More than $185 million in Free Cash Flow1
Expected in 2021
Noble Midstream Partners LP (NASDAQ: NBLX) (“Noble
Midstream” or the “Partnership”) today reported fourth-quarter and
full-year 2020 financial and operational results. The Partnership’s
results are consolidated to include Noble Midstream’s 54.4%
ownership of Black Diamond Gathering, LLC (“Black Diamond
Gathering”). References to Equity Method Investments pertain to
Noble Midstream’s equity interests in joint ventures that are not
wholly-owned by the Partnership.
Certain results are shown as “attributable to the Partnership,”
which exclude the noncontrolling interests in Black Diamond
Gathering retained by Greenfield Midstream. Noble Midstream
believes the results “attributable to the Partnership” provide the
best representation of the ongoing operations from which the
Partnership’s unitholders will benefit.
Fourth-Quarter 2020 and Recent Highlights
- Generated $40 million Net Income Attributable to the
Partnership, $85 million Net Cash Provided by Operating Activities,
and $95 million in Adjusted Net EBITDA1,2
- Self-funded $7 million in net organic capital expenditures and
$23 million in equity method investments
- Gathered 286,000 gross barrels of oil and gas equivalent per
day (Boe/d) and 146,000 barrels of produced water per day
(Bw/d)
- Delivered 89,000 Bw/d fresh water as producer activity resumes
across the Partnership’s dedication areas
- Transported 768,000 gross (170,000 net) barrels of oil per day
(Bbl/d) across intermediate and long-haul pipeline equity
interests
- Reduced flaring intensity in the Delaware Basin 53% and overall
volume of unintentional releases by 90+% year-over-year
2021 Investment Program and Operational Guidance
- $155 to $185 million in Net Income, $360 to $395 million in
Adjusted Net EBITDA1,2 and $185 to $220 million in Free Cash
Flow1
- Total capital investments of $80 to $110 million, including net
organic capital expenditures of $65 to $85 million
- 275,000 to 305,000 Boe/d of oil and gas gathering volumes and
120,000 to 140,000 Bw/d of produced water gathering volumes
- Leverage of 3.6x to 4.0x Net Debt to Trailing Twelve Months
(TTM) EBITDA1
Robin Fielder, Chief Executive Officer of the Partnership
stated, “Noble Midstream exited 2020 with five additional liquids
transmission projects in-service while achieving material operating
and capital cost savings during the year. These accomplishments,
coupled with the resumption of completion activity late in 2020,
position the Partnership for enhanced capital efficiency and
returns. Our 2021 capital program is focused primarily on
short-cycle investments, and we expect to generate material free
cash flow and reduce leverage.”
4Q20
Gross
Volumes
Actuals
Oil and Gas Gathered (MBoe/d)
286
Produced Water Gathered (MBw/d)
146
Fresh Water Delivered (MBw/d)
89
Financials (in
millions)
Net Income Attributable to the
Partnership
$40
Net Cash Provided by Operating
Activities
$85
Adjusted Net EBITDA1,2
$95
Distributable Cash Flow1
$74
Net Debt to Trailing Twelve Months
Adjusted Net EBITDA1
4.1x
Organic Capital, Excluding Equity
Investments
$7
Operational Momentum into New Year
Fourth-quarter 2020 revenues totaled $207 million, up 11%
sequentially, due to an increase in fresh water delivery revenue
and third-party crude oil sales. Affiliate oil and gas gathering
revenue of $76 million and third-party oil and gas gathering
revenue of $18 million both decreased 5% sequentially due to
natural field declines.
Operating expenses for the fourth quarter totaled $149 million
with $26 million in direct operating expenses. Direct operating
expenses increased sequentially due to higher fresh water delivery
volumes and one-time maintenance costs. The Partnership achieved
more than $20 million in annual, overall direct operating cost
savings, with roughly half sustainable at current activity levels.
Investment income losses were $9 million, related to costs
associated with the continued ramp in the EPIC and Delaware
Crossing Pipelines.
The Partnership reported fourth-quarter 2020 Net Cash Provided
by Operating Activities of $85 million and Adjusted Net EBITDA1,2
of $95 million. For the year, the Partnership generated $377
million in Net Cash Provided by Operating Activities and $393
million in Adjusted Net EBITDA1,2, above the midpoint of 2020
updated annual guidance range.
For the fourth-quarter 2020, maintenance capital expenditures
and cash interest expense attributable to the Partnership totaled
$7 million and $6 million, respectively, leading to $74 million
Distributable Cash Flow1 attributable to the Partnership.
Noble Midstream invested $7 million in fourth-quarter net
organic capital expenditures with full year 2020 net capital of $63
million, below the lower end of the updated annual guidance range.
Net equity method investments during the quarter totaled $23
million, including $17 million for EPIC Y-Grade and $5 million for
EPIC Crude. For the year, net equity investment capital equaled
$239 million.
Completion Activity Returned to Both Basins
In the Partnership’s wholly-owned DJ Basin assets, oil and gas
gathering volumes averaged 154,000 Boe/d, down 10% sequentially,
and produced water volumes averaged 29,000 Bw/d, flat sequentially.
Noble Midstream connected 9 affiliate wells and 12 third-party
wells in the DJ Basin. Fresh water delivery volumes averaged 89,000
Bw/d, and the Partnership delivered fresh water to 19 affiliate
wells in the quarter. DJ Basin net capital expenditures totaled
$0.9 million.
Black Diamond oil gathering throughput volumes averaged 66,000
Bo/d, excluding marketing volumes of 19,000 Bbl/d. Black Diamond
connected 22 wells across 3 customers, totaling $1.6 million in
fourth-quarter net capital expenditures.
In the Delaware Basin, quarterly oil and gas gathering
throughput was 66,000 Boe/d, down 8% sequentially, and produced
water gathering volumes were 117,000 Bw/d, down 7% from the third
quarter. The Partnership connected 8 affiliate wells and had
Delaware Basin net capital expenditures of $4.5 million.
Equity Method Investment Pipelines In Service
The Partnership averaged gross throughput of 768,000 Bbl/d
(170,000 net) across its intermediate and long-haul transmission
systems. Fourth-quarter equity method investment volumes and cash
flows decreased sequentially due to an operational closure at the
EPIC marine terminal.
Fourth-quarter 2020 Saddlehorn throughput averaged approximately
164,000 Bo/d. The 100,000 Bbl/d expansion has been completed in the
first-quarter 2021. Volumes on the Advantage Pipeline system
averaged 65,000 Bo/d, sequentially flat compared to the
third-quarter 2020. Delaware Crossing averaged 18,000 Bbl/d in
gathering and transportation volumes.
Fourth-Quarter Debt Reduction and Quarterly
Distribution
As of December 31, 2020, the Partnership had $456 million in
liquidity and $1.6 billion in total debt. During the quarter, Noble
Midstream reduced its total debt balance by $35 million.
Noble Midstream’s current debt obligation of $500 million
matures July 31, 2021. The Partnership is evaluating refinancing
options with Chevron to address this obligation.
On January 22, 2021, the Board of Directors of Noble Midstream’s
general partner, Noble Midstream GP LLC, declared a fourth-quarter
cash distribution of $0.1875 per unit, flat versus third-quarter
2020.
2021 Outlook Highlighted by Growth in Free Cash Flow1
Generation
Noble Midstream is reinstating oil, gas, and produced water
volume guidance and estimates 2021 gross oil and gas gathering and
sales volumes of 275,000 to 305,000 Boe/d and produced water
volumes of 120,000 to 140,000 Bw/d.
In 2021, Noble Midstream anticipates 250 to 300 affiliate and
third-party well connections in the DJ and Delaware basins. The
Partnership anticipates 50 to 60 Chevron-affiliate well
connections, including 45 to 55 connections in the Mustang
Integrated Development Plan Area in the DJ Basin.
Third-party connection activity is anticipated to ramp up in
2021 with more than 175 well connections in the DJ Basin and 10 to
15 connections across multiple operators in the Delaware Basin. The
Partnership anticipates connection activity to be first-half
weighted in 2021 with more than 30 connections on wholly-owned
dedication areas and more than 60 connections on Black Diamond
dedication areas in the first-quarter 2021.
Noble Midstream is anticipating 2021 total capital expenditures
of $80 to $110 million, including the EPIC Crude marine terminal
construction and EPIC Y-Grade raw NGL line to Sweeny, Texas,
associated with the BANGL joint venture.
The Partnership anticipates the midpoint of its Net Income
Attributable to the Partnership to be $170 million with 2021
Adjusted Net EBITDA1,2 of $360 to $395 million. At current activity
levels, the Partnership estimates a range of $185 to $220 million
in Free Cash Flow1 generation in 2021.
Net Debt to TTM Adjusted Net EBITDA1 expectations are
anticipated to be 3.6x to 4.0x.
2021 Guidance
Financials (in
millions)
Net Income
$155
$185
Adjusted Net EBITDA 1,2
$360
-
$395
Free Cash Flow 1
$185
-
$220
Net Debt to TTM Adjusted Net EBITDA1
3.6x
-
4.0x
2021 Organic Capital
$65
-
$85
Equity Method Investment Capital
$15
-
$25
Noble Midstream Receives Non-Binding Chevron Offer to Acquire
Outstanding LP Units
On February 5, 2021, Noble Midstream Partners received a
non-binding proposal (the “Proposal”) from Chevron Corporation
(“Chevron”) to acquire all of the publicly held common units
representing limited partner interests in the Partnership not
already owned by Chevron and its affiliates.
The Board of Directors of Noble Midstream GP LLC (the “General
Partner”), the General Partner of Noble Midstream, has delegated
authority to its conflicts committee to negotiate the terms of the
proposed transaction on behalf of the unaffiliated Noble Midstream
unitholders, as is customary in similar transactions. The Proposal
is subject to the negotiation and execution of a definitive
agreement, as well as approval by the Board of Directors of the
General Partner. There is no assurance that any such approvals will
be forthcoming, that such definitive agreement will be executed, or
that any transaction will be consummated.
Conference Call
Noble Midstream will host a webcast and conference call today at
9:00 a.m. Central Time to discuss fourth quarter and full year 2020
financial and operational results as well as 2021 guidance. The
live audio webcast and related presentation material is accessible
on the ‘Investors’ page of the Partnership’s website at
www.nblmidstream.com. Conference call numbers for participation are
877-883-0383, or 412-902-6506 for international calls. The passcode
number is 8383676. A replay of the conference call will be
available at the same web location following the event.
1 Adjusted Net EBITDA, Free Cash Flow (FCF), Distributable Cash
Flow (DCF), Distribution Coverage Ratio and Net Debt to TTM
Adjusted Net EBITDA are not Generally Accepted Accounting
Principles (GAAP) measures. Definitions and reconciliations of
these Non-GAAP measures to their most directly comparable GAAP
reporting measures appear in Schedule 4 attached hereto.
Noble Midstream does not provide guidance on the items used to
reconcile between forecasted Adjusted Net EBITDA, FCF, DCF, Net
Debt to TTM Adjusted Net EBITDA or Distribution Coverage Ratio and
Net Cash Provided by Operating Activities due to the uncertainty
regarding timing and estimates of certain of such items. Noble
Midstream provides a range of such Non-GAAP financial measures to
allow for the variability in timing and uncertainty of estimates of
such reconciling items. Therefore, Noble Midstream cannot reconcile
forecasted Adjusted Net EBITDA, FCF, DCF, Net Debt to TTM Adjusted
Net EBITDA or Distribution Coverage Ratio to Net Cash Provided by
Operating Activities without unreasonable effort. See Schedule 4
for further information.
2 “Net” is equivalent to “attributable to the Partnership”.
About Noble Midstream
Noble Midstream is a master limited partnership originally
formed by Noble Energy, Inc., and majority-owned by Chevron
Corporation to own, operate, develop and acquire domestic midstream
infrastructure assets. Noble Midstream currently provides crude
oil, natural gas, and water-related midstream services and owns
equity interests in oil pipelines in the DJ Basin in Colorado and
the Delaware Basin in Texas. Noble Midstream strives to be the
midstream provider and partner of choice for its safe operations,
reliability, and strong relationships while enhancing value for all
stakeholders. For more information, please visit
www.nblmidstream.com.
Forward Looking Statements
This news release contains forward-looking statements within the
meaning of the federal securities laws. Words such as “estimate,”
“anticipate,” “believe,” “project,” “budget,” “continue,” “could,”
“intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,”
“will,” “would,” “expect,” “objective,” “projection,” “forecast,”
“goal,” “guidance,” “outlook,” “effort,” “target,” “on schedule,”
“on track,” “strategy” and other similar expressions may be used to
identify forward-looking statements. Forward-looking statements are
not statements of historical fact and reflect Noble Midstream
Partners LP’s (“Noble Midstream,” “we,” or “our”) current views
about future events. Our forward-looking statements may include
statements about our business strategy, our industry, our future
profitability, our expected capital expenditures and the impact of
such expenditures on our performance, the costs of being a publicly
traded partnership and our capital programs. In addition, our
forward-looking statements address the various risks and
uncertainties associated with the extraordinary market environment
and impacts resulting from the COVID-19 pandemic and the actions of
foreign oil producers (most notably Saudi Arabia and Russia) to
maintain market share and impact commodity pricing and the expected
impact on our business, operations, earnings and results. You are
cautioned not to place undue reliance on any forward-looking
statements, which speak only as of the date hereof. Noble Midstream
does not assume any obligation to update publicly any
forward-looking statements whether as a result of new information,
future events or otherwise.
Forward-looking statements are not guarantees of future
performance, are based on certain assumptions, and are subject to
certain risks, uncertainties and other factors, many of which are
beyond our control and difficult to predict, that could cause
actual results to differ materially from those projected. These
risks include, without limitation, changes in general economic
conditions, including without limitation the impacts of the
COVID-19 pandemic; our customers’ ability to meet their drilling
and development plans; competitive conditions in the Partnership’s
industry; actions taken by third-party operators, gatherers,
processors and transporters; the demand for crude oil and natural
gas gathering and processing services; our ability to successfully
implement our business plan; our ability to complete internal
growth projects on time and on budget; the ability of third parties
to complete construction of pipelines in which Noble Midstream
holds equity interests on time and on budget; the price and
availability of debt and equity; the availability and price of
crude oil and natural gas to the consumer compared to the price of
alternative and competing fuels; risks associated with the change
in ownership of our General Partner; and other risks inherent in
the Partnership’s business, including those described under “Risk
Factors” and “Disclosure Regarding Forward-Looking Statements” in
Noble Midstream’s 2019 Annual Report on Form 10-K and in subsequent
reports that we file with the U.S. Securities and Exchange
Commission (SEC).
Non-GAAP Financial Measures
This news release also contains certain non-GAAP measures of
financial performance that management believes are good tools for
internal use and the investment community in evaluating Noble
Midstream’s overall financial performance. Please see the attached
schedules for reconciliations of the non-GAAP financial measures
used in this news release to the most directly comparable GAAP
financial measures and for the reasons why management believes
non-GAAP measures provide useful information to investors.
No Offer or Solicitation
This press release is for informational purposes only and shall
not constitute an offer to sell or the solicitation of an offer to
buy any securities pursuant to the transaction or otherwise, nor
shall there be any sale of securities in any jurisdiction in which
the offer, solicitation or sale would be unlawful prior to the
registration or qualification under the securities laws of any such
jurisdiction. No offer of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
Additional Information and Where You Can Find It
In connection with the proposal that Chevron made for a business
combination transaction with Noble Midstream, subject to further
developments and if a transaction is agreed, Chevron and Noble
Midstream may file one or more registration statements, information
statements, consent solicitation statements, proxy statements,
prospectuses, or other documents with the SEC. INVESTORS AND
SECURITY HOLDERS OF CHEVRON AND NOBLE MIDSTREAM ARE ADVISED TO
CAREFULLY READ ANY REGISTRATION STATEMENT, INFORMATION STATEMENT,
CONSENT SOLICITATION STATEMENT, PROXY STATEMENT, PROSPECTUS, OR
OTHER DOCUMENT (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO)
IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE TRANSACTION, THE PARTIES TO THE
TRANSACTION AND THE RISKS ASSOCIATED WITH THE TRANSACTION. Any
definitive information statement, consent solicitation statement,
or proxy statement, if any when available, will be sent to security
holders of Noble Midstream in connection with any solicitation of
proxies or consents of Noble Midstream unitholders relating to the
proposed transaction. Investors and security holders may obtain a
free copy of such documents and other relevant documents (if and
when available) filed by Chevron or Noble Midstream with the SEC
from the SEC’s website at www.sec.gov. Security holders and other
interested parties will also be able to obtain, without charge, a
copy of such documents and other relevant documents (if and when
available) from Chevron’s website at www.chevron.com under the
“Investors” tab under the heading “SEC Filings” or from Noble
Midstream’s website at www.nblmidstream.com under the “Investors”
tab and the “SEC Filings” sub-tab.
Participants in the Solicitation
Chevron, Noble Midstream and their respective directors,
executive officers and certain other members of management may be
deemed to be participants in the solicitation of proxies and
consents in respect of the transaction. Information about these
persons is set forth in Chevron’s proxy statement relating to its
2020 Annual Meeting of Stockholders, which was filed with the SEC
on April 7, 2020, and Noble Midstream’s Annual Report on Form 10-K
for the year ended December 31, 2019, which was filed with the SEC
on February 12, 2020, and subsequent statements of changes in
beneficial ownership on file with the SEC. Security holders and
investors may obtain additional information regarding the interests
of such persons, which may be different than those of the
respective companies’ security holders generally, by reading the
consent solicitation statement prospectus statement, or other
relevant documents regarding the transaction (if and when
available), which may be filed with the SEC.
Schedule 1
Noble Midstream Partners
LP
Revenue and Throughput Volume
Statistics
(unaudited)
Three Months Ended December
31,
Year Ended December 31,
2020
2019
2020
2019
DJ Basin
Crude Oil Sales Volumes (Bbl/d)
18,458
10,935
16,964
9,354
Crude Oil Gathering Volumes (Bbl/d)
153,020
190,216
174,644
182,121
Natural Gas Gathering Volumes
(MMBtu/d)
521,154
531,559
503,794
476,605
Natural Gas Processing Volumes
(MMBtu/d)
40,959
47,712
41,511
50,039
Produced Water Gathering Volumes
(Bbl/d)
28,532
37,122
35,190
39,629
Fresh Water Delivery Volumes (Bbl/d)
88,945
125,823
91,886
164,524
Delaware Basin
Crude Oil Gathering Volumes (Bbl/d)
46,906
59,671
54,347
49,842
Natural Gas Gathering Volumes
(MMBtu/d)
147,539
200,491
166,032
155,155
Produced Water Gathering Volumes
(Bbl/d)
117,299
181,581
138,449
148,886
Total Gathering Systems
Crude Oil Sales Volumes (Bbl/d)
18,458
10,935
16,964
9,354
Crude Oil Gathering Volumes (Bbl/d)
199,926
249,887
228,991
231,963
Natural Gas Gathering Volumes
(MMBtu/d)
668,693
732,050
669,826
631,760
Total Barrels of Oil Equivalent (Boe/d)
(1)
285,656
354,675
314,866
322,312
Natural Gas Processing Volumes
(MMBtu/d)
40,959
47,712
41,511
50,039
Produced Water Gathering Volumes
(Bbl/d)
145,831
218,703
173,639
188,515
Total Fresh Water Delivery
Fresh Water Services Volumes (Bbl/d)
88,945
125,823
91,886
164,524
Schedule 2
Noble Midstream Partners
LP
Consolidated Statements of
Operations
(in thousands, except per unit
amounts, unaudited)
Three Months Ended December
31,
Year Ended December 31,
2020
2019
2020
2019
Revenues
Gathering and Processing — Affiliate
$
76,412
$
92,985
$
328,411
$
337,086
Gathering and Processing — Third Party
17,892
22,381
78,654
76,645
Fresh Water Delivery — Affiliate
15,515
10,765
57,834
77,566
Fresh Water Delivery — Third Party
67
4,196
7,680
12,591
Crude Oil Sales — Third Party
93,455
57,938
281,205
189,772
Other — Affiliate
788
790
2,947
3,183
Other — Third Party
3,136
1,710
7,894
6,958
Total Revenues
207,265
190,765
764,625
703,801
Costs and Expenses
Cost of Crude Oil Sales
89,626
56,173
270,678
181,390
Direct Operating
25,844
27,763
92,387
116,675
Depreciation and Amortization
26,969
25,396
105,697
96,981
General and Administrative
6,545
11,789
24,721
25,777
Goodwill Impairment
—
—
109,734
—
Other Operating Expense (Income)
(28
)
—
4,698
(488
)
Total Operating Expenses
148,956
121,121
607,915
420,335
Operating Income
58,309
69,644
156,710
283,466
Other (Income) Expense
Interest Expense, Net of Amount
Capitalized
6,643
4,734
26,570
16,236
Investment Loss, Net
8,684
12,720
34,891
17,748
Total Other (Income) Expense
15,327
17,454
61,461
33,984
Income Before Income Taxes
42,982
52,190
95,249
249,482
Income Tax Expense
196
796
383
4,015
Net Income
42,786
51,394
94,866
245,467
Less: Net Income Prior to the Drop-Down
and Simplification
—
1,692
—
12,929
Net Income Subsequent to the Drop-Down
and Simplification
42,786
49,702
94,866
232,538
Less: Net Income (Loss) Attributable to
Noncontrolling Interests
2,878
10,306
(39,165
)
72,542
Net Income Attributable to Noble
Midstream Partners LP
39,908
39,396
134,031
159,996
Less: Net Income Attributable to Incentive
Distribution Rights
—
—
—
13,967
Net Income Attributable to Limited
Partners
$
39,908
$
39,396
$
134,031
$
146,029
Net Income Attributable to Limited
Partners Per Limited Partner Unit — Basic
Common Units
$
0.44
$
0.65
$
1.49
$
3.09
Subordinated Units
$
—
$
—
$
—
$
3.86
Net Income Attributable to Limited
Partners Per Limited Partner Unit — Diluted
Common Units
$
0.44
$
0.65
$
1.49
$
3.08
Subordinated Units
$
—
$
—
$
—
$
3.86
Weighted Average Limited Partner Units
Outstanding — Basic
Common Units
90,173
60,431
90,165
40,083
Subordinated Units
—
—
—
5,795
Weighted Average Limited Partner Units
Outstanding — Diluted
Common Units
90,201
60,454
90,167
40,105
Subordinated Units
—
—
—
5,795
Schedule 3
Noble Midstream Partners
LP
Consolidated Balance
Sheets
(in thousands,
unaudited)
December 31, 2020
December 31, 2019
ASSETS
Current Assets
Cash and Cash Equivalents
$
16,332
$
12,676
Accounts Receivable — Affiliate
55,011
42,428
Accounts Receivable — Third Party
45,615
44,093
Other Current Assets
8,093
8,730
Total Current Assets
125,051
107,927
Property, Plant and Equipment
Total Property, Plant and Equipment,
Gross
2,074,790
2,006,995
Less: Accumulated Depreciation and
Amortization
(315,441
)
(244,038
)
Total Property, Plant and Equipment,
Net
1,759,349
1,762,957
Investments
904,955
660,778
Intangible Assets, Net
245,510
277,900
Goodwill
—
109,734
Other Noncurrent Assets
2,331
6,786
Total Assets
$
3,037,196
$
2,926,082
LIABILITIES, MEZZANINE EQUITY
AND EQUITY
Current Liabilities
Accounts Payable — Affiliate
$
3,713
$
8,155
Accounts Payable — Trade
65,723
107,705
Current Portion of Debt
501,856
—
Other Current Liabilities
10,323
11,680
Total Current Liabilities
581,615
127,540
Long-Term Liabilities
Long-Term Debt
1,109,652
1,495,679
Asset Retirement Obligations
41,572
37,842
Other Long-Term Liabilities
4,006
4,160
Total Liabilities
1,736,845
1,665,221
Mezzanine Equity
Redeemable Noncontrolling Interest,
Net
119,658
106,005
Equity
Common Units (90,174 and 90,136 units
outstanding, respectively)
823,470
813,999
Noncontrolling Interests
357,223
340,857
Total Equity
1,180,693
1,154,856
Total Liabilities, Mezzanine Equity and
Equity
$
3,037,196
$
2,926,082
Schedule 4 Noble Midstream Partners
LP Reconciliations of GAAP Financial Measures to Non-GAAP
Financial Measures
Non-GAAP Financial Measures
This news release, the financial tables and other supplemental
information include Adjusted EBITDA, Adjusted Net EBITDA, FCF, DCF,
Net Debt to TTM Adjusted Net EBITDA and Distribution Coverage
Ratio, all of which are non-GAAP measures which may be used
periodically by management when discussing our financial results
with investors and analysts.
We define Adjusted EBITDA as net income before income taxes, net
interest expense, depreciation and amortization and certain other
items that we do not view as indicative of our ongoing performance.
Additionally, Adjusted EBITDA reflects the adjusted earnings impact
of our equity method investments by adjusting our equity earnings
or losses from our equity method investments to reflect our
proportionate share of the EBITDA of such equity method
investments. We define Adjusted Net EBITDA as Adjusted EBITDA less
the portion attributable to noncontrolling interests. We define Net
Debt to TTM Adjusted Net EBITDA as Total Debt less cash and cash
equivalents divided by the TTM Adjusted Net EBITDA. Net Debt to TTM
Adjusted Net EBITDA is an annualized leverage ratio used by
management to assess our ability to incur and service debt and fund
capital expenditures.
Adjusted EBITDA and Adjusted Net EBITDA are used as supplemental
financial measures by management and by external users of our
financial statements, such as investors, industry analysts, lenders
and ratings agencies, to assess:
- our operating performance as compared to those of other
companies in the midstream energy industry, without regard to
financing methods, historical cost basis or capital structure;
- the ability of our assets to generate sufficient cash flow to
make distributions to our partners;
- our ability to incur and service debt and fund capital
expenditures; and
- the viability of acquisitions and other capital expenditure
projects and the returns on investment of various investment
opportunities.
We define FCF as Net Cash Provided by Operating Activities
before working capital less total capital expenditures,
non-controlling interests and before equity distributions. DCF is
defined as Adjusted Net EBITDA plus distributions received from our
equity method investments less our proportionate share of Adjusted
EBITDA from such equity method investments, estimated maintenance
capital expenditures and cash interest paid.
FCF is used by management to evaluate our overall liquidity and
DCF is used by management to evaluate our overall performance and
liquidity. Our partnership agreement requires us to distribute all
available cash on a quarterly basis, and FCF and DCF are factors
used by the board of directors of our general partner to help
determine the amount of available cash that is available to our
unitholders for a given period. We define Distribution Coverage
Ratio as DCF divided by total distributions declared. The
Distribution Coverage Ratio is used by management to illustrate our
ability to make our distributions each quarter.
We believe that the presentation of Adjusted EBITDA, Adjusted
Net EBITDA, FCF, DCF, Net Debt to TTM Adjusted Net EBITDA and
Distribution Coverage Ratio provide information useful to investors
in assessing our financial condition and results of operations. The
GAAP measures most directly comparable to Adjusted EBITDA, Adjusted
Net EBITDA, Net Debt to TTM Adjusted Net EBITDA, DCF and
Distribution Coverage Ratio is net income, and net debt to net
income and net income to distributions as ratios. The GAAP measure
most directly comparable to FCF is Net Cash Provided by Operating
Activities, but due to the inability to accurately forecast working
capital changes, we cannot reconcile FCF without unreasonable
effort.
Adjusted EBITDA, Adjusted Net EBITDA, FCF, Net Debt to TTM
Adjusted Net EBITDA, DCF and Distribution Coverage Ratio should not
be considered alternatives to net income or any other measure of
financial performance or liquidity presented in accordance with
GAAP. Adjusted EBITDA, Adjusted Net EBITDA, FCF, Net Debt to TTM
Adjusted Net EBITDA, DCF and Distribution Coverage Ratio exclude
some, but not all, items that affect net income, and these measures
may vary from those of other companies. As a result, Adjusted
EBITDA, Adjusted Net EBITDA, FCF, Net Debt to TTM Adjusted Net
EBITDA, DCF and Distribution Coverage Ratio as presented herein may
not be comparable to similarly titled measures of other
companies.
Noble Midstream does not provide guidance on the reconciling
items between forecasted Adjusted Net EBITDA, FCF, Net Debt to TTM
Adjusted Net EBITDA, DCF or Distribution Coverage Ratio and their
most directly comparable GAAP reporting measures due to the
uncertainty regarding timing and estimates of these items. Noble
Midstream provides a range of such information to allow for the
variability in timing and uncertainty of estimates of such
reconciling items. Therefore, Noble Midstream cannot reconcile
forecasted FCF, Net Debt to TTM Adjusted Net EBITDA, DCF or
Distribution Coverage Ratio without unreasonable effort.
Schedule 4 (Continued)
Noble Midstream Partners
LP
Reconciliations of GAAP
Financial Measures to Non-GAAP Financial Measures
Reconciliation of Net Income
(GAAP) to Adjusted EBITDA (Non-GAAP)
and Distributable Cash Flow
(Non-GAAP)
(in thousands,
unaudited)
Three Months Ended December
31,
Trailing Twelve
2020
2019
Months
Reconciliation from Net Income
(GAAP)
Net Income
$
42,786
$
51,394
$
94,866
Add:
Depreciation and Amortization
26,969
25,396
105,697
Interest Expense, Net of Amount
Capitalized
6,643
4,734
26,570
Proportionate Share of Equity Method
Investment EBITDA Adjustments
25,781
6,330
82,363
Goodwill Impairment
—
—
109,734
Other
988
7,328
6,531
Adjusted EBITDA (Non-GAAP)
103,167
95,182
425,761
Less:
Adjusted EBITDA Prior to Drop-Down and
Simplification Transaction
—
4,593
—
Adjusted EBITDA Subsequent to Drop-Down
and Simplification (Non-GAAP)
103,167
90,589
425,761
Less:
Adjusted EBITDA Attributable to
Noncontrolling Interests
8,315
17,202
32,835
Adjusted EBITDA Attributable to Noble
Midstream Partners LP (Non-GAAP)
94,852
73,387
392,926
Add:
Distribution from Equity Method
Investments Attributable to Noble Midstream Partners LP
5,260
1,480
Less:
Proportionate Share of Equity Method
Investment EBITDA Attributable to Noble Midstream Partners LP
13,087
(7,247
)
Cash Interest Paid
6,415
9,772
Maintenance Capital Expenditures
6,612
7,011
Distributable Cash Flow of Noble
Midstream Partners LP (Non-GAAP)
$
73,998
$
65,331
Distributions (Declared)
$
16,917
$
62,004
Distribution Coverage Ratio
(Declared)
4.4x
1.1x
Schedule 4 (Continued)
Noble Midstream Partners
LP
Reconciliations of GAAP
Financial Measures to Non-GAAP Financial Measures
Reconciliation of Net Cash
Provided by Operating Activities (GAAP) to
Adjusted EBITDA (Non-GAAP) and
Distributable Cash Flow (Non-GAAP)
(in thousands,
unaudited)
Three Months Ended December
31,
Trailing Twelve
2020
2019
Months
Reconciliation from Net Cash Provided
by Operating Activities (GAAP)
Net Cash Provided by Operating
Activities (GAAP)
$
85,219
$
95,106
$
376,629
Add:
Interest Expense, Net of Amount
Capitalized
6,643
4,734
26,570
Changes in Operating Assets and
Liabilities
2,817
(5,261
)
16,144
Equity Method Investment EBITDA
Adjustments
8,436
(8,729
)
7,664
Other
52
9,332
(1,246
)
Adjusted EBITDA (Non-GAAP)
103,167
95,182
425,761
Less:
Adjusted EBITDA Prior to Drop-Down and
Simplification Transaction
—
4,593
—
Adjusted EBITDA Subsequent to Drop-Down
and Simplification Transaction
103,167
90,589
425,761
Less:
Adjusted EBITDA Attributable to
Noncontrolling Interests
8,315
17,202
32,835
Adjusted EBITDA Attributable to Noble
Midstream Partners LP (Non-GAAP)
94,852
73,387
392,926
Add:
Distribution from Equity Method
Investments Attributable to Noble Midstream Partners LP
5,260
1,480
Less:
Proportionate Share of Equity Method
Investment EBITDA Attributable to Noble Midstream Partners LP
13,087
(7,247
)
Cash Interest Paid
6,415
9,772
Maintenance Capital Expenditures
6,612
7,011
Distributable Cash Flow of Noble
Midstream Partners LP (Non-GAAP)
$
73,998
$
65,331
Distributions (Declared)
$
16,917
$
62,004
Distribution Coverage Ratio
(Declared)
4.4x
1.1x
Schedule 4 (Continued)
Noble Midstream Partners
LP
Reconciliations of GAAP
Financial Measures to Non-GAAP Financial Measures
Calculation of Net Debt to
Trailing Twelve Months Adjusted Net EBITDA
(in thousands,
unaudited)
December 31, 2020
Revolving Credit Facility, due March 9,
2023
710,000
Term Loan Credit Facility, due July 31,
2021
500,000
Term Loan Credit Facility, due August 23,
2022
400,000
Finance Lease Obligation
2,063
Total Debt
1,612,063
Less: Cash and Cash Equivalents
16,332
Net Debt
1,595,731
Trailing Twelve Months Adjusted Net
EBITDA
392,926
Net Debt to Trailing Twelve Months
Adjusted Net EBITDA
4.1x
Schedule 4 (Continued)
Noble Midstream Partners
LP
Reconciliations of GAAP
Financial Measures to Non-GAAP Financial Measures
Reconciliation of 2021 GAAP
Guidance to 2021 Non-GAAP Guidance
(in millions,
unaudited)
2021 Guidance Range
Full Year
Reconciliation from Net Income (GAAP)
to Adjusted EBITDA (Non-GAAP)
Net Income (GAAP)
$
155
-
$
185
Add:
Depreciation and Amortization
105
110
Interest Expense, Net of Amount
Capitalized
36
32
Proportionate Share of Equity Method
Investment EBITDA Adjustments
92
101
Other
2
2
Adjusted EBITDA (Non-GAAP)
390
430
Less:
Adjusted EBITDA Attributable to
Noncontrolling Interests
30
35
Adjusted EBITDA Attributable to Noble
Midstream Partners LP (Non-GAAP)
$
360
-
$
395
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210212005117/en/
Park Carrere General Manager, Investor Relations (281) 872-3208
park.carrere@nblmidstream.com
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