DALLAS, Nov. 2, 2021 /PRNewswire/ -- EnLink Midstream,
LLC (NYSE: ENLC) (EnLink) reported financial results for the third
quarter of 2021.
Highlights
- Reported net income of $32.3
million, net cash provided by operating activities of
$197.0 million, and adjusted EBITDA,
net to EnLink, of $256.4 million for
the third quarter of 2021, driven by strong producer activity and
continued focus on operating efficiencies. Results were ahead of
internal forecast, excluding temporary $4
million impact from Hurricane Ida during the quarter.
- Taking into account the third quarter results, EnLink expects
to report 2021 net income within the guidance range provided in
June of $125 to $165 million. EnLink also expects to report 2021
adjusted EBITDA in the upper end of guidance provided in June of
$1.02 billion to $1.06 billion.
- Grew adjusted EBITDA 3.6% compared to the third quarter of
2020, after excluding the impact of minimum volume commitments
(MVC) that expired in 2020.
- Continued to focus on operating efficiencies leading to
approximately flat operating and general and administrative
expenses in the first nine months of 2021 compared to the same
period in 2020, net of Project War Horse and Winter Storm Uri impacts. These results were
achieved despite the inflationary environment facing the
industry.
- Experienced improving volume trends across EnLink's Permian,
Oklahoma, and North Texas segments as producers continued to
take advantage of the improved commodity price environment. Given
the natural time lag between drilling a well and bringing volumes
online, EnLink's visibility and outlook for the fourth quarter of
2021 and into 2022 continues to strengthen.
- Delivered $80.5 million of free
cash flow after distributions (FCFAD) for the third quarter of
2021, driven by strong operational results and timing of capex. On
a trailing 12-month basis as of September
30, 2021, EnLink has generated nearly $340 million in total FCFAD.
- Completed Project War Horse and announcing Project Phantom, the
second plant relocation from Central
Oklahoma to the Midland Basin, demonstrating continued
success in executing our capital-light approach to meeting rising
customer activity while maximizing efficiency across our asset
footprint. Project Phantom will relocate EnLink's Thunderbird
Plant, bringing 200 million cubic feet per day (MMcf/d) of
processing capacity to the Midland Basin. The project is expected
to be online in the fourth quarter of 2022 and represents cost
savings of approximately 50% over illustrative new-build
costs.
- Exited the third quarter of 2021 with leverage at 4.1x as
EnLink continues to de-lever and approach its near-term target of
less than 4x.
- Paid down $100 million of
December 2021 term loan during the
third quarter of 2021, leaving a very manageable $150 million to be paid in the fourth
quarter.
- Repurchased $12.5 million of
common units during the third quarter.
- Subsequent to the quarter, EnLink made meaningful progress on
its emission goals to achieve a 30% reduction in our total carbon
dioxide (CO2) equivalent emissions by 2030 (as compared
to 2020 levels) and net zero greenhouse gas emissions by 2050 by
entering into a 15-year agreement to sell CO2 from
EnLink's Bridgeport plant to
Continental Carbonic Products to be used in food-grade
applications.
"EnLink delivered another great quarter and one that exceeded
our internal forecast, excluding the temporary impact of Hurricane
Ida," said Chairman and CEO Barry E.
Davis. "With the supportive commodity price environment, the
corresponding increase in producer activity in our key producing
basins, and our team's relentless focus on execution and
operational excellence, EnLink is delivering strong results this
year and remains on pace to be in the upper end of our previously
announced updated adjusted EBITDA guidance range. With the current
industry backdrop, our outlook for 2022 and beyond continues to
improve. We are excited about the future and will continue to work
to deliver growth in a capital-light, returns-focused manner with
capacity expansions like Project War Horse and now Project
Phantom."
"I am also very excited about the work our team is doing in
energy transition to provide solutions for other companies to
reduce their carbon footprints, as well as to address our own
emissions footprint. On that front, we are making meaningful
progress towards our net zero goals and entered into a 15-year
agreement to sell CO2 from our Bridgeport facility to Continental Carbonic
Products for use in food-grade products. Our teams, including our
new Carbon Solutions Group, are focused on identifying additional
projects that create sustainable value for EnLink and our
unitholders and help us achieve our vision for 'the future of
midstream.'"
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.
Third Quarter 2021 Financial Results and Highlights
|
Three Months Ended
|
$ millions, unless
noted
|
September 30,
2021
|
|
June 30,
2021
|
|
September 30,
2020
|
|
|
|
|
|
|
Net income
|
32
|
|
9
|
|
39
|
Adjusted EBITDA, net
to EnLink
|
256
|
|
258
|
|
262
|
Net cash provided by
operating activities
|
197
|
|
176
|
|
244
|
Free cash flow after
distributions
|
81
|
|
72
|
|
102
|
Total capex &
plant relocation costs, net to EnLink
|
49
|
|
58
|
|
38
|
Debt to Adjusted
EBITDA*
|
4.1x
|
|
4.1x
|
|
4.2x
|
Outstanding common
units**
|
487,957,616
|
|
488,622,133
|
|
489,746,802
|
|
|
|
|
|
|
*As calculated under
EnLink's Revolver.
|
**Outstanding common
units as of October 28, 2021, July 29, 2021, and October 29,
2020, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter 2021 Segment Updates
Permian Basin:
- Segment profit of $69.1 million
for the third quarter of 2021 was 57% higher than the second
quarter of 2021 and 47% higher than the third quarter of 2020.
Segment profit included $8.8 million
and $10.0 million of operating
expenses related to Project War Horse in the third quarter of 2021
and second quarter of 2021, respectively. Segment profit also
included unrealized derivative gains/(losses) of $10.2 million and $(7.9)
million for the third quarter of 2021 and second quarter of
2021, respectively. Excluding War Horse operating expenses and
unrealized derivative activity, segment profit in the third quarter
of 2021 grew approximately 9% sequentially and 47% over the prior
year quarter.
- Segment cash flow totaled $43.3
million for the third quarter of 2021, marking the fifth
consecutive quarter of positive segment cash flow.
- Average natural gas gathering volumes for the third quarter of
2021 were approximately 8% higher as compared to the second quarter
of 2021 and approximately 20% higher as compared to the third
quarter of 2020. Average natural gas processing volumes for the
third quarter of 2021 increased approximately 11% compared to the
prior quarter and were 14% higher as compared to the third quarter
of 2020.
- Project War Horse successfully came online during the third
quarter as expected, adding 80 MMcf/d of processing capacity to the
Midland Basin. A capital-light capacity expansion for the War Horse
processing plant is on pace to be completed during the fourth
quarter of 2021, bringing total facility capacity to 95
MMcf/d.
- Project Phantom, as discussed above, is a low-cost, high-return
project to relocate an underutilized natural gas processing plant
from Oklahoma to the Midland
Basin. The relocation is expected to cost approximately
$80 million - representing
approximately 50% savings over illustrative new-build costs - and
is expected to add approximately 200 MMcf/d of natural gas
processing capacity. Similar to Project War Horse, it is estimated
that $50 million of the total project
cost will be allocated to operating expenses under GAAP. The
relocation is expected to be completed during the fourth quarter of
2022 and is expected to achieve an EBITDA multiple under 4x.
- Average crude gathering volumes increased by approximately 29%
for the third quarter of 2021 as compared to the second quarter of
2021 due to timing of producer completion activity.
Louisiana:
- Segment profit of $63.7 million
for the third quarter of 2021 was 5% lower as compared to the
second quarter of 2021 and approximately 3% lower as compared to
the third quarter of 2020. Segment profit included unrealized
derivative losses of $8.8 million and
$2.7 million for the third quarter of
2021 and third quarter of 2020, respectively. The estimated impact
of Hurricane Ida on segment profit was approximately $4 million, primarily from the delay in
restarting industrial activity in the region. Excluding the impact
of unrealized derivative activity and Hurricane Ida, segment profit
in the third quarter of 2021 was approximately flat relative to the
second quarter of 2021.
- Segment cash flow for the third quarter of 2021 was
$63.3 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 third
quarter of 2021 were approximately 6% lower as compared to the
second quarter of 2021, and approximately 3% higher as compared to
the third quarter of 2020.
- NGL fractionation volumes for the third quarter of 2021 were
approximately 9% lower as compared to the second quarter of 2021,
and approximately 6% lower as compared to the third quarter of
2020, primarily as a result of impact of Hurricane Ida.
- Average crude volumes handled in EnLink's Ohio River Valley
operations for the third quarter of 2021 were higher by
approximately 12% as compared to the third quarter of 2020 due to
higher levels of activity in the region.
Oklahoma:
- Segment profit of $87.1 million
for the third quarter of 2021 was approximately 2% higher as
compared to the second quarter of 2021.
- Segment cash flow for the third quarter of 2021 was
$76.8 million, and Oklahoma is expected to continue generating
strong segment cash flow in the fourth quarter of 2021.
- Average natural gas gathering volumes for the third quarter of
2021 were approximately 2% lower as compared to the second quarter
of 2021. Average natural gas processing volumes for the third
quarter of 2021 decreased by approximately 3% when compared to the
second quarter of 2021.
- Gathering and processing volumes for the third quarter of 2021
were 4% lower compared to the fourth quarter of 2020, as producer
activity during the third quarter helped 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 third quarter of 2021. First volumes came online
during the third quarter of 2021 with a full quarter of
contribution beginning in the fourth quarter of 2021.
- As producer activity continues to improve in 2021, EnLink
anticipates its gathering volumes to be approximately flat in 2022
as compared to 2021. It is anticipated that approximately half of
the scheduled wells to be brought on line during 2021 will occur in
the fourth quarter. In addition, we expect an increase in the
number of wells brought on line in 2022.
- Average crude gathering volumes during the third quarter of
2021 were approximately 16% lower as compared to the second quarter
of 2021.
North Texas:
- Segment profit of $60.0 million
for the third quarter of 2021 increased by approximately 4% as
compared to the second quarter of 2021.
- Segment cash flow for the third quarter of 2021 was
$56.7 million. North Texas is expected to generate strong
segment cash flow in the fourth quarter of 2021.
- Average natural gas gathering and transportation volumes for
the third quarter of 2021 were approximately flat as compared to
the second quarter of 2021. Average natural gas processing volumes
for the third quarter of 2021 were flat when compared to the second
quarter of 2021.
Bridgeport CO2 Project
EnLink has entered
into an agreement with Continental Carbonic Products, a wholly
owned subsidiary of Matheson Tri-Gas, and member of the Nippon
Sanso Holdings Company group of companies, to capture and sell
CO2 emitted from EnLink's Bridgeport plant in North Texas. The CO2 will be sold
on a firm basis for 15 years and will be converted into food-grade
products. This project is expected to be in service in early 2024.
The project makes meaningful progress toward EnLink's goal of a 30%
reduction in total CO2-equivalent emissions intensity by
2030, while being modestly profitable.
Third Quarter 2021 Earnings Call Details
EnLink will
hold a conference call to discuss third quarter 2021 results on
November 3, 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/10160263/ed51129e99
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; costs
associated with the relocation of processing facilities; 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 and 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); (costs associated with the
relocation of processing facilities); non-cash interest
(income)/expense; (payments to terminate interest rate swaps);
(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 revenues,
less cost of sales (exclusive of operating expenses and
depreciation and amortization), less operating expenses. 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 September 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,"
"expect", "continue," 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 weather-related,
events such as 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 and certain of our other debt, (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
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Total
revenues
|
$
|
1,787.6
|
|
|
$
|
928.5
|
|
|
$
|
4,442.7
|
|
|
$
|
2,829.5
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
Cost of sales,
exclusive of operating expenses and depreciation and
amortization (1)(2)
|
1,400.8
|
|
|
549.5
|
|
|
3,390.6
|
|
|
1,702.5
|
|
Operating
expenses
|
106.9
|
|
|
94.3
|
|
|
260.0
|
|
|
283.1
|
|
Depreciation and
amortization
|
153.0
|
|
|
160.3
|
|
|
455.9
|
|
|
481.3
|
|
Impairments
|
—
|
|
|
—
|
|
|
—
|
|
|
354.5
|
|
(Gain) loss on
disposition of assets
|
(0.4)
|
|
|
(1.8)
|
|
|
(0.7)
|
|
|
2.8
|
|
General and
administrative
|
28.2
|
|
|
25.7
|
|
|
80.3
|
|
|
79.6
|
|
Total operating costs
and expenses
|
1,688.5
|
|
|
828.0
|
|
|
4,186.1
|
|
|
2,903.8
|
|
Operating income
(loss)
|
99.1
|
|
|
100.5
|
|
|
256.6
|
|
|
(74.3)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest expense, net
of interest income
|
(60.1)
|
|
|
(55.5)
|
|
|
(180.1)
|
|
|
(166.3)
|
|
Gain on extinguishment
of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
32.0
|
|
Income (loss) from
unconsolidated affiliates
|
(2.3)
|
|
|
(0.2)
|
|
|
(9.9)
|
|
|
0.8
|
|
Other income
|
—
|
|
|
0.4
|
|
|
0.1
|
|
|
0.4
|
|
Total other
expense
|
(62.4)
|
|
|
(55.3)
|
|
|
(189.9)
|
|
|
(133.1)
|
|
Income (loss) before
non-controlling interest and income taxes
|
36.7
|
|
|
45.2
|
|
|
66.7
|
|
|
(207.4)
|
|
Income tax benefit
(expense)
|
(4.4)
|
|
|
(6.0)
|
|
|
(12.4)
|
|
|
16.0
|
|
Net income
(loss)
|
32.3
|
|
|
39.2
|
|
|
54.3
|
|
|
(191.4)
|
|
Net income
attributable to non-controlling interest
|
30.4
|
|
|
26.6
|
|
|
86.7
|
|
|
78.7
|
|
Net income (loss)
attributable to ENLC
|
$
|
1.9
|
|
|
$
|
12.6
|
|
|
$
|
(32.4)
|
|
|
$
|
(270.1)
|
|
Net income (loss)
attributable to ENLC per unit:
|
|
|
|
|
|
|
|
Basic common
unit
|
$
|
—
|
|
|
$
|
0.03
|
|
|
$
|
(0.07)
|
|
|
$
|
(0.55)
|
|
Diluted common
unit
|
$
|
—
|
|
|
$
|
0.03
|
|
|
$
|
(0.07)
|
|
|
$
|
(0.55)
|
|
|
|
|
|
|
|
|
|
Weighted average
common units outstanding (basic and diluted)
|
488.6
|
|
|
489.7
|
|
|
489.6
|
|
|
489.2
|
|
Weighted average
common units outstanding (diluted)
|
494.8
|
|
|
490.9
|
|
|
489.6
|
|
|
489.2
|
|
|
________________________________
|
(1)
|
Includes related
party cost of sales of $4.9 million and $2.0 million for the three
months ended September 30, 2021 and 2020, respectively, and
excludes all operating expenses as well as depreciation and
amortization related to our operating segments of $150.8 million
and $158.6 million for the three months ended September 30,
2021 and 2020, respectively.
|
(2)
|
Includes related
party cost of sales of $11.7 million and $6.2 million for the nine
months ended September 30, 2021 and 2020, respectively, and
excludes all operating expenses as well as depreciation and
amortization related to our operating segments of $449.9 million
and $475.5 million for the nine months ended September 30,
2021 and 2020, respectively.
|
EnLink Midstream,
LLC
|
Reconciliation of
Net Income (Loss) to Adjusted EBITDA
|
(All amounts in
millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net income
(loss)
|
$
|
32.3
|
|
|
$
|
39.2
|
|
|
$
|
54.3
|
|
|
$
|
(191.4)
|
|
Interest expense, net
of interest income
|
60.1
|
|
|
55.5
|
|
|
180.1
|
|
|
166.3
|
|
Depreciation and
amortization
|
153.0
|
|
|
160.3
|
|
|
455.9
|
|
|
481.3
|
|
Impairments
|
—
|
|
|
—
|
|
|
—
|
|
|
354.5
|
|
(Income) loss from
unconsolidated affiliates
|
2.3
|
|
|
0.2
|
|
|
9.9
|
|
|
(0.8)
|
|
Distributions from
unconsolidated affiliates
|
0.1
|
|
|
—
|
|
|
3.8
|
|
|
2.0
|
|
(Gain) loss on
disposition of assets
|
(0.4)
|
|
|
(1.8)
|
|
|
(0.7)
|
|
|
2.8
|
|
Gain on
extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(32.0)
|
|
Unit-based
compensation
|
6.4
|
|
|
8.4
|
|
|
19.3
|
|
|
24.6
|
|
Income tax expense
(benefit)
|
4.4
|
|
|
6.0
|
|
|
12.4
|
|
|
(16.0)
|
|
Unrealized loss on
commodity swaps
|
1.2
|
|
|
2.2
|
|
|
32.9
|
|
|
8.0
|
|
Costs associated with
the relocation of processing facilities (1)
|
8.8
|
|
|
—
|
|
|
26.6
|
|
|
—
|
|
Other (2)
|
(0.2)
|
|
|
(0.3)
|
|
|
(0.2)
|
|
|
(0.8)
|
|
Adjusted EBITDA before
non-controlling interest
|
268.0
|
|
|
269.7
|
|
|
794.3
|
|
|
798.5
|
|
Non-controlling
interest share of adjusted EBITDA from joint ventures
(3)
|
(11.6)
|
|
|
(8.1)
|
|
|
(31.0)
|
|
|
(21.8)
|
|
Adjusted EBITDA, net to
ENLC
|
$
|
256.4
|
|
|
$
|
261.6
|
|
|
$
|
763.3
|
|
|
$
|
776.7
|
|
____________________________
|
(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 completed in the third quarter of 2021 and
is 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
September
30,
|
|
Nine Months
Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net cash provided by
operating activities
|
$
|
197.0
|
|
|
$
|
244.2
|
|
|
$
|
599.2
|
|
|
$
|
561.0
|
|
Interest expense
(1)
|
55.1
|
|
|
54.5
|
|
|
166.6
|
|
|
163.1
|
|
Utility credits, net
of usage (2)
|
(5.6)
|
|
|
—
|
|
|
38.2
|
|
|
—
|
|
Payments to terminate
interest rate swaps (3)
|
0.5
|
|
|
—
|
|
|
1.8
|
|
|
—
|
|
Accruals for settled
commodity swap transactions
|
(2.1)
|
|
|
0.9
|
|
|
(4.6)
|
|
|
0.7
|
|
Distributions from
unconsolidated affiliate investment in excess of
earnings
|
0.1
|
|
|
(0.4)
|
|
|
3.8
|
|
|
0.4
|
|
Costs associated with
the relocation of processing facilities (4)
|
8.8
|
|
|
—
|
|
|
26.6
|
|
|
—
|
|
Other (5)
|
(0.2)
|
|
|
0.4
|
|
|
2.4
|
|
|
1.1
|
|
Changes in operating
assets and liabilities which (provided) used cash:
|
|
|
|
|
|
|
|
Accounts receivable,
accrued revenues, inventories, and other
|
167.6
|
|
|
46.5
|
|
|
276.8
|
|
|
(72.6)
|
|
Accounts payable,
accrued product purchases, and other accrued liabilities
|
(153.2)
|
|
|
(76.4)
|
|
|
(316.5)
|
|
|
144.8
|
|
Adjusted EBITDA before
non-controlling interest
|
268.0
|
|
|
269.7
|
|
|
794.3
|
|
|
798.5
|
|
Non-controlling
interest share of adjusted EBITDA from joint ventures
(6)
|
(11.6)
|
|
|
(8.1)
|
|
|
(31.0)
|
|
|
(21.8)
|
|
Adjusted EBITDA, net
to ENLC
|
256.4
|
|
|
261.6
|
|
|
763.3
|
|
|
776.7
|
|
Growth capital
expenditures, net to ENLC (7)
|
(33.2)
|
|
|
(32.6)
|
|
|
(89.1)
|
|
|
(165.9)
|
|
Maintenance capital
expenditures, net to ENLC (7)
|
(6.9)
|
|
|
(5.0)
|
|
|
(19.1)
|
|
|
(20.9)
|
|
Interest expense, net
of interest income
|
(60.1)
|
|
|
(55.5)
|
|
|
(180.1)
|
|
|
(166.3)
|
|
Distributions
declared on common units
|
(46.6)
|
|
|
(46.4)
|
|
|
(140.0)
|
|
|
(139.3)
|
|
ENLK preferred unit
accrued cash distributions (8)
|
(23.0)
|
|
|
(22.9)
|
|
|
(69.0)
|
|
|
(68.5)
|
|
Costs associated with
the relocation of processing facilities (4)
|
(8.8)
|
|
|
—
|
|
|
(26.6)
|
|
|
—
|
|
Non-cash interest
expense
|
2.7
|
|
|
—
|
|
|
7.3
|
|
|
—
|
|
Payments to terminate
interest rate swaps (3)
|
(0.5)
|
|
|
—
|
|
|
(1.8)
|
|
|
—
|
|
Other (9)
|
0.5
|
|
|
2.9
|
|
|
1.3
|
|
|
3.1
|
|
Free cash flow after
distributions
|
$
|
80.5
|
|
|
$
|
102.1
|
|
|
$
|
246.2
|
|
|
$
|
218.9
|
|
|
|
|
|
|
|
|
|
Actual declared
distribution to common unitholders
|
$
|
46.6
|
|
|
$
|
46.4
|
|
|
$
|
140.0
|
|
|
$
|
139.3
|
|
Distribution
coverage
|
3.63x
|
|
|
3.83x
|
|
|
3.58x
|
|
|
3.73x
|
|
Distributions
declared per ENLC unit
|
$
|
0.09375
|
|
|
$
|
0.09375
|
|
|
$
|
0.28125
|
|
|
$
|
0.28125
|
|
____________________________
|
(1)
|
Net of amortization
of debt issuance costs, net discount of senior unsecured notes, and
designated cash flow hedge, 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. These utility credits are recorded as "Other
current assets" or "Other assets, net" on our consolidated balance
sheets depending on the timing of their expected usage, and
amortized as we incur utility expenses.
|
(3)
|
Represents cash paid
for the early termination of our interest rate swaps due to the
partial repayment of the Term Loan in May 2021 and September 2021
of $100.0 million and $100.0 million,
respectively.
|
(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 completed in the third quarter of 2021 and
is not part of our ongoing operations.
|
(5)
|
Includes current
income tax expense; 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
September 30, 2021
|
|
|
|
|
|
|
|
Segment
profit
|
$
|
69.1
|
|
|
$
|
63.7
|
|
|
$
|
87.1
|
|
|
$
|
60.0
|
|
Capital
expenditures
|
(25.8)
|
|
|
(0.4)
|
|
|
(10.3)
|
|
|
(3.3)
|
|
Segment cash
flow
|
$
|
43.3
|
|
|
$
|
63.3
|
|
|
$
|
76.8
|
|
|
$
|
56.7
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2020
|
|
|
|
|
|
|
|
Segment
profit
|
$
|
46.9
|
|
|
$
|
65.7
|
|
|
$
|
105.8
|
|
|
$
|
66.3
|
|
Capital
expenditures
|
(28.5)
|
|
|
(8.5)
|
|
|
(2.6)
|
|
|
(3.0)
|
|
Segment cash
flow
|
$
|
18.4
|
|
|
$
|
57.2
|
|
|
$
|
103.2
|
|
|
$
|
63.3
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2021
|
|
|
|
|
|
|
|
Segment
profit
|
$
|
155.9
|
|
|
$
|
213.2
|
|
|
$
|
228.2
|
|
|
$
|
194.8
|
|
Capital
expenditures
|
(78.6)
|
|
|
(5.4)
|
|
|
(17.1)
|
|
|
(7.6)
|
|
Segment cash
flow
|
$
|
77.3
|
|
|
$
|
207.8
|
|
|
$
|
211.1
|
|
|
$
|
187.2
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2020
|
|
|
|
|
|
|
|
Segment
profit
|
$
|
123.9
|
|
|
$
|
204.8
|
|
|
$
|
306.4
|
|
|
$
|
208.8
|
|
Capital
expenditures
|
(161.4)
|
|
|
(39.3)
|
|
|
(14.1)
|
|
|
(10.7)
|
|
Segment cash
flow
|
$
|
(37.5)
|
|
|
$
|
165.5
|
|
|
$
|
292.3
|
|
|
$
|
198.1
|
|
EnLink Midstream,
LLC
|
Operating
Data
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Midstream
Volumes:
|
|
|
|
|
|
|
|
Permian
Segment
|
|
|
|
|
|
|
|
Gathering and
Transportation (MMBtu/d)
|
1,111,800
|
|
|
923,400
|
|
|
1,021,800
|
|
|
875,200
|
|
Processing
(MMBtu/d)
|
1,062,800
|
|
|
929,900
|
|
|
966,500
|
|
|
895,800
|
|
Crude Oil Handling
(Bbls/d)
|
157,500
|
|
|
99,100
|
|
|
129,400
|
|
|
115,000
|
|
Louisiana
Segment
|
|
|
|
|
|
|
|
Gathering and
Transportation (MMBtu/d)
|
2,013,900
|
|
|
1,961,100
|
|
|
2,101,000
|
|
|
1,959,600
|
|
Crude Oil Handling
(Bbls/d)
|
17,600
|
|
|
15,700
|
|
|
16,000
|
|
|
16,300
|
|
NGL Fractionation
(Gals/d)
|
7,050,500
|
|
|
7,462,600
|
|
|
7,295,100
|
|
|
7,665,700
|
|
Brine Disposal
(Bbls/d)
|
3,300
|
|
|
1,100
|
|
|
2,500
|
|
|
1,400
|
|
Oklahoma
Segment
|
|
|
|
|
|
|
|
Gathering and
Transportation (MMBtu/d)
|
996,900
|
|
|
1,113,900
|
|
|
983,700
|
|
|
1,142,800
|
|
Processing
(MMBtu/d)
|
1,004,400
|
|
|
1,125,600
|
|
|
999,900
|
|
|
1,120,800
|
|
Crude Oil Handling
(Bbls/d)
|
20,000
|
|
|
25,600
|
|
|
20,400
|
|
|
30,800
|
|
North Texas
Segment
|
|
|
|
|
|
|
|
Gathering and
Transportation (MMBtu/d)
|
1,377,600
|
|
|
1,450,900
|
|
|
1,370,700
|
|
|
1,505,100
|
|
Processing
(MMBtu/d)
|
627,900
|
|
|
669,000
|
|
|
626,700
|
|
|
679,800
|
|
EnLink Midstream,
LLC
Forward-Looking
Reconciliation of Net Income to Adjusted EBITDA
(All amounts in
millions)
(Unaudited)
|
|
($MM)
|
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
|
|
|
___________________________
|
(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.
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EnLink Midstream does not provide a reconciliation of
forward-looking Net Cash Provided by Operating Activities to
Adjusted EBITDA because the company is unable to predict with
reasonable certainty changes in working capital, which may impact
cash provided or used during the year. Working capital includes
accounts receivable, accounts payable and other current assets and
liabilities. These items are uncertain and depend on various
factors outside the 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