CNX Midstream Reports First Quarter Results
PITTSBURGH, April 30, 2019 /PRNewswire/ -- CNX Midstream Partners LP (NYSE: CNXM) ("CNXM", "CNX Midstream" or the "Partnership") today reported financial and operational results for the three months ended March 31, 2019((1)).
First Quarter Results
Highlights of first quarter 2019 results attributable to the Partnership as compared to the first quarter of 2018 include:
-- Net Income of $35.1 million as compared to $27.8 million
-- Adjusted EBITDA((2)) of $54.4 million as compared to $34.8 million
-- Distributable cash flow (DCF)((2)) of $43.0 million as compared to $29.2
million
-- Cash distribution coverage((2)) of 1.49x on an as-declared basis
"CNXM continued to deliver strong results for the first quarter," commented Nicholas J. DeIuliis, CEO of CNX Midstream GP LLC (the "General Partner"). "As compared to the first quarter of 2018, Adjusted EBITDA and distributable cash flow were up by 56% and 47%, respectively. CNXM's focus on operational execution is driving strong financial performance, which supports our plan to continue 15% annual distribution growth through 2023 without drop-down transactions or need to access the equity capital markets."
Operations
During the quarter, the company had zero reportable injuries, making it the eighteenth quarter injury-free, highlighting the company's continued focus on safety and environmental compliance. While winter operations historically result in an uptick in first quarter costs, operating unit cost were consistent with the past few quarters and ranked as the third best quarter in the company's history.
2019 Guidance
Based on current expectations, management updates the following guidance for 2019:
($ in millions) 2019E 2019E
Previous Updated
Throughput 1,400 1,400
(BBtu/d)* - -
1,500 1,500
Capital
Expenditures
$250
-
$280
$310
-
$330
Adjusted EBITDA
$200
-
$220
$200
-
$220
Distributable
Cash Flow
$150
-
$170
$150
-
$170
Distributable 1.2x 1.2x
Coverage - -
1.4x 1.4x
LP Distribution
Growth Target 15% 15%
* Excludes
third-party
volumes under
high-pressure
short-haul
agreements.
"The Partnership expects its 2019 capital expenditures to increase to approximately $310-$330 million, compared to the previous guidance of $250-$280 million," continued Mr. DeIuliis. "The expected increase in midstream capital is due the construction of our planned Buckland compressor station and its related discharge lines and interconnect facilities. Buckland Station is a critical component of the system overhaul we described at our 2018 Analyst and Investor Meeting and is supported by CNX's (the "Sponsor") contractual well obligations per the gas gathering agreement. CNX's additional activity, and corresponding increase in volumes and revenues in early 2020, provides the financial justification for building this station in 2019, which was the Partnership's original plan, and further supports our planned distribution growth through 2023."
Quarterly Distribution
As previously announced, the Board of Directors of its general partner, CNX Midstream GP LLC, has declared a cash distribution of $0.3732 per unit with respect to the first quarter of 2019. The distribution will be made on May 14, 2019 to unitholders of record as of the close of business on May 6, 2019. The distribution, which equates to an annual rate of $1.4928 per unit, represents an increase of 3.6% over the prior quarter, and an increase of 15% over the distribution paid with respect to the first quarter of 2018.
Capital Investment and Resources
For the first quarter of 2019, CNX Midstream's total capital investment net to the Partnership was $75.9 million, which includes investment in expansion projects of $71.1 million and maintenance capital of $4.8 million.
As of March 31, 2019, CNX Midstream had outstanding borrowings of $136.7 million under its $600 million revolving credit facility.
First Quarter Financial and Operational Results Conference Call
A conference call and webcast, during which management will discuss first quarter 2019 financial and operational results, is scheduled for April 30, 2019 at 11:00 a.m. Eastern Time. Prepared remarks by members of management will be followed by a question and answer period. Interested parties may listen via webcast at www.cnxmidstream.com. Participants who would like to ask questions may join the conference by phone by dialing 888-349-0097 (international 412-902-0126) five to ten minutes prior to the scheduled start time (reference the CNX Midstream call). An on-demand replay of the webcast will also be available at www.cnxmidstream.com shortly after the conclusion of the conference call. A telephonic replay will be available through May 7, 2019 by dialing 877-344-7529 (international: 412-317-0088) and using the conference playback number 10130298.
(1) Unless otherwise indicated, the
reporting measures included in
this news release reflect the
unallocated total activity of
the three development companies
that have been jointly owned by
the Partnership and CNX
Gathering LLC ("CNX Gathering")
since completion of the
Partnership's initial public
offering ("IPO") in September
2014. Effective November 16,
2016, the Partnership acquired
the remaining 25% controlling
interest in the Anchor Systems,
which brought its controlling
interest in that system to 100%.
In connection with the
transaction with HG Energy, the
Partnership distributed its 5%
interest in the Growth System to
CNX Gathering. The Partnership's
current financial interests in
the development companies are:
100% in the Anchor Systems and
5% in the Additional Systems.
Because the Partnership owns a
controlling interest in each of
these development companies, it
fully consolidates their
financial results. CNX
Gathering, which is wholly owned
by CNX Resources Corporation,
owns a 95% noncontrolling
interest in the Additional
Systems of the Partnership.
(2) Adjusted EBITDA and DCF are not
measures that are recognized
under accounting principles
generally accepted in the U.S.
("GAAP"). Definitions and
reconciliations of these non-
GAAP measures to GAAP reporting
measures appear in the financial
tables which follow.
* * * * *
CNX Midstream is a growth-oriented master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available at our website www.cnxmidstream.com.
* * * * *
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CNX Midstream's distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CNX Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CNX Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
* * * * *
This press release contains forward-looking statements within the meaning of the federal securities laws. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words "will," "believe," "expect," "anticipate," "intend," "estimate" and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. You should not place undue reliance on forward-looking statements. Forward-looking statements include, among others, statements regarding the payment of our quarterly distribution for the quarter ended March 31, 2019 and our anticipated 2019 financial performance. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, and there can be no assurance that actual outcomes and results will not differ materially from those expected by our management. You should not place undue reliance on forward-looking statements. Although forward-looking statements reflect our good faith beliefs at the time they are made, they involve known and unknown risks, uncertainties and other factors. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following: if either or both of our two largest customers, who account for substantially all of our revenue, change their business strategies, or take actions that otherwise significantly reduce the volumes of natural gas and condensate transported through our gathering systems, our revenue would decline and we could be materially and adversely affected; under our gathering agreements, our customers may transfer their leasehold, working and mineral fee interests in their dedicated acreage; we may not generate sufficient distributable cash flow to make the payment of the minimum quarterly distribution to our unitholders; because of the natural decline in production from existing wells, our success, in part, depends on our ability to maintain or increase natural gas and condensate throughput volumes on our midstream systems, which depends on the level of development and completion activity on acreage dedicated to us; many of our gathering agreements do not include minimum volume commitments; certain of our dedicated acreage is either not held by production by our customers or has not yet been earned by them; the highly competitive nature of our industry may adversely impact our ability to attract dedications of third-party volumes, which could limit our ability to grow and continue our dependence on our existing customers; increased competition from other companies that provide midstream services could have a negative impact on the demand for our services, which could adversely affect our financial results; we may not be able to make attractive offers to CNX on our ROFO acreage; our only assets are controlling ownership interests in our operating subsidiaries, so our cash flow will depend entirely on the performance of our operating subsidiaries and their ability to distribute cash to us; some of our gathering agreements with our customers provide for the release of dedicated acreage or fee credits in certain situations; we are responsible for any mine subsidence costs in the future; our midstream systems are exclusively located in the Appalachian Basin, making us vulnerable to risks associated with operating in a single geographic area; we may be unable to grow by acquiring the noncontrolling interests in, or assets of, our operating subsidiaries owned by CNX Gathering or CNX, which could limit our ability to increase our distributable cash flow; we may be unable to acquire additional properties from third parties in the future and any acquired properties may not provide the anticipated benefits; if third-party pipelines, whether upstream or downstream, or other midstream facilities interconnected to our gathering systems become partially or fully unavailable, our operating margin, cash flow and ability to make cash distributions to our unitholders could be adversely affected; to maintain and grow our business, we will be required to make substantial capital expenditures; if we are unable to obtain needed capital or financing on satisfactory terms, our ability to make cash distributions may be diminished or our financial leverage could increase; the amount of cash we have available for distribution to our unitholders depends primarily on our cash flow and not solely on our profitability, which may prevent us from making distributions, even during periods in which we record net income; our construction of new gathering, compression, dehydration, treating or other midstream assets may not result in revenue increases and may be subject to regulatory, environmental, political, legal and economic risks, which could adversely affect our cash flows, results of operations and financial condition and, as a result, our ability to distribute cash to our unitholders; the provisions and restrictions in our revolving credit facility and other debt agreements, and the risks associated therewith, could adversely affect our business, financial condition, results of operations and ability to make quarterly cash distributions to our unitholders; environmental regulations can increase costs and introduce uncertainty that could adversely impact our or our customers' operations; existing and future governmental laws, regulations and other legal requirements and judicial decisions that govern our business may increase our costs of doing business and may restrict our operations; we may incur significant costs and liabilities as a result of pipeline operations and related increases in the regulation of gas gathering pipelines; climate change laws and regulations restricting emissions of greenhouse gases at the federal or state level could result in increased operating costs and reduced demand for the natural gas that we gather, while potential physical effects of climate change could disrupt our production and cause us to incur significant costs in preparing for or responding to those effects; our business involves many hazards and operational risks, some of which may not be fully covered by insurance, and the occurrence of a significant accident or other event that is not fully insured could curtail our operations and have a material adverse effect on our ability to distribute cash and, accordingly, the market price for our common units; cyber-incidents could have a material adverse effect on our business, financial condition or results of operations; we may not own in fee the land on which our pipelines and facilities are located, which could result in disruptions to our operations; a shortage of equipment and skilled labor in the Appalachian Basin could reduce equipment availability and labor productivity and increase labor and equipment costs, which could have a material adverse effect on our business and results of operations; we do not have any officers or employees and rely on officers of our general partner and employees of CNX; our success depends on key members of our general partner's senior management team and our ability to attract and retain experienced technical and other professional personnel; increases in interest rates could adversely impact our business, common unit price, our ability to issue equity or incur debt for acquisitions, capital expenditures or other purposes and our ability to make cash distributions at our intended levels; terrorist activities could materially and adversely affect our business and results of operations; negative public perception regarding our industry could have an adverse effect on our operations; our general partner and its affiliates, including CNX, have conflicts of interest with us and limited fiduciary duties to us and our unitholders, and they may favor their own interests to our detriment and that of our unitholders; we have no control over the business decisions and operations of CNX, and CNX is under no obligation to adopt a business strategy that favors us; our general partner's discretion in establishing cash reserves may reduce the amount of cash we have available to distribute to unitholders; affiliates of our general partner, including CNX and CNX Gathering, may compete with us, and neither our general partner nor its affiliates have any obligation to present business opportunities to us except with respect to rights of first offer contained in our omnibus agreement; our tax treatment depends on our status as a partnership for federal income tax purposes; as a result of investing in our common units, you may become subject to state and local taxes and return filing requirements in jurisdictions where we operate or own or acquire properties.
Although forward-looking statements reflect our good faith beliefs at the time they are made, they involve known and unknown risks, uncertainties and other factors. For more information concerning factors that could cause actual results to differ materially from those conveyed in the forward-looking statements, including, among others, that our business plans may change as circumstances warrant, please refer to the "Risk Factors" and "Forward-Looking Statements" sections of our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.
CNX MIDSTREAM PARTNERS LP
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per unit data)
(unaudited)
Three Months Ended
March 31,
2019 2018
---
Revenue
Gathering revenue -
related party $
53,776 $
37,730
Gathering revenue -
third party 18,443 26,139
Total Revenue 72,219 63,869
Expenses
Operating expense -
related party 5,548 4,435
Operating expense -
third party 5,974 8,468
General and
administrative expense
-related party 3,967 3,612
General and
administrative expense
-third party 1,536 2,549
Loss on asset sales and
abandonments 7,229 2,755
Depreciation expense 5,650 5,856
Interest expense 7,339 2,489
Total Expense 37,243 30,164
Net Income 34,976 33,705
Less: Net (loss) income
attributable to
noncontrolling
interest (131) 5,858
Net Income Attributable
to General and Limited
Partner Ownership
Interest in CNX
Midstream Partners LP $
35,107 $
27,847
Calculation of Limited Partner Interest
in Net Income:
Net Income Attributable
to General and Limited
Partner Ownership
Interest in CNX
Midstream Partners LP $
35,107 $
27,847
Less: General partner
interest in net
income, including
incentive distribution
rights 5,279 2,152
Limited partner
interest in net income $
29,828 $
25,695
Earnings per limited partner unit:
Basic $
0.47 $
0.40
Diluted $
0.47 $
0.40
Weighted average number of limited
partner units outstanding:
Basic 63,698 63,623
Diluted 63,758 63,659
Cash distributions
declared per unit (*) $
0.3732 $
0.3245
(*) Represents the cash distributions declared during the month following the end of each respective quarterly
period.
CNX MIDSTREAM PARTNERS LP
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except number of units)
(unaudited)
March 31, December 31,
2019 2018
---
ASSETS
Current Assets:
Cash $
70 $
3,966
Receivables -related party 19,269 17,073
Receivables -third party 6,580 7,028
Other current assets 2,018 2,383
Total Current Assets 27,937 30,450
Property and Equipment:
Property and equipment 1,056,637 974,394
Less -accumulated depreciation 88,229 82,619
Property and Equipment -Net 968,408 891,775
Other Assets:
Operating lease right of use
asset 9,348
Other assets 2,958 3,203
Total Other Assets 12,306 3,203
TOTAL ASSETS $
1,008,651 $
925,428
LIABILITIES AND EQUITY
Current Liabilities:
Trade accounts payable $
18,594 $
9,401
Accrued interest payable 1,193 7,761
Accrued liabilities 44,207 26,757
Due to related party 4,897 4,980
Total Current Liabilities 68,891 48,899
Other Liabilities:
Revolving credit facility 136,650 84,000
Long-term debt 393,452 393,215
Long-term operating lease
liabilities 2,658
Total Other Liabilities 532,760 477,215
Total Liabilities 601,651 526,114
Partners' Capital and Noncontrolling Interest:
Limited partner units
(63,730,710 issued and
outstanding at March 31, 2019
and 63,639,676 issued and
outstanding at December 31,
2018) 327,380 320,543
General partner interest 11,880 10,900
Partners' capital attributable
to CNX Midstream Partners LP 339,260 331,443
Noncontrolling interest 67,740 67,871
Total Partners' Capital and
Noncontrolling Interest 407,000 399,314
TOTAL LIABILITIES AND PARTNERS'
CAPITAL $
1,008,651 $
925,428
CNX MIDSTREAM PARTNERS LP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
Three Months Ended
March 31,
2019 2018
---
Cash Flows from Operating Activities:
Net Income $
34,976 $
33,705
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation expense and
amortization of debt issuance
costs 6,121 6,039
Unit-based compensation 612 579
Loss on asset sales and
abandonments 7,229 2,755
Other 11 117
Changes in assets and liabilities:
Due to/from affiliate (1,923) 1,010
Receivables -third party 448 (1,394)
Other current and non-current
assets (8,971) (650)
Accounts payable and other
accrued liabilities 11,410 (294)
Net Cash Provided by Operating
Activities 49,913 41,867
Cash Flows from Investing Activities:
Capital expenditures (78,557) (15,972)
Proceeds from sale of assets - 5,816
Net Cash Used in Investing
Activities (78,557) (10,156)
Cash Flows from Financing Activities:
Contributions from
(distributions to) general
partner and noncontrolling
interest holders, net 30 (5,509)
Vested units withheld for
unitholders taxes (664) (347)
Quarterly distributions to
unitholders (27,268) (21,489)
Net payment on unsecured $250.0
million credit facility - (149,500)
Net borrowings on secured
$600.0 million credit facility 52,650 20,000
Proceeds from issuance of long-
term debt, net of discount - 394,000
Debt issuance costs - (5,094)
Acquisition of Shirley-Penns
System - (265,000)
Net Cash Provided by (Used in)
Financing Activities 24,748 (32,939)
Net Decrease in Cash (3,896) (1,228)
Cash at Beginning of Period 3,966 3,194
Cash at End of Period $
70 $
1,966
CNX MIDSTREAM PARTNERS LP
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW
(Dollars in thousands)
Definition of Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA
We define EBITDA as net income (loss) before net interest expense, depreciation and amortization, and Adjusted EBITDA as EBITDA adjusted for gains or losses on asset sales and abandonments and other non-cash items which should not be included in the calculation of distributable cash flow. EBITDA and Adjusted 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 believe that the presentation of EBITDA and Adjusted EBITDA provides information that is useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to EBITDA and Adjusted EBITDA are net income and net cash provided by operating activities. EBITDA and Adjusted EBITDA should not be considered alternatives to net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA and Adjusted EBITDA exclude some, but not all, items that affect net income or net cash, and these measures may vary from those of other companies. As a result, EBITDA and Adjusted EBITDA as presented below may not be comparable to similarly titled measures of other companies.
Distributable Cash Flow
We define distributable cash flow as Adjusted EBITDA less net income attributable to noncontrolling interest, cash interest expense and maintenance capital expenditures, each net to the Partnership. Distributable cash flow does not reflect changes in working capital balances.
Distributable cash flow is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
-- the ability of our assets to generate cash sufficient to support our
indebtedness and make future cash distributions to our unitholders; and
-- the attractiveness of capital projects and acquisitions and the overall
rates of return on alternative investment opportunities.
We believe that the presentation of distributable cash flow in this release provides information that is useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to distributable cash flow are net income and net cash provided by operating activities. Distributable cash flow should not be considered an alternative to net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Distributable cash flow excludes some, but not all, items that affect net income or net cash, and these measures may vary from those of other companies. As a result, our distributable cash flow may not be comparable to similarly titled measures that other companies may use.
The following table presents a reconciliation of the non-GAAP measures of Adjusted EBITDA and distributable cash flow to the most directly comparable GAAP financial measures of net income and net cash provided by operating activities.
Three Months Ended
March 31,
(unaudited) 2019 2018
Net Income $
34,976 $
33,705
Depreciation expense 5,650 5,856
Interest expense 7,339 2,489
EBITDA 47,965 42,050
Non-cash unit-based
compensation expense 612 579
Loss on asset sales and
abandonments 7,229 2,755
Adjusted EBITDA 55,806 45,384
Less:
Net (loss) income
attributable to
noncontrolling interest (131) 5,858
Depreciation expense
attributable to
noncontrolling interest 394 1,665
Other expenses attributable
to noncontrolling interest 1,120 436
Loss on asset sales
attributable to
noncontrolling interest 2,617
Adjusted EBITDA
Attributable to General
and Limited Partner
Ownership Interest in CNX
Midstream Partners LP $
54,423 $
34,808
Less: cash interest
expense, net to the
Partnership 6,604 2,015
Less: maintenance capital
expenditures, net to the
Partnership 4,835 3,583
Distributable Cash Flow $
42,984 $
29,210
Net Cash Provided by
Operating Activities $
49,913 $
41,867
Interest expense 7,339 2,489
Loss on asset sales and
abandonments 7,229 2,755
Other, including changes in
working capital (8,675) (1,727)
Adjusted EBITDA 55,806 45,384
Less:
Net (loss) income
attributable to
noncontrolling interest (131) 5,858
Depreciation expense
attributable to
noncontrolling interest 394 1,665
Other expenses attributable
to noncontrolling interest 1,120 436
Loss on asset sales
attributable to
noncontrolling interest 2,617
Adjusted EBITDA
Attributable to General
and Limited Partner
Ownership Interest in CNX
Midstream Partners LP $
54,423 $
34,808
Less: cash interest
expense, net to the
Partnership 6,604 2,015
Less: maintenance capital
expenditures, net to the
Partnership 4,835 3,583
Distributable Cash Flow $
42,984 $
29,210
The following table presents a reconciliation of the non-GAAP measures Adjusted EBITDA and distributable cash flow by quarter and for the most recently completed twelve month period with the most directly comparable GAAP financial measures, which are net income and net cash provided by operating activities.
(unaudited) Q2 2018 Q3 2018 Q4 2018 Q1 2019 Twelve
Months
Ended
March 31,
2019
Net Income $
30,282 $
33,575 $
41,433 $
34,976 $
140,266
Depreciation expense 5,443 5,306 5,334 5,650 21,733
Interest expense 7,119 7,255 6,751 7,339 28,464
EBITDA 42,844 46,136 53,518 47,965 190,463
Non-cash unit-based
compensation expense 690 506 636 612 2,444
Loss (gain) on asset sales
and abandonments (254) 7,229 6,975
Adjusted EBITDA 43,280 46,642 54,154 55,806 199,882
Less:
Net (loss) income
attributable to
noncontrolling interest 277 (64) (1,118) (131) (1,036)
Depreciation expense
attributable to
noncontrolling interest 674 396 393 394 1,857
Other expenses attributable
to noncontrolling interest 1,224 1,280 1,389 1,120 5,013
Gain on asset sales
attributable to
noncontrolling interest (242) (242)
Adjusted EBITDA
Attributable to General
and Limited Partner
Ownership Interest in CNX
Midstream Partners LP $
41,347 $
45,030 $
53,490 $
54,423 $
194,290
Less: cash interest
expense, net to the
Partnership 5,573 5,593 6,040 6,604 23,810
Less: maintenance capital
expenditures, net to the
Partnership 4,125 4,449 4,735 4,835 18,144
Distributable Cash Flow $
31,649 $
34,988 $
42,715 $
42,984 $
152,336
Net Cash Provided by
Operating Activities $
53,674 $
35,666 $
48,908 $
49,913 $
188,161
Interest expense 7,119 7,255 6,751 7,339 28,464
Loss (gain) on asset sales
and abandonments (254) 7,229 6,975
Other, including changes in
working capital (17,259) 3,721 (1,505) (8,675) (23,718)
Adjusted EBITDA 43,280 46,642 54,154 55,806 199,882
Less:
Net (loss) income
attributable to
noncontrolling interest 277 (64) (1,118) (131) (1,036)
Depreciation expense
attributable to
noncontrolling interest 674 396 393 394 1,857
Other expenses attributable
to noncontrolling interest 1,224 1,280 1,389 1,120 5,013
Gain on asset sales
attributable to
noncontrolling interest (242) (242)
Adjusted EBITDA
Attributable to General
and Limited Partner
Ownership Interest in CNX
Midstream Partners LP $
41,347 $
45,030 $
53,490 $
54,423 $
194,290
Less: cash interest
expense, net to the
Partnership 5,573 5,593 6,040 6,604 23,810
Less: maintenance capital
expenditures, net to the
Partnership 4,125 4,449 4,735 4,835 18,144
Distributable Cash Flow $
31,649 $
34,988 $
42,715 $
42,984 $
152,336
Distributions Declared $
24,176 $
25,678 $
27,268 $
28,940 $
106,062
Distribution Coverage Ratio
-Declared 1.31 x 1.36 x 1.57 x 1.49 x 1.44 x
Distributable Cash Flow $
31,649 $
34,988 $
42,715 $
42,984 $
152,336
Distributions Paid $
22,700 $
24,176 $
25,678 $
27,268 $
99,822
Distribution Coverage Ratio
-Paid 1.39 x 1.45 x 1.66 x 1.58 x 1.53 x
The following table presents a reconciliation of the non-GAAP measures of the Partnership's projected Adjusted EBITDA and projected distributable cash flow with the most directly comparable GAAP financial measure, which is projected net income. The following projections represent the approximate midpoint of the announced full year 2019 expected guidance ranges of Adjusted EBITDA ($200-$220 million) and full year distributable cash flow ($150-$170 million) attributable to the Partnership. CNX Midstream's financial guidance is based on numerous assumptions about future events and conditions and, therefore, could vary materially from actual results. These estimates are meant to provide guidance only and are subject to revision for acquisitions or operating environment changes.
(unaudited) (Dollars in Forecast
millions) 2019
Estimate
Net Income $
151
Depreciation expense 26
Interest expense 35
EBITDA 212
Non-cash unit-based
compensation expense 3
Adjusted EBITDA 215
Less:
Net income attributable to
noncontrolling interest 3
Depreciation and other
expenses attributable to
noncontrolling interest 2
Adjusted EBITDA Attributable
to General and Limited
Partner Ownership Interest in
CNX Midstream Partners LP $
210
Less: cash interest expense,
net to the Partnership 33
Less: maintenance capital
expenditures, net to the
Partnership 17
Distributable Cash Flow $
160
The Partnership is unable to project net cash provided by operating activities or provide the related reconciliation of projected net cash provided by operating activities to projected distributable cash flow, the most comparable financial measure calculated in accordance with GAAP, because net cash provided by operating activities includes the impact of changes in operating assets and liabilities. Changes in operating assets and liabilities relate to the timing of the Partnership's cash receipts and disbursements that may not relate to the period in which the operating activities occurred, and the Partnership is unable to project these timing differences with any reasonable degree of accuracy.
Development Companies Jointly Owned by CNX Gathering LLC and CNX Midstream Partners LP
Operating Income Summary, Selected Operating Statistics and Capital Investment
(Dollars in thousands)
(unaudited)
Three Months Ended March 31, 2019
Development Company
Anchor Other Total
---
Income Summary
Revenue $
70,171 $
2,048 $
72,219
Expenses 35,057 2,186 37,243
Net Income (Loss) $
35,114 $
(138) $
34,976
Operating Statistics -Gathered
Volumes
Dry gas (BBtu/d) 828 3 831
Wet gas (BBtu/d) 629 71 700
Other (BBtu/d)* 134 134
Total Gathered
Volumes 1,591 74 1,665
Capital Investment
Maintenance capital $
4,819 $
319 $
5,138
Expansion capital 70,980 2,439 73,419
Total Capital
Investment $
75,799 $
2,758 $
78,557
Capital Investment Net to CNX
Midstream Partners LP
Maintenance capital $
4,819 $
16 $
4,835
Expansion capital 70,980 122 71,102
Total Capital
Investment Net to
CNX Midstream
Partners LP $
75,799 $
138 $
75,937
*Includes condensate handling and third-party volumes we gather under high-pressure short-haul agreements.
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SOURCE CNX Midstream Partners LP
