DALLAS, Aug. 3, 2021 /PRNewswire/ -- EnLink
Midstream, LLC (NYSE: ENLC) (EnLink) reported financial results for
the second quarter of 2021.
Highlights
- Reported net income of $9.4
million, net cash provided by operating activities of
$176.4 million, and adjusted EBITDA,
net to EnLink, of $257.5 million for
the second quarter of 2021, driven by strong producer activity and
continued focus on efficiencies.
- Grew adjusted EBITDA 6.5% compared to the second quarter of
2020, after excluding the impact of now expired 2020 minimum volume
commitments (MVC).
- Continued to focus on operating efficiencies leading to
approximately flat operating and G&A expenses in the first half
of 2021 compared to the second half of 2020, net of Project War
Horse and Winter Storm Uri impacts,
while in a growth and inflationary environment.
- Experienced increased producer activity during the quarter in
EnLink's Permian and Oklahoma
segments as operators responded to the strengthened commodity price
environment.
- Formed the previously announced EnLink Carbon Solutions Group
to develop carbon solutions service offerings built on EnLink's
extensive footprint and longstanding customer relationships in
Louisiana.
- Continued to generate positive segment cash flow in all four
business segments during the second quarter of 2021.
- Delivered $71.5 million of free
cash flow after distributions (FCFAD) for the second quarter of
2021 as a result of strong operational results and timing of capex.
On a trailing 12-month basis as of June 30,
2021, EnLink has generated $359.4
million in total FCFAD.
- Exited the quarter with leverage at 4.1x as EnLink approaches
its near-term target of less than 4x. EnLink will continue to
de-lever while pursuing a more balanced approach for uses of FCFAD
as it nears its near-term leverage goal.
- Paid down $100 million of
December 2021 term loan during the
second quarter of 2021.
- Repurchased $10 million of common
units in June and July 2021.
"EnLink delivered another solid quarter of operating and
financial results as we continue to make progress on our strategic
plan," said Barry E. Davis, EnLink
Chairman and CEO. "With the tremendous execution by our team,
continued momentum in producer activity on our footprint, and
strong commodity prices, we expect to end 2021 in the upper end of
our previously updated adjusted EBITDA guidance range of
$1.02 to $1.06
billion, which was itself a 7% increase over our original
full-year 2021 guidance at the midpoint.
"Our vision is to become the future of midstream by leading in
innovation and creating sustainable value for EnLink and our
unitholders. We took big steps toward achieving this vision
with the creation of our Carbon Solutions Group, which will work on
decarbonization projects that create compelling business
opportunities for EnLink and our industrial partners, while also
strengthening EnLink's leading role in the global energy
transition. Our extensive network of pipelines in
Louisiana and decades of
operational excellence uniquely positions us to build a carbon
capture and sequestration business that is mutually beneficial to
EnLink and our existing customer base along the Mississippi River
corridor, one of the highest CO2-emitting regions in the
country."
Adjusted EBITDA, segment cash flow, and free cash flow after
distributions used in this press release are non-GAAP measures and
are explained in greater detail under "Non-GAAP Financial
Information" below.
Second Quarter 2021 Financial Results and Highlights
|
Three Months
Ended
|
$millions, unless
noted
|
June 30,
2021
|
|
March 31,
2021
|
|
June 30,
2020
|
|
|
|
|
|
|
Net income
(loss)
|
9
|
|
13
|
|
30
|
Adjusted EBITDA, net
to EnLink
|
258
|
|
249
|
|
255
|
Net cash provided by
operating activities
|
176
|
|
226
|
|
135
|
Free cash flow after
distributions
|
72
|
|
94
|
|
72
|
Total capex &
plant relocation costs, net to EnLink
|
58
|
|
28
|
|
58
|
Debt to Adjusted
EBITDA*
|
4.1x
|
|
4.2x
|
|
4.3x
|
Outstanding common
units**
|
488,622,133
|
|
490,055,937
|
|
489,593,587
|
|
*As calculated under
EnLink's Revolver.
|
**Outstanding common
units as of July 29, 2021, April 29, 2021, and June 30, 2020,
respectively.
|
Second Quarter 2021 Segment Updates
Permian
Basin:
- Segment profit of $44.0 million
for the second quarter of 2021 was 3% higher than the first quarter
of 2021 and 28% higher than the second quarter of 2020. Segment
profit includes $10.0 million and
$6.0 million of operating expenses in
the second quarter of 2021 and first quarter of 2021, respectively,
related to our plant relocation project, Project War Horse.
- Segment cash flow totaled $4.5
million for the second quarter of 2021, marking the fourth
consecutive quarter of positive segment cash flow. This was
achieved despite a ramp up of capital expenditures and Project War
Horse operating expenses incurred during the quarter.
- Average natural gas gathering volumes for the second quarter of
2021 were approximately 11% higher as compared to the first quarter
of 2021 and approximately 18% higher as compared to the second
quarter of 2020. Average natural gas processing volumes for the
second quarter of 2021 increased approximately 9% compared to the
prior quarter and were 7% higher as compared to the second quarter
of 2020.
- While volumes in the first quarter of 2021 were adversely
impacted by Winter Storm Uri, gas
gathering and processing volumes in the second quarter were 10%
higher and 6% higher, respectively, over the fourth quarter of
2020. The second quarter of 2021 benefited from producers quickly
bringing wells back online following Winter
Storm Uri and continued momentum in rig and completion
activity.
- Average crude gathering volumes increased by approximately 13%
for the second quarter of 2021 as compared to the first quarter of
2021 due to timing of producer completion activity.
Louisiana:
- Segment profit of $67.3 million
for the second quarter of 2021 was 18% lower as compared to the
first quarter of 2021 and approximately 5% higher as compared to
the second quarter of 2020. The sequential decline was due to
normal natural gas liquids (NGL) business seasonality. The
improvement over the prior year was driven by the inception of the
Venture Global contract in the first quarter of 2021 and higher NGL
fractionation volumes.
- Segment cash flow for the second quarter of 2021 was
$65.1 million, and Louisiana is expected to continue generating
strong segment cash flow for the remainder of 2021 with the fourth
quarter expected to continue as the seasonally strongest
quarter.
- Average natural gas transportation volumes for the second
quarter of 2021 were approximately 1% lower as compared to the
first quarter of 2021 and approximately 14% higher as compared to
the second quarter of 2020.
- NGL fractionation volumes for the second quarter of 2021 were
approximately 9% higher as compared to the first quarter of 2021
and approximately 5% higher as compared to the second quarter of
2020.
- Average crude volumes handled in EnLink's Ohio River Valley
operations for the second quarter of 2021 were lower by
approximately 3% as compared to the second quarter of 2020 due to
lower overall levels of activity in the region.
Oklahoma:
- Segment profit of $85.6 million
for the second quarter of 2021 was approximately 54% higher as
compared to the first quarter of 2021, which was negatively
impacted by Winter Storm Uri.
Excluding the impact of MVC payments that expired in 2020, segment
profit grew over 5% in the second quarter of 2021 compared to the
fourth quarter of 2020.
- Segment cash flow for the second quarter of 2021 was
$80.7 million, and Oklahoma is expected to continue generating
strong segment cash flow for the remainder of 2021.
- Average natural gas gathering volumes for the second quarter of
2021 were approximately 8% higher as compared to the first quarter
of 2021. Average natural gas processing volumes for the second
quarter of 2021 increased by approximately 9% when compared to the
first quarter of 2021.
- Including the adverse impact of Winter
Storm Uri in the first quarter, gathering and processing
volumes were 2% lower compared to the fourth quarter of 2020, as
producer activity improved during the second quarter, helping to
moderate the decline in volumes.
- The Devon and Dow Inc. joint venture continues to progress as
expected under the joint venture's development plan, operating two
rigs during the second quarter of 2021. First volumes are expected
in the second half of 2021.
- Average crude gathering volumes during the second quarter of
2021 were approximately 36% higher as compared to the first quarter
of 2021.
North Texas:
- Segment profit of $57.9 million
for the second quarter of 2021 decreased by approximately 25% as
compared to the first quarter of 2021, which was positively
impacted by Winter Storm Uri.
Segment profit declined by approximately 6% compared to the fourth
quarter of 2020.
- Segment cash flow for the first quarter of 2021 was
$56.0 million. North Texas is expected to generate strong
segment cash flow for the remainder of 2021.
- Average natural gas gathering and transportation volumes for
the second quarter of 2021 increased by approximately 2% as
compared to the first quarter of 2021. Average natural gas
processing volumes for the second quarter of 2021 were flat when
compared to the first quarter of 2021.
- BKV and other operators continued to focus on production
optimization through restimulation activity in the basin.
Second Quarter 2021 Earnings Call Details
EnLink will
hold a conference call to discuss second quarter 2021 results on
August 4, 2021, 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 https://dpregister.com/sreg/10158225/ea8f026c35
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 EnLink Midstream
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
This press release
contains non-generally accepted accounting principles financial
measures that we refer to as adjusted EBITDA, free cash flow after
distributions, and segment cash flow.
We define adjusted EBITDA as net income (loss) plus (less)
interest expense, net of interest income; depreciation and
amortization; impairments; (income) loss from unconsolidated
affiliate investments; distributions from unconsolidated affiliate
investments; (gain) loss on disposition of assets; (gain) loss on
extinguishment of debt; unit-based compensation; income tax expense
(benefit); unrealized (gain) loss on commodity swaps; relocation
costs associated with the War Horse processing facility; accretion
expense associated with asset retirement obligations; transaction
costs; (non-cash rent); and (non-controlling interest share of
adjusted EBITDA from joint ventures).
We define free cash flow after distributions as adjusted EBITDA,
net to ENLC, plus (less) (growth capital expenditures, excluding
capital expenditures that were contributed by other entities and
relate to the non-controlling interest share of our consolidated
entities); (maintenance capital expenditures, excluding capital
expenditures that were contributed by other entities and relate to
the non-controlling interest share of our consolidated entities);
(interest expense, net of interest income); (distributions declared
on common units); (accrued cash distributions on Series B Preferred
Units and Series C Preferred Units paid or expected to be paid);
(relocation costs associated with the War Horse processing
facility); (payments to terminate interest rate swaps); non-cash
interest (income)/expense; (current income taxes); and proceeds
from the sale of equipment and land.
We define segment cash flow as segment profit less growth and
maintenance capital expenditures, which are gross to EnLink prior
to giving effect to the contributions by other entities related to
the non-controlling interest share of our consolidated
entities.
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
and free cash flow after distributions are both used as metrics in
our short-term incentive program for compensating employees.
Adjusted EBITDA, free cash flow after distributions, and segment
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.
Other definitions and explanations of terms used in this
press release:
Segment profit (loss) is defined as operating income (loss) plus
general and administrative expenses, depreciation and amortization,
(gain) loss on disposition of assets, and impairments. 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,
2020, and, when available, "Item 1. Financial Statements - Note
13—Segment Information" in ENLC's Quarterly Report on Form 10-Q for
the three months ended June 30, 2021, for further information
about segment profit (loss).
The Ascension JV is a joint venture between a subsidiary of
EnLink and a subsidiary of Marathon Petroleum Corporation in which
EnLink owns a 50% interest and Marathon Petroleum Corporation owns
a 50% interest. The Ascension JV, which began operations in
April 2017, owns an NGL pipeline that
connects EnLink's Riverside
fractionator to Marathon Petroleum Corporation's Garyville refinery.
The Delaware Basin JV is a
joint venture between EnLink and an affiliate of NGP in which
EnLink owns a 50.1% interest and NGP owns a 49.9% interest. The
Delaware Basin JV, which was
formed in August 2016, owns the Lobo
processing facilities and the Tiger processing plant located in the
Delaware Basin in Texas.
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, expected financial and operations results
associated with certain projects, acquisitions, or growth capital
expenditures, future operational results of our customers, results
in certain basins, future cost savings or operational initiatives,
profitability, financial or leverage metrics, the impact of
Winter Storm Uri on us and our
financial results and operations, including the impact of any
customer billing disputes and litigation arising out of Uri, future
expectations regarding sustainability initiatives, our future
capital structure and credit ratings, the impact of the COVID-19
pandemic on us and our financial results and operations,
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) the impact of the ongoing coronavirus (COVID-19)
pandemic including the impact of the emergence of any new variants
of the virus on our business, financial condition, and results of
operations, (b) 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 our other
unitholders, (c) 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, (d) 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, (e) the dependence on Devon for a
substantial portion of the natural gas and crude that we gather,
process, and transport, (f) developments that materially and
adversely affect Devon or other customers, (g) adverse developments
in the midstream business that may reduce our ability to make
distributions, (h) competition for crude oil, condensate, natural
gas, and NGL supplies and any decrease in the availability of such
commodities, (i) decreases in the volumes that we gather, process,
fractionate, or transport, (j) construction risks in our major
development projects, (k) our ability to receive or renew required
permits and other approvals, (l) increased federal, state, and
local legislation, and regulatory initiatives, as well as
government reviews relating to hydraulic fracturing resulting in
increased costs and reductions or delays in natural gas production
by our customers, (m) climate change legislation and regulatory
initiatives resulting in increased operating costs and reduced
demand for the natural gas and NGL services we provide, (n) changes
in the availability and cost of capital, including as a result of a
change in our credit rating, (o) volatile prices and market demand
for crude oil, condensate, natural gas, and NGLs that are beyond
our control, (p) our debt levels could limit our flexibility and
adversely affect our financial health or limit our flexibility to
obtain financing and to pursue other business opportunities, (q)
operating hazards, natural disasters, weather-related issues or
delays, casualty losses, and other matters beyond our control, (r)
reductions in demand for NGL products by the petrochemical,
refining, or other industries or by the fuel markets, (s)
impairments to goodwill, long-lived assets and equity method
investments, and (t) 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, LLC's and EnLink Midstream Partners,
LP's filings with the Securities and Exchange Commission, including
EnLink Midstream, LLC's and EnLink Midstream Partners, LP's Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current
Reports on Form 8-K. Neither EnLink Midstream, LLC nor EnLink
Midstream Partners, LP 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 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: Brian
Brungardt, Director of Investor Relations, 214-721-9353,
brian.brungardt@enlink.com
Media Relations: Jill
McMillan, Vice President of Strategic Relations & Public
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,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Total
revenues
|
$
|
1,406.7
|
|
|
$
|
744.9
|
|
|
$
|
2,655.1
|
|
|
$
|
1,901.0
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
Cost of sales,
exclusive of operating expenses and depreciation and amortization
(1)(2)
|
1,055.1
|
|
|
397.7
|
|
|
1,989.8
|
|
|
1,153.0
|
|
Operating
expenses
|
96.8
|
|
|
88.1
|
|
|
153.1
|
|
|
188.8
|
|
Depreciation and
amortization
|
151.9
|
|
|
158.2
|
|
|
302.9
|
|
|
321.0
|
|
Impairments
|
—
|
|
|
1.5
|
|
|
—
|
|
|
354.5
|
|
(Gain) loss on
disposition of assets
|
(0.3)
|
|
|
5.2
|
|
|
(0.3)
|
|
|
4.6
|
|
General and
administrative
|
26.1
|
|
|
23.5
|
|
|
52.1
|
|
|
53.9
|
|
Total operating costs
and expenses
|
1,329.6
|
|
|
674.2
|
|
|
2,497.6
|
|
|
2,075.8
|
|
Operating income
(loss)
|
77.1
|
|
|
70.7
|
|
|
157.5
|
|
|
(174.8)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest expense, net
of interest income
|
(60.0)
|
|
|
(55.2)
|
|
|
(120.0)
|
|
|
(110.8)
|
|
Gain on extinguishment
of debt
|
—
|
|
|
26.7
|
|
|
—
|
|
|
32.0
|
|
Income (loss) from
unconsolidated affiliates
|
(1.3)
|
|
|
(0.7)
|
|
|
(7.6)
|
|
|
1.0
|
|
Other income
|
0.2
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
Total other
expense
|
(61.1)
|
|
|
(29.2)
|
|
|
(127.5)
|
|
|
(77.8)
|
|
Income (loss) before
non-controlling interest and income taxes
|
16.0
|
|
|
41.5
|
|
|
30.0
|
|
|
(252.6)
|
|
Income tax benefit
(expense)
|
(6.6)
|
|
|
(11.7)
|
|
|
(8.0)
|
|
|
22.0
|
|
Net income
(loss)
|
9.4
|
|
|
29.8
|
|
|
22.0
|
|
|
(230.6)
|
|
Net income
attributable to non-controlling interest
|
31.0
|
|
|
25.7
|
|
|
56.3
|
|
|
52.1
|
|
Net income (loss)
attributable to ENLC
|
$
|
(21.6)
|
|
|
$
|
4.1
|
|
|
$
|
(34.3)
|
|
|
$
|
(282.7)
|
|
Net income (loss)
attributable to ENLC per unit:
|
|
|
|
|
|
|
|
Basic common
unit
|
$
|
(0.04)
|
|
|
$
|
0.01
|
|
|
$
|
(0.07)
|
|
|
$
|
(0.58)
|
|
Diluted common
unit
|
$
|
(0.04)
|
|
|
$
|
0.01
|
|
|
$
|
(0.07)
|
|
|
$
|
(0.58)
|
|
|
|
|
|
|
|
|
|
Weighted average
common units outstanding (basic and diluted)
|
490.0
|
|
|
489.3
|
|
|
490.0
|
|
|
489.0
|
|
Weighted average
common units outstanding (diluted)
|
490.0
|
|
|
490.4
|
|
|
490.0
|
|
|
489.0
|
|
________________________________
|
(1)
|
Includes related
party cost of sales of $3.6 million and $1.3 million for the three
months ended June 30, 2021 and 2020, respectively, and
excludes all operating expenses as well as depreciation and
amortization related to our operating segments of $150.1 million
and $156.1 million for the three months ended June 30, 2021
and 2020, respectively.
|
(2)
|
Includes related
party cost of sales of $6.8 million and $4.2 million for the six
months ended June 30, 2021 and 2020, respectively, and
excludes all operating expenses as well as depreciation and
amortization related to our operating segments of $299.1 million
and $316.9 million for the six months ended June 30, 2021 and
2020, respectively.
|
EnLink Midstream,
LLC
|
Reconciliation of
Net Income (Loss) to Adjusted EBITDA
|
(All amounts in
millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net income
(loss)
|
$
|
9.4
|
|
|
$
|
29.8
|
|
|
$
|
22.0
|
|
|
$
|
(230.6)
|
|
Interest expense, net
of interest income
|
60.0
|
|
|
55.2
|
|
|
120.0
|
|
|
110.8
|
|
Depreciation and
amortization
|
151.9
|
|
|
158.2
|
|
|
302.9
|
|
|
321.0
|
|
Impairments
|
—
|
|
|
1.5
|
|
|
—
|
|
|
354.5
|
|
(Income) loss from
unconsolidated affiliates
|
1.3
|
|
|
0.7
|
|
|
7.6
|
|
|
(1.0)
|
|
Distributions from
unconsolidated affiliates
|
0.1
|
|
|
0.2
|
|
|
3.7
|
|
|
2.0
|
|
(Gain) loss on
disposition of assets
|
(0.3)
|
|
|
5.2
|
|
|
(0.3)
|
|
|
4.6
|
|
Gain on
extinguishment of debt
|
—
|
|
|
(26.7)
|
|
|
—
|
|
|
(32.0)
|
|
Unit-based
compensation
|
6.4
|
|
|
7.4
|
|
|
12.9
|
|
|
16.2
|
|
Income tax expense
(benefit)
|
6.6
|
|
|
11.7
|
|
|
8.0
|
|
|
(22.0)
|
|
Unrealized loss on
commodity swaps
|
23.8
|
|
|
18.8
|
|
|
31.7
|
|
|
5.8
|
|
Relocation costs
associated with the War Horse processing facility (1)
|
10.2
|
|
|
—
|
|
|
17.8
|
|
|
—
|
|
Other (2)
|
0.4
|
|
|
(0.4)
|
|
|
—
|
|
|
(0.5)
|
|
Adjusted EBITDA before
non-controlling interest
|
269.8
|
|
|
261.6
|
|
|
526.3
|
|
|
528.8
|
|
Non-controlling
interest share of adjusted EBITDA from joint ventures
(3)
|
(12.3)
|
|
|
(6.5)
|
|
|
(19.4)
|
|
|
(13.7)
|
|
Adjusted EBITDA, net to
ENLC
|
$
|
257.5
|
|
|
$
|
255.1
|
|
|
$
|
506.9
|
|
|
$
|
515.1
|
|
____________________________
|
(1)
|
Represents cost
incurred related to the relocation of equipment and facilities from
the Battle Ridge processing plant, in the Oklahoma segment, to the
Permian segment that we expect to complete in 2021 and are not part
of our ongoing operations.
|
(2)
|
Includes accretion
expense associated with asset retirement obligations; transaction
costs, and non-cash rent, which relates to lease incentives
pro-rated over the lease term.
|
(3)
|
Non-controlling
interest share of adjusted EBITDA from joint ventures includes NGP
Natural Resources XI, L.P.'s ("NGP")'s 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.
|
EnLink Midstream,
LLC
|
Reconciliation of
Net Cash Provided by Operating Activities to Adjusted
EBITDA
|
and Free Cash Flow
After Distributions
|
(All amounts in
millions except ratios and per unit amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net cash provided by
operating activities
|
$
|
176.4
|
|
|
$
|
134.8
|
|
|
$
|
402.2
|
|
|
$
|
316.8
|
|
Interest expense
(1)
|
55.6
|
|
|
54.0
|
|
|
111.5
|
|
|
108.7
|
|
Utility credits
(2)
|
3.4
|
|
|
—
|
|
|
43.8
|
|
|
—
|
|
Payments to terminate
interest rate swaps (3)
|
1.3
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
Accruals for settled
commodity swap transactions
|
(2.6)
|
|
|
(5.2)
|
|
|
(2.5)
|
|
|
(0.2)
|
|
Distributions from
unconsolidated affiliate investment in excess of
earnings
|
0.1
|
|
|
0.6
|
|
|
3.7
|
|
|
0.8
|
|
Relocation costs
associated with the War Horse processing facility (4)
|
10.2
|
|
|
—
|
|
|
17.8
|
|
|
—
|
|
Other (5)
|
1.4
|
|
|
(0.1)
|
|
|
2.6
|
|
|
0.6
|
|
Changes in operating
assets and liabilities which (provided) used cash:
|
|
|
|
|
|
|
|
Accounts receivable,
accrued revenues, inventories, and other
|
91.7
|
|
|
50.2
|
|
|
109.2
|
|
|
(119.1)
|
|
Accounts payable,
accrued product purchases, and other accrued liabilities
|
(67.7)
|
|
|
27.3
|
|
|
(163.3)
|
|
|
221.2
|
|
Adjusted EBITDA before
non-controlling interest
|
269.8
|
|
|
261.6
|
|
|
526.3
|
|
|
528.8
|
|
Non-controlling
interest share of adjusted EBITDA from joint ventures
(6)
|
(12.3)
|
|
|
(6.5)
|
|
|
(19.4)
|
|
|
(13.7)
|
|
Adjusted EBITDA, net
to ENLC
|
257.5
|
|
|
255.1
|
|
|
506.9
|
|
|
515.1
|
|
Growth capital
expenditures, net to ENLC (7)
|
(40.0)
|
|
|
(50.7)
|
|
|
(55.9)
|
|
|
(133.3)
|
|
Maintenance capital
expenditures, net to ENLC (7)
|
(7.5)
|
|
|
(7.7)
|
|
|
(12.2)
|
|
|
(15.9)
|
|
Interest expense, net
of interest income
|
(60.0)
|
|
|
(55.2)
|
|
|
(120.0)
|
|
|
(110.8)
|
|
Distributions
declared on common units
|
(46.7)
|
|
|
(46.4)
|
|
|
(93.4)
|
|
|
(92.9)
|
|
ENLK preferred unit
accrued cash distributions (8)
|
(23.0)
|
|
|
(22.8)
|
|
|
(46.0)
|
|
|
(45.6)
|
|
Relocation costs
associated with the War Horse processing facility (4)
|
(10.2)
|
|
|
—
|
|
|
(17.8)
|
|
|
—
|
|
Non-cash interest
expense
|
2.4
|
|
|
—
|
|
|
4.6
|
|
|
—
|
|
Payments to terminate
interest rate swaps (3)
|
(1.3)
|
|
|
—
|
|
|
(1.3)
|
|
|
—
|
|
Other (9)
|
0.3
|
|
|
—
|
|
|
0.8
|
|
|
0.2
|
|
Free cash flow after
distributions
|
$
|
71.5
|
|
|
$
|
72.3
|
|
|
$
|
165.7
|
|
|
$
|
116.8
|
|
|
|
|
|
|
|
|
|
Actual declared
distribution to common unitholders
|
$
|
46.7
|
|
|
$
|
46.4
|
|
|
$
|
93.4
|
|
|
$
|
92.9
|
|
Distribution
coverage
|
3.61x
|
|
|
3.65x
|
|
|
3.56x
|
|
|
3.69x
|
|
Distributions
declared per ENLC unit
|
$
|
0.09375
|
|
|
$
|
0.09375
|
|
|
$
|
0.18750
|
|
|
$
|
0.18750
|
|
____________________________
|
(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)
|
Under our utility
agreements, we are entitled to a base load of electricity and pay
or receive credits, based on market pricing, when we exceed or do
not use the base load amounts. Due to Winter Storm Uri, we received
credits from our utility providers based on market rates for our
unused electricity.
|
(3)
|
Represents cash paid
for the early termination of $100.0 million of our interest rate
swaps due to the partial repayment of the Term Loan in May
2021.
|
(4)
|
Represents cost
incurred related to the relocation of equipment and facilities from
the Battle Ridge processing plant, in the Oklahoma segment, to the
Permian segment that we expect to complete in 2021 and are not part
of our ongoing operations.
|
(5)
|
Includes current
income tax expense; amortization of designated cash flow hedge;
transaction costs; and non-cash rent, which relates to lease
incentives pro-rated over the lease term.
|
(6)
|
Non-controlling
interest share of adjusted EBITDA from joint ventures includes
NGP's 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.
|
(7)
|
Excludes capital
expenditures that were contributed by other entities and relate to
the non-controlling interest share of our consolidated
entities.
|
(8)
|
Represents the cash
distributions earned by the Series B Preferred Units and Series C
Preferred Units, which are not available to common
unitholders.
|
(9)
|
Includes current
income tax expense and proceeds from the sale of surplus or unused
equipment and land, which occurred in the normal operation of our
business.
|
EnLink Midstream,
LLC
|
Reconciliation of
Segment Profit to Segment Cash Flow
|
(All amounts in
millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Permian
|
|
Louisiana
|
|
Oklahoma
|
|
North
Texas
|
Three Months Ended
June 30, 2021
|
|
|
|
|
|
|
|
Segment
profit
|
$
|
44.0
|
|
|
$
|
67.3
|
|
|
$
|
85.6
|
|
|
$
|
57.9
|
|
Capital
expenditures
|
(39.5)
|
|
|
(2.2)
|
|
|
(4.9)
|
|
|
(1.9)
|
|
Segment cash
flow
|
$
|
4.5
|
|
|
$
|
65.1
|
|
|
$
|
80.7
|
|
|
$
|
56.0
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2020
|
|
|
|
|
|
|
|
Segment
profit
|
$
|
34.4
|
|
|
$
|
63.8
|
|
|
$
|
92.6
|
|
|
$
|
68.3
|
|
Capital
expenditures
|
(46.9)
|
|
|
(15.6)
|
|
|
(3.0)
|
|
|
(3.0)
|
|
Segment cash
flow
|
$
|
(12.5)
|
|
|
$
|
48.2
|
|
|
$
|
89.6
|
|
|
$
|
65.3
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2021
|
|
|
|
|
|
|
|
Segment
profit
|
$
|
86.8
|
|
|
$
|
149.5
|
|
|
$
|
141.1
|
|
|
$
|
134.8
|
|
Capital
expenditures
|
(52.8)
|
|
|
(5.0)
|
|
|
(6.8)
|
|
|
(4.3)
|
|
Segment cash
flow
|
$
|
34.0
|
|
|
$
|
144.5
|
|
|
$
|
134.3
|
|
|
$
|
130.5
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2020
|
|
|
|
|
|
|
|
Segment
profit
|
$
|
77.0
|
|
|
$
|
139.1
|
|
|
$
|
200.6
|
|
|
$
|
142.5
|
|
Capital
expenditures
|
(132.9)
|
|
|
(30.8)
|
|
|
(11.5)
|
|
|
(7.7)
|
|
Segment cash
flow
|
$
|
(55.9)
|
|
|
$
|
108.3
|
|
|
$
|
189.1
|
|
|
$
|
134.8
|
|
EnLink Midstream,
LLC
|
Operating
Data
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Midstream
Volumes:
|
|
|
|
|
|
|
|
Permian
Segment
|
|
|
|
|
|
|
|
Gathering and
Transportation (MMBtu/d)
|
1,025,900
|
|
|
871,500
|
|
|
976,000
|
|
|
851,300
|
|
Processing
(MMBtu/d)
|
958,400
|
|
|
896,100
|
|
|
917,500
|
|
|
878,900
|
|
Crude Oil Handling
(Bbls/d)
|
121,900
|
|
|
112,300
|
|
|
115,100
|
|
|
122,900
|
|
Louisiana
Segment
|
|
|
|
|
|
|
|
Gathering and
Transportation (MMBtu/d)
|
2,139,300
|
|
|
1,873,600
|
|
|
2,145,300
|
|
|
1,958,400
|
|
Crude Oil Handling
(Bbls/d)
|
15,200
|
|
|
15,700
|
|
|
15,100
|
|
|
16,600
|
|
NGL Fractionation
(Gals/d)
|
7,729,300
|
|
|
7,344,800
|
|
|
7,419,500
|
|
|
7,764,500
|
|
Brine Disposal
(Bbls/d)
|
2,900
|
|
|
1,400
|
|
|
2,200
|
|
|
1,600
|
|
Oklahoma
Segment
|
|
|
|
|
|
|
|
Gathering and
Transportation (MMBtu/d)
|
1,016,200
|
|
|
1,092,600
|
|
|
977,000
|
|
|
1,156,800
|
|
Processing
(MMBtu/d)
|
1,040,000
|
|
|
1,082,100
|
|
|
997,900
|
|
|
1,118,300
|
|
Crude Oil Handling
(Bbls/d)
|
23,800
|
|
|
30,000
|
|
|
20,700
|
|
|
33,300
|
|
North Texas
Segment
|
|
|
|
|
|
|
|
Gathering and
Transportation (MMBtu/d)
|
1,377,400
|
|
|
1,485,900
|
|
|
1,367,200
|
|
|
1,531,800
|
|
Processing
(MMBtu/d)
|
627,600
|
|
|
670,600
|
|
|
626,100
|
|
|
685,200
|
|
EnLink Midstream,
LLC
|
Forward-Looking
Reconciliation of Net Income to Adjusted EBITDA and Free Cash Flow
After Distributions
|
(All amounts in
millions)
|
(Unaudited)
|
|
|
2021 Outlook
(1)
Provided on Jun 3,
2021
|
Net income of EnLink
Midstream, LLC (2)
|
$
|
145.0
|
|
Interest expense, net
of interest income
|
242.0
|
|
Depreciation and
amortization
|
604.0
|
|
Income from
unconsolidated affiliate investments
|
(2.0)
|
|
Distributions from
unconsolidated affiliate investments
|
1.0
|
|
Unit-based
compensation
|
31.0
|
|
Income
taxes
|
30.0
|
|
Project War Horse
(3)
|
25.0
|
|
Other (4)
|
(1.0)
|
|
Adjusted EBITDA before
non-controlling interest
|
1075.0
|
|
Non-controlling
interest share of adjusted EBITDA (5)
|
(35.0)
|
|
Adjusted EBITDA, net to
EnLink Midstream, LLC
|
1040.0
|
|
Interest expense, net
of interest income
|
(242.0)
|
|
Maintenance capital
expenditures, net to ENLK (6)
|
(40.0)
|
|
Preferred unit
accrued cash distributions (7)
|
(92.0)
|
|
Other (8)
|
10.0
|
|
Distributable cash
flow
|
676.0
|
|
Common distributions
declared
|
(186.0)
|
|
Growth capital
expenditures, net to EnLink and Project War Horse (3)(6)
|
(140.0)
|
|
Free cash flow after
distributions
|
$
|
350.0
|
|
___________________________
|
(1)
|
Represents the
forward-looking net income guidance of EnLink Midstream, LLC for
the year ended December 31, 2021. 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, gains or losses as a result of legal
settlements, gains or losses on extinguishment of debt, the
financial effects of future acquisitions, and proceeds from the
sale of equipment. 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 Natural Resources XI,
L.P.'s ("NGP") 49.9% share of net income from the Delaware Basin
JV, (ii) Marathon Petroleum Corp.'s ("Marathon") 50% share of net
income from the Ascension JV., and (iii) other minor
non-controlling interests.
|
(3)
|
Project War Horse
includes operating expenses incurred related to the relocation of
equipment and facilities from the Battle Ridge processing plant, in
the Oklahoma segment, to the Permian segment that we expect to
complete in 2021 and are not part of our ongoing
operations.
|
(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 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 ENLK
Series C Preferred Units. 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)
|
Includes non-cash
interest (income)/expense and current tax
income/(expense).
|
EnLink Midstream does not provide a reconciliation of
forward-looking Net Cash Provided by Operating Activities to
Adjusted EBITDA and Excess Free Cash Flow because the companies are
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 companies'
control. For the same reasons, EnLink is unable to address the
probable significance of the unavailable information, which could
be material to future results.
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SOURCE EnLink Midstream, LLC