Self-funding Operations with Joint Venture
Pipeline Ramp
Noble Midstream Partners LP (NASDAQ: NBLX) (“Noble
Midstream” or the “Partnership”) today reported third-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”). Equity Method
Investments refer to Noble Midstream’s equity interests in joint
ventures that are not wholly-owned by the Partnership.
Certain results are shown as “attributable to the Partnership,”
which exclude the noncontrolling interests in Black Diamond
Gathering retained by Greenfield Midstream1. 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.
Third-Quarter 2020 Operating Results and Highlights
- Generated $36 million Net Income attributable to the
Partnership, $72 million Net Cash Provided by Operating Activities,
and $96 million in Adjusted Net EBITDA2
- Self-funded quarterly operations, investing $8 million of
organic capital and $43 million in Equity Method Investments
- Gathered 315,000 barrels of gross oil and gas equivalent per
day (Boe/d) and 156,000 barrels of produced water per day
(Bw/d)
- Transported more than 790,000 gross (181,000 net) barrels per
day (Bbl/d) across intermediate and long-haul pipeline equity
interests, up 10% sequentially
Robin Fielder, Chief Executive Officer of the Partnership,
stated, “Noble Midstream generated operating cash flows in excess
of our capital and equity method investments for the
second-consecutive quarter through continued optimization and cost
reductions. We are encouraged to see customer completion activity
return and anticipate exiting 2020 with strong fourth-quarter
activity. Along with full-year run-rate contribution from our
transmission business, the Partnership is well-positioned for the
future. We are excited to be a part of the Chevron organization and
will work closely with our new parent to integrate our business and
create unitholder value.”
3Q20
Gross Volumes
Actuals
Oil and Gas Gathered (MBoe/d)
315
Produced Water Gathered (MBw/d)
156
Fresh Water Delivered (MBw/d)
22
Financials (in millions)
Net Income Attributable to the
Partnership
$36
Net Cash Provided by Operating
Activities
$72
Adjusted Net EBITDA2
$96
Distributable Cash Flow2
$79
Distribution Coverage Ratio2
4.7x
Organic Capital, Excluding Equity
Investments
$8
Resilient Gathering and Growing Transmission Businesses Drive
Cash Flow Generation
Third-quarter 2020 revenues totaled $187 million, an increase of
28% sequentially, largely related to higher third-party crude oil
sales, which when netted with cost of oil sales, equated to a gain
of $4 million. Affiliate oil and gas gathering revenue of $81
million declined 4% sequentially as Noble Energy reduced completion
activity. Third-party oil and gas gathering revenue of $21 million
declined 3% sequentially.
Total operating expenses were $125 million with $20 million in
direct operating expenses, down slightly quarter-over-quarter and
23% annually, as a result of continued cost-reduction measures and
temporary reductions in customer activity levels. The Partnership
identified roughly $20 million in annual, overall direct operating
cost savings and anticipates that more than 50% are sustainable at
current activity levels. Investment losses were $18 million, of
which $12 million was related to the EPIC Y-Grade and BANGL joint
venture described below.
The Partnership reported third-quarter 2020 Net Cash Provided by
Operating Activities of $72 million and Adjusted Net EBITDA2 of $96
million, up slightly from second-quarter 2020. Maintenance capital
expenditures and cash interest expense attributable to the
Partnership totaled $7 million and $6 million, respectively,
leading to $79 million Distributable Cash Flow2 attributable to the
Partnership. Despite producer curtailments and lower basin activity
levels, an increase in EBITDA2 from equity method investments
benefited quarterly financials.
Noble Midstream invested $8 million in third-quarter organic
capital expenditures. Equity method investments during the quarter
totaled $43 million, including $24 million for EPIC Crude, $17
million for EPIC Y-Grade, $4 million for EPIC Propane, and a $2
million reimbursement at Delaware Crossing.
Curtailed Volumes Returned to Production and Completions
Resuming
Noble Midstream connected two third-party wells during the
quarter, located in the Delaware Basin.
In the Partnership's wholly-owned DJ Basin assets, oil and gas
gathering averaged 171,000 Boe/d, up 6% sequentially, and produced
water volumes averaged 29,000 Bw/d. Freshwater delivery averaged
22,000 Bw/d, and the Partnership delivered water to 9 third-party
wells in September. DJ Basin capital expenditures totaled $2.3
million.
Black Diamond oil gathering throughput volumes averaged 72,000
Bo/d, excluding marketing volumes, down 9% sequentially, and oil
sales volumes were 17,000 Bo/d. Net1 capital expenditures totaled
$1.6 million. Total DJ Basin curtailed volumes averaged 11,000
Boew/d and returned to full production during the quarter.
In the Delaware Basin, quarterly oil and gas gathering
throughput and produced water gathering volumes were 72,000 Boe/d
and 127,000 Bw/d, respectively, both down 14% sequentially. Total
Delaware Basin curtailments averaged 9,000 Boew/d and returned to
production by August. Capital expenditures totaled $4.3
million.
Equity Method Investment Volumes Ramping
The Partnership averaged 790,000 gross Bbl/d (181,000 net)
across its intermediate and long-haul transmission systems. Equity
method investment volumes and cash flows are expected to grow in
the fourth-quarter 2020 as activity returns to the DJ and Delaware
basins and the first EPIC greenfield fractionator increases
throughput.
EPIC Crude ended interim service in April 2020 and recorded its
first full-service period in the third quarter with increasing
mainline throughput volumes. The Partnership does not anticipate
additional material equity method investment contributions for EPIC
Crude.
The EPIC Y-Grade first greenfield fractionator commenced service
at the end of the second-quarter 2020 and progressed toward
nameplate capacity throughout the third quarter. During the
quarter, EPIC Y-Grade announced an undivided joint interest (UJI)
and joint venture transaction with BANGL, a consortium led by MPLX
and Whitewater Midstream. The BANGL consortium purchased 30% of the
pipeline capacity in the existing long-haul NGL pipeline and
contracted a 10-year transportation and fractionation agreement to
deliver Y-Grade natural gas liquids (NGLs) to a fractionation
complex in Sweeny, Texas. The EPIC Y-Grade partners expect to
partially reinvest the proceeds to convert its ethane line to
Y-Grade service and extend it to Sweeny. This transaction should
provide connectivity to another market, increase cash flow back to
the partners, and allow EPIC Y-Grade to potentially defer a
construction decision on the second greenfield fractionator.
Third-quarter 2020 Saddlehorn throughput averaged approximately
164,000 Bo/d, down slightly sequentially. Expansion remains on
track for 2021, which is designed to add 100,000 Bbl/d of oil
transportation. Volumes on the Advantage Pipeline system averaged
66,000 Bo/d, compared to 72,000 Bo/d during the second-quarter
2020, and generated $5.5 million in gross distributions to the
joint venture partners during the quarter. Delaware Crossing
averaged 20,000 Bbl/d in gathering and transportation volumes with
essentially all third-party curtailed production back online in
July.
Strong Balance Sheet and Liquidity
As of September 30, 2020, the Partnership had $422 million in
liquidity and $1.6 billion in total debt. During the quarter, total
debt balance increased slightly by $10 million to account for
remaining equity method investment capital expenditures and working
capital phasing. The Partnership anticipates to delever in the
fourth-quarter 2020.
Noble Midstream has a current debt obligation of $500 million
that matures July 31, 2021. The Partnership is evaluating
opportunities with its parent to address this obligation.
On October 20, 2020, the Board of Directors of Noble Midstream’s
general partner, Noble Midstream GP LLC, declared a third-quarter
cash distribution of $0.1875 per unit, flat versus second-quarter
2020.
2020 Earnings and Cash Flow Guidance Raised as Fourth-Quarter
Activity Increases
After minimal affiliate activity in the third-quarter 2020,
Noble Midstream anticipates the resumption of affiliate well
completions in the fourth quarter as well as third-party activity
in the DJ and Delaware Basins. The Partnership estimates 17 to 20
well completions across its wholly-owned DJ Basin gathering
systems. In Black Diamond, the Partnership still estimates more
than 150 well connections this year with 25 to 30 connections
expected in the fourth-quarter 2020. In the Delaware Basin,
affiliate completion activity resumed in October, and the
Partnership anticipates 8 to 10 well connections, including 1 to 3
third-party connections.
Noble Midstream is narrowing its 2020 organic capital
expenditures expectations from $60 to $80 million to $70 to $80
million and is lowering the top end of its expected 2020 equity
method investment range, now $240 to $250 million, from a top end
of $260 million previously.
The Partnership anticipates the midpoint of its Net Income
Attributable to the Partnership to be $125 million in 2020. Noble
Midstream is increasing the midpoint of its expected 2020 Adjusted
Net EBITDA2 by 1% to $385 to $400 million and the midpoint of the
2020 Distributable Cash Flow2 by 4% to $300 to $315 million.
Distribution Coverage Ratio2 and Net Debt to Trailing Twelve Month
(TTM) Adjusted Net EBITDA2 expectations were adjusted to >4.5x
and 3.9x to 4.2x, respectively.
2020 Guidance
Financials (in millions)
Net Income
$125
Adjusted Net EBITDA 2
$385
-
$400
Distributable Cash Flow 2
$300
-
$315
Net Debt to TTM Adjusted Net EBITDA 2
3.9x
-
4.2x
Distribution Coverage Ratio 2
>4.5x
2020 Organic Capital
$70
-
$80
Equity Method Investment Capital
$240
-
$250
1 “Net” is equivalent to “attributable to the Partnership”. 2
Adjusted Net EBITDA, Distributable Cash Flow (DCF), Distribution
Coverage Ratio and Net Debt to Trailing Twelve Month (TTM) Adjusted
Net EBITDA 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. Noble
Midstream does not provide guidance on the reconciling items
between forecasted Adjusted Net EBITDA, Distributable Cash Flow,
Net Debt to TTM Adjusted Net EBITDA or Distribution Coverage Ratio
and Net Cash Provided by Operating Activities due to the
uncertainty regarding timing and estimates of certain of these
items. Noble Midstream provides a range of such Non-GAAP financial
measures to allow for the variability in timing and uncertainty of
estimates of such reconciling items. Therefore, Noble Midstream
cannot reconcile forecasted Adjusted Net EBITDA, Distributable Cash
Flow, Net Debt to TTM Adjusted Net EBITDA or Distribution Coverage
Ratio to Net Cash Provided by Operating Activities without
unreasonable effort.
About Noble Midstream
Noble Midstream is a master limited partnership originally
formed by Noble Energy, Inc. and majority-owned by Chevron Corp. to
own, operate, develop and acquire domestic midstream infrastructure
assets. Noble Midstream currently provides crude oil, natural gas,
and water-related midstream services and owns equity interests in
oil pipelines in the DJ Basin in Colorado and the Delaware Basin in
Texas. Noble Midstream strives to be the midstream provider and
partner of choice for its safe operations, reliability, and strong
relationships while enhancing value for all stakeholders. 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. Words such as “estimate,”
“anticipate,” “believe,” “project,” “budget,” “continue,” “could,”
“intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,”
“will,” “would,” “expect,” “objective,” “projection,” “forecast,”
“goal,” “guidance,” “outlook,” “effort,” “target,” “on schedule,”
“on track,” “strategy” and other similar expressions may be used to
identify forward-looking statements. Forward-looking statements are
not statements of historical fact and reflect Noble Midstream
Partners LP’s (“Noble Midstream,” “we,” or “our”) current views
about future events. 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
maintain market share and impact commodity pricing and the expected
impact on our business, operations, earnings and results. You are
cautioned not to place undue reliance on any forward-looking
statements, which speak only as of the date hereof. Noble Midstream
does not assume any obligation to update publicly any
forward-looking statements whether as a result of new information,
future events or otherwise.
Forward-looking statements are not guarantees of future
performance, are based on certain assumptions, and are subject to
certain risks, uncertainties and other factors, many of which are
beyond our control and difficult to predict, that could cause
actual results to differ materially from those projected. These
risks include, without limitation, changes in general economic
conditions, including without limitation the impacts of the
COVID-19 pandemic; our customers’ ability to meet their drilling
and development plans; competitive conditions in the Partnership’s
industry; actions taken by third-party operators, gatherers,
processors and transporters; the demand for crude oil and natural
gas gathering and processing services; our ability to successfully
implement our business plan; our ability to complete internal
growth projects on time and on budget; the ability of third parties
to complete construction of pipelines in which Noble Midstream
holds equity interests on time and on budget; the price and
availability of debt and equity; the availability and price of
crude oil and natural gas to the consumer compared to the price of
alternative and competing fuels; risks associated with the change
in ownership of our General Partner; and other risks inherent in
the Partnership’s business, including those described under “Risk
Factors” and “Disclosure Regarding Forward-Looking Statements” in
Noble Midstream’s 2019 Annual Report on Form 10-K and in subsequent
reports that we file with the U.S. Securities and Exchange
Commission (SEC).
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 and for the reasons why management believes
non-GAAP measures provide useful information to investors.
Schedule 1
Noble Midstream Partners
LP
Revenue and Throughput Volume
Statistics
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020
2019
2020
2019
DJ Basin
Crude Oil Sales Volumes (Bbl/d)
16,691
9,625
16,462
8,813
Crude Oil Gathering Volumes (Bbl/d)
172,393
181,486
177,210
179,392
Natural Gas Gathering Volumes
(MMBtu/d)
525,417
496,238
497,965
458,087
Natural Gas Processing Volumes
(MMBtu/d)
39,876
48,988
41,697
50,823
Produced Water Gathering Volumes
(Bbl/d)
29,452
41,508
37,426
40,474
Fresh Water Delivery Volumes (Bbl/d)
22,125
134,629
92,873
177,565
Delaware Basin
Crude Oil Gathering Volumes (Bbl/d)
51,064
51,822
56,845
46,530
Natural Gas Gathering Volumes
(MMBtu/d)
159,734
180,707
172,241
139,877
Produced Water Gathering Volumes
(Bbl/d)
126,688
151,739
145,551
137,868
Total Gathering Systems
Crude Oil Sales Volumes (Bbl/d)
16,691
9,625
16,462
8,813
Crude Oil Gathering Volumes (Bbl/d)
223,457
233,308
234,055
225,922
Natural Gas Gathering Volumes
(MMBtu/d)
685,151
676,945
670,206
597,964
Barrels of Oil Equivalent (Boe/d) (1)
314,822
322,872
324,674
306,508
Natural Gas Processing Volumes
(MMBtu/d)
39,876
48,988
41,697
50,823
Produced Water Gathering Volumes
(Bbl/d)
156,140
193,247
182,977
178,342
Total Fresh Water Delivery
Fresh Water Delivery Volumes (Bbl/d)
22,125
134,629
92,873
177,565
(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
September 30,
Nine Months Ended
September 30,
2020
2019
2020
2019
Revenues
Gathering and Processing — Affiliate
$
80,030
$
90,586
$
251,999
$
244,102
Gathering and Processing — Third Party
18,792
17,169
60,762
54,264
Fresh Water Delivery — Affiliate
8,420
20,847
42,319
66,801
Fresh Water Delivery — Third Party
1,628
2,132
7,613
8,395
Crude Oil Sales — Third Party
76,173
48,870
187,750
133,522
Other — Affiliate
504
791
2,159
2,393
Other — Third Party
1,818
1,279
4,758
3,559
Total Revenues
187,365
181,674
557,360
513,036
Costs and Expenses
Cost of Crude Oil Sales
72,089
46,240
181,052
125,216
Direct Operating
19,654
25,688
66,543
88,996
Depreciation and Amortization
26,443
24,571
78,728
71,585
General and Administrative
6,244
4,373
18,176
13,905
Goodwill Impairment
—
—
109,734
—
Other Operating Expense (Income)
864
(469
)
4,726
(488
)
Total Operating Expenses
125,294
100,403
458,959
299,214
Operating Income
62,071
81,271
98,401
213,822
Other Expense (Income)
Interest Expense, Net of Amount
Capitalized
6,437
3,952
19,927
11,502
Investment Loss, Net
18,068
5,621
26,207
5,028
Other Non-Operating Income
(1,336
)
—
—
—
Total Other Expense, Net
23,169
9,573
46,134
16,530
Income Before Income Taxes
38,902
71,698
52,267
197,292
Income Tax Expense
166
1,179
187
3,219
Net Income
38,736
70,519
52,080
194,073
Less: Net Income Prior to the Drop-Down
and Simplification
—
4,136
—
11,237
Net Income Subsequent to the Drop-Down
and Simplification
38,736
66,383
52,080
182,836
Less: Net Income (Loss) Attributable to
Noncontrolling Interests
2,952
25,751
(42,043
)
62,236
Net Income Attributable to Noble
Midstream Partners LP
35,784
40,632
94,123
120,600
Less: Net Income Attributable to Incentive
Distribution Rights
—
5,820
—
13,967
Net Income Attributable to Limited
Partners
$
35,784
$
34,812
$
94,123
$
106,633
Net Income Attributable to Limited
Partners Per Limited Partner Unit — Basic
Common Units
$
0.40
$
0.88
$
1.04
$
2.65
Subordinated Units
$
—
$
—
$
—
$
2.89
Net Income Attributable to Limited
Partners Per Limited Partner Unit — Diluted
Common Units
$
0.40
$
0.88
$
1.04
$
2.64
Subordinated Units
$
—
$
—
$
—
$
2.89
Weighted Average Limited Partner Units
Outstanding — Basic
Common Units
90,170
39,604
90,162
31,855
Subordinated Units
—
—
—
7,747
Weighted Average Limited Partner Units
Outstanding — Diluted
Common Units
90,170
39,624
90,166
31,879
Subordinated Units
—
—
—
7,747
Schedule 3
Noble Midstream Partners
LP
Consolidated Balance
Sheet
(in thousands,
unaudited)
September 30, 2020
December 31, 2019
ASSETS
Current Assets
Cash and Cash Equivalents
$
17,403
$
12,676
Accounts Receivable — Affiliate
48,966
42,428
Accounts Receivable — Third Party
45,051
44,093
Other Current Assets
8,474
8,730
Total Current Assets
119,894
107,927
Property, Plant and Equipment
Total Property, Plant and Equipment,
Gross
2,063,911
2,006,995
Less: Accumulated Depreciation and
Amortization
(297,181
)
(244,038
)
Total Property, Plant and Equipment,
Net
1,766,730
1,762,957
Investments
899,468
660,778
Intangible Assets, Net
253,652
277,900
Goodwill
—
109,734
Other Noncurrent Assets
3,028
6,786
Total Assets
$
3,042,772
$
2,926,082
LIABILITIES, MEZZANINE EQUITY
AND EQUITY
Current Liabilities
Accounts Payable — Affiliate
$
3,724
$
8,155
Accounts Payable — Trade
56,986
107,705
Current Portion of Debt
501,753
—
Other Current Liabilities
9,773
11,680
Total Current Liabilities
572,236
127,540
Long-Term Liabilities
Long-Term Debt
1,144,599
1,495,679
Asset Retirement Obligations
40,900
37,842
Other Long-Term Liabilities
3,963
4,160
Total Liabilities
1,761,698
1,665,221
Mezzanine Equity
Redeemable Noncontrolling Interest,
Net
116,104
106,005
Equity
Common Units (90,171 and 90,136 units
outstanding, respectively)
803,466
813,999
Noncontrolling Interests
361,504
340,857
Total Equity
1,164,970
1,154,856
Total Liabilities, Mezzanine Equity and
Equity
$
3,042,772
$
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, Adjusted Net EBITDA,
Distributable Cash Flow, Net Debt to Trailing Twelve Month Adjusted
Net EBITDA 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. We define Adjusted Net EBITDA as Adjusted EBITDA less
the portion attributable to noncontrolling interests. We define Net
Debt to Trailing Twelve Month Adjusted Net EBITDA as Total Debt
less cash and cash equivalents divided by the Trailing Twelve Month
Adjusted Net EBITDA. Net Debt to Trailing Twelve Month Adjusted Net
EBITDA is an annualized leverage ratio used by management to assess
our ability to incur and service debt and fund capital
expenditures.
Adjusted EBITDA and Adjusted Net EBITDA are used as supplemental
financial measures 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 Net 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, Adjusted
Net EBITDA, Net Debt to Trailing Twelve Month Adjusted Net EBITDA,
Distributable Cash Flow, and Distribution Coverage Ratio provide
information useful to investors in assessing our financial
condition and results of operations. The GAAP measures most
directly comparable to Adjusted EBITDA, Adjusted Net EBITDA, Net
Debt to Trailing Twelve Month Adjusted Net EBITDA, Distributable
Cash Flow and Distribution Coverage Ratio is net income, and net
debt to net income and net income to distributions as ratios.
Adjusted EBITDA, Adjusted Net EBITDA, Net Debt to Trailing Twelve
Month Adjusted Net 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, Adjusted Net
EBITDA, Net Debt to Trailing Twelve Month Adjusted Net 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, Adjusted Net EBITDA, Net Debt to Trailing Twelve Month
Adjusted Net EBITDA, Distributable Cash Flow and Distribution
Coverage Ratio as presented herein may not be comparable to
similarly titled measures of other companies.
Noble Midstream does not provide guidance on the reconciling
items between forecasted Adjusted Net EBITDA, Distributable Cash
Flow, Net Debt to Trailing Twelve Month Adjusted Net EBITDA or
Distribution Coverage Ratio and their most directly comparable GAAP
reporting measures due to the uncertainty regarding timing and
estimates of these items. Noble Midstream provides a range of such
information to allow for the variability in timing and uncertainty
of estimates of such reconciling items. Therefore, Noble Midstream
cannot reconcile forecasted Adjusted Net EBITDA, Distributable Cash
Flow, Net Debt to Trailing Twelve Month Adjusted Net EBITDA or
Distribution Coverage Ratio without unreasonable effort.
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 (Non-GAAP) and Distributable Cash Flow
(Non-GAAP)
(in thousands,
unaudited)
Three Months Ended September
30,
Trailing Twelve
2020
2019
Months
Reconciliation from Net Income
(GAAP)
Net Income (GAAP)
$
38,736
$
70,519
$
103,474
Add:
Depreciation and Amortization
26,443
24,571
104,124
Interest Expense, Net of Amount
Capitalized
6,437
3,952
24,661
Proportionate Share of Equity Method
Investment EBITDA Adjustments
33,133
3,257
62,912
Goodwill Impairment
—
—
109,734
Other
364
656
12,871
Adjusted EBITDA (Non-GAAP)
105,113
102,955
417,776
Less:
Adjusted EBITDA Prior to Drop-Down and
Simplification Transaction (1)
—
8,944
—
Adjusted EBITDA Subsequent to Drop-Down
and Simplification Transaction
105,113
94,011
417,776
Less:
Adjusted EBITDA Attributable to
Noncontrolling Interests (1)
9,002
34,507
30,225
Adjusted EBITDA Attributable to Noble
Midstream Partners LP (Non-GAAP)
96,111
59,504
387,551
Add:
Distributions from Equity Method
Investments Attributable to Noble Midstream Partners LP
6,624
1,711
Less:
Proportionate Share of Equity Method
Investment EBITDA Attributable to Noble Midstream Partners LP
10,619
(3,518
)
Cash Interest Paid
6,195
8,662
Maintenance Capital Expenditures
7,128
5,789
Distributable Cash Flow of Noble
Midstream Partners LP (Non-GAAP)
$
78,793
$
50,282
Distributions (Declared)
$
16,907
$
32,418
Distribution Coverage Ratio
(Declared)
4.7x
1.6x
(1)
As a result of the Drop Down and
Simplification Transaction in fourth quarter 2019, certain proforma
adjustments have been factored to reflect the Adjusted EBITDA for
the acquired assets for the full fourth quarter 2019. Furthermore,
Adjusted EBITDA Attributable to Noncontrolling Interests has been
recast for the quarter ended December 31, 2019 to only reflect
Adjusted EBITDA attributable to the interests in Black Diamond
Gathering retained by Greenfield Midstream.
Schedule 4 (Continued)
Noble Midstream Partners
LP
Reconciliations of GAAP
Financial Measures to Non-GAAP Financial Measures
Reconciliation of Net Cash
Provided by Operating Activities (GAAP) to Adjusted EBITDA
(Non-GAAP)
and Distributable Cash Flow
(Non-GAAP)
(in thousands,
unaudited)
Three Months Ended September
30,
Trailing Twelve
2020
2019
Months
Reconciliation from Net Cash Provided
by Operating Activities (GAAP)
Net Cash Provided by Operating
Activities (GAAP)
$
71,959
$
101,617
$
386,516
Add:
Interest Expense, Net of Amount
Capitalized
6,437
3,952
24,661
Changes in Operating Assets and
Liabilities
21,965
2,655
8,066
Equity Method Investment EBITDA
Adjustments
4,874
(5,229
)
(9,501
)
Other
(122
)
(40
)
8,034
Adjusted EBITDA (Non-GAAP)
105,113
102,955
417,776
Less:
Adjusted EBITDA Prior to Drop-Down and
Simplification Transaction (1)
—
8,944
—
Adjusted EBITDA Subsequent to Drop-Down
and Simplification Transaction
105,113
94,011
417,776
Less:
Adjusted EBITDA Attributable to
Noncontrolling Interests (1)
9,002
34,507
30,225
Adjusted EBITDA Attributable to Noble
Midstream Partners LP (Non-GAAP)
96,111
59,504
387,551
Add:
Distributions from Equity Method
Investments Attributable to Noble Midstream Partners LP
6,624
1,711
Less:
Proportionate Share of Equity Method
Investment EBITDA Attributable to Noble Midstream Partners LP
10,619
(3,518
)
Cash Interest Paid
6,195
8,662
Maintenance Capital Expenditures
7,128
5,789
Distributable Cash Flow of Noble
Midstream Partners LP (Non-GAAP)
$
78,793
$
50,282
Distributions (Declared)
$
16,907
$
32,418
Distribution Coverage Ratio
(Declared)
4.7x
1.6x
(1)
As a result of the Drop Down and
Simplification Transaction in fourth quarter 2019, certain proforma
adjustments have been factored to reflect the Adjusted EBITDA for
the acquired assets for the full fourth quarter 2019. Furthermore,
Adjusted EBITDA Attributable to Noncontrolling Interests has been
recast for the quarter ended December 31, 2019 to only reflect
Adjusted EBITDA attributable to the interests in Black Diamond
Gathering retained by Greenfield Midstream.
Schedule 4 (Continued)
Noble Midstream Partners
LP
Reconciliations of GAAP
Financial Measures to Non-GAAP Financial Measures
Calculation of Net Debt to
Trailing Twelve Months Adjusted Net EBITDA
(in thousands,
unaudited)
September 30, 2020
Revolving Credit Facility, due March 9,
2023
745,000
Term Loan Credit Facility, due July 31,
2021
500,000
Term Loan Credit Facility, due August 23,
2022
400,000
Finance Lease Obligation
2,048
Total Debt
1,647,048
Less: Cash and Cash Equivalents
17,403
Net Debt
1,629,645
Trailing Twelve Months Adjusted Net
EBITDA
387,551
Net Debt to Trailing Twelve Months
Adjusted Net EBITDA
4.2x
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
>4.5x
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201102005292/en/
Park Carrere Investor Relations (281) 872-3208
park.carrere@nblmidstream.com
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