DALLAS, May 3, 2022
/PRNewswire/ -- EnLink Midstream, LLC (NYSE: ENLC) (EnLink)
reported financial results for the first quarter of 2022 and raised
full-year 2022 guidance.
Highlights
- Reported net income of $66.0
million, net cash provided by operating activities of
$307.7 million, and adjusted EBITDA,
net to EnLink, of $304.3 million for
the first quarter of 2022, driven by robust producer activity and
strong commodity prices.
- Grew adjusted EBITDA 22% compared to the first quarter of 2021
and achieved the highest quarterly adjusted EBITDA result in
EnLink's history.
- Delivered $104.9 million of free
cash flow after distributions (FCFAD) for the first quarter of
2022, driven by strong operational results and timing of capital
expenditures. On a trailing 12-month basis as of March 31, 2022, EnLink has generated nearly
$325 million of FCFAD.
- Repurchased $23 million of common
units during the first quarter of 2022[1].
- Exited the first quarter of 2022 with leverage at 3.8x.
- Subsequent to the quarter, received a Corporate Family Rating
upgrade from Moody's Investor Service to Ba1. EnLink is now rated
one notch below investment grade by Moody's, S&P Global
Ratings, and Fitch Ratings Inc.
- Taking into account the record first quarter results, the
improving volume outlook, and the supportive commodity price
environment, EnLink is raising its full-year 2022 guidance. EnLink
now expects to report full-year 2022 net income of $315 million to $375
million and adjusted EBITDA of $1.19
billion to $1.25 billion. The
midpoint of the adjusted EBITDA guidance range represents an
increase of 6% over the initial 2022 guidance midpoint and implies
16% growth over full-year 2021.
- Based on current producer activity and plans, EnLink expects a
significant increase in volumes in 2023. As a result, EnLink
expects to spend $325 million to
$365 million on capital projects in
2022. These projects leverage existing infrastructure and have high
expected returns and quick paybacks.
- Even with increased investment levels, EnLink is raising
full-year 2022 FCFAD guidance to $320
million to $370 million. This
result would represent the third consecutive year of FCFAD of over
$300 million.
- As a result of the improved financial outlook, EnLink plans to
continue to increase the return of capital to common unitholders
from FCFAD in 2022.
- Subsequent to the quarter, EnLink announced that it had signed
its first customer with the execution of a letter of intent to
enter into a Transportation Services Agreement (TSA) with Oxy Low
Carbon Ventures, LLC (OLCV, a subsidiary of Occidental (NYSE:
OXY)). Under the TSA, EnLink would provide carbon dioxide
(CO2) transportation services for OLCV along the
Mississippi River corridor from Waggaman to Baton
Rouge, Louisiana.
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1Includes $6
million of common units repurchased from GIP pursuant to the
previously disclosed Unit Repurchase Agreement dated February 15,
2022 and which settled on May 2, 2022. These represent GIP's
pro-rata share of aggregate units repurchased from February 15
through March 31, 2022.
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"EnLink achieved excellent financial results in the first
quarter of 2022, driven by solid execution, increased producer
activity, and strong commodity prices," said Barry E. Davis, EnLink Chairman and Chief
Executive Officer. "The outlook for activity across our footprint
continues to improve, and, as a result, we are increasing guidance
for 2022 to a level that implies 16% growth over 2021, at the
midpoint of the range. Looking beyond this year, we expect to see
continued robust growth in the Permian and a return to significant
volume growth in Oklahoma. The
performance of our business and our team's relentless focus on
execution have strengthened our financial position, allowing us to
return significant capital to unitholders, while investing in our
asset base to support our customers.
"We also continue to take steps to accomplish our vision of
becoming the future of midstream by leading in innovation and
creating sustainable value, which is most evident in our growing
carbon capture, transportation, and sequestration (CCS) business.
I'm excited to share a recent achievement by our Carbon Solutions
Group: EnLink has entered into a letter of intent with Occidental
to provide CO2 transportation for industrial-scale
emitters in Louisiana. Along with
our previous announcement with Talos Energy, these relationships
support the growth of a substantial CCS business and further enable
us to build upon EnLink's large-scale, cash-flow-generating
platform. We are committed to driving value in 2022 and beyond, and
our increased financial guidance and development of our CCS
business are the latest wins on this effort."
Adjusted EBITDA, free cash flow after distributions, and segment
cash flow used in this press release are non-GAAP measures and are
explained in greater detail under "Non-GAAP Financial Information"
below.
First Quarter 2022
Financial Results and Highlights
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$MM, unless
noted
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First Quarter
2022
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Fourth Quarter
2021
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First Quarter
2021
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Net Income
(1)
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66
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89
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13
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Adjusted EBITDA, net to
EnLink
|
304
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286
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249
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Net Cash Provided by
Operating Activities
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308
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258
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226
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Total Capital
Expenditures & Plant Relocation Costs, net to EnLink
|
66
|
85
|
28
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Free Cash Flow After
Distributions
|
105
|
67
|
94
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Debt to Adjusted
EBITDA, net to EnLink* at March 31, 2022
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3.8x
|
3.9x
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4.2x
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Common Units
Outstanding**
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483,011,794
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484,003,750
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490,055,937
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(1) Net income is
before non-controlling interest.
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*Calculated according
to credit facility leverage covenant, which excludes cash on the
balance sheet.
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**Outstanding common
units as of April 28, 2022, February 9, 2022, and April 29,
2021, respectively.
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2022 Financial
Guidance Update
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$MM, unless noted
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Previous 2022
Guidance
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Updated 2022
Guidance
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Net Income
(1)
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230 - 310
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315 - 375
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Adjusted EBITDA, net to
EnLink
|
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1,110 -
1,190
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1,190 -
1,250
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Capital Expenditures,
net to EnLink, & Plant Relocation Costs
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285 - 325
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325 - 365
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Growth Capital Expenditures,
net to EnLink, & Plant Relocation Costs
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230 - 260
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280 - 310
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Maintenance Capital
Expenditures, net to EnLink
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55 - 65
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45 - 55
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Free Cash Flow After
Distributions
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285 - 345
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320 - 370
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Annualized 1Q22
Declared Distribution per Common Unit
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$0.45/unit
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$0.45/unit
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(1) Net income is
before non-controlling interest.
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First Quarter 2022 Segment Updates
Permian Basin:
- Segment profit of $73.0 million
for the first quarter of 2022 was 1% lower than the fourth quarter
of 2021 and 71% higher than the first quarter of 2021. Segment
profit included $8.9 million of
operating expenses related to Project Phantom in the first quarter
of 2022. Segment profit also included unrealized derivative
gains/(losses) of $(5.9) million,
$(4.7) million, and $(5.3) million for the first quarter of 2022,
fourth quarter of 2021, and first quarter 2021, respectively.
Excluding Phantom operating expenses and unrealized derivative
activity, segment profit in the first quarter of 2022 grew
approximately 12% sequentially and 62% over the prior year
quarter.
- Segment cash flow totaled $38.8
million for the first quarter of 2022, marking the seventh
consecutive quarter of positive segment cash flow.
- Average natural gas gathering volumes for the first quarter of
2022 were approximately 12% higher compared to the fourth quarter
of 2021 and approximately 46% higher compared to the first quarter
of 2021. Average natural gas processing volumes for the first
quarter of 2022 increased approximately 10% compared to the prior
quarter and 43% compared to the first quarter of 2021. EnLink
continues to benefit from strong producer drilling activity and the
start of operations of the War Horse and Tiger plants in the fourth
quarter of 2021.
- Average crude gathering volumes were relatively flat for the
first quarter of 2022 compared to the fourth quarter of 2021 and
were 39% higher compared to the first quarter of 2021. Timing of
producer completion activity drove the flat sequential volume
result, while the year-over-year increase was driven by increased
drilling activity.
- EnLink continues to meet growing customer needs through a
capital-light approach. Project Phantom remains on schedule to come
on line in the fourth quarter of 2022. Unlike a new-build project,
the project carries no material sourcing or inflation risk.
- Segment profit for 2022 is expected to range from $320 million to $360
million, which implies nearly 48% growth over full-year
2021,excluding plant relocation operating expenses. Growth is
expected to be driven primarily by strong producer activity in the
Midland Basin. Excluding approximately $40
million of Project Phantom expenses, the Permian is expected
to exit 2022 as the largest segment.
Louisiana:
- Segment profit of $90.5 million
for the first quarter of 2022 was 19% lower than the fourth quarter
of 2021 and approximately 10% higher than the first quarter of
2021. Segment profit included unrealized derivative gains/(losses)
of $(5.6) million, $19.3 million, and $(0.4)
million for the first quarter of 2022, fourth quarter of
2021, and first quarter 2021, respectively. Excluding unrealized
derivative activity, segment profit in the first quarter of 2022
grew approximately 4% sequentially and 16% over the prior year
period.
- Segment cash flow for the first quarter of 2022 was
$84.8 million, and Louisiana is expected to continue generating
strong segment cash flow for the remainder of 2022.
- Average natural gas transportation volumes for the first
quarter of 2022 were approximately 7% higher compared to the fourth
quarter of 2021 and approximately 16% higher compared to the first
quarter of 2021.
- NGL fractionation volumes for the first quarter of 2022 were
approximately 1% higher compared to the fourth quarter of 2021 and
approximately 13% higher compared to the first quarter of
2021.
- Average crude volumes handled in EnLink's Ohio River Valley
operations for the first quarter of 2022 were higher by
approximately 6% compared to the first quarter of 2021 due to
higher levels of activity in the region.
- Segment profit for 2022 is expected to range from $370 million to $380
million, which implies approximately 15% growth over
full-year 2021, with the second and third quarter being seasonally
weaker.
Oklahoma:
- Segment profit of $85.8 million
for the first quarter of 2022 was 14% lower than the fourth quarter
of 2021 and approximately 55% higher than the first quarter of
2021. Segment profit included $2.4
million of operating expenses related to plant relocation
expenses in the first quarter of 2022. Segment profit also included
unrealized derivative gains/(losses) of $(7.1) million, $9.4
million, and $(1.8) million
for the first quarter of 2022, fourth quarter of 2021, and first
quarter 2021, respectively. The first quarter of 2021 was adversely
impacted by approximately $15 million
due to Winter Storm Uri. Excluding
plant relocation expenses, unrealized derivative activity and
Winter Storm Uri impact, segment
profit in the first quarter grew approximately 4% sequentially and
29% over the prior year period.
- Segment cash flow for the first quarter of 2022 was
$70.4 million.
- Average natural gas gathering volumes for the first quarter of
2022 were approximately 2% lower compared to the fourth quarter of
2021, but 7% higher when compared to first quarter of 2021.
- Average natural gas processing volumes for the first quarter of
2022 decreased by approximately 1% when compared to the fourth
quarter of 2021, but were 8% higher when compared to first quarter
of 2021.
- Average crude gathering volumes during the first quarter of
2022 were approximately 23% higher compared to the fourth quarter
of 2021.
- The Devon Energy Corp. and Dow Inc. joint venture's development
plan continues to progress as expected, operating three rigs during
the first quarter of 2022.
- Producer activity continues to support robust cash flow
generation in full-year 2022. Based on producer plans, EnLink
anticipates Oklahoma has reached a
point of inflection with volume growth resuming in 2023.
- Segment profit for 2022 is expected to range from $350 million to $370
million, which implies modest growth over full-year 2021
after adjusting for Winter Storm Uri
impact.
North Texas:
- Segment profit of $63.0 million
for the first quarter of 2022 was 12% higher than the fourth
quarter of 2021 and approximately 18% lower than the first quarter
of 2021. Segment profit included unrealized derivative
gains/(losses) of $3.5 million,
$(3.5) million, and $(0.4) million for the first quarter of 2022,
fourth quarter of 2021, and first quarter 2021, respectively. First
quarter of 2021 was positively impacted by $15.0 million due to Winter Storm Uri. Excluding unrealized
derivative activity and Winter Storm
Uri impact, segment profit in the first quarter decreased
approximately 4% over the prior year period.
- Segment cash flow for the first quarter of 2022 was
$59.9 million.
- Average natural gas gathering and transportation volumes for
the first quarter of 2022 were approximately 2% lower compared to
the fourth quarter of 2021 and 1% higher than the first quarter of
2021.
- Average natural gas processing volumes for the first quarter of
2022 were 5% lower when compared to the fourth quarter of 2021 and
2% lower compared to the first quarter of 2021.
- Segment profit for 2022 is expected to range from $240 million to $250
million, which implies modest growth over full-year 2021
after adjusting for Winter Storm Uri
impact. EnLink expects to benefit from new drilling activity in the
basin by BKV Corp. and other customers.
Executed LOI with Oxy to Provide CO2
Transportation
EnLink and Oxy Low Carbon Ventures, a
subsidiary of Occidental, executed a letter of intent to enter into
a Transportation Service Agreement under which EnLink would provide
CO2 transportation services for OLCV along the
Mississippi River corridor from Waggaman to Baton
Rouge, Louisiana.
EnLink would utilize existing and newbuild pipelines and related
infrastructure to transport CO2 from industrial emitters
to OLCV's planned sequestration facility in Livingston Parish, Louisiana where OLCV has
secured a pore space lease of over 30,000 acres.
First Quarter 2022 Earnings Call Details
EnLink will
hold a conference call to discuss first quarter 2022 results on
May 4, 2022, 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/10164645/f20209967a where
they will receive dial-in information upon completion of
preregistration. Interested parties can access an archived replay
of the call on the Investors' page of EnLink's website
at www.EnLink.com.
About the EnLink Midstream Companies
EnLink Midstream
reliably operates a differentiated midstream platform that is built
for long-term, sustainable value creation. EnLink's best-in-class
services span the midstream value chain, providing natural gas,
crude oil, condensate, NGL capabilities, and carbon capture,
transportation, and sequestration. 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 InformationThis press release contains
non-generally accepted accounting principles financial measures
that we refer to as adjusted EBITDA, free cash flow after
distributions (FCFAD), 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,
2021, and, when available, "Item 1. Financial Statements - Note
12—Segment Information" in ENLC's Quarterly Report on Form 10-Q for
the three months ended March 31, 2022, 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 Natural
Resources XI, L.P. ("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 results or growth of our CCS business; future cost savings
or operational, environmental and climate change 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, the
impact of any customer billing disputes and litigation arising out
of Winter Storm Uri, future
expectations regarding sustainability initiatives, our future
capital structure and credit ratings, the impact of the COVID-19
pandemic or variants thereof 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 compete with us or favor GIP's own interests to the
detriment of our other unitholders, (c) adverse developments in the
midstream business that may reduce our ability to make
distributions, (d) competition for crude oil, condensate, natural
gas, and NGL supplies and any decrease in the availability of such
commodities, (e) decreases in the volumes that we gather, process,
fractionate, or transport, (i) our ability or our customers'
ability to receive or renew required government or third party
permits and other approvals, (j) 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, (k) climate change legislation and regulatory
initiatives resulting in increased operating costs and reduced
demand for the natural gas and NGL services we provide, (l) changes
in the availability and cost of capital, including as a result of a
change in our credit rating, (m) volatile prices and market demand
for crude oil, condensate, natural gas, and NGLs that are beyond
our control, (n) 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, (o)
operating hazards, natural disasters, weather-related issues or
delays, casualty losses, and other matters beyond our control, (p)
reductions in demand for NGL products by the petrochemical,
refining, or other industries or by the fuel markets, (q) our
dependence on significant customers for a substantial portion of
the natural gas and crude that we gather, process, and transport,
(r) construction risks in our major development projects, (s)
challenges we may face in connection with our strategy to enter
into new lines of business related to the energy transition, (t)
impairments to goodwill, long-lived assets and equity method
investments, and (u) the effects of existing and future laws and
governmental regulations, 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
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Selected Financial Data
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(All amounts in millions except per unit
amounts)
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(Unaudited)
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Three Months Ended
March 31,
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2022
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2021
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Total
revenues
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$ 2,227.7
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$ 1,248.4
|
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Operating costs and
expenses:
|
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Cost of sales,
exclusive of operating expenses and depreciation and amortization
(1)
|
1,794.5
|
|
934.7
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Operating
expenses
|
120.9
|
|
56.3
|
Depreciation and
amortization
|
152.9
|
|
151.0
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Loss on
disposition of assets
|
5.1
|
|
—
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General and
administrative
|
29.0
|
|
26.0
|
Total
operating costs and expenses
|
2,102.4
|
|
1,168.0
|
Operating
income
|
125.3
|
|
80.4
|
Other income
(expense):
|
|
|
|
Interest
expense, net of interest income
|
(55.1)
|
|
(60.0)
|
Loss from
unconsolidated affiliate investments
|
(1.1)
|
|
(6.3)
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Other income
(expense)
|
0.1
|
|
(0.1)
|
Total
other expense
|
(56.1)
|
|
(66.4)
|
Income before
non-controlling interest and income taxes
|
69.2
|
|
14.0
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Income tax
expense
|
(3.2)
|
|
(1.4)
|
Net income
|
66.0
|
|
12.6
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Net income attributable
to non-controlling interest
|
30.8
|
|
25.3
|
Net income (loss)
attributable to ENLC
|
$
35.2
|
|
$
(12.7)
|
Net income (loss)
attributable to ENLC per unit:
|
|
|
|
Basic common
unit
|
$
0.07
|
|
$
(0.03)
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Diluted common
unit
|
$
0.07
|
|
$
(0.03)
|
|
|
|
|
Weighted average common
units outstanding (basic)
|
484.0
|
|
490.0
|
Weighted average common
units outstanding (diluted)
|
490.6
|
|
490.0
|
|
|
|
|
|
|
|
(1)
|
Includes related party
cost of sales of $10.6 million and $3.2 million for the three
months ended March 31, 2022 and 2021, respectively.
|
EnLink Midstream, LLC
|
Reconciliation of Net Income to Adjusted
EBITDA
|
(All amounts in millions)
|
(Unaudited)
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2022
|
|
2021
|
Net income
|
$
66.0
|
|
$
12.6
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Interest expense, net
of interest income
|
55.1
|
|
60.0
|
Depreciation and
amortization
|
152.9
|
|
151.0
|
Loss from
unconsolidated affiliate investments
|
1.1
|
|
6.3
|
Distributions from
unconsolidated affiliate investments
|
0.2
|
|
3.6
|
Loss on disposition of
assets
|
5.1
|
|
—
|
Unit-based
compensation
|
6.6
|
|
6.5
|
Income tax
expense
|
3.2
|
|
1.4
|
Unrealized loss on
commodity swaps
|
15.1
|
|
7.9
|
Costs associated with
the relocation of processing facilities (1)
|
11.3
|
|
7.6
|
Other (2)
|
0.3
|
|
(0.4)
|
Adjusted EBITDA
before non-controlling interest
|
316.9
|
|
256.5
|
Non-controlling
interest share of adjusted EBITDA from joint ventures
(3)
|
(12.6)
|
|
(7.1)
|
Adjusted EBITDA,
net to ENLC
|
$
304.3
|
|
$
249.4
|
|
|
|
|
|
|
|
(1)
|
Represents cost
incurred that are not part of our ongoing operations related to the
relocation of equipment and facilities from the Thunderbird
processing plant and Battle Ridge processing plant in the Oklahoma
segment to the Permian segment. The relocation of equipment and
facilities from the Battle Ridge processing plant was completed in
the third quarter of 2021 and we expect to complete the relocation
of equipment and facilities from the Thunderbird processing plant
in the fourth quarter of 2022.
|
(2)
|
Includes accretion
expense associated with asset retirement obligations 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 and Marathon Petroleum
Corporation's 50% share of adjusted EBITDA from the Ascension
JV.
|
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
March 31,
|
|
2022
|
|
2021
|
Net cash provided by
operating activities
|
$ 307.7
|
|
$ 225.8
|
Interest expense
(1)
|
53.7
|
|
55.9
|
Utility credits
(redeemed) earned (2)
|
(5.6)
|
|
40.4
|
Accruals for settled
commodity swap transactions
|
(2.2)
|
|
0.1
|
Distributions from
unconsolidated affiliate investment in excess of
earnings
|
0.2
|
|
3.6
|
Costs associated with
the relocation of processing facilities (3)
|
11.3
|
|
7.6
|
Other (4)
|
1.7
|
|
1.2
|
Changes in operating
assets and liabilities which (provided) used cash:
|
|
|
|
Accounts
receivable, accrued revenues, inventories, and other
|
172.7
|
|
17.5
|
Accounts
payable, accrued product purchases, and other accrued
liabilities
|
(222.6)
|
|
(95.6)
|
Adjusted
EBITDA before non-controlling interest
|
316.9
|
|
256.5
|
Non-controlling
interest share of adjusted EBITDA from joint ventures
(5)
|
(12.6)
|
|
(7.1)
|
Adjusted
EBITDA, net to ENLC
|
304.3
|
|
249.4
|
Growth capital
expenditures, net to ENLC (6)
|
(40.5)
|
|
(15.9)
|
Maintenance capital
expenditures, net to ENLC (6)
|
(13.9)
|
|
(4.7)
|
Interest expense, net
of interest income
|
(55.1)
|
|
(60.0)
|
Distributions declared
on common units
|
(55.5)
|
|
(46.7)
|
ENLK preferred unit
accrued cash distributions (7)
|
(23.5)
|
|
(23.0)
|
Costs associated with
the relocation of processing facilities (3)
|
(11.3)
|
|
(7.6)
|
Other (8)
|
0.4
|
|
2.7
|
Free cash
flow after distributions
|
$ 104.9
|
|
$
94.2
|
|
|
|
|
Actual declared
distribution to common unitholders
|
$
55.5
|
|
$
46.7
|
Distribution
coverage
|
3.83x
|
|
3.51x
|
Distributions declared
per ENLC unit
|
$
0.1125
|
|
$ 0.09375
|
|
|
|
|
|
|
|
(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 cost
incurred that are not part of our ongoing operations related to the
relocation of equipment and facilities from the Thunderbird
processing plant and Battle Ridge processing plant in the Oklahoma
segment to the Permian segment. The relocation of equipment and
facilities from the Battle Ridge processing plant was completed in
the third quarter of 2021 and we expect to complete the relocation
of equipment and facilities from the Thunderbird processing plant
in the fourth quarter of 2022.
|
(4)
|
Includes current income
tax expense and non-cash rent, which relates to lease incentives
pro-rated over the lease term.
|
(5)
|
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.
|
(6)
|
Excludes capital
expenditures that were contributed by other entities and relate to
the non-controlling interest share of our consolidated
entities.
|
(7)
|
Represents the cash
distributions earned by the Series B Preferred Units and Series C
Preferred Units, which are not available to common
unitholders.
|
(8)
|
Includes current income
tax expense, non-cash interest (income)/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
March 31, 2022
|
|
|
|
|
|
|
|
Segment
profit
|
$
73.0
|
|
$
90.5
|
|
$
85.8
|
|
$
63.0
|
Capital
expenditures
|
(34.2)
|
|
(5.7)
|
|
(15.4)
|
|
(3.1)
|
Segment cash
flow
|
$
38.8
|
|
$
84.8
|
|
$
70.4
|
|
$
59.9
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2021
|
|
|
|
|
|
|
|
Segment
profit
|
$
42.8
|
|
$
82.2
|
|
$
55.5
|
|
$
76.9
|
Capital
expenditures
|
(13.3)
|
|
(2.8)
|
|
(1.9)
|
|
(2.4)
|
Segment cash
flow
|
$
29.5
|
|
$
79.4
|
|
$
53.6
|
|
$
74.5
|
EnLink Midstream, LLC
|
Operating Data
|
(Unaudited)
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2022
|
|
2021
|
Midstream Volumes:
|
|
|
|
Permian Segment
|
|
|
|
Gathering and
Transportation (MMBtu/d)
|
1,347,100
|
|
925,600
|
Processing
(MMBtu/d)
|
1,256,300
|
|
876,100
|
Crude Oil
Handling (Bbls/d)
|
150,700
|
|
108,200
|
Louisiana Segment
|
|
|
|
Gathering and
Transportation (MMBtu/d)
|
2,497,700
|
|
2,151,300
|
Crude Oil
Handling (Bbls/d)
|
15,900
|
|
15,000
|
NGL
Fractionation (Gals/d)
|
8,033,900
|
|
7,106,200
|
Brine Disposal
(Bbls/d)
|
3,000
|
|
1,400
|
Oklahoma Segment
|
|
|
|
Gathering and
Transportation (MMBtu/d)
|
1,000,700
|
|
937,300
|
Processing
(MMBtu/d)
|
1,029,500
|
|
955,400
|
Crude Oil
Handling (Bbls/d)
|
23,800
|
|
17,500
|
North Texas Segment
|
|
|
|
Gathering and
Transportation (MMBtu/d)
|
1,364,000
|
|
1,356,900
|
Processing
(MMBtu/d)
|
614,300
|
|
624,600
|
EnLink Midstream,
LLC
|
Updated 2022
Guidance Reconciliation of Net Income to Adjusted EBITDA,
Distributable Cash Flow and Free Cash Flow After
Distributions
|
(All amounts in
millions)
|
(Unaudited)
|
|
|
2022 Updated
Outlook (1) as of
May 3, 2022
|
|
Midpoint
|
Net income of EnLink
(2)
|
$
345
|
Interest expense, net
of interest income
|
217
|
Depreciation and
amortization
|
604
|
Income from
unconsolidated affiliate investments
|
(2)
|
Distributions from
unconsolidated affiliate investments
|
1
|
Unit-based
compensation
|
21
|
Income taxes
|
54
|
Plant relocation costs
(3)
|
45
|
Other (4)
|
(7)
|
Adjusted EBITDA
before non-controlling interest
|
1,278
|
Non-controlling
interest share of adjusted EBITDA (5)
|
(58)
|
Adjusted EBITDA,
net to EnLink Midstream, LLC
|
1,220
|
Interest expense, net
of interest income
|
(217)
|
Maintenance capital
expenditures, net to ENLK (6)
|
(50)
|
Preferred unit accrued
cash distributions (7)
|
(91)
|
Other (8)
|
(2)
|
Distributable
cash flow
|
860
|
Common distributions
declared
|
(220)
|
Growth capital
expenditures, net to EnLink and plant relocation costs
(3)(6)
|
(295)
|
Free cash flow
after distributions
|
$
345
|
|
|
|
|
|
|
|
(1)
|
Represents the
forward-looking net income guidance of EnLink Midstream, LLC for
the year ended December 31, 2022. 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 NGP Natural Resources XI,
L.P.'s ("NGP") 49.9% share of net income from
the Delaware Basin JV and Marathon Petroleum Corp.'s
("Marathon") 50% share of net income from the Ascension
JV.
|
(3)
|
Includes operating
expenses that are not part of our ongoing operations incurred
related to the relocation of equipment and facilities from the
Thunderbird processing plant in the Oklahoma segment to the Permian
segment.
|
(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 NGP's
49.9% share of adjusted EBITDA from the Delaware Basin JV
and Marathon's 50% share of adjusted EBITDA from the Ascension
JV.
|
(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 income tax
(income)/expense.
|
EnLink does not provide a reconciliation of forward-looking net
cash provided by operating activities to adjusted EBITDA because
the Company is unable to predict with reasonable certainty changes
in working capital, which may impact cash provided or used during
the year. Working capital includes accounts receivable, accounts
payable, and other current assets and liabilities. These items are
uncertain and depend on various factors outside the Company's
control.
EnLink Midstream,
LLC
|
Previously Issued
2022 Guidance Reconciliation of Net Income to Adjusted EBITDA,
Distributable Cash Flow and Free Cash Flow After
Distributions
|
(All amounts in
millions)
|
(Unaudited)
|
|
|
2022 Outlook (1)
as of February
15, 2022
|
|
Midpoint
|
Net income of EnLink
(2)
|
$
270
|
Interest expense, net
of interest income
|
216
|
Depreciation and
amortization
|
604
|
Income from
unconsolidated affiliate investments
|
(2)
|
Distributions from
unconsolidated affiliate investments
|
1
|
Unit-based
compensation
|
21
|
Income taxes
|
54
|
Plant relocation costs
(3)
|
45
|
Other (4)
|
(2)
|
Adjusted EBITDA before
non-controlling interest
|
1,207
|
Non-controlling
interest share of adjusted EBITDA (5)
|
(57)
|
Adjusted EBITDA, net to
EnLink Midstream, LLC
|
1,150
|
Interest expense, net
of interest income
|
(217)
|
Maintenance capital
expenditures, net to ENLK (6)
|
(60)
|
Preferred unit accrued
cash distributions (7)
|
(95)
|
Distributable cash
flow
|
778
|
Common distributions
declared
|
(218)
|
Growth capital
expenditures, net to EnLink and plant relocation costs
(3)(6)
|
(245)
|
Free cash flow after
distributions
|
$
315
|
|
|
|
|
|
|
|
(1)
|
Represents the
forward-looking net income guidance of EnLink Midstream, LLC for
the year ended December 31, 2022. 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 NGP Natural Resources XI,
L.P.'s ("NGP") 49.9% share of net income from
the Delaware Basin JV and Marathon Petroleum Corp.'s
("Marathon") 50% share of net income from the Ascension
JV.
|
(3)
|
Includes operating
expenses that are not part of our ongoing operations incurred
related to the relocation of equipment and facilities from the
Thunderbird processing plant in the Oklahoma segment to the Permian
segment.
|
(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 NGP's
49.9% share of adjusted EBITDA from the Delaware Basin JV
and Marathon's 50% share of adjusted EBITDA from the Ascension
JV.
|
(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 income tax
(income)/expense.
|
EnLink does not provide a reconciliation of forward-looking net
cash provided by operating activities to adjusted EBITDA because
the Company is unable to predict with reasonable certainty changes
in working capital, which may impact cash provided or used during
the year. Working capital includes accounts receivable, accounts
payable, and other current assets and liabilities. These items are
uncertain and depend on various factors outside the Company's
control.
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SOURCE EnLink Midstream, LLC