DALLAS, Aug. 6, 2019 /PRNewswire/ -- EnLink Midstream,
LLC (NYSE: ENLC) (EnLink) reported financial results for the second
quarter of 2019 and updated financial guidance for full-year 2019.
EnLink also announced the signing of a precedent agreement for
natural gas transportation with Venture Global Calcasieu Pass, LLC
(Venture Global) related to Venture Global's planned Calcasieu Pass
export facility in Louisiana.
Highlights
- Reported a net loss attributable to EnLink of $16.1 million, compared to net income of
$28.0 million for the second quarter
of 2018. Reported net cash provided by operating activities of
$257.5 million for the second quarter
of 2019.
- Delivered adjusted EBITDA of $259.2
million, distributable cash flow (DCF) of $167.6 million, and distribution coverage of
1.20x. Second quarter results were impacted by the write off of
EnLink's secured term loan receivable due to the bankruptcy filing
of a customer, White Star Petroleum Holdings, LLC (White Star),
that resulted in the recognition of a $40.5
million after-tax loss in EnLink's consolidated statement of
operations.
- Announced the signing of a precedent agreement for natural gas
transportation services related to Venture Global's Calcasieu Pass
liquefied natural gas (LNG) export facility. EnLink expects to
spend approximately $20 million on
this project during 2020, at an attractive adjusted EBITDA multiple
of 1 to 2 times. Venture Global has secured equity funding and is
in the late stages of completing debt financing for the Calcasieu
Pass facility, and, should Venture Global reach a positive final
investment decision, EnLink's project is expected to be operational
during 2021.
- Placed into service the 200 million cubic feet per day (MMcf/d)
Thunderbird natural gas processing plant in Oklahoma, resulting in a total of 1.2 billion
cubic feet per day (Bcf/d) of total gas processing capacity in
Central Oklahoma. The new
processing plant averaged a utilization rate of approximately 50%
for the month of July.
- Updated financial guidance due to moderating producer activity
in Oklahoma and a shift in timing
of producer activity in the Permian Basin:
-
- Updated full-year 2019 net loss guidance to a range of
$24 million to $31 million, revised down from the previous
guidance range of net income between $18
million and $28 million. The
updated range includes a $40.5
million non-cash loss, net of taxes, related to the complete
write off of the White Star secured term loan receivable recognized
during the second quarter of 2019, and a $186.5 million goodwill impairment recognized
during the first quarter of 2019.
- Updated full-year 2019 adjusted EBITDA guidance to a range of
$1.07 billion to $1.10 billion.
- Refined full-year estimated growth capital expenditures, net to
EnLink, guidance range to $630
million to $710 million, from
the original range of $565 million to
$725 million. Growth capital
expenditures remain within the original guidance range even with
new project announcements in the Permian during the first quarter
of 2019 due to successful sequencing of capital with well
completions in Oklahoma.
- Updated target distribution growth rate to approximately 5% for
full-year 2019 over 2018 and, going forward, to a range of up to 5%
growth, from the previous guidance range of 5% to 10%.
- Declared a quarterly cash distribution of $0.283 per unit on all outstanding common units
for the second quarter of 2019, which represents approximately 6%
growth over the declared distribution for the second quarter of
2018.
Adjusted EBITDA and distributable cash flow used in this press
release are non-GAAP measures and are explained in greater detail
under "Non-GAAP Financial Information and Certain Definitions"
below.
"EnLink's second quarter performance demonstrates the financial
resilience of our business, the strength of our differentiated
platform and the flexibility and diversity of our operations in the
midst of an evolving operating environment," said Barry E. Davis, Executive Chairman. "During the
quarter, outperformance in Louisiana and North
Texas enabled us to deliver solid results despite moderated
producer activity in Oklahoma and
certain timing delays in the Permian.
"Looking ahead at the remainder of the year, we see stable
growth, but the pace of that growth has moderated, particularly in
Oklahoma. We are in a strong
competitive position and are taking decisive actions to unlock the
value of our business, optimize our performance, and execute on
attractive growth opportunities. Our recent precedent agreement
with Venture Global, which is expected to generate a highly
attractive adjusted EBITDA multiple of between 1 to 2 times, is an
excellent example of our ability to identify and execute on
opportunities that strengthen our platform. Our financial strength,
further enhanced by our partnership with GIP, will enable us to
capitalize on these types of opportunities going forward."
Second Quarter 2019 Financial Results
- Reported a net loss of $16.1
million, including a $40.5
million loss, net of taxes, related to the complete
write-off of a secured term loan receivable from White Star. In
May 2019, White Star defaulted on its
approximately $10 million installment
payment under the secured term loan receivable and filed for
reorganization under Chapter 11 of the U.S. Bankruptcy Code.
- Achieved adjusted EBITDA net to EnLink of $259.2 million. If the previously expected White
Star payment of approximately $10
million had been received, adjusted EBITDA net to EnLink
would have been approximately $269.2
million.
- Reported net cash provided by operating activities of
$257.5 million.
- Achieved DCF of $167.6 million.
If the previously expected White Star payment of approximately
$10 million had been received, DCF
would have been approximately $177.6
million.
- Distribution coverage was 1.20x for the second quarter of 2019.
If the previously expected White Star payment of approximately
$10 million had been received,
distribution coverage would have been approximately 1.27x.
- Debt-to-adjusted EBITDA, as calculated under the terms of
EnLink's credit facility, was 4.0x.
- Growth capital expenditures, net to EnLink, were approximately
$141.9 million for the second quarter
and $361.4 million for the first half
of 2019.
- As of August 1, EnLink had
487,245,808 common units outstanding.
Precedent Long-Term Natural Gas Transport Agreement
Signed with Venture Global
- EnLink entered into a new precedent agreement for natural gas
transportation with Venture Global, a provider of LNG, with export
facilities under development along the U.S. Gulf Coast.
- Under the terms of the 20-year fixed-fee agreement, EnLink will
transport natural gas feedstock to Venture Global's Calcasieu Pass
facility in western Louisiana.
- Growth capital expenditures, net to EnLink, associated with the
agreement are expected to be approximately $20 million. The majority of the growth capital
associated with this project will be spent during 2020, and the
project is expected to generate an attractive adjusted EBITDA
multiple of between 1 to 2 times.
- Venture Global has secured equity funding and is in the late
stages of completing debt financing for the Calcasieu Pass
facility, and, should Venture Global reach a positive final
investment decision, EnLink's project is expected to be operational
during 2021.
Full-Year 2019 Financial Guidance Update
- EnLink updated its financial 2019 guidance ranges due to
moderating producer activity in Oklahoma and a shift in timing in producer
activity in the Permian Basin.
- A net loss range of $24 million
to $31 million is projected for
full-year 2019, revised down from the previous guidance range of
net income between $18 million and
$28 million. The updated range
includes a $40.5 million non-cash
loss, net of taxes, related to the complete write-off of the White
Star secured term loan receivable recognized this quarter and a
$186.5 million goodwill impairment
recognized during the first quarter of 2019.
- Adjusted EBITDA is projected to range from $1.07 billion to $1.10
billion for full-year 2019.
- DCF is projected to range from $715
million to $735 million for
full-year 2019, relative to the previous guidance range of
$730 million to $800 million.
- Growth capital expenditures net to EnLink for full-year 2019
are projected to range from $630
million to $710 million,
refined from the prior range of $565
million to $725 million.
- Annual, as declared, distribution growth is being refined to
approximately 5% for full-year 2019 over 2018, which is within the
previous guidance range of 5% to 10% growth for 2019. On a
go-forward basis, annual distribution growth is expected to be in
the range of up to 5%.
Second Quarter 2019 Segment Updates
Oklahoma:
- Segment profit for the second quarter of 2019 was approximately
3% higher as compared to the first quarter of 2019 and 7% higher as
compared to the second quarter of 2018 (excluding the non-cash
$45.5 million contract restructuring
benefit related to White Star reported during the second quarter of
2018).
- The Oklahoma segment also
achieved natural gas volume growth quarter over quarter and year
over year. Natural gas gathering and transportation volumes for the
second quarter of 2019 were approximately 6% higher as compared to
the first quarter of 2019 and approximately 7% higher as compared
to the second quarter of 2018. Average natural gas processing
volumes for the second quarter of 2019 increased approximately 5%
and 8% when compared to the first quarter of 2019 and the second
quarter of 2018, respectively.
- Average crude gathering volumes in the second quarter of 2019
increased significantly quarter over quarter and year over year.
Crude gathering volumes for the second quarter of 2019 were
approximately 84% higher as compared to the first quarter of 2019
and approximately 300% higher as compared to the second quarter of
2018 due to the continued ramp up of crude gathering services in
the STACK play in Oklahoma.
- EnLink's previously announced 200 MMcf/d Thunderbird processing
plant became operational at the end of the second quarter of 2019.
With the completion of the Thunderbird natural gas processing
plant, EnLink's total gas processing capacity in Central Oklahoma exceeds 1.2 Bcf/d. Volumes
processed by Thunderbird averaged around 100 MMcf/d during
July.
- Oklahoma segment profit is
forecasted to grow by approximately 5% to 10% in the second half of
2019 as compared to the first half of 2019 because of expected
increased volume throughput.
Permian Basin:
- The Permian Basin segment reported growth in segment profit of
approximately 7% for the second quarter of 2019 as compared to the
second quarter of 2018. Permian segment profit declined 13% for the
second quarter of 2019 as compared to the first quarter of 2019,
due primarily to lower commodity prices during the period and lower
gross operating margin contributions from EnLink's Permian crude
business due to the impact of crude price fluctuations. EnLink
hedges exposure to crude price fluctuations, and will realize the
benefit of some of the related hedges for the Permian crude
business in the third quarter of 2019.
- Average natural gas volume activity realized strong growth for
the second quarter of 2019, as compared to the second quarter of
2018, with average gathering and transportation volumes increasing
by approximately 32%, while processing volumes increased by
approximately 37% over the same period. Average natural gas
gathering and transportation volumes for the second quarter of 2019
experienced growth of 3% as compared to the first quarter of 2019,
and average processing volumes experienced 2% growth as compared to
the first quarter of 2019.
- Average crude gathering volumes achieved growth for the second
quarter of 2019, increasing approximately 20% as compared to the
second quarter of 2018 and reflecting a slight decline of 1% over
the first quarter of 2019 driven primarily by lower trucking
volumes.
- Permian Basin segment profit is forecasted to grow by
approximately 15% to 25% in the second half of 2019 as compared to
the first half because of expected increased volume
throughput.
Louisiana:
- Segment profit contribution from the Louisiana segment for the second quarter of
2019 was unchanged as compared to the second quarter of 2018 and
declined 15% as compared to the first quarter of 2019. The second
quarter of the year tends to be the weakest quarter for the
Louisiana segment, mainly driven
by normal seasonal activity related to EnLink's Gulf Coast NGL
operations. The Louisiana natural
gas system was also impacted by normal course contract roll-offs,
as expected, and re-contracting in a lower natural gas pricing
environment. EnLink's natural gas system has strategic Gulf Coast
access to growing demand markets and is expected to generate
growing cash flows over the long-term.
- The Cajun-Sibon III NGL pipeline expansion became operational
during the second quarter of 2019, increasing liquids
transportation capabilities from the Mont Belvieu NGL hub region to
EnLink's fractionation facilities on the Louisiana Gulf Coast.
Cajun-Sibon III expands EnLink's NGL transport capacity to
approximately 185,000 barrels per day. Growth capital expenditures
for Cajun-Sibon III were approximately $50
million, which are expected to generate an average annual
adjusted EBITDA multiple of 2 to 3 times. EnLink experienced record
NGL volumes of 178,000 barrels per day during the second quarter of
2019, and the Cajun-Sibon III expansion being in full-service will
be a key growth driver during the second half of 2019.
- Average natural gas gathering and transportation volumes
activity on EnLink's Louisiana
system for the second quarter of 2019 decreased by approximately 7%
and 8%, as compared to the first quarter of 2019 and the second
quarter of 2018, respectively.
- Average natural gas processing volumes decreased by
approximately 28% and 15% as compared to the first quarter of 2019
and the second quarter of 2018, respectively, due to a reduction in
opportunity processing from a generally weaker commodity price
environment. This tends to be a low-margin activity for EnLink,
thus the impact on segment profit for the second quarter of 2019
was insignificant.
- Average crude volumes handled in EnLink's Ohio River Valley
operations increased during the second quarter of 2019, as compared
to the first quarter of 2019 and the second quarter of 2018, by
approximately 33% and 25%, respectively, due to improved producer
activity in the region.
- Louisiana segment profit is
forecasted to grow by approximately 5% to 10% in the second half of
2019, as compared to the first half because of expected increased
volume throughput.
North Texas:
- In line with company expectations, segment profit declined by
approximately 21% for the second quarter of 2019 as compared to the
second quarter of 2018 because of the expiration of minimum volume
commitments with Devon Energy Corp. on December 31, 2018. Minimum volume commitment
deficiency payments accounted for approximately 22% of segment
profit for the second quarter of 2018. Segment profit for the
second quarter of 2019 reduced modestly, by approximately 3% as
compared to the first quarter of 2019.
- Average natural gas volume decline for the second quarter of
2019, as compared to the second quarter of 2018, was between 2% and
6% for gathering, transmission, and processing volumes.
- North Texas segment profit is
forecasted to decline by approximately 5% to 10% in the second half
of 2019, as compared to the first half as a result of the expected
decline in volume throughput due to limited new drilling
activity.
Second Quarter 2019 Earnings Call Details
EnLink will hold a conference call to discuss second quarter 2019
results on Wednesday, August 7, at 8
a.m. Central Time (9 a.m. Eastern Time). The dial-in
number for the call is 1-855-656-0924. Callers outside the
United States should dial 1-412-542-4172. Participants can
also preregister for the conference call by
navigating to http://dpregister.com/10132191 where they
will receive dial-in information upon completion of
preregistration. Interested parties can access an archived replay
of the call on the Investors' page of EnLink's website
at www.EnLink.com.
About the EnLink Midstream Companies
EnLink Midstream reliably operates a differentiated midstream
platform that is built for long-term, sustainable value creation.
EnLink's best-in-class services span the midstream value chain,
providing natural gas, crude oil, condensate, and NGL capabilities.
Our purposely built, integrated asset platforms are in premier
production basins and core demand centers, including the Permian
Basin, Oklahoma, North Texas, and the Gulf Coast. EnLink's
strong financial foundation and commitment to execution excellence
drive competitive returns and value for our employees, customers,
and investors. Headquartered in Dallas, EnLink is publicly traded through
EnLink Midstream, LLC (NYSE: ENLC). Visit www.EnLink.com to learn
how EnLink connects energy to life.
Non-GAAP Financial Information and Other Definitions
This press release contains non-generally accepted accounting
principles financial measures that we refer to as adjusted EBITDA,
and distributable cash flow available to common unitholders
(distributable cash flow). We define adjusted EBITDA as net income
(loss) plus interest expense, provision (benefit) for income taxes,
depreciation and amortization expense, impairments, unit-based
compensation, (gain) loss on non-cash derivatives, (gain) loss on
disposition of assets, loss on secured term loan receivable,
successful transaction costs (if any), accretion expense associated
with asset retirement obligations, non-cash rent, and distributions
from unconsolidated affiliate investments less payments under
onerous performance obligations, non-controlling interest, income
(loss) from unconsolidated affiliate investments and non-cash
revenue from contract restructuring. We define distributable cash
flow as adjusted EBITDA (defined above, net to ENLC), less interest
expense, interest rate swaps, current income taxes and other
non-distributable cash flows, accrued cash distributions on EnLink
Midstream Partners, LP's (ENLK) Series B Cumulative Convertible
Preferred Units (the "ENLK Series B Preferred Units") and ENLK's
Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual
Preferred Units (the "ENLK Series C Preferred Units") paid or
expected to be paid, and maintenance capital expenditures,
excluding maintenance capital expenditures that were contributed by
other entities and relate to the non-controlling interest share of
our consolidated entities.
Distribution coverage is calculated by dividing distributable
cash flow by distributions declared to common unitholders.
Growth capital expenditures generally include capital
expenditures made for acquisitions or capital improvements that we
expect will increase our asset base, operating income or operating
capacity over the long-term. Maintenance capital expenditures
generally include capital expenditures made to replace partially or
fully depreciated assets in order to maintain the existing
operating capacity of the assets and to extend their useful
lives.
EnLink believes these measures are useful to investors because
they may provide users of this financial information with
meaningful comparisons between current results and
previously-reported results and a meaningful measure of the
company's cash flow after it has satisfied the capital and related
requirements of its operations. In addition, adjusted EBITDA
achievement is a primary metric used in our short-term incentive
program for compensating employees.
Segment profit (loss) is defined as operating income (loss) plus
general and administrative expenses, depreciation and amortization,
(gain) loss on disposition of assets, impairments, and loss on
secured term loan receivable. Segment profit (loss) includes
non-cash compensation expenses reflected in operating expenses. See
"Item 8. Financial Statements and Supplementary Data - Note 15 -
Segment Information" in ENLC's Annual Report on Form 10-K for the
year ended December 31, 2018, and,
when available, "Item 1. Financial Statements - Note 14-Segment
Information" in ENLC's Quarterly Report on Form 10-Q for the three
and six months ended June 30, 2019,
for further information about segment profit (loss).
Adjusted EBITDA and distributable cash flow, as defined above,
are not measures of financial performance or liquidity under GAAP.
They should not be considered in isolation or as an indicator of
EnLink's performance. Furthermore, they should not be seen as a
substitute for metrics prepared in accordance with GAAP.
Reconciliations of these measures to their most directly comparable
GAAP measures are included in the following tables. See
ENLC's filings with the Securities and Exchange Commission for more
information.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the federal securities laws. Although these
statements reflect the current views, assumptions and expectations
of our management, the matters addressed herein involve certain
assumptions, risks and uncertainties that could cause actual
activities, performance, outcomes and results to differ materially
from those indicated herein. Therefore, you should not rely on any
of these forward-looking statements. All statements, other than
statements of historical fact, included in this press release
constitute forward-looking statements, including but not limited to
statements identified by the words "forecast," "may," "believe,"
"will," "should," "plan," "predict," "anticipate," "intend,"
"estimate," and "expect" and similar expressions. Such
forward-looking statements include, but are not limited to,
statements about guidance, projected or forecasted financial and
operating results, when additional capacity will be operational,
timing for completion of construction or expansion projects, timing
of third party projects and associated growth capital expenditures,
expected financial and operational results associated with certain
projects or growth capital expenditures, future operational results
of our customers, results in certain basins, future rig count
information, objectives, strategies, expectations, and intentions,
and other statements that are not historical facts. Factors that
could result in such differences or otherwise materially affect our
financial condition, results of operations, or cash flows include,
without limitation (a) potential conflicts of interest
of Global Infrastructure Partners ("GIP") with us and the potential
for GIP to favor GIP's own interests to the detriment of the
unitholders, (b) GIP's ability to compete with us and the fact that
it is not required to offer us the opportunity to acquire
additional assets or businesses, (c) a default under GIP's credit
facility could result in a change in control of us, could adversely
affect the price of our common units, and could result in a default
under our credit facility, (d) the dependence on Devon for a
substantial portion of the natural gas and crude that we gather,
process, and transport, (e) developments that materially and
adversely affect Devon or other customers, (f) adverse developments
in the midstream business that may reduce our ability to make
distributions, (g) competition for crude oil, condensate, natural
gas, and NGL supplies and any decrease in the availability of such
commodities, (h) decreases in the volumes that we gather, process,
fractionate, or transport, (i) construction risks in our major
development projects, (j) our ability to receive or renew required
permits and other approvals, (k) changes in the availability and
cost of capital, including as a result of a change in our credit
rating, (l) operating hazards, natural disasters, weather-related
issues or delays, casualty losses, and other matters beyond our
control, (m) impairments to goodwill, long-lived assets and equity
method investments, and (n) the effects of existing and future laws
and governmental regulations, including environmental and climate
change requirements and other uncertainties. These and other
applicable uncertainties, factors, and risks are described more
fully in EnLink Midstream Partners, LP's and EnLink Midstream,
LLC's filings with the Securities and Exchange Commission,
including EnLink Midstream Partners, LP's and EnLink Midstream,
LLC's Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q, and Current Reports on Form 8-K. Neither
EnLink Midstream Partners, LP nor EnLink Midstream, LLC assumes any
obligation to update any forward-looking statements.
The EnLink management team based the forecasted financial
information included herein on certain information and assumptions,
including, among others, the producer budgets / forecasts to which
EnLink has access as of the date of this press release and the
projects / opportunities expected to require growth capital
expenditures as of the date of this press release. The assumptions,
information, and estimates underlying the forecasted financial
information included in the guidance information in this press
release are inherently uncertain and, though considered reasonable
by the EnLink management team as of the date of its preparation,
are subject to a wide variety of significant business, economic,
and competitive risks and uncertainties that could cause actual
results to differ materially from those contained in the forecasted
financial information. Accordingly, there can be no assurance that
the forecasted results are indicative of EnLink's future
performance or that actual results will not differ materially from
those presented in the forecasted financial information. Inclusion
of the forecasted financial information in this press release
should not be regarded as a representation by any person that the
results contained in the forecasted financial information will be
achieved.
Investor Relations: Kate
Walsh, Vice President of Investor Relations, 214-721-9696,
kate.walsh@enlink.com
Media Relations: Jill
McMillan, Vice President of Public & Industry
Affairs, 214-721-9271, jill.mcmillan@enlink.com
EnLink Midstream,
LLC
|
Selected Financial
Data
|
(All amounts in
millions except per unit amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Total
revenues
|
$
|
1,710.0
|
|
|
$
|
1,764.7
|
|
|
$
|
3,489.2
|
|
|
$
|
3,526.4
|
|
Cost of
sales
|
1,300.1
|
|
|
1,325.6
|
|
|
2,663.5
|
|
|
2,707.1
|
|
Gross operating
margin
|
409.9
|
|
|
439.1
|
|
|
825.7
|
|
|
819.3
|
|
Operating costs and
expenses, excluding cost of sales:
|
|
|
|
|
|
|
|
Operating
expenses
|
117.9
|
|
|
113.4
|
|
|
232.4
|
|
|
222.6
|
|
General and
administrative
|
32.2
|
|
|
30.4
|
|
|
83.6
|
|
|
57.9
|
|
Loss on disposition
of assets
|
0.1
|
|
|
1.2
|
|
|
0.1
|
|
|
1.3
|
|
Depreciation and
amortization
|
153.7
|
|
|
145.3
|
|
|
305.8
|
|
|
283.4
|
|
Impairments
|
—
|
|
|
—
|
|
|
186.5
|
|
|
—
|
|
Loss on secured term
loan receivable
|
52.9
|
|
|
—
|
|
|
52.9
|
|
|
—
|
|
Total operating costs
and expenses, excluding cost of sales
|
356.8
|
|
|
290.3
|
|
|
861.3
|
|
|
565.2
|
|
Operating income
(loss)
|
53.1
|
|
|
148.8
|
|
|
(35.6)
|
|
|
254.1
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest expense, net
of interest income
|
(54.3)
|
|
|
(44.6)
|
|
|
(103.9)
|
|
|
(89.1)
|
|
Income from
unconsolidated affiliates
|
4.7
|
|
|
4.4
|
|
|
10.0
|
|
|
7.4
|
|
Other income
(expense)
|
0.2
|
|
|
(0.1)
|
|
|
0.2
|
|
|
0.2
|
|
Total other
expense
|
(49.4)
|
|
|
(40.3)
|
|
|
(93.7)
|
|
|
(81.5)
|
|
Income (loss) before
non-controlling interest and income taxes
|
3.7
|
|
|
108.5
|
|
|
(129.3)
|
|
|
172.6
|
|
Income tax benefit
(provision)
|
5.4
|
|
|
(6.3)
|
|
|
3.6
|
|
|
(13.3)
|
|
Net income
(loss)
|
9.1
|
|
|
102.2
|
|
|
(125.7)
|
|
|
159.3
|
|
Net income
attributable to non-controlling interest
|
25.2
|
|
|
74.2
|
|
|
66.7
|
|
|
118.9
|
|
Net income (loss)
attributable to ENLC
|
$
|
(16.1)
|
|
|
$
|
28.0
|
|
|
$
|
(192.4)
|
|
|
$
|
40.4
|
|
Net income (loss)
attributable to ENLC per unit:
|
|
|
|
|
|
|
|
Basic common
unit
|
$
|
(0.03)
|
|
|
$
|
0.15
|
|
|
$
|
(0.44)
|
|
|
$
|
0.22
|
|
Diluted common
unit
|
$
|
(0.03)
|
|
|
$
|
0.15
|
|
|
$
|
(0.44)
|
|
|
$
|
0.22
|
|
EnLink Midstream,
LLC
|
Reconciliation of
Net Income to Adjusted EBITDA
|
(All amounts in
millions except ratios and per unit amounts)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net income
(loss)
|
$
|
9.1
|
|
|
$
|
102.2
|
|
|
$
|
(125.7)
|
|
|
$
|
159.3
|
|
Interest expense, net
of interest income
|
54.3
|
|
|
44.6
|
|
|
103.9
|
|
|
89.1
|
|
Depreciation and
amortization
|
153.7
|
|
|
145.3
|
|
|
305.8
|
|
|
283.4
|
|
Impairments
|
—
|
|
|
—
|
|
|
186.5
|
|
|
—
|
|
Non-cash revenue from
contract restructuring (1)
|
—
|
|
|
(45.5)
|
|
|
—
|
|
|
(45.5)
|
|
Loss on secured term
loan receivable (1)
|
52.9
|
|
|
—
|
|
|
52.9
|
|
|
—
|
|
Income from
unconsolidated affiliates
|
(4.7)
|
|
|
(4.4)
|
|
|
(10.0)
|
|
|
(7.4)
|
|
Distributions from
unconsolidated affiliates
|
7.6
|
|
|
5.4
|
|
|
10.1
|
|
|
11.4
|
|
Loss on disposition
of assets
|
0.1
|
|
|
1.2
|
|
|
0.1
|
|
|
1.3
|
|
Unit-based
compensation
|
8.0
|
|
|
9.6
|
|
|
19.1
|
|
|
14.7
|
|
Income tax provision
(benefit)
|
(5.4)
|
|
|
6.3
|
|
|
(3.6)
|
|
|
13.3
|
|
(Gain) loss on
non-cash derivatives
|
(7.2)
|
|
|
10.5
|
|
|
(5.2)
|
|
|
14.0
|
|
Payments under
onerous performance obligation offset to other current and
long-term liabilities
|
(4.5)
|
|
|
(4.5)
|
|
|
(9.0)
|
|
|
(9.0)
|
|
Transaction costs
(2)
|
0.4
|
|
|
—
|
|
|
13.9
|
|
|
—
|
|
Other (3)
|
0.1
|
|
|
(0.2)
|
|
|
0.4
|
|
|
0.8
|
|
Adjusted EBITDA
before non-controlling interest
|
264.4
|
|
|
270.5
|
|
|
$
|
539.2
|
|
|
$
|
525.4
|
|
Non-controlling
interest share of adjusted EBITDA from joint ventures
(4)
|
(5.2)
|
|
|
(4.1)
|
|
|
(11.8)
|
|
|
(7.7)
|
|
Adjusted EBITDA, net
to ENLC (5)
|
$
|
259.2
|
|
|
$
|
266.4
|
|
|
$
|
527.4
|
|
|
$
|
517.7
|
|
|
|
|
|
|
(1)
|
In May 2018, we
restructured our natural gas gathering and processing contract with
White Star, and, as a result, recognized non-cash revenue
representing the discounted present value of a secured term loan
receivable granted to us by White Star. In late May 2019,
White Star, the counterparty to our $58.0 million second lien
secured term loan receivable, defaulted on its approximately $10
million installment payment under the term loan and filed for
reorganization under Chapter 11 of the U.S. Bankruptcy Code. We do
not believe that it is probable that White Star will be able to
repay the outstanding amounts owed to us under the second lien
secured term loan.
|
(2)
|
Represents
transaction costs primarily attributable to costs incurred related
to the acquisition of all outstanding, publicly-held ENLK common
units.
|
(3)
|
Includes accretion
expense associated with asset retirement obligations and non-cash
rent, which relates to lease incentives pro-rated over the lease
term.
|
(4)
|
Non-controlling
interest share of adjusted EBITDA from joint ventures includes NGP
Natural resources XI, L.P.'s ("NGP") 49.9% share of adjusted EBITDA
from the Delaware Basin JV, Marathon Petroleum Corporation's 50%
share of adjusted EBITDA from the Ascension JV, and other minor
non-controlling interests.
|
(5)
|
If the White Star
payment of approximately $10 million, as discussed in (1) above,
had been received in May of 2019, adjusted EBITDA would have been
approximately $269.2 million for the three months ended June 30,
2019, and approximately $537.4 million for the six months ended
June 30, 2019.
|
EnLink Midstream,
LLC
|
Reconciliation of
Net Cash Provided by Operating Activities to Adjusted
EBITDA
|
and Distributable
Cash Flow
|
(All amounts in
millions)
|
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2019
|
|
2019
|
Net cash provided by
operating activities
|
$
|
257.5
|
|
|
$
|
521.5
|
|
Interest expense
(1)
|
53.9
|
|
|
103.4
|
|
Current income tax
expense
|
0.3
|
|
|
1.3
|
|
Transaction costs
(2)
|
0.4
|
|
|
13.9
|
|
Other (3)
|
1.6
|
|
|
0.1
|
|
Changes in operating
assets and liabilities which (provided) used cash:
|
|
|
|
Accounts receivable,
accrued revenues, inventories, and other
|
(165.9)
|
|
|
(263.3)
|
|
Accounts payable,
accrued product purchases, and other accrued liabilities
(4)
|
116.6
|
|
|
162.3
|
|
Adjusted EBITDA
before non-controlling interest
|
264.4
|
|
|
539.2
|
|
Non-controlling
interest share of adjusted EBITDA from joint ventures
(5)
|
(5.2)
|
|
|
(11.8)
|
|
Adjusted EBITDA, net
to ENLC
|
259.2
|
|
|
527.4
|
|
Interest expense, net
of interest income
|
(54.3)
|
|
|
(103.9)
|
|
Current taxes and
other
|
(1.0)
|
|
|
(3.5)
|
|
Maintenance capital
expenditures, net to ENLC (6)
|
(13.2)
|
|
|
(21.7)
|
|
ENLK preferred unit
accrued cash distributions (7)
|
(23.1)
|
|
|
(45.8)
|
|
Distributable cash
flow (8)
|
$
|
167.6
|
|
|
$
|
352.5
|
|
|
|
|
|
Actual declared
distribution to common unitholders
|
$
|
139.2
|
|
|
$
|
276.6
|
|
Distribution
coverage
|
1.20x
|
|
|
1.27x
|
|
Distributions
declared per ENLC unit
|
$
|
0.283
|
|
|
$
|
0.562
|
|
|
|
|
|
|
(1)
|
Net of amortization
of debt issuance costs and discount and premium, which are included
in interest expense but not included in net cash provided by
operating activities, and non-cash interest income, which is netted
against interest expense but not included in adjusted
EBITDA.
|
(2)
|
Represents
transaction costs primarily attributable to costs incurred related
to the acquisition of all outstanding, publicly-held ENLK common
units.
|
(3)
|
Includes accruals for
settled commodity swap transactions and distributions received from
equity method investments to the extent those distributions exceed
earnings from the investment.
|
(4)
|
Net of payments under
onerous performance obligation offset to other current and
long-term liabilities.
|
(5)
|
Non-controlling
interest share of adjusted EBITDA from joint ventures includes
NGP's 49.9% s share of adjusted EBITDA from the Delaware Basin JV,
Marathon Petroleum Corporation's 50% share of adjusted EBITDA from
the Ascension JV, and other minor non-controlling
interests.
|
(6)
|
Excludes maintenance
capital expenditures that were contributed by other entities and
relate to the non-controlling interest share of our consolidated
entities.
|
(7)
|
Represents the cash
distributions earned by the ENLK Series B Preferred Units and ENLK
Series C Preferred Units of $17.1 million and $6.0 million,
respectively, for the three months ended June 30, 2019, and
cash distributions earned by the ENLK Series B Preferred Units and
ENLK Series C Preferred Units of $33.8 million and $12.0
million, respectively, for the six months ended June 30,
2019. Cash distributions to be paid to holders of the ENLK Series B
Preferred Units and ENLK Series C Preferred Units are not available
to common unitholders.
|
(8)
|
If the White Star
payment of approximately $10 million had been received in May of
2019, distributable cash flow would have been approximately $177.6
million for the three months ended June 30, 2019, and approximately
$362.5 million for the six months ended June 30, 2019.
|
Distributable cash flow is not presented for the three and six
months ended June 30, 2018 because distributable cash flow was
not used as a supplemental liquidity measure by ENLC during 2018.
ENLC began using distributable cash flow as a supplemental
liquidity measure in 2019 as a result of the simplification of our
corporate structure in the Merger.
EnLink Midstream,
LLC
|
Operating
Data
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Midstream
Volumes:
|
|
|
|
|
|
|
|
Permian
Segment
|
|
|
|
|
|
|
|
Gathering and
Transportation (MMBtu/d)
|
676,000
|
|
|
511,300
|
|
|
666,800
|
|
|
467,900
|
|
Processing
(MMBtu/d)
|
724,100
|
|
|
529,100
|
|
|
718,100
|
|
|
485,800
|
|
Crude Oil Handling
(Bbls/d)
|
145,100
|
|
|
119,700
|
|
|
146,200
|
|
|
113,800
|
|
North Texas
Segment
|
|
|
|
|
|
|
|
Gathering and
Transportation (MMBtu/d)
|
1,646,900
|
|
|
1,747,000
|
|
|
1,664,900
|
|
|
1,756,800
|
|
Processing
(MMBtu/d)
|
770,100
|
|
|
754,000
|
|
|
750,100
|
|
|
753,100
|
|
Oklahoma
Segment
|
|
|
|
|
|
|
|
Gathering and
Transportation (MMBtu/d)
|
1,314,900
|
|
|
1,235,500
|
|
|
1,279,800
|
|
|
1,142,200
|
|
Processing
(MMBtu/d)
|
1,298,800
|
|
|
1,200,700
|
|
|
1,265,400
|
|
|
1,135,400
|
|
Crude Oil Handling
(Bbls/d)
|
53,800
|
|
|
13,000
|
|
|
41,600
|
|
|
10,600
|
|
Louisiana
Segment
|
|
|
|
|
|
|
|
Gathering and
Transportation (MMBtu/d)
|
1,925,900
|
|
|
2,094,100
|
|
|
1,997,800
|
|
|
2,158,100
|
|
Processing
(MMBtu/d)
|
337,100
|
|
|
395,600
|
|
|
402,200
|
|
|
418,600
|
|
Crude Oil Handling
(Bbls/d)
|
20,000
|
|
|
15,700
|
|
|
17,500
|
|
|
13,600
|
|
NGL Fractionation
(Gals/d)
|
7,477,400
|
|
|
6,480,100
|
|
|
7,227,000
|
|
|
6,412,200
|
|
Brine Disposal
(Bbls/d)
|
3,400
|
|
|
3,500
|
|
|
3,400
|
|
|
3,200
|
|
EnLink Midstream,
LLC
|
Forward-Looking
Reconciliation of Net Income to Full-Year Adjusted EBITDA Guidance
(1)
|
(All amounts in
millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
Revised 2019
Outlook
|
|
Low
|
|
Midpoint
|
|
High
|
Net loss of EnLink
Midstream, LLC (2)
|
$
|
(24)
|
|
|
$
|
(28)
|
|
|
$
|
(31)
|
|
Interest expense, net
of interest income
|
209
|
|
|
210
|
|
|
212
|
|
Depreciation and
amortization
|
609
|
|
|
621
|
|
|
634
|
|
Impairments
|
187
|
|
|
187
|
|
|
187
|
|
Income from
unconsolidated affiliate investments
|
(17)
|
|
|
(18)
|
|
|
(19)
|
|
Distributions from
unconsolidated affiliate investments
|
16
|
|
|
17
|
|
|
18
|
|
Unit-based
compensation
|
40
|
|
|
44
|
|
|
46
|
|
Income
taxes
|
24
|
|
|
28
|
|
|
31
|
|
(Gain) loss on
non-cash derivatives
|
(4)
|
|
|
(5)
|
|
|
(6)
|
|
Payments under
onerous performance obligation offset to other current and
long-term liabilities
|
(10)
|
|
|
(10)
|
|
|
(10)
|
|
Loss on secured term
loan receivable (3)
|
53
|
|
|
53
|
|
|
53
|
|
Other (4)
|
14
|
|
|
14
|
|
|
14
|
|
Adjusted EBITDA
before non-controlling interest
|
1,097
|
|
|
1,113
|
|
|
1,129
|
|
Non-controlling
interest share of adjusted EBITDA (5)
|
(27)
|
|
|
(28)
|
|
|
(29)
|
|
Adjusted EBITDA, net
to EnLink Midstream, LLC
|
1,070
|
|
|
1,085
|
|
|
1,100
|
|
Interest expense, net
of interest income
|
(209)
|
|
|
(210)
|
|
|
(212)
|
|
Current taxes and
other
|
(8)
|
|
|
(7)
|
|
|
(5)
|
|
Maintenance capital
expenditures, net to ENLK
|
(45)
|
|
|
(50)
|
|
|
(55)
|
|
Preferred unit
accrued cash distributions (6)
|
(93)
|
|
|
(93)
|
|
|
(93)
|
|
Distributable cash
flow
|
$
|
715
|
|
|
$
|
725
|
|
|
$
|
735
|
|
|
|
|
|
|
(1)
|
Represents the
revised forward-looking net income guidance for the year ended
December 31, 2019, and includes the actual results for the six
months ended June 30, 2019 and the projected results for the second
half of the year ended December 31, 2019. The forward-looking net
income guidance from July 1, 2019 through December 31, 2019
excludes the potential impact of gains or losses on derivative
activity, gains or losses on disposition of assets, impairment
expense, gains or losses as a result of legal settlements, gains or
losses on extinguishment of debt, and the financial effects of
future acquisitions. The exclusion of these items is due to the
uncertainty regarding the occurrence, timing and/or amount of these
events.
|
|
EnLink does not
provide a reconciliation of forward-looking net cash provided by
operating activities to adjusted EBITDA because the company is
unable to predict with reasonable certainty changes in working
capital, which may impact cash provided or used during the year.
Working capital includes accounts receivable, accounts payable and
other current assets and liabilities. These items are uncertain and
depend on various factors outside the company's control.
|
(2)
|
Net income includes
estimated net income attributable to (i) NGP's 49.9% share of net
income from the Delaware Basin JV and (ii) Marathon Petroleum
Corp.'s 50% share of net income from the Ascension JV.
|
(3)
|
Represents non-cash
loss of $52.9 million related to the write-off of the White Star
secured term loan receivable.
|
(4)
|
Includes (i)
estimated accretion expense associated with asset retirement
obligations; (ii) estimated non-cash rent, which relates to lease
incentives pro-rated over the lease term; and (iii) transaction
costs, including transaction costs related to the simplification
transaction.
|
(5)
|
Non-controlling
interest share of adjusted EBITDA includes estimates for (i) NGP's
49.9% share of adjusted EBITDA from the Delaware Basin JV, (ii)
Marathon's 50% share of adjusted EBITDA from the Ascension JV, and
(iii) other minor non-controlling interests.
|
(6)
|
Represents the cash
distributions earned by the ENLK Series B Preferred Units and ENLK
Series C Preferred Units. Cash distributions to be paid to holders
of the ENLK Series B Preferred Units and ENLC Series C Preferred
Units are not available to common unitholders.
|
EnLink Midstream,
LLC
|
Forward-Looking
Reconciliation of Net Income to Full-Year Adjusted EBITDA Guidance
(1)
|
Published May
2019
|
(All amounts in
millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
2019
Outlook
|
|
|
Low
|
|
Midpoint
|
|
High
|
Net income of EnLink
Midstream, LLC (2)
|
|
$
|
18
|
|
|
$
|
23
|
|
|
$
|
28
|
|
Interest expense, net
of interest income
|
|
211
|
|
|
212
|
|
|
213
|
|
Depreciation and
amortization
|
|
594
|
|
|
624
|
|
|
654
|
|
Impairments
|
|
187
|
|
|
187
|
|
|
187
|
|
Income from
unconsolidated affiliate investments
|
|
(15)
|
|
|
(16)
|
|
|
(17)
|
|
Distributions from
unconsolidated affiliate investments
|
|
14
|
|
|
15
|
|
|
16
|
|
Unit-based
compensation
|
|
44
|
|
|
46
|
|
|
49
|
|
Income
taxes
|
|
57
|
|
|
65
|
|
|
73
|
|
Payments under
onerous performance obligation offset to other current and
long-term liabilities
|
|
(10)
|
|
|
(10)
|
|
|
(10)
|
|
Payments on secured
term loan receivable (3)
|
|
17
|
|
|
17
|
|
|
17
|
|
Other (4)
|
|
(1)
|
|
|
(1)
|
|
|
(1)
|
|
Adjusted EBITDA
before non-controlling interest
|
|
1,116
|
|
|
1,162
|
|
|
1,209
|
|
Non-controlling
interest share of adjusted EBITDA from joint ventures
(5)
|
|
(31)
|
|
|
(32)
|
|
|
(34)
|
|
Adjusted EBITDA, net
to EnLink Midstream, LLC
|
|
1,085
|
|
|
1,130
|
|
|
1,175
|
|
Interest expense, net
of interest income
|
|
(211)
|
|
|
(212)
|
|
|
(213)
|
|
Current taxes and
other
|
|
(12)
|
|
|
(11)
|
|
|
(10)
|
|
Maintenance capital
expenditures (6)
|
|
(40)
|
|
|
(50)
|
|
|
(60)
|
|
Preferred unit
accrued distributions (7)
|
|
(92)
|
|
|
(92)
|
|
|
(92)
|
|
Distributable cash
flow
|
|
$
|
730
|
|
|
$
|
765
|
|
|
$
|
800
|
|
|
|
|
|
|
(1)
|
Represents the
forward-looking net income guidance for the year ended December 31,
2019 adjusted to include $187 million of non-cash impairment
recognized in the first quarter of 2019. The forward-looking net
income guidance excludes the potential impact of gains or losses on
derivative activity, gains or losses on disposition of assets,
impairment expense (other than the $187 million impairment
recognized in the first quarter of 2019), gains or losses as a
result of legal settlements, gains or losses on extinguishment of
debt, and the financial effects of future acquisitions. The
exclusion of these items is due to the uncertainty regarding the
occurrence, timing and/or amount of these events.
|
(2)
|
Net income includes
estimated net income attributable to (i) NGP's 49.9% share of net
income from the Delaware Basin JV, (ii) Marathon Petroleum Corp.'s
50% share of net income from the Ascension JV., and (iii) other
minor non-controlling interests.
|
(3)
|
Represents estimated
payments on secured term loan receivable from White
Star.
|
(4)
|
Includes (i)
estimated accretion expense associated with asset retirement
obligations and (ii) estimated non-cash rent, which relates to
lease incentives pro-rated over the lease term.
|
(5)
|
Non-controlling
interest share of adjusted EBITDA includes estimates for (i) NGP's
49.9% share of adjusted EBITDA from the Delaware Basin JV, (ii)
Marathon's 50% share of adjusted EBITDA from the Ascension JV and
(iii) other minor non-controlling interests.
|
(6)
|
Excludes maintenance
capital expenditures that are contributed by other entities and
relate to the non-controlling interest share of our consolidated
entities.
|
(7)
|
Represents the cash
distributions earned by the ENLK Series B Preferred Units and ENLC
Series C Preferred Units. Cash distributions to be paid to holders
of the ENLK Series B Preferred Units and ENLC Series C Preferred
Units are not available to common unitholders.
|
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SOURCE EnLink Midstream