CNX Midstream Reports Second Quarter Results and Provides Updated 2020 Guidance
PITTSBURGH, July 30, 2019 /PRNewswire/ -- CNX Midstream Partners LP (NYSE: CNXM) ("CNXM", "CNX Midstream" or the "Partnership") today reported financial and operational results for the three and six months ended June 30, 2019((1)).
Second Quarter Results
The Partnership continued its solid financial performance during the three and six months ended June 30, 2019. Comparative results net to the Partnership, with the exception of operating cash flows, which is presented on a gross consolidated basis, were as follows:
Three Months Ended Six Months Ended
June 30, June 30,
(in millions) 2019 2018 2019 2018
Net income $
46.7 $
30.0 $
81.9 $
57.9
Net cash provided
by operating
activities $
74.8 $
53.7 $
124.7 $
95.5
Adjusted EBITDA
(non-GAAP)(2) $
59.3 $
41.3 $
113.8 $
76.2
Distributable cash
flow (non-
GAAP)(2) $
46.9 $
31.6 $
89.9 $
60.9
-- Cash distribution coverage((2)) of 1.53x on an as-declared basis
"CNXM continued to deliver strong results as evidenced by the second quarter," commented Nicholas J. DeIuliis, CEO of CNX Midstream GP LLC (the "General Partner"). "As compared to the second quarter of 2018, Adjusted EBITDA and distributable cash flow were up by 44% and 48%, respectively. This marks the 17th consecutive quarterly cash distribution increase at the targeted 15% annual growth rate, and CNXM's focus on operational execution resulting in strong financial performance supports our plan to continue 15% annual distribution growth through 2023 without drop-down transactions or need to access the equity capital markets. The 2019 capital build out is rapidly coming to an end, and we expect that the company will generate approximately $130 million in free cash flow in 2020."
2019 and 2020 Guidance
Based on current expectations, management provides the following update:
($ in millions) 2019E 2020E
Reaffirmed
Updated
Throughput (BBtu/d)* 1,400 1,500 1,650 1,800
Capital Expenditures $310 $330 $80 $100
Adjusted EBITDA $200 $220 $250 $270
Distributable Cash Flow $150 $170 $185 $205
Distribution Coverage 1.2x
1.4x 1.2x
1.3x
LP Distribution Growth Target 15% 15%
* Excludes third-party volumes under high-pressure short-haul agreements.
Quarterly Distribution
As previously announced, the Board of Directors of its general partner, CNX Midstream GP LLC, has declared a cash distribution of $0.3865 per unit with respect to the second quarter of 2019. The distribution will be made on August 14, 2019 to unitholders of record as of the close of business on August 6, 2019. The distribution, which equates to an annual rate of $1.546 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 second quarter of 2018.
Capital Investment and Resources
For the second quarter of 2019, CNX Midstream's total capital investment net to the Partnership was $103.4 million, which includes investment in expansion projects of $98.2 million and maintenance capital of $5.2 million.
As of June 30, 2019, CNX Midstream had outstanding borrowings of $208.0 million under its $600.0 million revolving credit facility.
Second Quarter Financial and Operational Results Conference Call
A conference call and webcast, during which management will discuss second quarter 2019 financial and operational results, is scheduled for July 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 August 6, 2019 by dialing 877-344-7529 (international: 412-317-0088) and using the conference playback number 10133226.
_____________
(1) Unless otherwise indicated, the
reporting measures included in
this news release reflect the
unallocated total activity of the
three development companies that
have or had been jointly owned, as
applicable, by the Partnership and
CNX Gathering LLC ("CNX
Gathering") since completion of
the Partnership's initial public
offering ("IPO") in September
2014. In connection with the
transaction with HG Energy, the
Partnership distributed its 5%
interest in the Growth System to
CNX Gathering and has no remaining
interests in the Growth Systems.
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 two
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, DCF, and cash
distribution coverage are not
measures or ratios 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 for the year ended December 31, 2018 filed with the Securities and Commission on February 7, 2019 and subsequent 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 Six Months Ended
June 30, June 30,
2019 2018 2019 2018
---
Revenue
Gathering revenue -
related party $
59,205 $
37,576 $
112,981 $
75,306
Gathering revenue -
third party 18,896 23,438 37,339 49,577
Total Revenue 78,101 61,014 150,320 124,883
Expenses
Operating expense -
related party 6,514 5,079 12,062 9,514
Operating expense -
third party 6,188 7,406 12,162 15,874
General and
administrative expense
-related party 4,027 3,620 7,994 7,232
General and
administrative expense
-third party 1,364 2,319 2,900 4,868
(Gain) Loss on asset
sales and abandonments - (254) 7,229 2,501
Depreciation expense 5,860 5,443 11,510 11,299
Interest expense 7,685 7,119 15,024 9,608
Total Expense 31,638 30,732 68,881 60,896
Net Income 46,463 30,282 81,439 63,987
Less: Net (loss) income
attributable to
noncontrolling
interest (282) 277 (413) 6,135
Net Income Attributable
to General and Limited
Partner Ownership
Interest in CNX
Midstream Partners LP $
46,745 $
30,005 $
81,852 $
57,852
Calculation of Limited Partner Interest
in Net Income:
Net Income Attributable
to General and Limited
Partner Ownership
Interest in CNX
Midstream Partners LP $
46,745 $
30,005 $
81,852 $
57,852
Less: General partner
interest in net
income, including
incentive distribution
rights 6,325 2,903 11,604 5,055
Limited partner
interest in net income $
40,420 $
27,102 $
70,248 $
52,797
Earnings per limited partner unit:
Basic $
0.63 $
0.43 $
1.10 $
0.83
Diluted $
0.63 $
0.43 $
1.10 $
0.83
Weighted average number of limited
partner units outstanding:
Basic 63,732 63,638 63,715 63,630
Diluted 63,755 63,677 63,759 63,670
Cash distributions
declared per unit (*) $
0.3865 $
0.3361 $
0.7597 $
0.6606
(*) 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)
June 30, December 31,
2019 2018
---
ASSETS
Current Assets:
Cash $
11,677 $
3,966
Receivables -related party 19,028 17,073
Receivables -third party 6,681 7,028
Other current assets 1,648 2,383
Total Current Assets 39,034 30,450
Property and Equipment:
Property and equipment 1,171,084 974,394
Less -accumulated depreciation 94,107 82,619
Property and Equipment -Net 1,076,977 891,775
Other Assets:
Operating lease right of use
asset 7,875
Other assets 3,731 3,203
Total Other Assets 11,606 3,203
TOTAL ASSETS $
1,127,617 $
925,428
LIABILITIES AND EQUITY
Current Liabilities:
Trade accounts payable $
33,299 $
9,401
Accrued interest payable 7,901 7,761
Accrued liabilities 55,095 26,757
Due to related party 3,425 4,980
Total Current Liabilities 99,720 48,899
Other Liabilities:
Revolving credit facility 208,000 84,000
Long-term debt 393,688 393,215
Long-term operating lease
liabilities 1,171
Total Other Liabilities 602,859 477,215
Total Liabilities 702,579 526,114
Partners' Capital and Noncontrolling Interest:
Limited partner units
(63,735,464 issued and
outstanding at June 30, 2019
and 63,639,676 issued and
outstanding at December 31,
2018) 344,530 320,543
General partner interest 13,050 10,900
Partners' capital attributable
to CNX Midstream Partners LP 357,580 331,443
Noncontrolling interest 67,458 67,871
Total Partners' Capital and
Noncontrolling Interest 425,038 399,314
TOTAL LIABILITIES AND PARTNERS'
CAPITAL $
1,127,617 $
925,428
CNX MIDSTREAM PARTNERS LP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2019 2018 2019 2018
---
Cash Flows from Operating Activities:
Net income $
46,463 $
30,282 $
81,439 $
63,987
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation expense and
amortization of debt issuance
costs 6,328 5,833 12,449 11,872
Unit-based compensation 541 690 1,153 1,269
(Gain) loss on asset sales and
abandonments - (254) 7,229 2,501
Other 30 270 41 387
Changes in assets and liabilities:
Due to/from affiliate (1,346) 878 (3,269) 1,888
Receivables -third party (101) 2,099 347 705
Other current and non-current
assets 1,932 758 (7,039) 108
Accounts payable and other
accrued liabilities 20,906 13,118 32,316 12,824
Net Cash Provided by Operating
Activities 74,753 53,674 124,666 95,541
Cash Flows from Investing Activities:
Capital expenditures (104,310) (25,615) (182,867) (41,587)
Proceeds from sale of assets - 646 6,462
Net Cash Used in Investing
Activities (104,310) (24,969) (182,867) (35,125)
Cash Flows from Financing Activities:
Contributions from
(distributions to) general
partner and noncontrolling
interest holders, net - 2,004 30 (3,505)
Vested units withheld for
unitholders taxes (26) (690) (347)
Quarterly distributions to
unitholders (28,940) (22,700) (56,208) (44,189)
Net payments on unsecured
$250.0 million credit facility - (149,500)
Net borrowings on secured
$600.0 million credit facility 71,350 (9,000) 124,000 11,000
Proceeds from issuance of long-
term debt, net of discount - 394,000
Debt issuance costs (1,220) (268) (1,220) (5,362)
Acquisition of Shirley-Penns
System - (265,000)
Net Cash Provided by (Used in)
Financing Activities 41,164 (29,964) 65,912 (62,903)
Net Increase (Decrease) in Cash 11,607 (1,259) 7,711 (2,487)
Cash at Beginning of Period 70 1,966 3,966 3,194
Cash at End of Period $
11,677 $
707 $
11,677 $
707
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 Six Months Ended
June 30, June 30,
(unaudited) 2019 2018 2019 2018
Net Income $
46,463 $
30,282 $
81,439 $
63,987
Depreciation expense 5,860 5,443 11,510 11,299
Interest expense 7,685 7,119 15,024 9,608
EBITDA 60,008 42,844 107,973 84,894
Non-cash unit-based
compensation expense 541 690 1,153 1,269
(Gain) loss on asset sales
and abandonments (254) 7,229 2,501
Adjusted EBITDA 60,549 43,280 116,355 88,664
Less:
Net (loss) income
attributable to
noncontrolling interest (282) 277 (413) 6,135
Depreciation expense
attributable to
noncontrolling interest 395 674 789 2,339
Other expenses
attributable to
noncontrolling interest 1,098 1,224 2,218 1,660
(Gain) loss on asset sales
attributable to
noncontrolling interest (242) 2,375
Adjusted EBITDA
Attributable to General
and Limited Partner
Ownership Interest in CNX
Midstream Partners LP $
59,338 $
41,347 $
113,761 $
76,155
Less: cash interest
expense, net to the
Partnership 7,282 5,573 13,886 7,588
Less: maintenance capital
expenditures, net to the
Partnership 5,168 4,125 10,003 7,708
Distributable Cash Flow $
46,888 $
31,649 $
89,872 $
60,859
Net Cash Provided by
Operating Activities $
74,753 $
53,674 $
124,666 $
95,541
Interest expense 7,685 7,119 15,024 9,608
(Gain) loss on asset sales
and abandonments (254) 7,229 2,501
Other, including changes
in working capital (21,889) (17,259) (30,564) (18,986)
Adjusted EBITDA 60,549 43,280 116,355 88,664
Less:
Net (loss) income
attributable to
noncontrolling interest (282) 277 (413) 6,135
Depreciation expense
attributable to
noncontrolling interest 395 674 789 2,339
Other expenses
attributable to
noncontrolling interest 1,098 1,224 2,218 1,660
(Gain) loss on asset sales
attributable to
noncontrolling interest (242) 2,375
Adjusted EBITDA
Attributable to General
and Limited Partner
Ownership Interest in CNX
Midstream Partners LP $
59,338 $
41,347 $
113,761 $
76,155
Less: cash interest
expense, net to the
Partnership 7,282 5,573 13,886 7,588
Less: maintenance capital
expenditures, net to the
Partnership 5,168 4,125 10,003 7,708
Distributable Cash Flow $
46,888 $
31,649 $
89,872 $
60,859
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) Q3 2018 Q4 2018 Q1 2019 Q2 2019 Twelve Months
Ended June 30,
2019
Net Income $
33,575 $
41,433 $
34,976 $
46,463 $
156,447
Depreciation expense 5,306 5,334 5,650 5,860 22,150
Interest expense 7,255 6,751 7,339 7,685 29,030
EBITDA 46,136 53,518 47,965 60,008 207,627
Non-cash unit-based
compensation expense 506 636 612 541 2,295
Loss on asset sales and
abandonments 7,229 7,229
Adjusted EBITDA 46,642 54,154 55,806 60,549 217,151
Less:
Net loss attributable to
noncontrolling interest (64) (1,118) (131) (282) (1,595)
Depreciation expense
attributable to
noncontrolling interest 396 393 394 395 1,578
Other expenses
attributable to
noncontrolling interest 1,280 1,389 1,120 1,098 4,887
Adjusted EBITDA
Attributable to General
and Limited Partner
Ownership Interest in CNX
Midstream Partners LP $
45,030 $
53,490 $
54,423 $
59,338 $
212,281
Less: cash interest
expense, net to the
Partnership 5,593 6,040 6,604 7,282 25,519
Less: maintenance capital
expenditures, net to the
Partnership 4,449 4,735 4,835 5,168 19,187
Distributable Cash Flow $
34,988 $
42,715 $
42,984 $
46,888 $
167,575
Net Cash Provided by
Operating Activities $
35,666 $
48,908 $
49,913 $
74,753 $
209,240
Interest expense 7,255 6,751 7,339 7,685 29,030
Loss on asset sales and
abandonments 7,229 7,229
Other, including changes
in working capital 3,721 (1,505) (8,675) (21,889) (28,348)
Adjusted EBITDA 46,642 54,154 55,806 60,549 217,151
Less:
Net loss attributable to
noncontrolling interest (64) (1,118) (131) (282) (1,595)
Depreciation expense
attributable to
noncontrolling interest 396 393 394 395 1,578
Other expenses
attributable to
noncontrolling interest 1,280 1,389 1,120 1,098 4,887
Adjusted EBITDA
Attributable to General
and Limited Partner
Ownership Interest in CNX
Midstream Partners LP $
45,030 $
53,490 $
54,423 $
59,338 $
212,281
Less: cash interest
expense, net to the
Partnership 5,593 6,040 6,604 7,282 25,519
Less: maintenance capital
expenditures, net to the
Partnership 4,449 4,735 4,835 5,168 19,187
Distributable Cash Flow $
34,988 $
42,715 $
42,984 $
46,888 $
167,575
Distributions Declared $
25,678 $
27,268 $
28,940 $
30,637 $
112,523
Distribution Coverage
Ratio -Declared 1.36 x 1.57 x 1.49 x 1.53 x 1.49 x
Distributable Cash Flow $
34,988 $
42,715 $
42,984 $
46,888 $
167,575
Distributions Paid $
24,176 $
25,678 $
27,268 $
28,940 $
106,062
Distribution Coverage
Ratio -Paid 1.45 x 1.66 x 1.58 x 1.62 x 1.58 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 and 2020 expected guidance ranges of Adjusted EBITDA (2019: $200-$220 million; 2020: $250-$270 million) and full year distributable cash flow (2019: $150-$170 million; 2020: $185-$205 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) Forecast Forecast
(Dollars in 2019 2020
millions) Estimate Estimate
Net Income $
151 $
194
Depreciation
expense 26 29
Interest expense 35 43
EBITDA 212 266
Non-cash unit-
based
compensation
expense 3 3
Adjusted EBITDA 215 269
Less:
Net income
attributable to
noncontrolling
interest 3 7
Depreciation and
other expenses
attributable to
noncontrolling
interest 2 2
Adjusted EBITDA
Attributable to
General and
Limited Partner
Ownership
Interest in CNX
Midstream
Partners LP $
210 $
260
Less: cash
interest
expense, net to
the Partnership 33 40
Less:
maintenance
capital
expenditures,
net to the
Partnership 17 25
Distributable
Cash Flow $
160 $
195
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 June 30, 2019
Development Company
Anchor Additional Total
---
Income Summary
Revenue $
76,298 $
1,803 $
78,101
Expenses 29,538 2,100 31,638
Net Income (Loss) $
46,760 $
(297) $
46,463
Operating Statistics -Gathered
Volumes
Dry gas (BBtu/d) 879 3 882
Wet gas (BBtu/d) 670 61 731
Other (BBtu/d)* 178 178
Total Gathered
Volumes 1,727 64 1,791
Capital Investment
Maintenance capital $
5,155 $
251 $
5,406
Expansion capital 98,167 737 98,904
Total Capital
Investment $
103,322 $
988 $
104,310
Capital Investment Net to CNX
Midstream Partners LP
Maintenance capital $
5,155 $
13 $
5,168
Expansion capital 98,167 37 98,204
Total Capital
Investment Net to
CNX Midstream
Partners LP $
103,322 $
50 $
103,372
*Includes condensate handling
and third-party volumes we
gather under high-pressure
short-haul agreements.
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SOURCE CNX Midstream Partners LP
