Dominion Energy Midstream Partners Announces Second-Quarter 2017 Earnings

RICHMOND, Va., Aug. 2, 2017 /PRNewswire/ -- Dominion Energy Midstream Partners, LP (NYSE: DM) reported unaudited net income attributable to the partnership of $42.0 million for the three months ended June 30, 2017. Adjusted earnings before interest, income taxes, depreciation and amortization (Adjusted EBITDA) was $68.6 million, which includes $4.0 million of Dominion Energy Questar Pipeline integration costs that were reimbursed by its general partner. Distributable cash flow was $40.7 million for the quarter.

Dominion Energy Midstream uses Adjusted EBITDA and distributable cash flow as the primary performance measurements of its earnings and results for public communications with analysts and investors. Dominion Energy Midstream also uses Adjusted EBITDA and distributable cash flow internally for budgeting, reporting to the Board of Directors and other purposes. Management believes Adjusted EBITDA and distributable cash flow provide a more meaningful representation of the partnership's financial performance and liquidity. Schedules B and D of this press release include reconciliations to the most directly comparable GAAP measures.

QUARTERLY DISTRIBUTION
On July 21, 2017, the Board of Directors declared a quarterly distribution of $0.2880 per common and subordinated unit, payable on Aug. 15, 2017, to such unitholders of record at the close of business Aug. 4, 2017. This distribution represents a 5 percent increase over last quarter and supports our 22 percent annual distribution growth rate plan.

CONFERENCE CALL TODAY
Dominion Energy Midstream and Dominion Energy will jointly host a second-quarter earnings conference call at 9 a.m. ET on Wednesday, Aug. 2, 2017. Management will discuss its second-quarter financial results and other matters of interest to the financial community.

Domestic callers should dial (877) 410-5657. International callers should dial (334) 323-9872. The passcode for the conference call is "Dominion." Participants should dial in 10 to 15 minutes prior to the scheduled start time. Members of the media also are invited to listen.

A live webcast of the conference call, including accompanying slides, will be available on the partnership's investor information page at www.dominionenergymidstream.com/investors.

A replay of the conference call will be available beginning about 1 p.m. ET Aug. 2, 2017 and lasting until 11 p.m. ET Aug. 9, 2017. Domestic callers may access the recording by dialing (877) 919-4059. International callers should dial (334) 323-0140. The PIN for the replay is 89026239. Additionally, a replay of the webcast will be available on the investor information pages by the end of the day Aug. 2, 2017.

ABOUT DOMINION ENERGY MIDSTREAM
Dominion Energy Midstream is a Delaware limited partnership formed by Dominion Energy, Inc., to grow a portfolio of natural gas terminaling, processing, storage, transportation and related assets. It is headquartered in Richmond, Va. For more information about Dominion Energy Midstream, visit its website at www.dominionenergymidstream.com.

                                     Dominion Energy Midstream Partners, LP

                                 Schedule A- Consolidated Statements of Income*

                                                   (Unaudited)


                                                        Three Months Ended                     Six Months Ended

                                                                  June 30,                             June 30,

                                                         2017                      2016                    2017                       2016
                                                         ----                      ----                    ----                       ----

    (millions, except per unit data)

    Operating Revenue                                  $115.7                     $85.6                  $245.9                     $168.6
    -----------------                                  ------                     -----                  ------                     ------

    Operating Expenses

    Purchased gas                                         9.8                       4.0                    22.0                        4.9

    Other operations and
     maintenance                                         38.1                      16.1                    69.2                       36.1

    Depreciation and
     amortization                                        25.4                      10.2                    50.3                       20.2

    Other taxes                                           9.2                       6.8                    18.5                       14.1

    Total operating expenses                             82.5                      37.1                   160.0                       75.3
    ------------------------                             ----                      ----                   -----                       ----

    Income from operations                               33.2                      48.5                    85.9                       93.3

    Earnings from equity
     method investees                                     5.2                       3.7                    13.2                       10.1

    Other income                                          1.3                       0.9                     2.6                        1.4

    Interest and related
     charges (benefit)                                    8.1                         -                   15.8                      (0.1)
    --------------------                                  ---                       ---                   ----                       ----

    Net income including
     noncontrolling interest
     and predecessors                                   $31.6                     $53.1                   $85.9                     $104.9
    ------------------------                            -----                     -----                   -----                     ------

    Less: Net income (loss)
     attributable to
     noncontrolling interest                           (10.4)                     30.6                   (8.3)                      59.3
    ------------------------                            -----                      ----                    ----                       ----

    Net income attributable
     to partners                                        $42.0                     $22.5                   $94.2                      $45.6
    -----------------------                             -----                     -----                   -----                      -----


    Net income attributable to partners'
     ownership interest

      Preferred unitholders'
       interest in net income                            $9.5                $        -                  $19.0                $         -

      General partner's
       interest in net income                             0.3                       0.6                     3.0                        1.0

      Common unitholders'
       interest in net income                            21.8                      12.9                    48.9                       26.3

      Subordinated unitholder's
       interest in net income                            10.4                       9.0                    23.3                       18.3


    Net income per limited partner unit (basic)

      Common units                                      $0.33                     $0.28                   $0.73                      $0.57

      Subordinated units                                $0.33                     $0.28                   $0.73                      $0.57

    Net income per limited partner unit (diluted)

      Common units                                      $0.31                     $0.28                   $0.67                      $0.57

      Subordinated units                                $0.33                     $0.28                   $0.73                      $0.57
      ------------------                                -----                     -----                   -----                      -----


    * The notes contained in Dominion Energy Midstream's most recent quarterly report on Form 10-Q or annual report on Form 10-K are an
     integral part of the Consolidated Financial Statements.

                                                                                      Dominion Energy Midstream Partners, LP

                                                                     Schedule B - Reconciliation of EBITDA and Adjusted EBITDA to Net Income*

                                                                                                    (Unaudited)


    The following table presents a reconciliation of EBITDA and Adjusted EBITDA to the most directly comparable GAAP financial measure for each period.


                                                                 Three Months Ended                        Six Months Ended

                                                                           June 30,                                June 30,

                                                                               2017                                     2016                                         2017   2016
                                                                               ----                                     ----                                         ----   ----

    (millions)

    Net income including
     noncontrolling interest and
     predecessors                                                             $31.6                                    $53.1                                        $85.9 $104.9

    Add:

    Depreciation and amortization                                              25.4                                     10.2                                         50.3   20.2

    Interest and related charges
     (benefit)                                                                  8.1                                        -                                        15.8  (0.1)
    ----------------------------                                                ---                                      ---                                        ----   ----

    EBITDA                                                                    $65.1                                    $63.3                                       $152.0 $125.0
    ------                                                                    -----                                    -----                                       ------ ------

    Distributions from equity method
     investees                                                                  7.0                                      5.9                                         14.0   11.7

    Less:

    Earnings from equity method
     investees                                                                  5.2                                      3.7                                         13.2   10.1

    EBITDA attributable to
     noncontrolling interest                                                  (1.7)                                    38.3                                          8.8   74.5
    ------------------------                                                   ----                                     ----                                          ---   ----

    Adjusted EBITDA                                                           $68.6                                    $27.2                                       $144.0  $52.1
    ---------------                                                           -----                                    -----                                       ------  -----


    * The notes contained in Dominion Energy Midstream's most recent quarterly report on Form 10-Q or annual report on Form 10-K are an integral part of the Consolidated
     Financial Statements.

                                                                       Dominion Energy Midstream Partners, LP

                                                           Schedule C- Summary of Consolidated Statements of Cash Flows*

                                                                                    (Unaudited)


                                                       Three Months Ended                    Six Months Ended

                                                                 June 30,                            June 30,

                                                                     2017                                 2016                                 2017        2016
                                                                     ----                                 ----                                 ----        ----

    (millions)

    Cash flows from operating
     activities:

      Net income including
       noncontrolling interest and
       predecessors                                                 $31.6                                $53.1                                $85.9      $104.9

      Adjustments to reconcile net
       income including
       noncontrolling interest and                                   33.4                                  8.8                                 89.1        25.5
        predecessors to net cash
         provided by operating
         activities


    Net cash provided by
     operating activities                                           $64.7                                $61.9                               $175.0      $130.4
    ---------------------                                           -----                                -----                               ------      ------


    Net cash used in investing
     activities                                                  $(175.3)                            $(354.4)                            $(537.1)   $(654.2)
    --------------------------                                    -------                              -------                              -------     -------


    Net cash provided by
     financing activities                                           $90.0                               $281.3                               $393.0      $513.0
    ---------------------                                           -----                               ------                               ------      ------


    Cash and cash equivalents at
     beginning of period                                             91.1                                 35.4                                 39.6        35.0

    Cash and cash equivalents at
     end of period                                                  $70.5                                $24.2                                $70.5       $24.2
    ----------------------------                                    -----                                -----                                -----       -----


    * The notes contained in Dominion Energy Midstream's most recent quarterly report on Form 10-Q or annual report on Form 10-K are an integral
     part of the Consolidated Financial Statements.

                                                                   Dominion Energy Midstream Partners, LP

                                       Schedule D - Reconciliation of Distributable Cash Flow to Net Cash from Operating Activities*

                                                                                (Unaudited)


    The following table presents a reconciliation of distributable cash flow to the most directly comparable GAAP financial measure for
     each period.

                                                     Three Months Ended                Six Months Ended

                                                               June 30,                        June 30,

                                                                   2017                             2016                                2017     2016
                                                                   ----                             ----                                ----     ----

    (millions)

    Net cash provided by operating
     activities                                                   $64.7                            $61.9                              $175.0   $130.4

    Less:

      Cash attributable to
       noncontrolling interest                                      1.8                             38.8                                20.6     79.5

    Other changes in working
     capital and noncash
     adjustments                                                    5.5                              4.1                              (10.9)     1.2

    Equity method investee
     distributions included in
     investing activities                                           0.2                                -                                0.5        -
    --------------------------                                      ---                              ---                                ---      ---

    Adjusted EBITDA                                                68.6                             27.2                               144.0     52.1
    ---------------                                                ----                             ----                               -----     ----

    Adjustments to cash:

      Less:
       Distributions to preferred
       unitholders                                                (9.5)                               -                             (19.0)       -

      Plus (less):   Deferred
       revenue                                                    (0.2)                               -                              (0.3)     2.0

      Less:             Amortization
       of regulatory liability                                    (0.7)                           (0.7)                              (1.4)   (1.4)

      Less:             Maintenance
       capital expenditures                                      (12.7)                           (2.3)                             (25.9)   (7.8)

      Plus:              Acquisition
       costs funded by Dominion
       Energy                                                       4.0                              0.1                                 4.2      0.1

      Less:             Interest
       expense and AFUDC equity                                   (8.8)                           (0.5)                             (16.9)   (1.0)

      Plus:              Non-cash
       director compensation                                          -                               -                                0.1      0.1
      ---------------------------                                   ---                             ---                                ---      ---

    Distributable cash flow                                       $40.7                            $23.8                               $84.8    $44.1
    -----------------------                                       -----                            -----                               -----    -----


    * The notes contained in Dominion Energy Midstream's most recent quarterly report on Form 10-Q or  annual report on Form 10-K are an
     integral part of the Consolidated Financial Statements.

HOW WE EVALUATE OUR OPERATIONS

Subsequent to the acquisition of Dominion Energy Questar Pipeline, we define distributable cash flow as Adjusted EBITDA less distributions to preferred unitholders, maintenance capital expenditures and interest expense and adjusted for known timing differences between cash and income.

                                                                                                                          Dominion Energy Midstream Partners, LP

                                                                                                                           Schedule E- Selected Financial Data*

                                                                                                                                        (Unaudited)


                                                                                                                                                   Three Months Ended                        Six Months Ended

                                                                                                                                                                                                     June 30,           June 30,

                                                                                                                                                                 2017                                     2016     2017        2016
                                                                                                                                                                 ----                                     ----     ----        ----

    (millions, except ratio)

    Adjusted EBITDA                                                                                                                                             $68.6                                    $27.2   $144.0       $52.1

    Adjustments to cash:

      Less:            Distributions to preferred unitholders                                                                                                   (9.5)                                       -  (19.0)          -

      Plus (less):  Deferred revenue                                                                                                                            (0.2)                                       -   (0.3)        2.0

      Less:            Amortization of regulatory liability                                                                                                     (0.7)                                   (0.7)   (1.4)      (1.4)

      Less:            Maintenance capital expenditures                                                                                                        (12.7)                                   (2.3)  (25.9)      (7.8)

      Plus:             Acquisition costs funded by Dominion Energy                                                                                               4.0                                      0.1      4.2         0.1

      Less:            Interest expense and AFUDC equity                                                                                                        (8.8)                                   (0.5)  (16.9)      (1.0)

      Plus:             Non-cash director compensation                                                                                                              -                                       -     0.1         0.1
      ------------------------------------------------                                                                                                            ---                                     ---     ---         ---

    Distributable cash flow                                                                                                                                     $40.7                                    $23.8    $84.8       $44.1
    -----------------------                                                                                                                                     -----                                    -----    -----       -----

    Distributions:

      Incentive distribution rights                                                                                                                               4.3                                      0.7      7.2         1.1

      Common unitholders                                                                                                                                         19.4                                     10.7     37.8        21.0

      Subordinated unitholder                                                                                                                                     9.2                                      7.6     18.0        14.7

    Total distributions                                                                                                                                         $32.9                                    $19.0    $63.0       $36.8
    -------------------                                                                                                                                         -----                                    -----    -----       -----

    Coverage ratio                                                                                                                                              1.24x                                   1.25x   1.35x      1.20x
    --------------                                                                                                                                              -----                                   -----   -----      -----


    * The notes contained in Dominion Energy Midstream's most recent quarterly report on Form 10-Q or annual report on Form 10-K are an integral part of the Consolidated Financial Statements.




    See schedules B and D for reconciliations of non-GAAP measures.

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SOURCE Dominion Midstream Partners