Equitrans Midstream Corporation (NYSE: ETRN) today announced
2021 financial and capital expenditure guidance. Included in the
“Non-GAAP Disclosures” section of this news release are important
disclosures regarding the use of non-GAAP supplemental financial
measures, including information regarding their most comparable
GAAP financial measure.
Financial Forecast:(1)
$ millions
2021 Forecast
Net income attributable to ETRN
$540 - $610
Adjusted EBITDA
$1,035 - $1,105
Deferred revenue
$295
Free cash flow
$(150) - $(80)
Retained free cash flow
$(410) - $(340)
Capital Expenditures and Capital
Contributions:
$ millions
2021 Forecast
Mountain Valley Pipeline (MVP)
$670 - $720
Gathering(2)
$305 - $335
Transmission(3)
$45 - $65
Water
$20
Total
$1,040 - $1,140
(1)
Does not reflect impact of
capital markets transactions, if any.
(2)
Includes approximately $30
million from ETRN’s 60% interest in Eureka Midstream Holdings, LLC
(Eureka).
(3)
Includes capital contributions of
approximately $20 million to Mountain Valley Pipeline, LLC (MVP JV)
for the MVP Southgate project.
Additional Information:
- Approximately 70% of the 2021 forecast for total operating
revenue is expected to be generated from firm reservation
fees.
- The mid-point of the 2021 financial forecast range assumes an
average of 8.0 MMdth per day total gathered volume.
- The MVP JV is continuing to target a full in-service date for
the MVP in late 2021 at a total project cost estimate of $5.8 -
$6.0 billion. The 2021 financial forecast assumes an MVP in-service
date of December 31, 2021.
- The 2021 water EBITDA forecast is approximately $25 million.
The year-over-year decrease is driven by a lower forecast for
delivered water volumes.
Investor Presentation
ETRN management speaks to investors from time-to-time and the
presentation for these discussions, which is updated periodically,
is available via www.equitransmidstream.com.
Non-GAAP Disclosures
Adjusted EBITDA
As used in this news release, adjusted EBITDA means, as
applicable, net income, plus income tax expense, net interest
expense, loss on early extinguishment of debt, depreciation,
amortization of intangible assets, impairments of long-lived
assets, payments on the preferred interest in EQT Energy Supply,
LLC (Preferred Interest), non-cash long-term compensation expense
(income), and transaction costs, less equity income, AFUDC-equity,
unrealized gain (loss) on derivative instruments and adjusted
EBITDA attributable to noncontrolling interest.
Free Cash Flow
As used in this news release, free cash flow means net cash
provided by operating activities plus principal payments received
on the Preferred Interest, and less net cash provided by operating
activities attributable to noncontrolling interest, capital
expenditures (excluding the noncontrolling interest share (40%) of
Eureka capital expenditures), capital contributions to MVP JV, and
dividends paid to Series A Preferred shareholders.
Retained Free Cash Flow
As used in this news release, retained free cash flow means free
cash flow less dividends paid to common shareholders.
Adjusted EBITDA, free cash flow and retained free cash flow are
non-GAAP supplemental financial measures that management and
external users of ETRN's consolidated financial statements, such as
industry analysts, investors, lenders, and rating agencies, may use
to assess:
- ETRN’s operating performance as compared to other publicly
traded companies in the midstream energy industry without regard to
historical cost basis or, in the case of adjusted EBITDA, financing
methods
- The ability of ETRN’s assets to generate sufficient cash flow
to pay dividends to ETRN’s shareholders
- ETRN’s ability to incur and service debt and fund capital
expenditures and capital contributions
- The viability of acquisitions and other capital expenditure
projects and the returns on investment of various investment
opportunities
ETRN believes that adjusted EBITDA, free cash flow, and retained
free cash flow provide useful information to investors in assessing
ETRN's financial condition and results of operations. Adjusted
EBITDA, free cash flow, and retained free cash flow should not be
considered as alternatives to net income, operating income, net
cash provided by operating activities, as applicable, or any other
measure of financial performance or liquidity presented in
accordance with GAAP. Adjusted EBITDA, free cash flow, and retained
free cash flow have important limitations as analytical tools
because they exclude some, but not all, items that affect net
income, operating income and net cash provided by operating
activities. Additionally, because these non-GAAP metrics may be
defined differently by other companies in ETRN's industry, ETRN's
definitions of adjusted EBITDA, free cash flow, and retained free
cash flow may not be comparable to similarly titled measures of
other companies, thereby diminishing the utility of the measures.
Free cash flow and retained free cash flow should not be viewed as
indicative of the actual amount of cash that ETRN has available for
dividends or that ETRN plans to distribute and are not intended to
be liquidity measures.
ETRN is unable to provide a reconciliation of projected adjusted
EBITDA from projected net income, the most comparable financial
measure calculated in accordance with GAAP, or a reconciliation of
projected free cash flow or retained cash flow to net cash provided
by operating activities, the most comparable financial measure
calculated in accordance with GAAP. ETRN has not provided a
reconciliation of projected adjusted EBITDA to projected net
income, the most comparable financial measure calculated in
accordance with GAAP, due to the inherent difficulty and
impracticability of predicting certain amounts required by GAAP
with a reasonable degree of accuracy. Net income includes the
impact of depreciation expense, income tax expense, the revenue
impact of changes in the projected fair value of derivative
instruments prior to settlement, potential changes in estimates for
certain contract liabilities and unbilled revenues and certain
other items that impact comparability between periods and the tax
effect of such items, which may be significant and difficult to
project with a reasonable degree of accuracy. Therefore, a
reconciliation of projected adjusted EBITDA to projected net income
is not available without unreasonable effort.
ETRN is unable to project net cash provided by operating
activities because this metric includes the impact of changes in
operating assets and liabilities related to the timing of cash
receipts and disbursements that may not relate to the period in
which the operating activities occurred. ETRN is unable to project
these timing differences with any reasonable degree of accuracy to
a specific day, three or more months in advance. Therefore, ETRN is
unable to provide projected net cash provided by operating
activities, or the related reconciliation of each of projected free
cash flow and projected retained free cash flow to projected net
cash provided by operating activities without unreasonable effort.
ETRN provides a range for the forecasts of net income attributable
to ETRN, adjusted EBITDA, free cash flow and retained free cash
flow to allow for the inherent difficulty of predicting certain
amounts and the variability in the timing of cash spending and
receipts and the impact on the related reconciling items, many of
which interplay with each other.
Water EBITDA
As used in this news release, water EBITDA means the earnings
before interest, taxes, depreciation and amortization of ETRN’s
water services business. Water EBITDA is a non-GAAP supplemental
financial measure that management and external users of ETRN’s
consolidated financial statements, such as industry analysts,
investors, lenders and rating agencies, use to assess the impact of
ETRN’s water services business on ETRN’s operating performance and
ETRN’s ability to incur and service debt and fund capital
expenditures. Water EBITDA should not be considered as an
alternative to ETRN’s net income, operating income or any other
measure of financial performance presented in accordance with GAAP.
Water EBITDA has important limitations as an analytical tool
because the measure excludes some, but not all, items that affect
net income and operating income. Additionally, because water EBITDA
may be defined differently by other companies in ETRN’s industry,
the definition of water EBITDA may not be comparable to similarly
titled measures of other companies, thereby diminishing the utility
of the measure.
ETRN has not provided a reconciliation of projected water EBITDA
from projected water operating income, the most comparable measure
calculated in accordance with GAAP. ETRN does not allocate certain
costs, such as interest expenses, to individual assets within its
business segments. Therefore, the reconciliation of projected water
EBITDA from projected water operating income is not available
without unreasonable effort.
About Equitrans Midstream Corporation:
Equitrans Midstream Corporation (ETRN) has a premier asset
footprint in the Appalachian Basin and, as the parent company of
EQM Midstream Partners, is one of the largest natural gas gatherers
in the United States. Through its strategically located assets in
the Marcellus and Utica regions, ETRN has an operational focus on
gas transmission and storage systems, gas gathering systems, and
water services that support natural gas development and production
across the Basin. With a rich 135-year history in the energy
industry, ETRN was launched as a standalone company in 2018 with
the vision to be the premier midstream services provider in North
America. ETRN is helping to meet America’s growing need for
clean-burning energy, while also providing a rewarding workplace
and enriching the communities where its employees live and work.
For more information on Equitrans Midstream Corporation, visit
www.equitransmidstream.com; and to learn more about our
environmental, social, and governance practices, visit
https://csr.equitransmidstream.com.
Cautionary Statements
This news release contains certain forward-looking statements
within the meaning of Section 21E of the United States Securities
Exchange Act of 1934, as amended (the Exchange Act), and Section
27A of the United States Securities Act of 1933, as amended (the
Securities Act), concerning ETRN and other matters. These
statements may discuss goals, intentions and expectations as to
future plans, trends, events, results of operations or financial
condition, or otherwise, based on current beliefs of the management
of ETRN, as well as assumptions made by, and information currently
available to, such management. Words such as “could,” “will,”
“may,” “assume,” “forecast,” “position,” “predict,” “strategy,”
“expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe,”
“project,” “budget,” “potential,” “target,” "expect," "intend" or
“continue,” and similar expressions are used to identify
forward-looking statements. These statements are subject to various
risks and uncertainties, many of which are outside ETRN's control.
Without limiting the generality of the foregoing, forward-looking
statements contained in this communication specifically include
expectations of plans, strategies, objectives and growth and
anticipated financial and operational performance of ETRN and its
affiliates, including guidance regarding net income attributable to
ETRN, adjusted EBITDA, deferred revenue, free cash flow, retained
free cash flow and water EBITDA; projected revenue (including from
firm reservation fees) and volume; the cost, timing of regulatory
approvals, and targeted in-service dates of current or in-service
projects or assets, in each case as applicable; the impact of a
dispute with EQT (or resolution thereof) regarding the Hammerhead
gathering agreement and/or ownership of the Hammerhead pipeline on
ETRN’s business and results of operations; expected cash flows and
minimum volume commitments; projected capital contributions and
capital and operating expenditures, including the amount and timing
of reimbursable capital expenditures, capital budget and sources of
funds for capital expenditures; dividend amounts, timing and rates;
liquidity and financing requirements, including sources and
availability; and expectations regarding production, gathered and
water volumes in ETRN’s areas of operations. These forward-looking
statements involve risks and uncertainties that could cause actual
results to differ materially from projected results.
Accordingly, investors should not place undue reliance on
forward-looking statements as a prediction of actual results. ETRN
has based these forward-looking statements on current expectations
and assumptions about future events. While ETRN considers these
expectations and assumptions to be reasonable, they are inherently
subject to significant business, economic, competitive, regulatory
and other risks and uncertainties, many of which are difficult to
predict and beyond ETRN’s control. The risks and uncertainties that
may affect the operations, performance and results of ETRN’s
business and forward-looking statements include, but are not
limited to, those set forth under Item 1A, "Risk Factors" in ETRN's
Annual Report on Form 10-K for the year ended December 31, 2019
filed with the Securities and Exchange Commission (the SEC), as
updated by the risk factors disclosed under Part II, Item 1A, "Risk
Factors," of ETRN’s Quarterly Report on Form 10-Q for the three
months ended September 30, 2020 filed with the SEC. Any
forward-looking statement speaks only as of the date on which such
statement is made, and ETRN does not intend to correct or update
any forward-looking statement, unless required by securities laws,
whether as a result of new information, future events or otherwise.
As forward-looking statements involve significant risks and
uncertainties, caution should be exercised against placing undue
reliance on such statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20201217005113/en/
Analyst inquiries: Nate Tetlow – Vice President,
Corporate Development and Investor Relations 412-553-5834
ntetlow@equitransmidstream.com
Media inquiries: Natalie Cox – Communications and
Corporate Affairs 412-395-3941 ncox@equitransmidstream.com
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