EnLink Midstream Reports Second Quarter 2020 Results and Updates 2020 Guidance
DALLAS, Aug. 4, 2020 /PRNewswire/ -- EnLink Midstream, LLC (NYSE: ENLC) (EnLink) reported financial results for the second quarter of 2020 and updated 2020 guidance metrics.
Highlights
-- Reported net income of $29.8 million and net cash provided by operating
activities of $134.8 million for the second quarter of 2020.
-- Achieved adjusted EBITDA, net to EnLink, of $255.1 million for the
second quarter of 2020, largely unchanged from the first quarter of
2020, driven by a focus on cost reductions and strong operational
execution. EnLink is on track to achieve in the high end of its
previously announced full-year 2020 guidance range of $950 million to
$1.025 billion.
-- Delivered $72.0 million of excess free cash flow for the second quarter
of 2020, positioning EnLink to meet or exceed the high end of its
previously announced full-year 2020 guidance range of $260 million to
$280 million.
-- Increased Permian segment profit by approximately 35% for the second
quarter of 2020 as compared to the first quarter of 2020, through a
combination of volume growth, cost reductions, commodity price
improvements, and opportunistic margin opportunities captured by
EnLink's crude oil storage assets.
-- Reduced expected full-year 2020 operating and general and administrative
costs by an incremental $20 million, leading to approximately $120
million of aggregate operating and general and administrative cost
savings compared to 2019.
-- Continued to achieve new company safety records, notably including 138
days without an employee recordable injury. EnLink continues to be a
top-tier safety performer in the midstream industry.
"We have taken decisive steps to reposition EnLink as a self-funded company with the ability to generate significant excess free cash flow," Chairman and CEO Barry Davis said. "Our team has done great work to positively impact results and cost structure across our large and diverse footprint this year and will continue to do so as we navigate the dynamic road ahead. EnLink is committed to operational excellence, a disciplined investment approach, and maintaining strong financial flexibility in this challenging environment."
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.
Second Quarter 2020 Financial Results and Other Highlights
Three Months Ended
$millions, unless noted
June 30, 2020 March 31, 2020
June 30, 2019
Net income (loss) 30 (260) 9
Adjusted EBITDA, net to EnLink 255 260 259
Net cash provided by operating activities 135 182 258
Excess free cash flow 72 44 (114)
Total capital expenditures, net to EnLink 58 91 155
Debt-to-adjusted EBITDA*
4.3x
4.6x
4.0x
Outstanding common units** 489,593,587 489,259,906 487,245,808
*As calculated under EnLink's revolving credit facility.
**Outstanding common units as of July 30, 2020, April 30, 2020, and August 1, 2019, respectively.
-- EnLink continues to maintain a diversified customer base across its
asset platform, which includes large integrated customers and other
investment-grade counterparties. Approximately 85% of EnLink's second
quarter of 2020 revenues were generated from investment-grade
counterparties or from customers who provided credit protections to
EnLink.
-- EnLink launched a "GoalZERO" environmental, health, and safety program
earlier this year. Since its launch, EnLink has continued to achieve new
company records, notably including 138 days without an employee
recordable injury, which reflects a company record for EnLink.
-- EnLink has a $1.75 billion unsecured revolving credit facility
(Revolver), upon which $400 million was drawn at the end of the second
quarter. EnLink's Revolver matures in 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.
-- During the second quarter of 2020, EnLink repurchased $57 million face
amount of its outstanding senior notes in the open market, resulting in
a net gain of approximately $27 million.
2020 Financial Guidance and 2021 Outlook
Significant market and industry uncertainty remains regarding the pace of improving energy demand associated with the global economic recovery. EnLink's 2020 guidance is based upon assumptions that global energy demand continues its recovery and does not assume any new macro events resulting in additional declines in future demand or commodity prices.
$millions, unless noted 2020 Guidance
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 2Q20 declared distribution per common unit $0.375
-- Adjusted EBITDA, net to EnLink, for full-year 2020 is on track to
achieve in the high end of the guidance range. Excess free cash flow for
full-year 2020 is expected to meet - or exceed - the high end of the
guidance range. As a result, EnLink is projecting that debt-to-adjusted
EBITDA will be broadly in line with the second quarter of 2020 level.
-- EnLink expects to continue to generate strong excess free cash flow
during 2021, driven in part by significantly lower capital
expenditures. EnLink plans to provide more detailed 2021 guidance at a
later date.
Second Quarter 2020 Segment Updates
Permian Basin:
-- Segment profit of $43.5 million for the second quarter of 2020 was
approximately 35% higher as compared to the first quarter of 2020 and
approximately 30% higher as compared to the second quarter of 2019.
Strong results for the second quarter of 2020 were driven by a
combination of volume growth, cost reductions, commodity price
improvements, and opportunistic margin opportunities captured by
EnLink's crude oil storage assets.
-- Average natural gas gathering and transportation volumes for the second
quarter of 2020 were approximately 5% higher as compared to the first
quarter of 2020 and approximately 29% higher as compared to the second
quarter of 2019. Average natural gas processing volumes for the second
quarter of 2020 increased approximately 4% and 24% as compared to the
first quarter of 2020 and the second quarter of 2019, respectively.
-- Average crude oil gathering volumes decreased by approximately 16% for
the second quarter of 2020 as compared to the first quarter of 2020 and
declined approximately 23% as compared to the second quarter of 2019,
driven by volume curtailments during the second quarter of 2020 and by
EnLink's recent exit of the crude oil first-purchase business in the
Permian Basin.
-- The Tiger Natural Gas Processing Plant construction in the Delaware
Basin is nearing completion and is expected to become operational during
the third quarter of 2020, as planned. Once operational, the
200-million-cubic-feet-per-day Tiger Plant will bring total EnLink
processing capacity in the Permian to over 1 billion cubic feet per day.
-- Segment free cash flow for the second quarter of 2020 was close to
neutral, as the main growth project, the Tiger Plant, was nearing
completion. The Permian Segment is expected to generate positive segment
free cash flow for the remainder of 2020.
Louisiana:
-- Segment profit of $69.7 million for the second quarter of 2020 was
approximately 3% lower as compared to the first quarter of 2020 and
approximately 7% higher as compared to the second quarter of 2019.
Segment profit decline for the second quarter of 2020, as compared to
the first quarter of 2020, was driven primarily due to normal business
seasonality in the natural gas liquids (NGL) business. The increase in
segment profit for the second quarter of 2020, as compared to the second
quarter of 2019, was driven primarily by low-cost, high-return capital
expansions of the NGL system.
-- Segment free cash flow for the second quarter of 2020 was $54 million,
and Louisiana is expected to generate significant segment free cash flow
for the remainder of 2020.
-- NGL fractionation volumes for the second quarter of 2020 were
approximately 10% lower as compared to the first quarter of 2020 and 2%
lower as compared to the second quarter of 2019. Volume declines
relative to prior periods were primarily due to upstream curtailments
and shut-ins during the second quarter of 2020.
-- Average natural gas gathering and transportation volumes for the second
quarter of 2020 were approximately 8% lower as compared to the first
quarter of 2020 and approximately 3% lower as compared to the second
quarter of 2019. Industrial demand remained strong despite the weak
economic backdrop of the second quarter of 2020.
-- Average natural gas processing volumes for the second quarter of 2020
were approximately16% higher and 42% lower as compared to the first
quarter of 2020 and the second 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 being transported on
EnLink's system.
-- Average crude volumes handled in EnLink's Ohio River Valley operations
for the second quarter of 2020 were approximately 10% and 22% lower as
compared to the first quarter of 2020 and the second quarter of 2019,
respectively. Crude volumes were negatively impacted during the second
quarter of 2020 as a result of the macro demand decline for crude oil
impacting refinery activity in Ohio.
Oklahoma:
-- Segment profit of $99.3 million for the second quarter of 2020 was
approximately 4% lower as compared to the first quarter of 2020 and
approximately 13% lower as compared to the second quarter of 2019. The
decline in segment profit for the second quarter of 2020 as compared to
prior periods was driven by reduced producer activity coupled with
temporary shut-ins and curtailments in Oklahoma's STACK play. Most
production impacted by curtailments was back on line by the end of the
second quarter of 2020.
-- Segment free cash flow for the second quarter of 2020 was $96 million,
and Oklahoma is expected to continue to generate strong segment free
cash flow for the remainder of 2020.
-- Average natural gas gathering and transportation volumes for the second
quarter of 2020 were approximately 11% lower as compared to the first
quarter of 2020 and approximately 17% lower as compared to the second
quarter of 2019. Average natural gas processing volumes for the second
quarter of 2020 decreased by approximately 6% and 17% when compared to
the first quarter of 2020 and the second quarter of 2019, respectively.
The decrease in volumes during the second quarter of 2020 as compared to
prior periods resulted from reduced producer activity coupled with
temporary shut-ins and curtailments in Oklahoma's STACK play.
-- Average crude gathering volumes in the second quarter of 2020 were
approximately 18% lower as compared to the first quarter of 2020 and
approximately 44% lower as compared to the second quarter of 2019.
Volume declines in the second quarter of 2020 as compared to the prior
periods resulted from reduced activity by key producers supporting
EnLink's crude oil gathering systems in Oklahoma's STACK play.
North Texas:
-- Segment profit of $69.0 million for the second quarter of 2020 decreased
by approximately 6% as compared to the first quarter of 2020 and by
approximately 5% as compared to the second quarter of 2019. Segment
profit for the second quarter of 2020 as compared to prior periods was
lower due to natural volumetric decline in the mature Barnett Shale
play.
-- Segment free cash flow for the second quarter of 2020 was $66 million,
and North Texas is expected to generate significant segment free cash
flow for the remainder of 2020.
-- Average natural gas gathering and transportation volumes for the second
quarter of 2020 decreased by approximately 6% as compared to the first
quarter of 2020 and decreased by approximately 10% as compared to the
second quarter of 2019. Average natural gas processing volumes for the
second quarter of 2020 decreased by 4% and 13%, respectively, when
compared to the first quarter of 2020 and the second quarter of 2019.
Second Quarter 2020 Earnings Call Details
EnLink will hold a conference call to discuss second quarter 2020 results on August 5, 2020, 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/10146379 where they will receive dial-in information upon completion of preregistration. Interested parties can access an archived replay of the call on the Investors' page of EnLink's website at www.EnLink.com.
About the EnLink Midstream Companies
EnLink 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
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"), excess free cash flow, and segment free cash flow.
We define adjusted EBITDA as net income (loss) plus (less) interest expense, net of interest income; depreciation and amortization; impairments; loss on secured term loan receivable, (income) loss from unconsolidated affiliates; distributions from unconsolidated affiliates; (gain) loss on disposition of assets; (gain) loss on extinguishment of debt; unit-based compensation; income tax expense (benefit); unrealized (gain) loss on commodity swaps; (payments under onerous performance obligation); transaction costs; accretion expense associated with asset retirement obligations; (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 ENLK's Series B Cumulative Convertible Preferred Units ("Series B Preferred Units") and ENLK's Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units ("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.
Segment free cash flow is defined as segment profit less growth and maintenance capital expenditures, which are gross to EnLink prior to giving effect to the contributions by other entities related to the non-controlling interest share of our consolidated entities.
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, excess free cash flow, and segment 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 13-Segment Information" in ENLC's Quarterly Report on Form 10-Q for the three months ended June 30, 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, timing for completion of construction or expansion projects, future operational results of our customers, results in certain basins, future cost savings or operational initiatives, profitability, financial or leverage metrics, 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 impact of the ongoing coronavirus (COVID-19) outbreak on 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.
EnLink Midstream, LLC
Selected Financial Data
(All amounts in millions except per unit amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30,
June 30,
2020 2019 2020 2019
Total revenues $
744.9 $
1,710.0 $
1,901.0 $
3,489.2
Cost of sales 397.7 1,300.1 1,153.0 2,663.5
Gross operating margin 347.2 409.9 748.0 825.7
Operating costs and expenses, excluding cost of sales:
Operating expenses 88.1 117.9 188.8 232.4
General and administrative 23.5 32.2 53.9 83.6
Loss on disposition of assets 5.2 0.1 4.6 0.1
Depreciation and amortization 158.2 153.7 321.0 305.8
Impairments 1.5 354.5 186.5
Total operating costs and expenses, excluding cost of sales 276.5 356.8 922.8 861.3
Operating income (loss) 70.7 53.1 (174.8) (35.6)
Other income (expense):
Interest expense, net of interest income (55.2) (54.3) (110.8) (103.9)
Gain on extinguishment of debt 26.7 32.0
Income (loss) from unconsolidated affiliates (0.7) 4.7 1.0 10.0
Other income - 0.2 0.2
Total other expense (29.2) (49.4) (77.8) (93.7)
Income (loss) before non-controlling interest and income taxes 41.5 3.7 (252.6) (129.3)
Income tax benefit (expense) (11.7) 5.4 22.0 3.6
Net income (loss) 29.8 9.1 (230.6) (125.7)
Net income attributable to non-controlling interest 25.7 25.2 52.1 66.7
Net income (loss) attributable to ENLC $
4.1 $
(16.1) $
(282.7) $
(192.4)
Net income (loss) attributable to ENLC per unit:
Basic common unit $
0.01 $
(0.03) $
(0.58) $
(0.44)
Diluted common unit $
0.01 $
(0.03) $
(0.58) $
(0.44)
EnLink Midstream, LLC
Reconciliation of Net Income (Loss) to Adjusted EBITDA
(All amounts in millions)
(Unaudited)
Three Months Ended Six Months Ended
June 30,
June 30,
2020 2019 2020 2019
Net income (loss) $
29.8 $
9.1 $
(230.6) $
(125.7)
Interest expense, net of interest income 55.2 54.3 110.8 103.9
Depreciation and amortization 158.2 153.7 321.0 305.8
Impairments 1.5 354.5 186.5
Loss on secured term loan receivable (1) - 52.9 52.9
(Income) loss from unconsolidated affiliates 0.7 (4.7) (1.0) (10.0)
Distributions from unconsolidated affiliates 0.2 7.6 2.0 10.1
Loss on disposition of assets 5.2 0.1 4.6 0.1
Gain on extinguishment of debt (26.7) (32.0)
Unit-based compensation 7.4 8.0 16.2 19.1
Income tax expense (benefit) 11.7 (5.4) (22.0) (3.6)
Unrealized (gain) loss on commodity swaps 18.8 (7.2) 5.8 (5.2)
Payments under onerous performance obligation offset to other current and long-term liabilities - (4.5) (9.0)
Transaction costs (2) - 0.4 13.9
Other (3) (0.4) 0.1 (0.5) 0.4
Adjusted EBITDA before non-controlling interest 261.6 264.4 528.8 539.2
Non-controlling interest share of adjusted EBITDA from joint ventures (4) (6.5) (5.2) (13.7) (11.8)
Adjusted EBITDA, net to ENLC $
255.1 $
259.2 $
515.1 $
527.4
____________________________
(1) In May 2018, we restructured our
natural gas gathering and
processing contract with White
Star, and, as a result,
recognized the discounted present
value of a secured term loan
receivable granted to us by White
Star. We recorded a $52.9 million
loss in our consolidated
statement of operations for the
three and six months ended June
30, 2019 related to the write-
off of the secured term loan
receivable.
(2) Represents transaction costs
primarily attributable to costs
incurred related to the
acquisition of all outstanding,
publicly-held EnLink Midstream
Partners, LP ("ENLK") common
units in January 2019.
(3) Includes accretion expense
associated with asset retirement
obligations and non-cash rent,
which relates to lease incentives
pro-rated over the lease term.
(4) Non-controlling interest share of
adjusted EBITDA from joint
ventures includes NGP Natural
Resources XI, L.P.'s ("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.
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 Six Months Ended June 30,
June 30,
2020 2019 2020 2019
Net cash provided by operating activities $
134.8 $
257.5 $
316.8 $
521.5
Interest expense (1) 54.0 53.9 108.7 103.4
Current income tax expense 0.4 0.3 0.7 1.3
Transaction costs (2) - 0.4 13.9
Other (3) (5.1) 1.6 0.5 0.1
Changes in operating assets and liabilities which (provided) used cash:
Accounts receivable, accrued revenues, inventories, and other 50.2 (165.9) (119.1) (263.3)
Accounts payable, accrued product purchases, and other accrued liabilities (4) 27.3 116.6 221.2 162.3
Adjusted EBITDA before non-controlling interest 261.6 264.4 528.8 539.2
Non-controlling interest share of adjusted EBITDA from joint ventures (5) (6.5) (5.2) (13.7) (11.8)
Adjusted EBITDA, net to ENLC 255.1 259.2 515.1 527.4
Interest expense, net of interest income (55.2) (54.3) (110.8) (103.9)
Maintenance capital expenditures, net to ENLC (6) (7.7) (13.2) (15.9) (21.7)
ENLK preferred unit accrued cash distributions (7) (22.8) (23.1) (45.6) (45.8)
Other (8) (0.3) (1.0) (0.6) (3.5)
Distributable cash flow 169.1 167.6 342.2 352.5
Common distributions declared (46.4) (139.3) (92.9) (276.6)
Growth capital expenditures, net to ENLC (6) (50.7) (141.9) (133.3) (361.5)
Excess free cash flow $
72.0 $
(113.6) $
116.0 $
(285.6)
Actual declared distribution to common unitholders $
46.4 $
139.2 $
92.9 $
276.6
Distribution coverage 3.65x 1.20x 3.69x 1.27x
Distributions declared per ENLC unit $
0.09375 $
0.283 $
0.1875 $
0.562
____________________________
(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 and six
months ended June 30, 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, which are not available to
common unitholders.
(8) Includes non-cash interest income
and current income tax expense.
EnLink Midstream, LLC
Reconciliation of Segment Profit to Segment Free Cash Flow
(All amounts in millions)
(Unaudited)
Louisiana Oklahoma North Texas
Q2 2020
Segment profit $
69.7 $
99.3 $
69.0
Capital
expenditures (15.6) (3.0) (3.0)
Segment free cash
flow $
54.1 $
96.3 $
66.0
Q2 2019
Segment profit $
65.0 $
113.7 $
73.0
Capital
expenditures (19.5) (70.3) (27.0)
Segment free cash
flow $
45.5 $
43.4 $
46.0
EnLink Midstream, LLC
Operating Data
(Unaudited)
Three Months Ended Six Months Ended
June 30,
June 30,
2020 2019 2020 2019
Midstream Volumes:
Permian Segment
Gathering and Transportation (MMBtu/d) 871,500 676,000 851,300 666,800
Processing (MMBtu/d) 896,100 724,100 878,900 718,100
Crude Oil Handling (Bbls/d) 112,300 145,100 122,900 146,200
North Texas Segment
Gathering and Transportation (MMBtu/d) 1,485,900 1,646,900 1,531,800 1,664,900
Processing (MMBtu/d) 670,600 770,100 685,200 750,100
Oklahoma Segment
Gathering and Transportation (MMBtu/d) 1,092,600 1,314,900 1,156,800 1,279,800
Processing (MMBtu/d) 1,082,100 1,298,800 1,118,300 1,265,400
Crude Oil Handling (Bbls/d) 30,000 53,800 33,300 41,600
Louisiana Segment
Gathering and Transportation (MMBtu/d) 1,873,600 1,925,900 1,958,400 1,997,800
Processing (MMBtu/d) 197,200 337,100 183,400 402,200
Crude Oil Handling (Bbls/d) 15,700 20,000 16,600 17,500
NGL Fractionation (Gals/d) 7,344,800 7,477,400 7,764,500 7,227,000
Brine Disposal (Bbls/d) 1,400 3,400 1,600 3,400
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
Unit-based compensation 27 30 33
Gain on extinguishment of debt (32) (32) (32)
Income taxes (17) (15) (13)
Gain 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,
including transaction costs
related to the simplification
transaction.
(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.
Investor Relations: Kate Walsh, Vice President of Investor Relations & 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
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SOURCE EnLink Midstream, LLC
