EnLink Midstream Reports First Quarter 2018 Results, Reaffirms 2018 Guidance, and Announces STACK Crude Oil Gathering Expansion
EnLink Midstream Reports First Quarter 2018 Results, Reaffirms 2018 Guidance, and Announces STACK Crude Oil Gathering Expansion
DALLAS, May 1, 2018 /PRNewswire/ -- The EnLink Midstream companies (EnLink), EnLink Midstream Partners, LP (NYSE: ENLK) (the Partnership or ENLK) and EnLink Midstream, LLC (NYSE: ENLC) (the General Partner or ENLC), reported financial results for the first quarter of 2018, reaffirmed full-year 2018 guidance, and announced an expansion of its crude oil gathering system in Central Oklahoma.
Highlights
-- ENLK reported net income attributable to ENLK after non-controlling
interest of approximately $60 million for the first quarter of 2018,
compared to approximately $18 million for the first quarter of 2017.
This represents approximately 230 percent growth quarter over quarter.
-- ENLK achieved approximately $244 million of adjusted EBITDA net to ENLK
for the first quarter of 2018, compared to approximately $208 million
for the first quarter of 2017. This represents approximately 17 percent
growth quarter over quarter. Adjusted EBITDA is a non-GAAP measure and
is explained in greater detail under "Non-GAAP Financial Information."
-- ENLC reported net income attributable to ENLC after non-controlling
interest of approximately $12 million for the first quarter of 2018,
compared to a net loss of approximately $2 million for the first quarter
of 2017. This represents approximately $14 million growth quarter over
quarter.
-- ENLC achieved approximately $57 million of cash available for
distribution for the first quarter of 2018, compared to approximately
$51 million for the first quarter of 2017. This represents approximately
12 percent growth quarter over quarter. Cash available for distribution
is a non-GAAP measure and is explained in greater detail under "Non-GAAP
Financial Information."
-- EnLink reaffirmed full-year 2018 guidance for both ENLK and ENLC.
-- EnLink completed construction of the first phase of its previously
announced Black Coyote crude oil gathering system during the first
quarter of 2018, with the system becoming operational during April 2018.
EnLink also signed a new commercial contract to provide crude oil
gathering services for an existing large, active customer in the STACK.
EnLink is now the primary crude oil gathering service provider for two
of the largest producers in the STACK. EnLink expects to spend
approximately $40 million of growth capital during 2018 related to this
strategic expansion, called the Redbud crude oil gathering system, with
an expected operational date during the second half of 2018.
-- EnLink's Oklahoma segment realized strong volume growth during the first
quarter of 2018. Average gas gathering and transmission volumes
increased by approximately 10 percent from fourth quarter 2017 and 49
percent from first quarter 2017. Average processing volumes increased
approximately 9 percent from fourth quarter 2017 and 64 percent from
first quarter 2017.
"EnLink continues to execute well on our long-term strategic plan and continues to deliver solid growth in financial results," said Michael J. Garberding, EnLink President and Chief Executive Officer. "Operating in the right places with the right partners has enabled us to develop an opportunity-rich inventory of projects, highlighted by today's announcement of an exciting crude oil gathering expansion in the STACK. We continue to enhance our strategic asset positions while putting highly efficient capital to work across our key growth areas. Our long-term growth outlook is robust, and we remain committed to returning value to unitholders and maintaining a strong balance sheet."
EnLink Midstream Partners, LP: First Quarter 2018 Financial Results
-- The Partnership reported net income attributable to ENLK of $60.1
million for the first quarter of 2018, compared to net income of $18.1
million for the first quarter of 2017.
-- The Partnership achieved $243.7 million of adjusted EBITDA net to ENLK
for the first quarter of 2018, compared to $207.6 million for the first
quarter of 2017.
-- The Partnership reported net cash provided by operating activities of
$192.7 million for the first quarter of 2018, compared to net cash
provided by operating activities of $174.2 million for the first quarter
of 2017.
-- Distributable cash flow attributable to ENLK's common units was $171.2
million for the first quarter of 2018, as compared to $153.0 million for
the first quarter of 2017. Distributable cash flow is a non-GAAP measure
and is explained in greater detail under "Non-GAAP Financial
Information."
-- ENLK reaffirmed its full-year 2018 guidance, which includes net income
of $255 million to $315 million and adjusted EBITDA of $950 million to
$1.02 billion.
-- Distribution coverage was 1.12x for the first quarter of 2018, compared
to 1.01x for the first quarter of 2017.
-- Debt to adjusted EBITDA as of March 31, 2018 was 3.85x, compared to
3.99x as of March 31, 2017.
-- Growth capital expenditures net to ENLK for the first quarter of 2018
totaled approximately $138 million. Total EnLink funded capital
expenditures outlook remains unchanged for 2018, however, segment level
growth capital expenditure outlook has been adjusted to reflect the new
Redbud crude oil gathering system expansion in Oklahoma and the expected
timing of gas opportunities in and around the Gulf Coast region:
-- Crude and condensate range has increased by $40 million
-- Louisiana range has decreased by $40 million
-- Full-year 2018 growth capital expenditure outlook net to ENLK is now at
a range of $580 million to $710 million, which reflects a $5 million
reduction from the previous range of $585 million to $715 million. The
reduction in growth capital expenditures outlook net to ENLK is offset
by an equal increase in ENLC's growth capital expenditure outlook due to
a reduction in projects funded solely by ENLK and the addition of Redbud
which is jointly funded.
-- As of April 26, 2018, ENLK had 350,243,418 common units outstanding.
EnLink Midstream, LLC: First Quarter 2018 Financial Results
-- The General Partner reported net income attributable to ENLC of $12.4
million for the first quarter of 2018, compared to a net loss of $1.9
million for the first quarter of 2017.
-- ENLC's cash available for distribution totaled $56.6 million for the
first quarter of 2018, compared to $51.0 million for the first quarter
of 2017. The cash available for distribution for the first quarter of
2018 included $8.9 million related to ENLC's approximately 16 percent
interest in EnLink Oklahoma Gas Processing LP (together with its
subsidiaries, "EnLink Oklahoma T.O.").
-- ENLC reaffirmed its full-year 2018 guidance, which includes net income
of $233 million to $291 million, and cash available for distribution of
$230 million to $240 million.
-- Growth capital expenditures net to ENLC for the first quarter of 2018
totaled approximately $12 million. Full-year 2018 growth capital
expenditure outlook net to ENLC has increased due to the crude oil
gathering expansion in the STACK, with the expected range now being $50
million to $60 million, up $5 million from the previous range of $45
million to $55 million.
-- Distribution coverage was 1.18x for the first quarter of 2018, compared
to 1.09x for the first quarter of 2017.
-- As of April 26, 2018, ENLC had 181,042,318 common units outstanding.
Regional Updates:
Central Oklahoma:
-- EnLink's Oklahoma segment reported strong segment profit growth during
the first quarter of 2018, achieving an approximate 11 percent increase
over the fourth quarter of 2017 and achieving an approximate 80 percent
increase from the first quarter 2017. The pace of growth in the Oklahoma
segment anchors management's confidence in the strength of the STACK
play and the ability to achieve 2018 year guidance.
-- EnLink's Oklahoma segment experienced solid volume growth during the
first quarter of 2018, including average gas gathering and transmission
volume increases of 10 percent and average processing volume increases
of 9 percent, in each case, as compared to the fourth quarter of 2017.
Average gas gathering and transmission volumes increased 49 percent and
average processing volumes increased approximately 64 percent, in each
case, from the first quarter of 2017. Volume growth in Central Oklahoma
is expected to remain robust as Devon Energy Corp. and other large
active producer customers on EnLink's dedicated acreage continue to
deliver strong well results and transition to full-field development.
-- EnLink's previously announced Thunderbird processing plant is
progressing well and remains on track to be operational during the first
quarter of 2019. Once operational, Thunderbird will increase EnLink's
gas processing capacity in Central Oklahoma by 200 million cubic feet
per day (MMcf/d), bringing total gas processing capacity to
approximately 1.2 Bcf/d and reinforcing EnLink's position as one of the
largest and most cost-efficient providers of natural gas processing in
the STACK.
-- During the first quarter of 2018, Devon brought Coyote on-line, its
first large scale development. Coyote is comprised of seven wells, four
of which are currently producing, and the development is delivering
record flow rates. Devon announced that its Showboat development, which
is comprised of 24 wells, is in progress and is currently 40 days ahead
of plan. According to Devon, Showboat's first production was achieved in
April, and well tie-ins are staggered over the next two months. Devon
has indicated that it expects Showboat to be fully producing by the end
of the second quarter of 2018.
-- EnLink placed the first phase of its crude oil gathering system, Black
Coyote, into service in April of 2018. Black Coyote will initially
gather volumes primarily from Devon's Showboat development and is
expected to connect to all of Devon's near-term large-scale development
projects. Devon is concentrating resources in the over-pressured oil
window, which has the best returns in the play, and Devon expects to
have eight large-scale developments underway by year end.
-- EnLink continues to enhance its core position in Central Oklahoma with
the signing of a new commercial contract to provide additional crude oil
gathering services for an existing large and active customer in the
STACK. This project, called the Redbud crude oil gathering system, will
build upon the Black Coyote footprint, with total 2018 growth capital
expenditures related to this expansion expected to be approximately $40
million. ENLC will fund approximately 16 percent of the capital
expenditures related to this project, with ENLK funding the remainder.
EnLink is now the primary crude oil gathering service provider for two
of the largest producers in the STACK.
Midland Basin:
-- EnLink's Midland Basin natural gas volume activity remained sequentially
flat, as the pace of well completions in the first quarter of 2018 was
slower than forecasted. Volumes exited March 2018 above the quarterly
average and have continued to increase since the end of the quarter.
Volumes have increased by approximately 12 percent from the first
quarter of 2017, and one of EnLink's largest producer customers recently
announced the acquisition of another of EnLink's largest producer
customers. The combined company is expected to run one of the largest
drilling program in the Permian Basin, which will likely benefit EnLink.
-- EnLink's Midland Basin natural gas processing facilities averaged
approximately 60 percent utilization of total capacity in the first
quarter of 2018. EnLink's position in the Midland Basin reflects an
attractive opportunity for additional low-cost, high-return expansions,
including filling available capacity. EnLink also has the infrastructure
in place to cost effectively expand the Riptide processing facility by
an additional 100 MMcf/d as system volumes continue to increase.
-- EnLink's Chickadee crude oil gathering operations in the Midland Basin
have achieved recent success with the addition of two new customers to
the system. The new projects are expected to be accretive to volumes and
segment profit during 2018, and leverage the gathering platform in
place. EnLink continues to successfully execute its crude oil gathering
strategy in the Permian Basin, and EnLink's proven capabilities are
attracting new opportunities.
Delaware Basin:
-- Volumes across EnLink's Delaware Basin Joint Venture (JV) system were
roughly flat sequentially, as the pace of well completions in the first
quarter of 2018 was slower than forecasted. Volumes exited the first
quarter of 2018 above the quarterly average, and have continued to
increase since the end of the quarter. Volumes have increased by
approximately 110 percent from the first quarter of 2017. Rig activity
remains strong on the JV's footprint, and solid volume growth is
expected for the second half of 2018 and into 2019.
-- The JV previously announced the construction of Lobo III, a new 200
MMcf/d expansion of gas processing capacity at the existing Lobo
complex. The construction of the facility is progressing well and is
expected to be operational during the second half of 2018.
Louisiana:
-- EnLink's natural gas liquids (NGL) network continues to benefit from
growth in liquids output from EnLink's Chisholm processing complex in
the STACK. NGLs produced from EnLink's Chisholm complex are
preferentially shipped to EnLink's Gulf Coast operations for further
transportation, fractionation and downstream value creation. NGL volumes
on EnLink's system were up slightly during the first quarter of 2018
from a very strong fourth quarter of 2017, and volumes are expected to
remain roughly in-line with first quarter of 2018 levels for the
remainder of 2018.
-- EnLink continued to experience increased volumes on its Louisiana gas
system during the first quarter of 2018, driven by strong demand across
its Gulf Coast network. Gathering and transmission throughput on
EnLink's Louisiana gas system hit record highs during the first quarter
of 2018, exceeding, on average, 2.2 Bcf/d. This growth reflects a six
percent increase as compared to the fourth quarter of 2017 and 15
percent growth as compared to the first quarter of 2017. Volumes are
expected to remain above initial guidance expectations for the balance
of 2018.
North Texas:
-- Devon recently announced a joint venture with Dow Chemical Co. in the
liquids-rich area of the Barnett Shale, where the two companies plan to
partner in the drilling of up to 116 new wells over a five-year period,
with approximately 20 wells expected to be drilled in 2018. Devon's
stated intention is to execute a capital program that stabilizes
production for its retained assets in the area, which in turn will
assist in stabilizing EnLink's long-term volume outlook as volumes
naturally decline in this mature basin.
-- Devon also recently announced the sale of its Johnson County acreage,
and EnLink is encouraged by the potential for the incoming producer to
bring an increased focus on optimizing existing wells, new refrac
activity and potential new well drilling plans. The acreage produces
volumes that represent approximately 7 percent of EnLink's North Texas
revenues, and incremental capital and focus in this area is expected to
positively impact volumes.
First Quarter 2018 Earnings Call Details
The General Partner and the Partnership will hold a conference call to discuss first quarter 2018 results on Wednesday, May 2, 2018, at 9 a.m. Central Time (10 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 http://dpregister.com/10118595 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 provides integrated midstream services across natural gas, crude oil, condensate, and NGL commodities. EnLink operates in several top U.S. basins and is strategically focused on the core growth areas of the Permian's Midland and Delaware basins, Oklahoma's Midcontinent, and Louisiana's Gulf Coast. Headquartered in Dallas, EnLink is publicly traded through EnLink Midstream, LLC (NYSE: ENLC), the General Partner, and EnLink Midstream Partners, LP (NYSE: ENLK), the Master Limited Partnership. Visit www.EnLink.com for more information on how EnLink connects energy to life.
Non-GAAP Financial Information & Other Definitions
This press release contains non-generally accepted accounting principles financial measures that we refer to as adjusted EBITDA, distributable cash flow available to common unitholders ("distributable cash flow"), and the General Partner's cash available for distribution. We define adjusted EBITDA as net income (loss) plus interest expense, provision (benefit) for income taxes, depreciation and amortization expense, impairments , unit-based compensation, (gain) loss on non-cash derivatives, (gain) loss on disposition of assets, (gain) loss on extinguishment of debt, successful acquisition transaction costs (if any), accretion expense associated with asset retirement obligations, non-cash rent and distributions from unconsolidated affiliate investments less payments under onerous performance obligations, non-controlling interest and (income) loss from unconsolidated affiliate investments. We define distributable cash flow as adjusted EBITDA (defined above), net to the Partnership, less interest expense (excluding amortization of the EnLink Oklahoma T.O. acquisition installment payable discount), litigation settlement adjustment, adjustments for the redeemable non-controlling interest, interest rate swaps, current income taxes and other non-distributable cash flows, accrued cash distributions on Series B Preferred Units and Series C Preferred Units paid or expected to be paid, and maintenance capital expenditures, excluding maintenance capital expenditures that were contributed by other entities and relate to the non-controlling interest share of our consolidated entities. The General Partner's cash available for distribution is defined as net income (loss) of the General Partner less the net income (loss) attributable to the Partnership, which is consolidated into the General Partner's net income (loss), plus the General Partner's (i) share of distributions from the Partnership, (ii) share of EnLink Oklahoma T.O.'s non-cash expenses, (iii) deferred income tax expense (benefit), (iv) corporate goodwill impairment, if any, and (v) successful acquisition transaction costs, if any, less the General Partner's interest in maintenance capital expenditures of EnLink Oklahoma T.O., and less third-party non-controlling interest share of the Partnership's net income (loss) from consolidated affiliates.
The Partnership's distribution coverage is calculated by dividing distributable cash flow by distributions declared to the General Partner and the common unitholders. The General Partner's distribution coverage is calculated by dividing cash available for distribution by distributions declared by the General Partner.
Growth capital expenditures generally include capital expenditures made for acquisitions or capital improvements that we expect will increase our asset base, operating income or operating capacity over the long-term. Maintenance capital expenditures generally include capital expenditures made to replace partially or fully depreciated assets in order to maintain the existing operating capacity of the assets and to extend their useful lives.
The Partnership and General Partner believe 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 each of the Partnership's and the General Partner's cash flow after it has satisfied the capital and related requirements of its operations. In addition, adjusted EBITDA achievement is a primary metric used in the Partnership's credit facility and short-term incentive program for compensating its employees.
Segment profit (loss) is defined as operating income (loss) plus general and administrative expenses, depreciation and amortization, (gain) loss on disposition of assets, impairments and (gain) loss on litigation settlement. 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 ENLK's Annual Report on Form 10-K for the year ended December 31, 2017, and, when available, "Item 1. Financial Statements and Supplementary Data - Note 11--Segment Information" in ENLK's Quarterly Report on Form 10-Q for the three months ended March 31, 2018, for further information about segment profit (loss)
Adjusted EBITDA, distributable cash flow, and cash available for distribution, 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 the Partnership's and the General Partner'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 ENLK's and ENLC's filings with the Securities and Exchange Commission for more information.
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," and "expect" and similar expressions. Such forward-looking statements include, but are not limited to, statements about guidance, projected or forecasted financial and operating results, timing for completion of construction or expansion projects, future operational results of our customers, results in certain basins, future rig count information, objectives, 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 dependence on Devon for a substantial portion of the natural gas that we gather, process, and transport, (b) developments that materially and adversely affect Devon or other customers, (c) Devon's ability to compete with us, (d) adverse developments in the midstream business may reduce our ability to make distributions, (e) our vulnerability to having a significant portion of our operations concentrated in the Barnett Shale, (f) continually competing for crude oil, condensate, natural gas, and NGL supplies and any decrease in the availability of such commodities, (g) decreases in the volumes that we gather, process, fractionate, or transport, (h) construction risks in our major development projects, (i) our ability to receive or renew required permits and other approvals, (j) changes in the availability and cost of capital, including as a result of a change in our credit rating, (k) operating hazards, natural disasters, weather-related issues or delays, casualty losses, and other matters beyond our control, (l) impairments to goodwill, long-lived assets and equity method investments, and (m) the effects of existing and future laws and governmental regulations, including environmental and climate change requirements and other uncertainties. These and other applicable uncertainties, factors, and risks are described more fully in EnLink Midstream Partners, LP's and EnLink Midstream, LLC's filings with the Securities and Exchange Commission, including EnLink Midstream Partners, LP's and EnLink Midstream, LLC's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Neither EnLink Midstream Partners, LP nor EnLink Midstream, LLC assumes any obligation to update any forward-looking statements.
The assumptions 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 Midstream 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 Midstream'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.
EnLink Midstream Partners, LP
Selected Financial Data
(All amounts in millions except per unit amounts)
(Unaudited)
Three Months Ended
March 31,
2018 2017
---- ----
Total
revenues $1,761.7 $1,321.9
Cost of
sales 1,381.5 1,002.3
------- -------
Gross
operating
margin 380.2 319.6
Operating costs and
expenses, excluding cost
of sales:
Operating
expenses 109.2 104.1
General
and
administrative 26.2 35.0
Loss on
disposition
of
assets 0.1 5.1
Depreciation
and
amortization 138.1 128.3
Impairments - 7.0
Gain on
litigation
settlement - (17.5)
--- -----
Total
operating
costs
and
expenses,
excluding
cost of
sales 273.6 262.0
----- -----
Operating
income 106.6 57.6
Other income (expense):
Interest
expense,
net of
interest
income (43.7) (44.5)
Income
from
unconsolidated
affiliates 3.0 0.7
Other
income 0.2 -
--- ---
Total
other
expense (40.5) (43.8)
----- -----
Income
before
non-
controlling
interest
and
income
taxes 66.1 13.8
Income
tax
provision (1.0) (0.5)
---- ----
Net
income 65.1 13.3
Net
income
(loss)
attributable
to non-
controlling
interest 5.0 (4.8)
--- ----
Net
income
attributable
to ENLK $60.1 $18.1
===== =====
General
partner
interest
in net
income $10.6 $5.9
===== ====
Limited
partners'
interest
in net
income
(loss)
attributable
to ENLK $21.6 $(9.3)
=====
Series B
preferred
interest
in net
income
attributable
to ENLK $21.9 $21.5
===== =====
Series C
preferred
interest
in net
income
attributable
to ENLK $6.0 $ -
==== === ===
Net income (loss)
attributable to ENLK per
limited partners' unit:
Basic
common
unit $0.06 $(0.03)
===== ======
Diluted
common
unit $0.06 $(0.03)
===== ======
EnLink Midstream Partners, LP
Reconciliation of Net Income to Adjusted EBITDA and
Distributable Cash Flow and Calculation of Coverage Ratio
(All amounts in millions except ratios and per unit amounts) (Unaudited)
Three Months Ended
March 31,
2018 2017
---- ----
Net income $65.1 $13.3
Interest expense, net of interest income 43.7 44.5
Depreciation and amortization 138.1 128.3
Impairments - 7.0
Income from unconsolidated affiliates (3.0) (0.7)
Distributions from unconsolidated affiliates 6.0 2.9
Loss on disposition of assets 0.1 5.1
Unit-based compensation 5.1 19.3
Income tax provision 1.0 0.5
(Gain) loss on non-cash derivatives 3.5 (5.3)
Payments under onerous performance obligation offset to other current and long-term liabilities (4.5) (4.5)
Other (1) 1.1 0.8
--- ---
Adjusted EBITDA before non-controlling interest $256.2 $211.2
Non-controlling interest share of adjusted EBITDA (2) (12.5) (3.6)
----- ----
Adjusted EBITDA, net to ENLK $243.7 $207.6
------ ------
Interest expense, net of interest income (43.7) (44.5)
Amortization of EnLink Oklahoma T.O. installment payable discount included in interest expense (3) 0.5 7.0
Litigation settlement adjustment (4) - (12.3)
Current taxes and other (0.9) (0.6)
Maintenance capital expenditures, net to ENLK (5) (6.2) (4.2)
Preferred unit accrued cash distributions (6) (22.2) -
Distributable cash flow $171.2 $153.0
====== ======
Actual declared distribution to common unitholders $152.9 $151.4
Distribution coverage 1.12x 1.01x
Distributions declared per limited partner unit $0.39 $0.39
(1) Includes accretion expense
associated with asset retirement
obligations and non-cash rent,
which relates to lease
incentives pro-rated over the
lease term.
(2) Non-controlling interest share
of adjusted EBITDA includes
ENLC's 16.1% share of adjusted
EBITDA from EnLink Oklahoma
T.O., NGP Natural Resources XI,
L.P.'s ("NGP") 49.9% share of
adjusted EBITDA from the
Delaware Basin JV, Marathon
Petroleum's 50% share of
adjusted EBITDA from the
Ascension JV, and other minor
non-controlling interests.
(3) Amortization of the EnLink
Oklahoma T.O. installment
payable discount is considered
non-cash interest under the
ENLK credit facility since the
payment under the payable is
consideration for the
acquisition of the EnLink
Oklahoma T.O. assets.
(4) Represents recoveries from a
lawsuit settled in 2017 for
amounts not previously deducted
from distributable cash flow.
(5) Excludes maintenance capital
expenditures that were
contributed by other entities
and relate to the non-
controlling interest share of
our consolidated entities.
(6) Represents the cash distributions
earned by the Series B Preferred
Units of $16.2 million and $6.0
million earned by the Series C
Preferred Units for the three
months ended March 31, 2018.
Cash distributions to be paid to
holders of the Series B
Preferred Units and Series C
Preferred Units are not
available to common unitholders.
EnLink Midstream Partners, LP
Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA
and Distributable Cash Flow
(All amounts in millions)
(Unaudited)
Three Months Ended
March 31,
2018 2017
---- ----
Net
cash
provided
by
operating
activities $192.7 $174.2
Interest
expense,
net
(1) 42.2 37.3
Current
income
tax 1.0 0.8
Distributions
from
unconsolidated
affiliate
investment
in
excess
of
earnings 1.4 2.9
Other
(2) 1.8 0.9
Changes in operating
assets and
liabilities which
(provided) used
cash:
Accounts
receivable,
accrued
revenues,
inventories
and
other 55.6 (19.4)
Accounts
payable,
accrued
gas
and
crude
oil
purchases
and
other
(3) (38.5) 14.5
Adjusted
EBITDA
before
non-
controlling
interest $256.2 $211.2
Non-
controlling
interest
share
of
adjusted
EBITDA
(4) (12.5) (3.6)
Adjusted
EBITDA,
net
to
ENLK $243.7 $207.6
------ ------
Interest
expense,
net
of
interest
income (43.7) (44.5)
Amortization
of expense
EnLink (5)
Oklahoma
T.O.
installment
payable
discount
included
in
interest 0.5 7.0
Litigation
settlement
adjustment
(6) - (12.3)
Current
taxes
and
other (0.9) (0.6)
Maintenance
capital
expenditures,
net
to
ENLK
(7) (6.2) (4.2)
Preferred
unit
accrued
cash
distributions
(8) (22.2) -
Distributable
cash
flow $171.2 $153.0
====== ======
(1) Net of amortization of debt
issuance costs and discount and
premium, which are included in
interest expense but not
included in net cash provided by
operating activities.
(2) Includes non-cash rent, which
relates to lease incentives pro-
rated over the lease term, and
accruals for settled commodity
swap transactions.
(3) Net of payments under onerous
performance obligation offset to
other current and long-term
liabilities.
(4) Non-controlling interest share
of adjusted EBITDA includes
ENLC's 16% share of adjusted
EBITDA from EnLink Oklahoma
T.O., NGP's 49.9% share of
adjusted EBITDA from the
Delaware Basin JV, Marathon
Petroleum's 50% share of
adjusted EBITDA from the
Ascension JV, and other minor
non-controlling interests.
(5) Amortization of the EnLink
Oklahoma T.O. installment
payable discount is considered
non-cash interest under the
ENLK credit facility since the
payment under the payable is
consideration for the
acquisition of the EnLink
Oklahoma T.O. assets.
(6) Represents recoveries from a
lawsuit settled in 2017 for
amounts not previously deducted
from distributable cash flow.
(7) Excludes maintenance capital
expenditures that were
contributed by other entities
and relate to the non-
controlling interest share of
our consolidated entities.
(8) Represents the cash distributions
earned by the Series B Preferred
Units of $16.2 million and $6.0
million earned by the Series C
Preferred Units for the three
months ended March 31, 2018.
Cash distributions to be paid to
holders of the Series B
Preferred Units and Series C
Preferred Units are not
available to common unitholders.
EnLink Midstream Partners, LP
Operating Data
(Unaudited)
Three Months Ended
March 31,
2018 2017
---- ----
Midstream Volumes:
Texas Segment
Gathering and Transportation
(MMBtu/d) 2,190,800 2,274,100
Processing (MMBtu/d) 1,194,100 1,162,100
Louisiana Segment
Gathering and Transportation
(MMBtu/d) 2,222,900 1,931,300
Processing (MMBtu/d) 441,900 467,800
NGL Fractionation (Gals/d) 6,343,500 5,245,500
Oklahoma Segment
Gathering and Transportation
(MMBtu/d) 1,047,900 705,500
Processing (MMBtu/d) 1,069,400 652,800
Crude and Condensate Segment
Crude Oil Handling (Bbls/d) 127,700 110,400
Brine Disposal (Bbls/d) 2,800 4,300
EnLink Midstream, LLC
Selected Financial Data
(All amounts in millions except per unit amounts)
(Unaudited)
Three Months Ended
March 31,
2018 2017
---- ----
Total
revenues $1,761.7 $1,321.9
Cost of
sales 1,381.5 1,002.3
------- -------
Gross
operating
margin 380.2 319.6
Operating costs and expenses,
excluding cost of sales:
Operating
expenses 109.2 104.1
General and
administrative 27.5 36.1
Loss on
disposition
of assets 0.1 5.1
Depreciation
and
amortization 138.1 128.3
Impairments - 7.0
Gain on
litigation
settlement - (17.5)
--- -----
Total
operating
costs and
expenses,
excluding
cost of
sales 274.9 263.1
----- -----
Operating
income 105.3 56.5
Other income (expense):
Interest
expense,
net of
interest
income (44.5) (44.9)
Income from
unconsolidated
affiliates 3.0 0.7
Other income 0.3 -
--- ---
Total other
expense (41.2) (44.2)
----- -----
Income
before non-
controlling
interest
and income
taxes 64.1 12.3
Income tax
provision (7.0) (3.0)
---- ----
Net income 57.1 9.3
Net income
attributable
to non-
controlling
interest 44.7 11.2
---- ----
Net income
(loss)
attributable
to ENLC $12.4 $(1.9)
===== =====
Net income (loss)
attributable to ENLC per
unit:
Basic common
unit $0.07 $(0.01)
----- ------
Diluted
common unit $0.07 $(0.01)
===== ======
EnLink Midstream, LLC
Cash Available for Distribution and Calculation of Coverage Ratio
(All amounts in millions except ratios and per unit amounts)
(Unaudited)
Three Months Ended
March 31,
2018 2017
---- ----
Distribution declared by
ENLK associated with
(1):
General
partner
interest $0.6 $0.6
Incentive
distribution
rights 14.8 14.7
ENLK
common
units
owned 34.5 34.5
---- ----
Total
share of
ENLK
distributions
declared $49.9 $49.8
Adjusted
EBITDA
of
EnLink
Oklahoma
T.O. (2) 8.9 2.6
Total
cash
available $58.8 $52.4
----- -----
Uses of cash:
General
and
administrative
expenses (1.2) (1.0)
Current
income
taxes
(3) (0.1) -
Interest
expense (0.8) (0.4)
Maintenance
capital
expenditures
(4) (0.1) -
Total
cash
used $(2.2) $(1.4)
ENLC cash
available
for
distribution $56.6 $51.0
===== =====
Actual
declared
distribution
to
common
unitholders $48.2 $46.7
Distribution
coverage 1.18x 1.09x
Distributions
declared
per ENLC
unit $0.263 $0.255
(1) Represents distributions declared
by ENLK and to be paid to ENLC on
May 14, 2018 and distributions
paid by ENLK to ENLC on May 12,
2017.
(2) Represents ENLC's interest in
EnLink Oklahoma T.O. adjusted
EBITDA, which is disbursed to
ENLC by EnLink Oklahoma T.O. on a
monthly basis. EnLink Oklahoma
T.O. adjusted EBITDA is defined
as earnings before depreciation
and amortization and provision
for income taxes and includes
allocated expenses from ENLK.
(3) Represents ENLC's stand-alone
current tax expense.
(4) Represents ENLC's interest in
EnLink Oklahoma T.O.s'
maintenance capital expenditures
which is netted against the
monthly disbursement of EnLink
Oklahoma T.O.s' adjusted EBITDA
per (2) above.
EnLink Midstream, LLC
Reconciliation of Net Income of ENLC to ENLC Cash Available for Distribution
(All amounts in millions)
(Unaudited)
Three Months Ended
March 31,
2018 2017
---- ----
Net
income
of
ENLC $57.1 $9.3
Less:
Net
income
attributable
to
ENLK 60.1 18.1
Net
loss
of
ENLC
excluding
ENLK $(3.0) $(8.8)
ENLC's
share
of
distributions
from
ENLK
(1) 49.9 49.8
ENLC's
interest
in
EnLink
Oklahoma
T.O.'s
non-
cash
expenses
(2) 4.7 4.0
ENLC
deferred
income
tax
expense
(3) 5.8 2.5
Non-
controlling
interest
share
of
ENLK's
net
income
(4) (0.7) 3.4
Other
items
(5) (0.1) 0.1
---- ---
ENLC
cash
available
for
distribution $56.6 $51.0
===== =====
(1) Represents distributions declared
by ENLK and to be paid to ENLC on
May 14, 2018 and distributions
paid by ENLK to ENLC on May 12,
2017.
(2) Includes depreciation and
amortization and unit-based
compensation expense allocated to
EnLink Oklahoma T.O.
(3) Represents ENLC's stand-alone
deferred taxes.
(4) Represents NGP's 49.9% share of the
Delaware Basin JV, Marathon
Petroleum's 50% share of the
Ascension JV, and other minor non-
controlling interests.
(5) Represents ENLC's interest in
EnLink Oklahoma T.O.s' maintenance
capital expenditures (which is
netted against the monthly
disbursement of EnLink Oklahoma
T.O.s' adjusted EBITDA) and other
non-cash items not included in
cash available for distribution.
EnLink Midstream Partners, LP
Forward-Looking Reconciliation of Net Income to Adjusted EBITDA and Distributable Cash Flow (1)
(All amounts in millions)
(Unaudited)
2018 Outlook
Low Midpoint High
--- -------- ----
Net income (2) $255 $285 $315
Interest expense, net of
interest income 175 179 183
Depreciation and
amortization 554 564 574
Income from
unconsolidated
affiliate investments (19) (20) (21)
Distribution from
unconsolidated
affiliate investments 16 17 18
Unit-based compensation 42 37 32
Income taxes 4 5 6
Payments under onerous
performance obligation
offset to other current
and long-term
liabilities (18) (18) (18)
Adjusted EBITDA before
non-controlling
interest $1,009 $1,049 $1,089
Non-controlling
interest share of
adjusted EBITDA (3) (59) (64) (69)
--- --- ---
Adjusted EBITDA, net to
ENLK $950 $985 $1,020
---- ---- ------
Interest expense, net of
interest income (175) (179) (183)
Preferred unit accrued
cash distributions (89) (89) (89)
Current taxes and other (1) (5) (8)
Maintenance capital
expenditures, net to
ENLK (55) (57) (60)
--- --- ---
Distributable cash flow $630 $655 $680
==== ==== ====
(1) The forecasted net income guidance
for the year ended December 31, 2018
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,
and the financial effects of future
acquisitions. The exclusion of these
items is due to the uncertainty
regarding the occurrence, timing,
and/or amount of these events.
EnLink Midstream does not provide a
reconciliation of forward-looking
Net Cash Provided by Operating
Activities to Adjusted EBITDA
because the companies are unable to
predict with reasonable certainty
changes in working capital, which
may impact cash provided or used
during the year. Working capital
includes accounts receivable,
accounts payable and other current
assets and liabilities. These items
are uncertain and depend on various
factors outside the companies'
control.
(2) Net income includes estimated net
income attributable to ENLK's non-
controlling interest in ENLC's 16.1%
share of net income from EnLink
Oklahoma T.O., NGP's 49.9% share of
net income from the Delaware Basin
JV, and Marathon's 50% share of net
income from the Ascension JV.
(3) Non-controlling interest share of
adjusted EBITDA includes ENLC's
16.1% share of adjusted EBITDA from
EnLink Oklahoma T.O., NGP's 49.9%
share of adjusted EBITDA from the
Delaware Basin JV, Marathon
Petroleum's 50% share of adjusted
EBITDA from the Ascension JV, and
other minor non-controlling
interests.
EnLink Midstream, LLC
Forward-Looking Reconciliation of Net Income of ENLC to ENLC Cash Available for Distribution (1)
(All amounts in millions)
(Unaudited)
2018 Outlook
Low Midpoint High
--- -------- ----
Net income of ENLC
(2) $233 $262 $291
Less: Net income
attributable to ENLK
(3) (225) (250) (275)
---- ---- ----
Net income of ENLC
excluding ENLK $8 $12 $16
ENLC's share of
distributions from
ENLK (4) 201 201 201
ENLC's interest in
EnLink Oklahoma T.O.
depreciation 19 19 19
Non-controlling
interest share of
ENLK's net income
(5) (11) (11) (11)
ENLC deferred income
tax expense (6) 14 15 16
Maintenance capital
expenditures (7) (1) (1) (1)
ENLC cash available
for distribution $230 $235 $240
==== ==== ====
(1) The forecasted net income guidance
for the year ended December 31, 2018
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,
and the financial effects of future
acquisitions. The exclusion of these
items is due to the uncertainty
regarding the occurrence, timing,
and/or amount of these events.
(2) Net income of ENLC includes estimated
net income attributable to ENLC's
non-controlling interest in ENLK.
(3) Net income attributable to ENLK is
net of the estimated non-
controlling interest share
attributable to the Delaware Basin
JV, Ascension JV, and EnLink
Oklahoma T.O.
(4) Represents quarterly distributions
estimated to be paid to ENLC by ENLK
for 2018.
(5) Represents estimated net income for
NGP's 49.9% share of the Delaware
Basin JV, Marathon Petroleum's 50%
share of the Ascension JV, and other
minor non-controlling interests.
(6) Represents ENLC's estimated stand-
alone deferred taxes for 2018.
(7) Represents 2018 maintenance capital
expenditures attributable to ENLC's
share of EnLink Oklahoma T.O.
Investor Relations: Kate Walsh, Vice President of Investor Relations, 214-721-9696, kate.walsh@enlink.com
Media Relations: Jill McMillan, Vice President of Public & Industry Affairs, 214-721-9271, jill.mcmillan@enlink.com
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SOURCE EnLink Midstream
