CNX Midstream Reports Third Quarter Results and Provides Updated 2019 and 2020 Guidance
PITTSBURGH, Oct. 29, 2019 /PRNewswire/ -- CNX Midstream Partners LP (NYSE: CNXM) ("CNXM", "CNX Midstream" or the "Partnership") today reported financial and operational results for the three and nine months ended September 30, 2019((1)).
Third Quarter Results
The Partnership continued its solid financial performance during the three and nine months ended September 30, 2019. Comparative results net to the Partnership, with the exception of net cash provided by operating activities, which is presented on a gross consolidated basis, were as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
(in millions) 2019 2018 2019 2018
Net income $
44.0 $
33.6 $
125.8 $
91.5
Net cash provided by operating activities $
51.0 $
35.7 $
175.7 $
131.2
Adjusted EBITDA (non-GAAP)(2) $
56.5 $
45.0 $
170.3 $
121.2
Distributable cash flow (non-GAAP)(2) $
43.6 $
35.0 $
133.5 $
95.8
The cash distribution coverage((2)) of 1.35x is on an as-declared basis for the quarter.
"CNXM delivered another strong quarter," commented Nicholas J. DeIuliis, CEO of CNX Midstream GP LLC, the general partner of the Partnership (the "General Partner"). "As compared to the third quarter of 2018, Adjusted EBITDA and distributable cash flow were up by 26% and 25%, respectively. This marks the 18th consecutive quarterly cash distribution increase at the targeted 15% annual growth rate. The 2019 capital build-out is nearly complete, and CNXM continues to expect capital to decline significantly in 2020, resulting in approximately $130 million in free cash flow((3))."
2019 and 2020 Updated Guidance
Based on current expectations, management provides the following update:
($ in millions) 2019E 2019E 2020E 2020E
---
Previous
Updated
Previous
Updated
Throughput (BBtu/d)* 1,400 1,500 1,500 1,600 1,650 1,800 1,600 1,750
Capital Expenditures $310 $330 $310 $330 $80 $100 $80 $100
Adjusted EBITDA(2) $200 $220 $220 $230 $250 $270 $250 $270
Distributable Cash Flow(2) $150 $170 $170 $180 $185 $205 $185 $205
Distribution Coverage(2)
1.2x
1.4x
1.4x
1.5x
1.2x
1.3x
1.2x
1.3x
LP Distribution Growth Target 15% 15% 15% 15%
* Excludes third-party volumes under high-pressure short-haul agreements.
In 2020, despite a lower volume range compared to the previous guidance, Adjusted EBITDA remains unchanged due primarily to offsetting general and administrative cost reductions.
Quarterly Distribution
As previously announced, the Board of Directors of its general partner, CNX Midstream GP LLC, has declared a cash distribution of $0.4001 per unit with respect to the third quarter of 2019. The distribution will be paid on November 12, 2019 to unitholders of record as of the close of business on November 5, 2019. The distribution, which equates to an annual rate of $1.6004 per unit, represents an increase of 3.5% over the prior quarter, and an increase of 15% over the distribution paid with respect to the third quarter of 2018.
Capital Investment and Resources
For the third quarter of 2019, CNX Midstream's total capital investment net to the Partnership was $63.9 million, which includes investment in expansion projects of $58.5 million and maintenance capital of $5.4 million.
As of September 30, 2019, CNX Midstream had outstanding borrowings of $246.0 million under its $600.0 million revolving credit facility.
Third Quarter Financial and Operational Results Conference Call
A conference call and webcast, during which management will discuss third quarter 2019 financial and operational results, is scheduled for October 29, 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 November 12, 2019 by dialing 877-344-7529 (international: 412-317-0088) and using the conference playback number 10135370.
_____________
(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, distributable cash
flow (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.
(3) Free cash flow (FCF) calculated as
Adjusted EBITDA of $260 million
less interest expense of $40
million less capital expenditures
of $90 million.
* * * * *
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 September 30, 2019 and our anticipated 2019 and 2020 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 Nine Months Ended
September 30, September 30,
2019 2018 2019 2018
---
Revenue
Gathering revenue - related party $
55,453 $
41,022 $
168,434 $
116,328
Gathering revenue - third party 18,523 19,946 55,862 69,523
Total Revenue 73,976 60,968 224,296 185,851
Expenses
Operating expense - related party 6,105 5,131 18,167 14,645
Operating expense - third party 5,612 4,870 17,774 20,744
General and administrative expense - related party 3,573 3,060 11,567 10,292
General and administrative expense - third party 1,236 1,771 4,136 6,639
Loss on asset sales and abandonments - 7,229 2,501
Depreciation expense 6,184 5,306 17,694 16,605
Interest expense 7,601 7,255 22,625 16,863
Total Expense 30,311 27,393 99,192 88,289
Net Income 43,665 33,575 125,104 97,562
Less: Net (loss) income attributable to noncontrolling interest (298) (64) (711) 6,071
Net Income Attributable to General and Limited Partner Ownership $
43,963 $
33,639 $
125,815 $
91,491
Interest in CNX Midstream Partners LP
Calculation of Limited Partner Interest in Net Income:
Net Income Attributable to General and Limited Partner Ownership $
43,963 $
33,639 $
125,815 $
91,491
Interest in CNX Midstream Partners LP
Less: General partner interest in net income, including incentive 7,103 3,697 18,707 8,752
distribution rights
Limited partner interest in net income $
36,860 $
29,942 $
107,108 $
82,739
Earnings per limited partner unit:
Basic $
0.58 $
0.47 $
1.68 $
1.30
Diluted $
0.58 $
0.47 $
1.68 $
1.30
Weighted average number of limited partner units outstanding
(in thousands):
Basic 63,735 63,638 63,722 63,633
Diluted 63,770 63,709 63,763 63,682
Cash distributions declared per unit (*) $
0.4001 $
0.3479 $
1.1598 $
1.0085
(*) 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 limited partner units)
(Unaudited)
September 30, December 31,
2019 2018
---
ASSETS
Current Assets:
Cash $
1,735 $
3,966
Receivables - related party 17,845 17,073
Receivables - third party 6,074 7,028
Other current assets 1,646 2,383
Total Current Assets 27,300 30,450
Property and Equipment:
Property and equipment 1,244,472 974,394
Less - accumulated depreciation 100,295 82,619
Property and Equipment - Net 1,144,177 891,775
Other Assets:
Operating lease right-of-use assets 6,281
Other assets 3,508 3,203
Total Other Assets 9,789 3,203
TOTAL ASSETS $
1,181,266 $
925,428
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities:
Trade accounts payable $
33,414 $
9,401
Accrued interest payable 1,237 7,761
Accrued liabilities 64,467 26,757
Due to related party 3,788 4,980
Total Current Liabilities 102,906 48,899
Other Liabilities:
Revolving credit facility 246,000 84,000
Long-term debt 393,925 393,215
Long-term operating lease liabilities 40
Total Other Liabilities 639,965 477,215
Total Liabilities 742,871 526,114
Partners' Capital and Noncontrolling Interest:
Limited partner units (63,735,464 issued and outstanding at September 30, 2019 and 357,085 320,543
63,639,676 issued and outstanding at December 31, 2018)
General partner interest 14,150 10,900
Partners' capital attributable to CNX Midstream Partners LP 371,235 331,443
Noncontrolling interest 67,160 67,871
Total Partners' Capital and Noncontrolling Interest 438,395 399,314
TOTAL LIABILITIES AND PARTNERS' CAPITAL $
1,181,266 $
925,428
CNX MIDSTREAM PARTNERS LP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2019 2018 2019 2018
---
Cash Flows from Operating Activities:
Net income $
43,665 $
33,575 $
125,104 $
97,562
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation expense and amortization of debt issuance costs 6,658 5,857 19,107 17,729
Unit-based compensation 328 506 1,481 1,775
Loss on asset sales and abandonments - 7,229 2,501
Other 8 1 49 388
Changes in assets and liabilities:
Due to/from affiliate 1,647 (1,764) (1,622) 124
Receivables - third party 607 361 954 1,066
Other current and non-current assets 1,738 (104) (5,301) 4
Accounts payable and other accrued liabilities (3,637) (2,766) 28,679 10,058
Net Cash Provided by Operating Activities 51,014 35,666 175,680 131,207
Cash Flows from Investing Activities:
Capital expenditures (68,289) (44,241) (251,156) (85,828)
Proceeds from sale of assets - 6,462
Net Cash Used in Investing Activities (68,289) (44,241) (251,156) (79,366)
Cash Flows from Financing Activities:
Contributions from (distributions to) general partner and noncontrolling 1 31 (3,505)
interest holders, net
Vested units withheld for unitholders taxes - (1) (690) (348)
Quarterly distributions to unitholders (30,637) (24,176) (86,845) (68,365)
Net payments on unsecured $250.0 million credit facility - (149,500)
Net borrowings on secured $600.0 million credit facility 38,000 33,000 162,000 44,000
Proceeds from issuance of long-term debt, net of discount - 394,000
Debt issuance costs (31) (5) (1,251) (5,367)
Acquisition of Shirley-Penns System - (265,000)
Net Cash Provided by (Used in) Financing Activities 7,333 8,818 73,245 (54,085)
Net (Decrease) Increase in Cash (9,942) 243 (2,231) (2,244)
Cash at Beginning of Period 11,677 707 3,966 3,194
Cash at End of Period $
1,735 $
950 $
1,735 $
950
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 Nine Months Ended
September 30, September 30,
(Unaudited) 2019 2018 2019 2018
Net Income $
43,665 $
33,575 $
125,104 $
97,562
Depreciation expense 6,184 5,306 17,694 16,605
Interest expense 7,601 7,255 22,625 16,863
EBITDA 57,450 46,136 165,423 131,030
Non-cash unit-based compensation expense 328 506 1,481 1,775
Loss on asset sales and abandonments 7,229 2,501
Adjusted EBITDA 57,778 46,642 174,133 135,306
Less:
Net (loss) income attributable to noncontrolling interest (298) (64) (711) 6,071
Depreciation expense attributable to noncontrolling interest 392 396 1,181 2,735
Other expenses attributable to noncontrolling interest 1,152 1,280 3,370 2,940
Loss on asset sales attributable to noncontrolling interest 2,375
Adjusted EBITDA Attributable to General and Limited Partner $
56,532 $
45,030 $
170,293 $
121,185
Ownership Interest in CNX Midstream Partners LP
Less: cash interest expense, net to the Partnership 7,528 5,593 21,414 13,181
Less: maintenance capital expenditures, net to the Partnership 5,388 4,449 15,391 12,157
Distributable Cash Flow $
43,616 $
34,988 $
133,488 $
95,847
Net Cash Provided by Operating Activities $
51,014 $
35,666 $
175,680 $
131,207
Interest expense 7,601 7,255 22,625 16,863
Loss on asset sales and abandonments 7,229 2,501
Other, including changes in working capital (837) 3,721 (31,401) (15,265)
Adjusted EBITDA 57,778 46,642 174,133 135,306
Less:
Net (loss) income attributable to noncontrolling interest (298) (64) (711) 6,071
Depreciation expense attributable to noncontrolling interest 392 396 1,181 2,735
Other expenses attributable to noncontrolling interest 1,152 1,280 3,370 2,940
Loss on asset sales attributable to noncontrolling interest 2,375
Adjusted EBITDA Attributable to General and Limited Partner $
56,532 $
45,030 $
170,293 $
121,185
Ownership Interest in CNX Midstream Partners LP
Less: cash interest expense, net to the Partnership 7,528 5,593 21,414 13,181
Less: maintenance capital expenditures, net to the Partnership 5,388 4,449 15,391 12,157
Distributable Cash Flow $
43,616 $
34,988 $
133,488 $
95,847
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) Q4 2018 Q1 2019 Q2 2019 Q3 2019 Twelve
Months
Ended
September
30, 2019
Net Income $
41,433 $
34,976 $
46,463 $
43,665 $
166,537
Depreciation expense 5,334 5,650 5,860 6,184 23,028
Interest expense 6,751 7,339 7,685 7,601 29,376
EBITDA 53,518 47,965 60,008 57,450 218,941
Non-cash unit-based compensation expense 636 612 541 328 2,117
Loss on asset sales and abandonments 7,229 7,229
Adjusted EBITDA 54,154 55,806 60,549 57,778 228,287
Less:
Net loss attributable to noncontrolling interest (1,118) (131) (282) (298) (1,829)
Depreciation expense attributable to noncontrolling interest 393 394 395 392 1,574
Other expenses attributable to noncontrolling interest 1,389 1,120 1,098 1,152 4,759
Adjusted EBITDA Attributable to General and Limited $
53,490 $
54,423 $
59,338 $
56,532 $
223,783
Partner Ownership Interest in CNX Midstream Partners LP
Less: cash interest expense, net to the Partnership 6,040 6,604 7,282 7,528 27,454
Less: maintenance capital expenditures, net to the Partnership 4,735 4,835 5,168 5,388 20,126
Distributable Cash Flow $
42,715 $
42,984 $
46,888 $
43,616 $
176,203
Net Cash Provided by Operating Activities $
48,908 $
49,913 $
74,753 $
51,014 $
224,588
Interest expense 6,751 7,339 7,685 7,601 29,376
Loss on asset sales and abandonments 7,229 7,229
Other, including changes in working capital (1,505) (8,675) (21,889) (837) (32,906)
Adjusted EBITDA 54,154 55,806 60,549 57,778 228,287
Less:
Net loss attributable to noncontrolling interest (1,118) (131) (282) (298) (1,829)
Depreciation expense attributable to noncontrolling interest 393 394 395 392 1,574
Other expenses attributable to noncontrolling interest 1,389 1,120 1,098 1,152 4,759
Adjusted EBITDA Attributable to General and Limited $
53,490 $
54,423 $
59,338 $
56,532 $
223,783
Partner Ownership Interest in CNX Midstream Partners LP
Less: cash interest expense, net to the Partnership 6,040 6,604 7,282 7,528 27,454
Less: maintenance capital expenditures, net to the Partnership 4,735 4,835 5,168 5,388 20,126
Distributable Cash Flow $
42,715 $
42,984 $
46,888 $
43,616 $
176,203
Distributions Declared $
27,268 $
28,940 $
30,637 $
32,371 $
119,216
Distribution Coverage Ratio - Declared 1.57 x 1.49 x 1.53 x 1.35 x 1.48 x
Distributable Cash Flow $
42,715 $
42,984 $
46,888 $
43,616 $
176,203
Distributions Paid $
25,678 $
27,268 $
28,940 $
30,637 $
112,523
Distribution Coverage Ratio - Paid 1.66 x 1.58 x 1.62 x 1.42 x 1.57 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 updated announced full year 2019 and 2020 expected guidance ranges of Adjusted EBITDA (2019: $220-$230 million; 2020: $250-$270 million) and full year distributable cash flow (2019: $170-$180 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) (Dollars in millions) Forecast Forecast
2019 2020
Estimate Estimate
Net Income $
168 $
194
Depreciation expense 26 29
Interest expense 33 43
EBITDA 227 266
Non-cash unit-based compensation expense 3 3
Adjusted EBITDA 230 269
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 $
225 $
260
Partner Ownership Interest in CNX Midstream Partners LP
Less: cash interest expense, net to the Partnership 30 40
Less: maintenance capital expenditures, net to the Partnership 20 25
Distributable Cash Flow $
175 $
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 September 30, 2019
Anchor Additional Total
---
Income Summary
Revenue $
72,329 $
1,647 $
73,976
Expenses 28,351 1,960 30,311
Net Income (Loss) $
43,978 $
(313) $
43,665
Operating Statistics - Gathered Volumes
Dry gas (BBtu/d) 848 3 851
Wet gas (BBtu/d) 630 55 685
Other (BBtu/d)* 273 273
Total Gathered Volumes 1,751 58 1,809
Capital Investment
Maintenance capital $
5,376 $
240 $
5,616
Expansion capital 58,240 4,433 62,673
Total Capital Investment $
63,616 $
4,673 $
68,289
Capital Investment Net to CNX Midstream Partners LP
Maintenance capital $
5,376 $
12 $
5,388
Expansion capital 58,240 222 58,462
Total Capital Investment Net to CNX Midstream Partners LP $
63,616 $
234 $
63,850
*Includes condensate handling and third-party volumes we gather under high-pressure short-haul agreements.
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SOURCE CNX Midstream Partners LP
