Enable Midstream Partners, LP (NYSE: ENBL) today announced
financial and operating results for second quarter 2021.
Net income attributable to limited partners was $87 million for
second quarter 2021, an increase of $43 million compared to $44
million of net income for second quarter 2020. Net income
attributable to common units was $79 million for second quarter
2021, an increase of $44 million compared to $35 million of net
income for second quarter 2020. Net cash provided by operating
activities was $190 million for second quarter 2021, an increase of
$79 million compared to $111 million for second quarter 2020.
Adjusted EBITDA was $251 million for second quarter 2021, an
increase of $27 million compared to $224 million for second quarter
2020. Distributable cash flow (DCF) was $184 million for second
quarter 2021, an increase of $36 million compared to $148 million
for second quarter 2020.
For second quarter 2021, DCF exceeded declared distributions to
common unitholders by $112 million, resulting in a distribution
coverage ratio of 2.56x.
For additional information regarding the non-GAAP financial
measures Gross margin, Adjusted EBITDA, DCF, Adjusted interest
expense and distribution coverage ratio, please see “Non-GAAP
Financial Measures.”
MANAGEMENT PERSPECTIVE
“Enable delivered a solid second quarter, and I am proud of our
team’s continued efforts,” said Rod Sailor, president and CEO. “We
remain focused on developing and building innovative market
solutions for our customers. Following FERC approval in June of our
Gulf Run Pipeline project, we are moving forward to safely and
efficiently construct the pipeline and place it into service as
scheduled. We also saw strong customer interest for a recent open
season we held for the Supply Diversity Project on our EGT
pipeline, a project designed to address the supply and demand
disparities seen in February of this year during Winter Storm
Uri.”
BUSINESS HIGHLIGHTS
- Achieved higher net income attributable to limited partners,
Adjusted EBITDA and DCF for second quarter 2021 compared to second
quarter 2020, primarily as a result of higher commodity prices and
higher gathering and processing volumes due to production
curtailments experienced during the second quarter of 2020 as a
result of low crude prices
- Fully funded the partnership’s capital program and
distributions for second quarter 2021 while reducing leverage as
measured by total debt to Adjusted EBITDA to below 4.0x on a
trailing twelve-month basis
- 10 rigs were drilling wells across Enable’s footprint expected
to be connected to Enable’s gathering systems as of July 28, 2021,
with 6 rigs operating in the Anadarko Basin and 4 rigs operating in
the Ark-La-Tex Basin
- Contracted or extended over 300,000 dekatherms per day (Dth/d)
of transportation capacity during second quarter 2021 on Enable Gas
Transmission, LLC (EGT), Enable Mississippi River Transmission, LLC
and Enable Oklahoma Intrastate Transmission, LLC (EOIT)
- Contracted for 100,000 Dth/d of firm service with a utility
customer on Enable’s Southeast Supply Header, LLC joint
venture
- As previously announced, received Federal Energy Regulatory
Commission approval under section 7(c) of the Natural Gas Act to
construct and operate the Gulf Run Pipeline project
- Completed a successful open season with significant customer
interest for the EGT Supply Diversity Project, which would provide
Mid-Continent markets access to supply and storage in and around
the Perryville Hub area
- Attained a favorable rate case settlement for EOIT rates
governed by section 311 of the Natural Gas Policy Act
ENERGY TRANSFER TRANSACTION
UPDATE
Energy Transfer LP’s (NYSE: ET) merger with Enable is subject,
among other conditions, to the delivery of written consents
representing the affirmative vote or consent of holders of at least
a majority of Enable’s outstanding common units, and this consent
was obtained through a unitholder vote, which ended May 7, 2021. On
May 12, 2021, Enable and Energy Transfer each received a request
for additional information and documentary material from the FTC in
connection with the FTC’s review of the merger. The effect of the
second request is to extend the waiting period imposed by the
Hart-Scott-Rodino Act. Enable continues to expect the transaction
will close in the second half of 2021.
QUARTERLY DISTRIBUTIONS
As previously announced, on July 30, 2021, the board of
directors of Enable’s general partner declared a quarterly cash
distribution of $0.16525 per unit on all outstanding common units
for the quarter ended June 30, 2021. The distribution is unchanged
from the previous quarter and represents Enable’s 29th consecutive
quarterly distribution since the partnership’s initial public
offering in April 2014. The quarterly cash distribution of $0.16525
per unit on all outstanding common units will be paid August 24,
2021, to unitholders of record at the close of business August 12,
2021.
As also previously announced, the board declared a quarterly
cash distribution of $0.5439 per unit on all outstanding Series A
Preferred Units for the quarter ended June 30, 2021. The quarterly
cash distribution of $0.5439 per unit on all outstanding Series A
Preferred Units will be paid August 13, 2021, to unitholders of
record at the close of business July 30, 2021.
AVAILABLE INFORMATION
Enable files annual, quarterly and other reports and other
information with the U.S. Securities and Exchange Commission (SEC).
Enable’s SEC filings are also available at the SEC’s website at
https://www.sec.gov which contains information regarding issuers
that file electronically with the SEC. Information about Enable may
also be obtained at the offices of the NYSE, 20 Broad Street, New
York, New York 10005, or on Enable’s website at
https://enablemidstream.com. On the Investor Relations section of
Enable’s website, https://investors.enablemidstream.com, Enable
makes available free of charge a variety of information to
investors. Enable’s goal is to maintain the Investor Relations
section of its website as a portal through which investors can
easily find or navigate to pertinent information about Enable,
including but not limited to:
- Enable’s annual reports on Form 10-K, quarterly reports on Form
10-Q, current reports on Form 8-K and any amendments to those
reports as soon as reasonably practicable after Enable
electronically files that material with or furnishes it to the
SEC;
- press releases on quarterly distributions, quarterly earnings
and other developments;
- governance information, including Enable’s governance
guidelines, committee charters and code of ethics and business
conduct;
- information on events and presentations, including an archive
of available calls, webcasts and presentations;
- news and other announcements that Enable may post from time to
time that investors may find useful or interesting; and
- opportunities to sign up for email alerts and RSS feeds to have
information pushed in real time.
ABOUT ENABLE MIDSTREAM
PARTNERS
Enable owns, operates and develops strategically located natural
gas and crude oil infrastructure assets. Enable’s assets include
approximately 14,000 miles of natural gas, crude oil, condensate
and produced water gathering pipelines, approximately 2.6 Bcf/d of
natural gas processing capacity, approximately 7,800 miles of
interstate pipelines (including Southeast Supply Header, LLC of
which Enable owns 50%), approximately 2,200 miles of intrastate
pipelines and seven natural gas storage facilities comprising 84.5
billion cubic feet of storage capacity. For more information, visit
https://enablemidstream.com.
This release is intended to be a qualified notice under Treasury
Regulation Section 1.1446-4(b). Brokers and nominees should treat
one hundred percent (100%) of Enable’s distributions to foreign
investors as being attributable to income that is effectively
connected with a United States trade or business. Accordingly,
Enable’s distributions to foreign investors are subject to federal
income tax withholding at the highest applicable effective tax
rate. Brokers and nominees, and not Enable, are treated as the
withholding agents responsible for withholding on the distributions
received by them on behalf of foreign investors.
NON-GAAP FINANCIAL
MEASURES
Enable has included the non-GAAP financial measures Gross
margin, Adjusted EBITDA, DCF, Adjusted interest expense and
distribution coverage ratio in this press release based on
information in its consolidated financial statements.
Gross margin, Adjusted EBITDA, DCF, Adjusted interest expense
and distribution coverage ratio are supplemental financial measures
that management and external users of Enable’s financial
statements, such as industry analysts, investors, lenders and
rating agencies may use, to assess:
- Enable’s operating performance as compared to those of other
publicly traded partnerships in the midstream energy industry,
without regard to capital structure or historical cost basis;
- The ability of Enable’s assets to generate sufficient cash flow
to make distributions to its partners;
- Enable’s 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.
This press release includes a reconciliation of Gross margin to
total revenues, Adjusted EBITDA and DCF to net income attributable
to limited partners, Adjusted EBITDA to net cash provided by
operating activities and Adjusted interest expense to interest
expense, the most directly comparable GAAP financial measures as
applicable, for each of the periods indicated. Distribution
coverage ratio is a financial performance measure used by
management to reflect the relationship between Enable’s financial
operating performance and cash distributions. Enable believes that
the presentation of Gross margin, Adjusted EBITDA, DCF, Adjusted
interest expense and distribution coverage ratio provides
information useful to investors in assessing its financial
condition and results of operations. Gross margin, Adjusted EBITDA,
DCF, Adjusted interest expense and distribution coverage ratio
should not be considered as alternatives to net income, operating
income, total revenue, cash flow from operating activities or any
other measure of financial performance or liquidity presented in
accordance with GAAP. Gross margin, Adjusted EBITDA, DCF, Adjusted
interest expense and distribution coverage ratio have important
limitations as analytical tools because they exclude some but not
all items that affect the most directly comparable GAAP measures.
Additionally, because Gross margin, Adjusted EBITDA, DCF, Adjusted
interest expense and distribution coverage ratio may be defined
differently by other companies in Enable’s industry, its
definitions of these measures may not be comparable to similarly
titled measures of other companies, thereby diminishing their
utility.
FORWARD-LOOKING
STATEMENTS
Some of the information in this press release may contain
forward-looking statements. Forward-looking statements give our
current expectations and contain projections of results of
operations or of financial condition, or forecasts of future
events. Words such as “could,” “will,” “should,” “may,” “assume,”
“forecast,” “position,” “predict,” “strategy,” “expect,” “intend,”
“plan,” “estimate,” “anticipate,” “believe,” “project,” “budget,”
“potential,” or “continue,” and similar expressions are used to
identify forward-looking statements. Without limiting the
generality of the foregoing, forward-looking statements contained
in this press release include statements pertaining to our pending
merger with Energy Transfer LP and our expectations of plans,
strategies, objectives, growth and anticipated financial and
operational performance, as updated by this press release. In
particular, our statements with respect to continuity plans and
preparedness measures we have implemented in response to the novel
coronavirus (COVID-19) pandemic and its expected impact on our
business, operations, earnings and results are forward-looking
statements. Forward-looking statements can be affected by
assumptions used or by known or unknown risks or uncertainties.
Consequently, no forward-looking statements can be guaranteed.
A forward-looking statement may include a statement of the
assumptions or bases underlying the forward-looking statement. We
believe that we have chosen these assumptions or bases in good
faith and that they are reasonable. However, when considering these
forward-looking statements, you should keep in mind the risk
factors and other cautionary statements in this press release and
our Annual Report on Form 10-K for the year ended Dec. 31, 2020
(Annual Report). Those risk factors and other factors noted
throughout this press release and in our Annual Report could cause
our actual results to differ materially from those disclosed in any
forward-looking statement. You are cautioned not to place undue
reliance on any forward-looking statements.
Any forward-looking statements speak only as of the date on
which such statement is made, and we undertake no obligation to
correct or update any forward-looking statement, whether as a
result of new information or otherwise, except as required by
applicable law.
ENABLE MIDSTREAM PARTNERS,
LP
CONSOLIDATED STATEMENTS OF
INCOME
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
(In millions, except per unit
data)
Revenues (including revenues from
affiliates):
Product sales
$
460
$
196
$
1,087
$
484
Service revenues
327
319
670
679
Total Revenues
787
515
1,757
1,163
Cost and Expenses (including expenses
from affiliates):
Cost of natural gas and natural gas
liquids (excluding depreciation and amortization shown
separately)
426
177
945
403
Operation and maintenance
91
115
175
217
General and administrative
25
21
62
45
Depreciation and amortization
103
105
209
209
Impairments of property, plant and
equipment and goodwill
—
—
—
28
Taxes other than income tax
18
17
36
35
Total Cost and Expenses
663
435
1,427
937
Operating Income
124
80
330
226
Other Income (Expense):
Interest expense
(42)
(46)
(84)
(93)
Equity in earnings of equity method
affiliate
—
5
1
11
Other, net
6
5
6
5
Total Other Expense
(36)
(36)
(77)
(77)
Income Before Income Tax
88
44
253
149
Income tax benefit
—
—
—
—
Net Income
$
88
$
44
$
253
$
149
Less: Net income (loss) attributable to
noncontrolling interest
1
—
2
(7)
Net Income Attributable to Limited
Partners
$
87
$
44
$
251
$
156
Less: Series A Preferred Unit
distributions
8
9
17
18
Net Income Attributable to Common
Units
$
79
$
35
$
234
$
138
Basic and diluted earnings per
unit
Basic
$
0.18
$
0.08
$
0.53
$
0.32
Diluted
$
0.18
$
0.08
$
0.52
$
0.30
ENABLE MIDSTREAM PARTNERS,
LP
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
(In millions)
Reconciliation of Gross margin to Total
Revenues:
Consolidated
Product sales
$
460
$
196
$
1,087
$
484
Service revenues
327
319
670
679
Total Revenues
787
515
1,757
1,163
Cost of natural gas and natural gas
liquids (excluding depreciation and amortization)
426
177
945
403
Gross margin
$
361
$
338
$
812
$
760
Reportable Segments
Gathering and Processing
Product sales
$
461
$
193
$
889
$
468
Service revenues
212
198
408
400
Total Revenues
673
391
1,297
868
Cost of natural gas and natural gas
liquids (excluding depreciation and amortization)
437
176
835
387
Gross margin
$
236
$
215
$
462
$
481
Transportation and Storage
Product sales
$
135
$
59
$
467
$
134
Service revenues
118
124
268
283
Total Revenues
253
183
735
417
Cost of natural gas and natural gas
liquids (excluding depreciation and amortization)
128
59
385
137
Gross margin
$
125
$
124
$
350
$
280
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
(In millions, except
Distribution coverage ratio)
Reconciliation of Adjusted EBITDA and
DCF to net income attributable to limited partners and calculation
of Distribution coverage ratio:
Net income attributable to limited
partners
$
87
$
44
$
251
$
156
Depreciation and amortization expense
103
105
209
209
Interest expense, net of interest
income
42
45
84
92
Distributions received from equity method
affiliate in excess of equity earnings
—
4
3
8
Non-cash equity-based compensation
4
3
8
7
Change in fair value of derivatives
(1)
19
12
29
2
Equity AFUDC and other non-cash items
(2)
(4)
17
(5)
22
Impairments of property, plant and
equipment and goodwill
—
—
—
28
Gain on extinguishment of debt
—
(5)
—
(5)
Noncontrolling Interest Share of Adjusted
EBITDA
—
(1)
—
(9)
Adjusted EBITDA
$
251
$
224
$
579
$
510
Series A Preferred Unit distributions
(3)
(8)
(9)
(17)
(18)
Distributions for phantom and performance
units (4)
—
(1)
—
(1)
Adjusted interest expense (5)
(41)
(45)
(83)
(92)
Maintenance capital expenditures
(18)
(22)
(34)
(38)
Current income tax
—
1
—
1
DCF
$
184
$
148
$
445
$
362
Distributions related to common
unitholders (6)
$
72
$
72
$
144
$
144
Distribution coverage ratio (7)
2.56
2.06
3.09
2.51
___________________
(1)
Change in fair value of
derivatives includes changes in the fair value of derivatives that
are not designated as hedging instruments.
(2)
Other non-cash items includes
write-downs and gains and loss on sale and retirement of
assets.
(3)
This amount represents the
quarterly cash distributions on the Series A Preferred Units
declared for the three months ended June 30, 2021 and 2020. In
accordance with the Partnership Agreement, the Series A Preferred
Unit distributions are deemed to have been paid out of available
cash with respect to the quarter immediately preceding the quarter
in which the distribution is made.
(4)
Distributions for phantom and
performance units represent distribution equivalent rights paid in
cash. Phantom unit distribution equivalent rights are paid during
the vesting period and performance unit distribution equivalent
rights are paid at vesting.
(5)
See below for a reconciliation of
Adjusted interest expense to Interest expense.
(6)
Represents cash distributions
declared for common units outstanding as of each respective period.
Amounts for 2021 reflect estimated cash distributions for common
units outstanding for the quarter ended June 30, 2021.
(7)
Distribution coverage ratio is
computed by dividing DCF by Distributions related to common
unitholders.
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
(In millions)
Reconciliation of Adjusted EBITDA to
net cash provided by operating activities:
Net cash provided by operating
activities
$
190
$
111
$
413
$
311
Interest expense, net of interest
income
42
45
84
92
Noncontrolling interest share of cash
provided by operating activities
(2)
(1)
(3)
(2)
Current income tax
—
1
—
1
Equity AFUDC and other non-cash items
(1)
2
(2)
(1)
2
Proceeds from insurance
(1)
—
—
—
Changes in operating working capital which
(provided) used cash:
Accounts receivable
41
30
75
(30)
Accounts payable
(4)
12
(14)
70
Other, including changes in noncurrent
assets and liabilities
(36)
12
(7)
56
Return of investment in equity method
affiliate
—
4
3
8
Change in fair value of derivatives
(2)
19
12
29
2
Adjusted EBITDA
$
251
$
224
$
579
$
510
___________________
(1)
Other non-cash losses includes
write-downs of assets.
(2)
Change in fair value of
derivatives includes changes in the fair value of derivatives that
are not designated as hedging instruments.
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
(In millions)
Reconciliation of Adjusted interest
expense to Interest expense:
Interest expense
$
42
$
46
$
84
$
93
Interest income
—
(1)
—
(1)
Amortization of premium on long-term
debt
—
—
—
1
Capitalized interest on expansion
capital
1
1
2
1
Amortization of debt expense and
discount
(2)
(1)
(3)
(2)
Adjusted interest expense
$
41
$
45
$
83
$
92
ENABLE MIDSTREAM PARTNERS,
LP
OPERATING DATA
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Operating Data:
Natural gas gathered volumes—TBtu
399
377
767
788
Natural gas gathered volumes—TBtu/d
4.39
4.14
4.24
4.33
Natural gas processed volumes—TBtu (1)
200
185
385
408
Natural gas processed volumes—TBtu/d
(1)
2.20
2.04
2.13
2.24
NGLs produced—MBbl/d (1)(2)
145.61
112.78
132.33
116.82
NGLs sold—MBbl/d (2)(3)
147.62
122.99
133.82
122.15
Condensate sold—MBbl/d
6.76
5.68
6.77
6.96
Crude oil and condensate gathered
volumes—MBbl/d
110.98
84.68
112.17
112.97
Transported volumes—TBtu
499
495
1,048
1,092
Transported volumes—TBtu/d
5.44
5.40
5.77
5.98
Interstate firm contracted
capacity—Bcf/d
5.73
5.78
6.13
6.13
Intrastate average deliveries—TBtu/d
1.57
1.67
1.61
1.87
___________________
(1)
Includes volumes under
third-party processing arrangements.
(2)
Excludes condensate.
(3)
NGLs sold includes volumes of
NGLs withdrawn from inventory or purchased for system balancing
purposes.
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Anadarko
Gathered volumes—TBtu/d
2.14
1.89
2.07
2.09
Natural gas processed volumes—TBtu/d
(1)
1.93
1.73
1.86
1.90
NGLs produced—MBbl/d (1)(2)
132.77
100.34
120.47
103.46
Crude oil and condensate gathered
volumes—MBbl/d
79.97
61.40
80.36
87.94
Arkoma
Gathered volumes—TBtu/d
0.40
0.39
0.39
0.41
Natural gas processed volumes—TBtu/d
(1)
0.07
0.08
0.07
0.08
NGLs produced—MBbl/d (1)(2)
4.48
4.05
3.99
3.97
Ark-La-Tex
Gathered volumes—TBtu/d
1.85
1.86
1.78
1.83
Natural gas processed volumes—TBtu/d
0.20
0.23
0.20
0.26
NGLs produced—MBbl/d (2)
8.36
8.39
7.87
9.39
Williston
Crude oil gathered volumes—MBbl/d
31.01
23.28
31.81
25.03
___________________
(1)
Includes volumes under third-party
processing arrangements.
(2)
Excludes condensate.
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version on businesswire.com: https://www.businesswire.com/news/home/20210804005233/en/
Media and Investor Matt Beasley (405) 558-4600
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