636

 

 

199,390

 

 

 

 

 

 

 

 

 

Delaware Basin

 

 

 

 

 

 

 

Crude Oil Gathering Volumes (Bbl/d)

60,980

 

 

45,501

 

 

59,768

 

 

43,840

 

Natural Gas Gathering Volumes (MMBtu/d)

174,845

 

 

137,498

 

 

178,564

 

 

119,124

 

Produced Water Gathering Volumes (Bbl/d)

147,994

 

 

137,584

 

 

155,086

 

 

130,818

 

 

 

 

 

 

 

 

 

Total Gathering Systems

 

 

 

 

 

 

 

Crude Oil Sales Volumes (Bbl/d)

13,025

 

 

9,750

 

 

16,346

 

 

8,401

 

Crude Oil Gathering Volumes (Bbl/d)

237,164

 

 

219,986

 

 

239,413

 

 

222,168

 

Natural Gas Gathering Volumes (MMBtu/d)

643,816

 

 

596,459

 

 

662,652

 

 

557,819

 

Barrels of Oil Equivalent (Boe/d) (1)

323,816

 

 

300,594

 

 

329,654

 

 

298,190

 

Natural Gas Processing Volumes (MMBtu/d)

42,566

 

 

51,167

 

 

42,617

 

 

51,755

 

Produced Water Gathering Volumes (Bbl/d)

188,813

 

 

179,414

 

 

196,543

 

 

170,766

 

 

 

 

 

 

 

 

 

Total Fresh Water Delivery

 

 

 

 

 

 

 

Fresh Water Delivery Volumes (Bbl/d)

30,335

 

 

179,289

 

 

128,636

 

 

199,390

 

(1)

 

Includes crude oil sales volumes that are transported on our gathering systems and sold to third-party customers.

Schedule 2

Noble Midstream Partners LP

Consolidated Statement of Operations

(in thousands, except per unit amounts, unaudited

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2020

 

2019

 

2020

 

2019

Revenues

 

 

 

 

 

 

 

Gathering and Processing — Affiliate

$

82,671

 

 

$

78,136

 

 

$

171,969

 

 

$

153,516

 

Gathering and Processing — Third Party

20,002

 

 

17,863

 

 

41,970

 

 

37,095

 

Fresh Water Delivery — Affiliate

10,300

 

 

18,367

 

 

33,899

 

 

45,954

 

Fresh Water Delivery — Third Party

1,811

 

 

2,454

 

 

5,985

 

 

6,263

 

Crude Oil Sales — Third Party

29,214

 

 

51,782

 

 

111,577

 

 

84,652

 

Other — Affiliate

768

 

 

766

 

 

1,655

 

 

1,602

 

Other — Third Party

1,184

 

 

1,292

 

 

2,940

 

 

2,280

 

Total Revenues

145,950

 

 

170,660

 

 

369,995

 

 

331,362

 

Costs and Expenses

 

 

 

 

 

 

 

Cost of Crude Oil Sales

29,104

 

 

48,079

 

 

108,963

 

 

78,977

 

Direct Operating

20,039

 

 

32,866

 

 

46,889

 

 

63,289

 

Depreciation and Amortization

26,354

 

 

23,980

 

 

52,285

 

 

47,013

 

General and Administrative

6,446

 

 

5,171

 

 

11,932

 

 

9,532

 

Goodwill Impairment

 

 

 

 

109,734

 

 

 

Other Operating Expense

2,576

 

 

 

 

3,862

 

 

 

Total Operating Expenses

84,519

 

 

110,096

 

 

333,665

 

 

198,811

 

Operating Income

61,431

 

 

60,564

 

 

36,330

 

 

132,551

 

Other Expense (Income)

 

 

 

 

 

 

 

Interest Expense, Net of Amount Capitalized

6,633

 

 

2,322

 

 

13,490

 

 

7,550

 

Investment Loss (Income)

2,730

 

 

1,748

 

 

8,139

 

 

(593

)

Other Non-Operating Expense

1,336

 

 

 

 

1,336

 

 

 

Total Other Expense (Income)

10,699

 

 

4,070

 

 

22,965

 

 

6,957

 

Income Before Income Taxes

50,732

 

 

56,494

 

 

13,365

 

 

125,594

 

Income Tax (Benefit) Expense

(128

)

 

731

 

 

21

 

 

2,040

 

Net Income

50,860

 

 

55,763

 

 

13,344

 

 

123,554

 

Less: Net Income Prior to the Drop-Down and Simplification Transaction

 

 

2,565

 

 

 

 

7,101

 

Net Income Subsequent to the Drop-Down and Simplification Transaction

50,860

 

 

53,198

 

 

13,344

 

 

116,453

 

Less: Net Income (Loss) Attributable to Noncontrolling Interests

2,624

 

 

16,789

 

 

(44,995

)

 

36,485

 

Net Income Attributable to Noble Midstream Partners LP

48,236

 

 

36,409

 

 

58,339

 

 

79,968

 

Less: Net Income Attributable to Incentive Distribution Rights

 

 

4,640

 

 

 

 

8,147

 

Net Income Attributable to Limited Partners

$

48,236

 

 

$

31,769

 

 

$

58,339

 

 

$

71,821

 

 

 

 

 

 

 

 

 

Net Income Attributable to Limited Partners Per Limited Partner Unit — Basic and Diluted

 

 

 

 

 

 

 

Common Units

$

0.53

 

 

$

0.79

 

 

$

0.65

 

 

$

1.77

 

Subordinated Units

$

 

 

$

0.84

 

 

$

 

 

$

1.91

 

 

 

 

 

 

 

 

 

Weighted Average Limited Partner Units OutstandingBasic

 

 

 

 

 

 

 

Common Units

90,163

 

 

32,090

 

 

90,158

 

 

27,916

 

Subordinated Units

 

 

7,514

 

 

 

 

11,685

 

 

 

 

 

 

 

 

 

Weighted Average Limited Partner Units OutstandingDiluted

 

 

 

 

 

 

 

Common Units

90,164

 

 

32,121

 

 

90,163

 

 

27,944

 

Subordinated Units

 

 

7,514

 

 

 

 

11,685

 

Schedule 3

Noble Midstream Partners LP

Consolidated Balance Sheet

(in thousands, unaudited)

 

 

June 30, 2020

 

December 31, 2019

ASSETS

 

 

 

Current Assets

 

 

 

Cash and Cash Equivalents

$

12,729

 

 

$

12,676

 

Accounts Receivable — Affiliate

37,298

 

 

42,428

 

Accounts Receivable — Third Party

24,751

 

 

44,093

 

Other Current Assets

7,196

 

 

8,730

 

Total Current Assets

81,974

 

 

107,927

 

Property, Plant and Equipment

 

 

 

Total Property, Plant and Equipment, Gross

2,056,882

 

 

2,006,995

 

Less: Accumulated Depreciation and Amortization

(279,115

)

 

(244,038

)

Total Property, Plant and Equipment, Net

1,777,767

 

 

1,762,957

 

Investments

860,817

 

 

660,778

 

Intangible Assets, Net

261,794

 

 

277,900

 

Goodwill

 

 

109,734

 

Other Noncurrent Assets

25,995

 

 

6,786

 

Total Assets

$

3,008,347

 

 

$

2,926,082

 

LIABILITIES, MEZZANINE EQUITY AND EQUITY

 

 

 

Current Liabilities

 

 

 

Accounts Payable — Affiliate

$

6,557

 

 

$

8,155

 

Accounts Payable — Trade

46,138

 

 

107,705

 

Other Current Liabilities

11,096

 

 

11,680

 

Total Current Liabilities

63,791

 

 

127,540

 

Long-Term Liabilities

 

 

 

Long-Term Debt

1,635,919

 

 

1,495,679

 

Asset Retirement Obligations

40,762

 

 

37,842

 

Other Long-Term Liabilities

3,849

 

 

4,160

 

Total Liabilities

1,744,321

 

 

1,665,221

 

Mezzanine Equity

 

 

 

Redeemable Noncontrolling Interest, Net

112,646

 

 

106,005

 

Equity

 

 

 

Common Units (90,164 and 90,136 units outstanding, respectively)

787,584

 

 

813,999

 

Noncontrolling Interests

363,796

 

 

340,857

 

Total Equity

1,151,380

 

 

1,154,856

 

Total Liabilities, Mezzanine Equity and Equity

$

3,008,347

 

 

$

2,926,082

 

Schedule 4 Noble Midstream Partners LP Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures

Non-GAAP Financial Measures

This news release, the financial tables and other supplemental information include Adjusted EBITDA, Distributable Cash Flow, and Distribution Coverage Ratio, all of which are non-GAAP measures which may be used periodically by management when discussing our financial results with investors and analysts.

We define Adjusted EBITDA as net income before income taxes, net interest expense, depreciation and amortization and certain other items that we do not view as indicative of our ongoing performance. Additionally, Adjusted EBITDA reflects the adjusted earnings impact of our equity method investments by adjusting our equity earnings or losses from our equity method investments to reflect our proportionate share of the EBITDA of such equity method investments.

Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:

  • our operating performance as compared to those of other companies in the midstream energy industry, without regard to financing methods, historical cost basis or capital structure;
  • the ability of our assets to generate sufficient cash flow to make distributions to our partners;
  • our ability to incur and service debt and fund capital expenditures; and
  • the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.

We define distributable cash flow as Adjusted EBITDA plus distributions received from our equity method investments less our proportionate share of Adjusted EBITDA from such equity method investments, estimated maintenance capital expenditures and cash interest paid.

Distributable Cash Flow is used by management to evaluate our overall performance. Our partnership agreement requires us to distribute all available cash on a quarterly basis, and Distributable Cash Flow is one of the factors used by the board of directors of our general partner to help determine the amount of available cash that is available to our unitholders for a given period. We define Distribution Coverage Ratio as Distributable Cash Flow divided by total distributions declared. The Distribution Coverage Ratio is used by management to illustrate our ability to make our distributions each quarter.

We believe that the presentation of Adjusted EBITDA, Distributable Cash Flow, and Distribution Coverage Ratio provide information useful to investors in assessing our financial condition and results of operations. The GAAP measure most directly comparable to Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio is net income. Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio should not be considered alternatives to net income or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio exclude some, but not all, items that affect net income, and these measures may vary from those of other companies. As a result, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio as presented herein may not be comparable to similarly titled measures of other companies.

In addition to Net Income, the GAAP measure most directly comparable to Adjusted EBITDA and Distributable Cash Flow is net cash provided by operating activities. Adjusted EBITDA and Distributable Cash Flow should not be considered alternatives to net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Due to the forward-looking nature of net cash provided by operating activities, management cannot reliably predict certain of the necessary components of the most directly comparable forward-looking GAAP measures, such as future impairments and future changes in working capital. Accordingly, Noble Midstream is unable to present a quantitative reconciliation of the aforementioned forward-looking non-GAAP financial measures to net cash provided by operating activities. Amounts excluded from these non-GAAP measures in future periods could be significant.

Schedule 4 (Continued)

Noble Midstream Partners LP

Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures

 

Reconciliation of Net Income (GAAP) to Adjusted EBITDA and Distributable Cash Flow (Non-GAAP)

(in thousands, unaudited)

 

 

Three Months Ended June 30,

 

2020

 

2019

Reconciliation from Net Income (GAAP)

 

 

 

Net Income (GAAP)

$

50,860

 

$

55,763

Add:

 

 

 

Depreciation and Amortization

26,354

 

23,980

Interest Expense, Net of Amount Capitalized

6,633

 

2,322

Proportionate Share of Equity Method Investment EBITDA Adjustments

14,537

 

4,570

Other

4,333

 

1,209

Adjusted EBITDA (Non-GAAP)

102,717

 

87,844

Less:

 

 

 

Adjusted EBITDA Prior to Drop-Down and Simplification Transaction

 

6,897

Adjusted EBITDA Subsequent to Drop-Down and Simplification Transaction

102,717

 

80,947

Less:

 

 

 

Adjusted EBITDA Attributable to Noncontrolling Interests

7,965

 

25,326

Adjusted EBITDA Attributable to Noble Midstream Partners LP (Non-GAAP)

94,752

 

55,621

Add:

 

 

 

Distributions from Equity Method Investments Attributable to Noble Midstream Partners LP

7,276

 

285

Less:

 

 

 

Proportionate Share of Equity Method Investment EBITDA Attributable to Noble Midstream Partners LP

7,867

 

1,459

Cash Interest Paid

7,092

 

7,991

Maintenance Capital Expenditures

7,388

 

5,815

Distributable Cash Flow of Noble Midstream Partners LP (Non-GAAP)

$

79,681

 

$

40,641

Distributions (Declared)

$

16,906

 

$

30,057

Distribution Coverage Ratio (Declared)

4.7x

 

1.4x

Reconciliation of Net Cash Provided by Operating Activities (GAAP) to Adjusted EBITDA

and Distributable Cash Flow (Non-GAAP)

(in thousands, unaudited)

 

Three Months Ended June 30,

 

2020

 

2019

Reconciliation from Net Cash Provided by Operating Activities (GAAP)

 

 

 

Net Cash Provided by Operating Activities (GAAP)

$

101,068

 

 

$

93,624

 

Add:

 

 

 

Interest Expense, Net of Amount Capitalized

6,633

 

 

2,322

 

Changes in Operating Assets and Liabilities

(5,742

)

 

(8,960

)

Equity Method Investment EBITDA Adjustments

635

 

 

1,174

 

Other

123

 

 

(316

)

Adjusted EBITDA (Non-GAAP)

102,717

 

 

87,844

 

Less:

 

 

 

Adjusted EBITDA Prior to Drop-Down and Simplification Transaction

 

 

6,897

 

Adjusted EBITDA Subsequent to Drop-Down and Simplification Transaction

102,717

 

 

80,947

 

Less:

 

 

 

Adjusted EBITDA Attributable to Noncontrolling Interests

7,965

 

 

25,326

 

Adjusted EBITDA Attributable to Noble Midstream Partners LP (Non-GAAP)

94,752

 

 

55,621

 

Add:

 

 

 

Distributions from Equity Method Investments Attributable to Noble Midstream Partners LP

7,276

 

 

285

 

Less:

 

 

 

Proportionate Share of Equity Method Investment EBITDA Attributable to Noble Midstream Partners LP

7,867

 

 

1,459

 

Cash Interest Paid

7,092

 

 

7,991

 

Maintenance Capital Expenditures

7,388

 

 

5,815

 

Distributable Cash Flow of Noble Midstream Partners LP (Non-GAAP)

$

79,681

 

 

$

40,641

 

Distributions (Declared)

$

16,906

 

 

$

30,057

 

Distribution Coverage Ratio (Declared)

 

4.7x

 

 

 

1.4x

 

Schedule 4 (Continued)

Noble Midstream Partners LP

Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures

 

Reconciliation of 2020 GAAP Guidance to 2020 Non-GAAP Guidance

(in millions, unaudited)

 

2020 Guidance

 

Full Year

Reconciliation from Net Income (GAAP) to Distributable Cash Flow (Non-GAAP)

 

Net Income (GAAP)

$

125

Add:

 

Depreciation and Amortization

105

Interest Expense, Net of Amount Capitalized

30

Proportionate Share of Equity Method Investment EBITDA Adjustments

50

Goodwill Impairment

110

Other

3

Adjusted EBITDA (Non-GAAP)

423

Adjusted EBITDA Attributable to Noncontrolling Interests

33

Adjusted EBITDA Attributable to Noble Midstream Partners LP

390

Plus:

 

Distributions from Equity Method Investments

25

Less:

 

Proportionate Share of Equity Method Investment Adjusted EBITDA

40

Maintenance Capital Expenditures and Cash Interest Paid

75

Distributable Cash Flow of Noble Midstream Partners LP

$

300

Distribution Coverage Ratio

4.0x - 4.5x

 

Park Carrere Investor Relations (281) 872-3208 park.carrere@nblmidstream.com

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