EnLink Midstream Reports First Quarter 2020 Results, Reduces Capital Expenditures by an Additional 14%, and Revises 2020 Outlook
DALLAS, May 7, 2020 /PRNewswire/ -- EnLink Midstream, LLC (NYSE: ENLC) (EnLink) reported financial results for the first quarter of 2020, announced a further 14% reduction in 2020 capital expenditures, net to EnLink, and provided revisions to the company's 2020 outlook.
Highlights:
-- $260 million net loss reported for first quarter of 2020, which includes
non-cash impairment charges of $353 million. Net loss for full-year 2020
projected to range from $123 million to $222 million.
-- $260 million of adjusted EBITDA achieved for first quarter of 2020,
which includes approximately $6 million of severance expense. Full-year
2020 adjusted EBITDA projected to range from $950 million to $1.025
billion.
-- $182 million of net cash provided by operating activities reported for
first quarter of 2020.
-- $44 million of excess free cash flow generated for first quarter of
2020. Excess free cash flow projected to range from $260 million to $280
million for full-year 2020.
-- 14% additional reduction in 2020 capital expenditures (midpoint) to
bring 2020 capital expenditures down by approximately 40% relative to
original 2020 guidance range. Updated 2020 total capital expenditures
guidance range, net to EnLink, is $190 million to $250 million.
-- ~67% reduction in common unit distribution payout, as previously
announced, since the third quarter of 2019 distribution.
-- $50 million of incremental expense savings, announced on March 24, 2020,
being targeted across cost structure during 2020. Full-year 2020 cost
savings compared to 2019 are projected to be $100 million.
"EnLink's first quarter results and updated 2020 outlook demonstrate the strength of our large-scale diversified platform, and the flexibility and resiliency of our people and operations in the midst of unprecedented market volatility," said Barry E. Davis, EnLink Chairman and Chief Executive Officer.
"We have acted swiftly and decisively in response to the evolving business climate and have taken steps to retain roughly $600 million of cash flow in 2020 to manage liquidity, sustain balance sheet strength, and maintain leverage below our covenant.
"We continue to prioritize the health and safety of our employees and stakeholders while remaining focused on operating reliably and responsibly and providing exceptional service to our customers. Everything that we are doing is positioning us for what will become the new normal, and I am confident we will be stronger as a result of our team's incredibly hard work through these challenging times."
Adjusted EBITDA and excess free cash flow used in this press release are non-GAAP measures and are explained in greater detail under "Non-GAAP Financial Information and Other Definitions" below.
First Quarter 2020 Financial Results
Three Months Ended March 31
$MM, unless noted 2020 2019
---
Net loss (260) (135)
Adjusted EBITDA, net to EnLink* 260 268
Net cash provided by operating activities 182 264
Excess free cash flow 44 (172)
Total capital expenditures, net to EnLink 91 228
Cash and cash equivalents, net to EnLink 195 (6)
Amount outstanding on revolving credit facility 550 160
Outstanding common units as of April 30 489,259,906 487,170,379
*Adjusted EBITDA, net to EnLink, for 1Q20 includes approximately $6 million of expenses related to severance.
---
-- EnLink exited the first quarter of 2020 with $195 million of cash on
hand, and a $1.75 billion unsecured revolving credit facility, upon
which approximately $550 million was drawn. EnLink's unsecured revolving
credit facility matures in early 2024 and is backed by 21 leading global
financial institutions, 17 of which are lenders under EnLink's term
loan, which matures in December 2021. EnLink is evaluating a number of
options to refinance the term loan and expects to have sufficient
financial flexibility to repay the term loan by drawing on the unsecured
revolving credit facility, with no impact to leverage metrics or
covenant calculations. EnLink's first maturity on its senior notes is
not until the first quarter of 2024. Approximately 35% of EnLink's
outstanding senior notes have a remaining tenor of more than 20 years,
and all outstanding senior notes are unsecured.
-- During the first quarter of 2020, EnLink opportunistically repurchased a
small portion of its outstanding senior notes on the open market. The
repurchases have resulted in a net gain of approximately $5 million.
-- EnLink continues to maintain a diversified customer base across its
asset platform, which includes large integrated customers and other
investment-grade counterparties. Approximately 90% of EnLink's first
quarter of 2020 revenues were generated from investment-grade
counterparties or from customers who provided credit protections to
EnLink. EnLink has limited credit exposure related to its producer
customers as the structure of the majority of gathering and processing
contracts limits the amount of outstanding receivables from producer
customers to EnLink. EnLink continues to monitor its working capital and
credit exposure closely.
-- EnLink's debt-to-adjusted EBITDA for the first quarter of 2020 was 4.6x,
as calculated under the revolving credit facility agreement, which
excludes cash on the balance sheet. Debt-to-adjusted EBITDA when debt is
netted with cash and cash equivalents is 4.4x.
2020 Full-Year Outlook
Given the uncertainty surrounding the market dislocations caused by the COVID-19 pandemic, including reduced demand for crude oil and natural gas, commodity price volatility, and curtailed customer activity, EnLink's previously issued 2020 financial guidance originally published on January 15, 2020, and reaffirmed on February 25, 2020, has been revised to reflect current market conditions and assumptions. While providing relevant segment and volume guidance at this time is not possible due to material uncertainties, EnLink has outlined 2020 ranges for key company-level financial metrics in the table below:
$MM, unless noted 2020
Outlook
---
Net loss (123) (222)
Adjusted EBITDA, net to EnLink 950 1,025
Excess free cash flow 260 280
Total capital expenditures, net to
EnLink 190 250
Annualized 1Q20 declared
distribution per common unit $0.375
---
-- EnLink's updated 2020 outlook takes into consideration announced actions
and current expectations related to all major customers and includes a
range of assumptions given the uncertainty around the timing and size of
further production curtailments and shut-ins.
-- EnLink is projecting that debt-to-adjusted EBITDA for full-year 2020, as
calculated by the revolving credit facility agreement, will be within
the range of 4.4x - 4.7x.
First Quarter 2020 Segment Updates
Permian:
-- Segment profit of $32.3 million for the first quarter of 2020 was
approximately 13% lower as compared to the fourth quarter of 2019 and
approximately 16% lower as compared to the first quarter of 2019.
Segment profit for the first quarter of 2020 was negatively impacted as
compared to the prior periods due primarily to lower contribution from
crude operations and lower natural gas and NGL prices. EnLink hedges
exposure to commodity price fluctuations and realized approximately $2.5
million of benefit related to Permian hedges in the corporate segment
for the first quarter of 2020, providing a partial offset to the impacts
of a weaker commodity environment.
-- Average natural gas gathering and transportation volumes for the first
quarter of 2020 were approximately 3% higher as compared to the fourth
quarter of 2019 and approximately 26% higher as compared to the first
quarter of 2019. Average natural gas processing volumes for the first
quarter of 2020 increased approximately 1% and 21% as compared to the
fourth quarter of 2019 and the first quarter of 2019, respectively.
Volume increases were driven by increased producer activity on EnLink's
footprint.
-- Average crude gathering volumes increased approximately 9% for the first
quarter of 2020 as compared to the fourth quarter of 2019, driven by
activity on EnLink's Delaware Basin footprint. Average crude gathering
volumes declined by approximately 10% in the first quarter of 2020 as
compared to the first quarter of 2019 as a result of lower crude
first-purchase volumes. EnLink expects to fully exit the first-purchase
business in the Midland Basin during the second quarter of 2020.
-- The Tiger natural gas processing plant construction in the Delaware
Basin is progressing well and is expected to become operational during
the second half of 2020, as planned. Once operational, the
200-million-cubic-feet-per-day Tiger plant will increase EnLink's total
processing capacity in the Permian Basin to over 1 billion cubic feet
per day.
Louisiana:
-- Segment profit of $72.0 million for the first quarter of 2020 was
approximately 16% lower as compared to the fourth quarter of 2019 and
approximately 5% lower as compared to the first quarter of 2019. The
segment profit decline for the first quarter of 2020, as compared to the
fourth quarter of 2019, was driven primarily by mark-to-market inventory
adjustments in the NGL business. The segment profit decline for the
first quarter of 2020, as compared to the first quarter of 2019, was
driven by mark-to-market impacts and by the expiration of legacy
transportation contracts in the natural gas business. EnLink hedges
exposure to commodity price fluctuations and realized approximately $3
million of benefit related to Louisiana hedges in its corporate segment
for the first quarter of 2020, providing a partial offset to the impacts
of a weaker commodity environment.
-- Average NGL transportation and fractionation volumes for the first
quarter of 2020 were approximately 7% higher as compared to the fourth
quarter of 2019 and 17% higher as compared to the first quarter of 2019.
Average NGL volumes for the first quarter of 2020 increased compared to
the fourth quarter of 2019 as improvements to optimize throughput were
implemented. Average NGL transportation and fractionation volumes for
the first quarter of 2020 increased as compared to the first quarter of
2019 as a result of the Cajun-Sibon III expansion being placed into
service during the second quarter of 2019.
-- Average natural gas gathering and transportation volumes for the first
quarter of 2020 were approximately 4% lower as compared to the fourth
quarter of 2019 and roughly flat as compared to the first quarter of
2019.
-- Average natural gas processing volumes for the first quarter of 2020
were approximately 59% and 64% lower as compared to the fourth quarter
of 2019 and the first quarter of 2019, respectively. EnLink's natural
gas processing operations in Louisiana are opportunistic in nature and
are highly dependent on market dynamics being present to incentivize
further processing of natural gas on EnLink's system. During the first
quarter of 2020, market dynamics did not present compelling economics
for EnLink to process volumes at a level similar to prior periods.
-- Average crude volumes handled in EnLink's Ohio River Valley operations
for the first quarter of 2020 were approximately 9% lower as compared to
the fourth quarter of 2019 and increased by 16% as compared to the first
quarter of 2019.
Oklahoma:
-- Segment profit of $103.4 million for the first quarter of 2020 was
approximately 12% lower as compared to the fourth quarter of 2019 and
approximately 6% lower as compared to the first quarter of 2019. The
decline in segment profit for the first quarter of 2020 as compared to
prior periods was driven by reduced producer activity in the STACK play.
-- Average natural gas gathering and transportation volumes for the first
quarter of 2020 were approximately 6% lower as compared to the fourth
quarter of 2019 and approximately 2% lower as compared to the first
quarter of 2019. Average natural gas processing volumes for the first
quarter of 2020 decreased by approximately 8% and 6% when compared to
the fourth quarter of 2019 and the first quarter of 2019, respectively.
Volume decline during the first quarter of 2020 as compared to prior
periods resulted from reduced producer activity.
-- Average crude gathering volumes in the first quarter of 2020 were
approximately 21% lower as compared to the fourth quarter of 2019, and
approximately 25% higher as compared to the first quarter of 2019.
Volume decline in the first quarter of 2020 as compared to the fourth
quarter of 2019 was the result of reduced activity by the key producers
supporting EnLink's crude gathering systems in the STACK play. The
volume increase in the first quarter of 2020 as compared to the first
quarter of 2019 was the result of well connect activity on EnLink's
footprint throughout 2019.
North Texas:
-- Segment profit of $73.2 million for the first quarter of 2020 increased
by approximately 2% as compared to the fourth quarter of 2019 and was
approximately 2% lower as compared to the first quarter of 2019. Segment
profit for the first quarter of 2020 increased as compared to the fourth
quarter of 2019 as a result of cost reductions and was lower than the
first quarter of 2019 due to natural volume decline in the mature basin.
-- Average natural gas gathering and transportation volumes for the first
quarter of 2020 decreased by approximately 3% as compared to the fourth
quarter of 2019 and decreased by approximately 6% as compared to the
first quarter of 2019. Average natural gas processing volumes for the
first quarter of 2020 decreased by approximately 6% and 4% as compared
to the fourth quarter of 2019 and the first quarter of 2019,
respectively. Volume declines were in line with management expectations
given the maturity of the basin.
First Quarter 2020 Earnings Call Details
EnLink will hold a conference call to discuss first quarter 2020 results on Friday, May 8, at 8 a.m. Central time (9 a.m. Eastern time). The dial-in number for the call is 1-855-656-0924. Callers outside the United States should dial 1-412-542-4172. Participants can also preregister for the conference call by navigating to http://dpregister.com/10141422 where they will receive dial-in information upon completion of preregistration. Interested parties can access an archived replay of the call on the Investors' page of EnLink's website at EnLink.com.
About the EnLink Midstream Companies
EnLink Midstream reliably operates a differentiated midstream platform that is built for long-term, sustainable value creation. EnLink's best-in-class services span the midstream value chain, providing natural gas, crude oil, condensate, and NGL capabilities. Our purposely built, integrated asset platforms are in premier production basins and core demand centers, including the Permian Basin, Oklahoma, North Texas, and the Gulf Coast. EnLink's strong financial foundation and commitment to execution excellence drive competitive returns and value for our employees, customers, and investors. Headquartered in Dallas, EnLink is publicly traded through EnLink Midstream, LLC (NYSE: ENLC). Visit www.EnLink.com to learn how EnLink connects energy to life.
Non-GAAP Financial Information and Other Definitions
This press release contains non-generally accepted accounting principles financial measures that we refer to as adjusted EBITDA, distributable cash flow available to common unitholders ("distributable cash flow"), and excess free cash flow.
We define adjusted EBITDA as net loss plus interest expense, net of interest income; income tax expense (benefit); depreciation and amortization; impairments; distributions from unconsolidated affiliates; unit-based compensation; transaction costs; unrealized (gain) loss on commodity swaps; and accretion expense associated with asset retirement obligations; less gain on disposition of assets; gain on extinguishment of debt; income from unconsolidated affiliates; payments under onerous performance obligation; non-cash rent; and non-controlling interest share of adjusted EBITDA from joint ventures.
We define distributable cash flow as adjusted EBITDA, net to ENLC, less interest expense, interest rate swaps, current income taxes and other non-distributable cash flows, accrued cash distributions on Series B Preferred Units and Series C Preferred Units paid or expected to be paid, and maintenance capital expenditures, excluding maintenance capital expenditures that were contributed by other entities and relate to the non-controlling interest share of our consolidated entities.
Excess free cash flow is defined as distributable cash flow less distributions declared on common units and growth capital expenditures, excluding growth capital expenditures that were contributed by other entities and relate to the non-controlling interest share of our consolidated joint ventures.
EnLink believes these measures are useful to investors because they may provide users of this financial information with meaningful comparisons between current results and previously reported results and a meaningful measure of the company's cash flow after it has satisfied the capital and related requirements of its operations. In addition, adjusted EBITDA achievement is a primary metric used in our short-term incentive program for compensating employees.
Adjusted EBITDA, distributable cash flow, and excess free cash flow, as defined above, are not measures of financial performance or liquidity under GAAP. They should not be considered in isolation or as an indicator of EnLink's performance. Furthermore, they should not be seen as a substitute for metrics prepared in accordance with GAAP. Reconciliations of these measures to their most directly comparable GAAP measures are included in the following tables. See ENLC's filings with the Securities and Exchange Commission for more information.
Other definitions and explanations of terms used in this press release:
Segment profit (loss) is defined as operating income (loss) plus general and administrative expenses, depreciation and amortization, (gain) loss on disposition of assets, impairments, and loss on secured term loan receivable. Segment profit (loss) includes non-cash compensation expenses reflected in operating expenses. See "Item 8. Financial Statements and Supplementary Data - Note 15 - Segment Information" in ENLC's Annual Report on Form 10-K for the year ended December 31, 2019, and, when available, "Item 1. Financial Statements - Note 14-Segment Information" in ENLC's Quarterly Report on Form 10-Q for the three months ended March 31, 2020, for further information about segment profit (loss).
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws. Although these statements reflect the current views, assumptions and expectations of our management, the matters addressed herein involve certain assumptions, risks and uncertainties that could cause actual activities, performance, outcomes and results to differ materially from those indicated herein. Therefore, you should not rely on any of these forward-looking statements. All statements, other than statements of historical fact, included in this press release constitute forward-looking statements, including but not limited to statements identified by the words "forecast," "may," "believe," "will," "should," "plan," "predict," "anticipate," "intend," "estimate," and "expect" and similar expressions. Such forward-looking statements include, but are not limited to, statements about guidance, projected or forecasted financial and operating results, when additional capacity will be operational, timing for completion of construction or expansion projects, expected financial and operational results associated with certain projects or growth capital expenditures, future operational results of our customers, results in certain basins, future rig count information, future cost savings, profitability, financial metrics, operating efficiencies and other benefits of cost savings or operational initiatives, our future capital structure and credit ratings, objectives, strategies, expectations, and intentions, the impact of the COVID-19 pandemic on us and our financial results and operations, and other statements that are not historical facts. Factors that could result in such differences or otherwise materially affect our financial condition, results of operations, or cash flows include, without limitation (a) the ongoing coronavirus (COVID-19) outbreak could adversely affect our business, financial condition, and results of operations, (b) potential conflicts of interest of Global Infrastructure Partners ("GIP") with us and the potential for GIP to favor GIP's own interests to the detriment of our other unitholders, (c) GIP's ability to compete with us and the fact that it is not required to offer us the opportunity to acquire additional assets or businesses, (d) a default under GIP's credit facility could result in a change in control of us, could adversely affect the price of our common units, and could result in a default under our credit facility, (e) the dependence on Devon for a substantial portion of the natural gas and crude that we gather, process, and transport, (f) developments that materially and adversely affect Devon or other customers, (g) adverse developments in the midstream business that may reduce our ability to make distributions, (h) competition for crude oil, condensate, natural gas, and NGL supplies and any decrease in the availability of such commodities, (i) decreases in the volumes that we gather, process, fractionate, or transport, (j) construction risks in our major development projects, (k) our ability to receive or renew required permits and other approvals, (l) increased federal, state, and local legislation, and regulatory initiatives, as well as government reviews relating to hydraulic fracturing resulting in increased costs and reductions or delays in natural gas production by our customers, (m) climate change legislation and regulatory initiatives resulting in increased operating costs and reduced demand for the natural gas and NGL services we provide, (n) changes in the availability and cost of capital, including as a result of a change in our credit rating, (o) volatile prices and market demand for crude oil, condensate, natural gas, and NGLs that are beyond our control, (p) our debt levels could limit our flexibility and adversely affect our financial health or limit our flexibility to obtain financing and to pursue other business opportunities, (q) operating hazards, natural disasters, weather-related issues or delays, casualty losses, and other matters beyond our control, (r) reductions in demand for NGL products by the petrochemical, refining, or other industries or by the fuel markets, (s) impairments to goodwill, long-lived assets and equity method investments, and (t) the effects of existing and future laws and governmental regulations, including environmental and climate change requirements and other uncertainties. These and other applicable uncertainties, factors, and risks are described more fully in EnLink Midstream, LLC's and EnLink Midstream Partners, LP's filings with the Securities and Exchange Commission, including EnLink Midstream, LLC's and EnLink Midstream Partners, LP's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. Neither EnLink Midstream, LLC nor EnLink Midstream Partners, LP assumes any obligation to update any forward-looking statements.
The EnLink management team based the forecasted financial information included herein on certain information and assumptions, including, among others, the producer budgets / forecasts to which EnLink has access as of the date of this press release and the projects / opportunities expected to require capital expenditures as of the date of this press release. The assumptions, information, and estimates underlying the forecasted financial information included in the guidance information in this press release are inherently uncertain and, though considered reasonable by the EnLink management team as of the date of its preparation, are subject to a wide variety of significant business, economic, and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the forecasted financial information. Accordingly, there can be no assurance that the forecasted results are indicative of EnLink's future performance or that actual results will not differ materially from those presented in the forecasted financial information. Inclusion of the forecasted financial information in this press release should not be regarded as a representation by any person that the results contained in the forecasted financial information will be achieved.
Investor Relations: Kate Walsh, Vice President of Investor Relations and Tax, 214-721-9696, kate.walsh@enlink.com
Media Relations: Jill McMillan, Vice President of Strategic Relations & Public Affairs, 214-721-9271, jill.mcmillan@enlink.com
EnLink Midstream, LLC
Selected Financial Data
(All amounts in millions except per unit amounts)
(Unaudited)
Three Months Ended
March 31,
2020 2019
Total revenues $
1,156.1 $
1,779.2
Cost of sales 755.3 1,363.4
Gross operating margin 400.8 415.8
Operating costs and expenses,
excluding cost of sales:
Operating expenses 100.7 114.5
General and
administrative 30.4 51.4
Gain on disposition of
assets (0.6)
Depreciation and
amortization 162.8 152.1
Impairments 353.0 186.5
Total operating costs
and expenses, excluding
cost of sales 646.3 504.5
Operating loss (245.5) (88.7)
Other income (expense):
Interest expense, net of
interest income (55.6) (49.6)
Gain on extinguishment
of debt 5.3
Income from
unconsolidated
affiliates 1.7 5.3
Total other expense (48.6) (44.3)
Loss before non-
controlling interest
and income taxes (294.1) (133.0)
Income tax benefit
(expense) 33.7 (1.8)
Net loss (260.4) (134.8)
Net income attributable
to non-controlling
interest 26.4 41.5
Net loss attributable to
ENLC $
(286.8) $
(176.3)
Net loss attributable to ENLC per
unit:
Basic common unit $
(0.59) $
(0.45)
Diluted common unit $
(0.59) $
(0.45)
EnLink Midstream, LLC
Reconciliation of Net Loss to Adjusted EBITDA
(All amounts in millions)
(Unaudited)
Three Months Ended
March 31,
2020 2019
Net loss $
(260.4) $
(134.8)
Interest expense, net
of interest income 55.6 49.6
Depreciation and
amortization 162.8 152.1
Impairments 353.0 186.5
Income from
unconsolidated
affiliates (1.7) (5.3)
Distributions from
unconsolidated
affiliates 1.8 2.5
Gain on extinguishment
of debt (5.3)
Unit-based
compensation 8.8 11.1
Income tax expense
(benefit) (33.7) 1.8
Unrealized (gain) loss
on commodity swaps (13.0) 2.0
Payments under onerous
performance
obligation offset to
other current and
long-term
liabilities - (4.5)
Transaction costs (1) - 13.5
Other (2) (0.7) 0.3
Adjusted EBITDA before
non-controlling
interest 267.2 274.8
Non-controlling
interest share of
adjusted EBITDA from
joint ventures (3) (7.2) (6.6)
Adjusted EBITDA, net
to ENLC $
260.0 $
268.2
(1) Represents
transaction
costs
primarily
attributable
to costs
incurred
related to
the
acquisition
of all
outstanding,
publicly-
held ENLK
common units
in January
2019.
(2) Includes
accretion
expense
associated
with asset
retirement
obligations,
gain on
disposition
of assets,
and non-
cash rent,
which
relates to
lease
incentives
pro-rated
over the
lease term.
(3) Non-
controlling
interest
share of
adjusted
EBITDA from
joint
ventures
includes NGP
Natural
Resources
XI, L.P.'s
("NGP")
49.9% share
of adjusted
EBITDA from
the Delaware
Basin JV,
Marathon
Petroleum
Corporation's
50% share of
adjusted
EBITDA from
the
Ascension
JV, and
other minor
non-
controlling
interests.
EnLink Midstream, LLC
Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA
and Excess Free Cash Flow
(All amounts in millions except ratios and per unit amounts)
(Unaudited)
Three Months Ended
March 31,
2020 2019
Net cash provided by operating activities $
182.0 $
264.0
Interest expense (1) 54.7 49.5
Current income tax expense 0.3 1.0
Transaction costs (2) - 13.5
Other (3) 5.6 (1.5)
Changes in operating assets and liabilities which (provided) used cash:
Accounts receivable, accrued revenues, inventories, and other (169.3) (97.4)
Accounts payable, accrued product purchases, and other accrued
liabilities (4) 193.9 45.7
Adjusted EBITDA before non-controlling interest 267.2 274.8
Non-controlling interest share of adjusted EBITDA from joint ventures
(5) (7.2) (6.6)
Adjusted EBITDA, net to ENLC 260.0 268.2
Interest expense, net of interest income (55.6) (49.6)
Maintenance capital expenditures, net to ENLC (6) (8.2) (8.5)
ENLK preferred unit accrued cash distributions (7) (22.8) (22.7)
Other (8) (0.3) (2.5)
Distributable cash flow 173.1 184.9
Common distributions declared (46.5) (137.3)
Growth capital expenditures, net to ENLC (6) (82.6) (219.6)
Excess free cash flow $44.0 $
(172.0)
Distribution coverage 3.72x 1.35x
Distributions declared per ENLC unit $
0.09375 $
0.279
(1) Net of
amortization
of debt
issuance
costs and
discount and
premium,
which are
included in
interest
expense but
not included
in net cash
provided by
operating
activities,
and non-
cash
interest
income,
which is
netted
against
interest
expense but
not included
in adjusted
EBITDA.
(2) Represents
transaction
costs
primarily
attributable
to costs
incurred
related to
the
acquisition
of all
outstanding,
publicly-
held ENLK
common units
in January
2019.
(3) Includes
accruals for
settled
commodity
swap
transactions,
distributions
received
from equity
method
investments
to the
extent those
distributions
exceed
earnings
from the
investment,
and non-
cash rent,
which
relates to
lease
incentives
pro-rated
over the
lease term.
(4) Net of
payments
under
onerous
performance
obligation
offset to
other
current and
long-term
liabilities
for the
three months
ended March
31, 2019.
(5) Non-
controlling
interest
share of
adjusted
EBITDA from
joint
ventures
includes
NGP's 49.9%
share of
adjusted
EBITDA from
the Delaware
Basin JV,
Marathon
Petroleum
Corporation's
50% share of
adjusted
EBITDA from
the
Ascension
JV, and
other minor
non-
controlling
interests.
(6) Excludes
capital
expenditures
that were
contributed
by other
entities and
relate to
the non-
controlling
interest
share of our
consolidated
entities.
(7) Represents
the cash
distributions
earned by
the Series B
Preferred
Units and
Series C
Preferred
Units of
$16.8
million and
$6.0
million,
respectively,
for the
three months
ended March
31, 2020,
and cash
distributions
earned by
the Series B
Preferred
Units and
Series C
Preferred
Units of
$16.7
million and
$6.0
million,
respectively,
for the
three months
ended March
31, 2019.
Cash
distributions
to be paid
to holders
of the
Series B
Preferred
Units and
Series C
Preferred
Units are
not
available to
common
unitholders.
(8) Includes non-
cash
interest
income and
current
income tax
expense.
EnLink Midstream, LLC
Operating Data
(Unaudited)
Three Months Ended
March 31,
2020 2019
Midstream Volumes:
Permian Segment
Gathering and Transportation
(MMBtu/d) 831,100 657,500
Processing (MMBtu/d) 861,700 712,000
Crude Oil Handling (Bbls/d) 133,400 147,400
North Texas Segment
Gathering and Transportation
(MMBtu/d) 1,577,700 1,683,100
Processing (MMBtu/d) 699,700 729,800
Oklahoma Segment
Gathering and Transportation
(MMBtu/d) 1,220,900 1,244,400
Processing (MMBtu/d) 1,154,400 1,231,600
Crude Oil Handling (Bbls/d) 36,600 29,200
Louisiana Segment
Gathering and Transportation
(MMBtu/d) 2,043,200 2,070,500
Processing (MMBtu/d) 169,600 468,000
Crude Oil Handling (Bbls/d) 17,400 15,000
NGL Fractionation (Gals/d) 8,184,100 6,973,800
Brine Disposal (Bbls/d) 1,700 3,500
EnLink Midstream, LLC
Forward-Looking Reconciliation of Net Income to Full-Year Adjusted EBITDA Guidance (1)
Published May 2020
(All amounts in millions)
(Unaudited)
Revised 2020 Outlook
Low Midpoint High
Net loss of EnLink Midstream, LLC (2) $
(222) $
(172) $
(123)
Interest expense, net of interest income 222 219 216
Depreciation and amortization 664 650 636
Impairments 353 353 353
Income from unconsolidated affiliate investments (3) (4) (5)
Distributions from unconsolidated affiliate investments 3 5 7
Gain on extinguishment of debt (32) (32) (32)
Unit-based compensation 27 30 33
Income taxes (17) (15) (13)
(Gain) loss on non-cash derivatives (13) (13) (13)
Other (3) (1) (1) (1)
Adjusted EBITDA before non-controlling interest 981 1,020 1,058
Non-controlling interest share of adjusted EBITDA (4) (31) (32) (33)
Adjusted EBITDA, net to EnLink Midstream, LLC 950 988 1,025
Interest expense, net of interest income (222) (219) (216)
Current taxes and other (1) (2) (2)
Capital expenditures, net to ENLK (5) (190) (220) (250)
Preferred unit accrued cash distributions (6) (91) (91) (91)
Common distributions declared (186) (186) (186)
Excess Free Cash Flow $
260 $
270 $
280
(1) Represents
the revised
forward-
looking net
income
guidance for
the year
ended
December 31,
2020, and
includes the
actual
results for
the three
months ended
March 31,
2020 and the
projected
results for
the
remainder of
the year
ended
December 31,
2020. The
forward-
looking net
income
guidance
from April
1, 2020
through
December 31,
2020
excludes the
potential
impact of
gains or
losses on
derivative
activity,
gains or
losses on
disposition
of assets,
impairment
expense,
gains or
losses as a
result of
legal
settlements,
and the
financial
effects of
future
acquisitions.
The
exclusion of
these items
is due to
the
uncertainty
regarding
the
occurrence,
timing and/
or amount of
these
events.
EnLink does
not provide
a
reconciliation
of forward-
looking net
cash
provided by
operating
activities
to adjusted
EBITDA
because the
company is
unable to
predict with
reasonable
certainty
changes in
working
capital,
which may
impact cash
provided or
used during
the year.
Working
capital
includes
accounts
receivable,
accounts
payable and
other
current
assets and
liabilities.
These items
are
uncertain
and depend
on various
factors
outside the
company's
control.
(2) Net income
includes
estimated
net income
attributable
to (i) NGP's
49.9% share
of net
income from
the Delaware
Basin JV and
(ii)
Marathon
Petroleum
Corp.'s 50%
share of net
income from
the
Ascension
JV.
(3) Includes (i)
estimated
accretion
expense
associated
with asset
retirement
obligations;
(ii)
estimated
non-cash
rent, which
relates to
lease
incentives
pro-rated
over the
lease term;
and (iii)
transaction
costs.
(4) Non-
controlling
interest
share of
adjusted
EBITDA
includes
estimates
for (i)
NGP's 49.9%
share of
adjusted
EBITDA from
the Delaware
Basin JV,
(ii)
Marathon's
50% share of
adjusted
EBITDA from
the
Ascension
JV, and
(iii) other
minor non-
controlling
interests.
(5) Excludes
capital
expenditures
that are
contributed
by other
entities and
relate to
the non-
controlling
interest
share of our
consolidated
entities.
(6) Represents
the cash
distributions
earned by
the Series B
Preferred
Units and
Series C
Preferred
Units. Cash
distributions
to be paid
to holders
of the
Series B
Preferred
Units and
Series C
Preferred
Units are
not
available to
common
unitholders.
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SOURCE EnLink Midstream, LLC
