ENLINK MIDSTREAM PARTNERS LP DALLAS, Feb. 14, 2017 /PRNewswire/ -- The EnLink Midstream companies (EnLink), EnLink Midstream Partners, LP (NYSE: ENLK) (the Partnership or ENLK) and EnLink Midstream, LLC (NYSE: ENLC) (the General Partner or ENLC), today reported financial results for the fourth quarter and full-year 2016, reaffirmed guidance outlook for full-year 2017, and provided an operational update.
Highlights:
-- ENLK reported a net loss of approximately $565 million for the year
ended December 31, 2016. ENLK achieved approximately $775 million of
adjusted EBITDA net to ENLK for the same period, exceeding guidance for
the year. Adjusted EBITDA is a non-GAAP measure and is explained in
greater detail under "Non-GAAP Financial Information."
-- ENLC reported a net loss of $460 million for the year ended December 31,
2016. ENLC achieved approximately $202 million of cash available for
distribution for the same period, which was in-line with guidance. Cash
available for distribution is a non-GAAP measure and is explained in
greater detail under "Non-GAAP Financial Information."
-- EnLink announced commercial success in the prolific Delaware Basin with
the addition of a long-term, fee-based contract with a large,
investment-grade producer who is very active in the region. Related to
this new business, EnLink announced the acceleration of the Lobo II
processing facility expansion, from its current 60 million cubic feet
per day (MMcf/d) capacity to 120 MMcf/d of capacity, which is expected
to be operational during the second quarter of 2017. The volume
commitments associated with the new contract are expected to utilize the
majority of the expanded capacity.
-- EnLink also recently announced gas gathering and processing commercial
successes in the STACK with the signing of a contract with Newfield
Exploration Co. and the formation of a joint venture with Kinder Morgan
Inc. EnLink continues to expand and deepen key relationships in the
STACK.
"In 2016, we performed well and are proud of the accomplishments achieved during a volatile and challenging commodity environment," said Barry E. Davis, Chairman and Chief Executive Officer of EnLink. "The team focused on executing our strategic growth plan and we are stronger today due to the progress made this year. We delivered on financial and operational priorities, and exited the year on track.
"We are seeing favorable developments on our asset footprint, as producers increase investments, accelerate drilling programs and experience higher well productivity. We expect the momentum of producer activity to continue throughout 2017, and our current plan remains to exit the year with an annual adjusted EBITDA run-rate net to ENLK between $925 million and $950 million, which represents approximately 20 percent growth compared to 2016's adjusted EBITDA."
EnLink Midstream Partners, LP: Fourth Quarter and Full-Year 2016 Financial Results
-- The Partnership reported a net loss attributable to ENLK of $29 million
for the fourth quarter of 2016, and $565 million for the full-year 2016.
The full-year 2016 net loss was primarily due to a non-cash expense of
$566 million related to impairments. Comparatively, the Partnership
reported a net loss of $714 million for the fourth quarter of 2015, and
a net loss of $1.4 billion for full-year 2015. The full-year 2015 net
losses were again primarily due to non-cash expenses related to
impairments.
-- The Partnership achieved $195 million of adjusted EBITDA net to ENLK for
the fourth quarter of 2016 and $775 million for the full-year 2016.
Adjusted EBITDA net to ENLK was $186 million for the fourth quarter of
2015, and $678 million for the full-year 2015.
-- The Partnership achieved net cash provided by operating activities of
$153 million for the fourth quarter of 2016, and $663 million for the
full-year 2016. Comparatively, net cash provided by operating activities
of $138 million was reported for the fourth quarter of 2015, with full
year 2015 results being $646 million.
-- Distributable cash flow attributable to ENLK was $146 million for the
fourth quarter of 2016 and $607 million for the full-year 2016.
Comparatively, distributable cash flow was $149 million for the fourth
quarter of 2015, and $529 million for the full-year 2015. Distributable
cash flow is a non-GAAP measure and is explained in greater detail under
"Non-GAAP Financial Information."
-- Growth capital expenditures net to ENLK for full-year 2016 were $465
million, slightly above the midpoint of the guidance range of $425
million to $490 million. ENLK 2017 growth capital expenditures guidance
net to ENLK is still expected to be in the range of $505 million to $645
million.
EnLink Midstream, LLC: Fourth Quarter and Full-Year 2016 Financial Results
-- The General Partner reported a net loss attributable to ENLC of $4
million for the fourth quarter of 2016 and a 2016 full-year net loss of
$460 million. Comparatively, ENLC reported a net loss of $195 million in
the fourth quarter of 2015, and a net loss of $355 million for full-year
2015. As previously mentioned, the net losses are primarily due to
non-cash expenses related to impairments.
-- The General Partner's cash available for distribution was $52 million
for the fourth quarter of 2016, and $202 million for the full year 2016.
Comparatively, cash available for distribution was $48 million in the
fourth quarter of 2015, and $199 million for the full-year 2015.
ENLK 2017 Full-Year Guidance Reaffirmed
-- Full-year 2017 net income midpoint for ENLK is projected to be $100
million and adjusted EBITDA midpoint net to ENLK is projected to be $850
million. Year-over-year growth in excess of 10 percent is forecasted
related to annual adjusted EBITDA midpoint guidance from 2016 to 2017.
EnLink's 2017 guidance reflects a reduction to adjusted EBITDA related
to announced non-core asset sales.
-- Distributable cash flow for 2017 is projected to range from $590 million
to $650 million, and ENLK is projected to exit 2017 with a distribution
coverage ratio in excess of 1.0, assuming flat distributions throughout
2017. EnLink expects to continue to build excess coverage during 2017,
supporting the potential to resume distribution growth during 2018.
-- ENLK's debt to adjusted EBITDA ratio for 2017 is projected to be in the
range of 3.75 to 4.0, with no near-term debt maturities. EnLink is
committed to maintaining a strong liquidity position with ample revolver
capacity.
-- Growth capital expenditures funded solely by ENLK continue to be
projected to range from $505 million to $645 million for 2017. A
mid-single-digit adjusted EBITDA multiple is projected to be achieved
from 2017 organic capital investments. Total growth capital expenditures
are projected to range from $610 million to $770 million, including
contributions from joint venture partners and ENLC of approximately $105
million to $125 million. Growth capital expenditure ranges exclude the
$250 million installment payment related to the acquisition in January
2016 which was paid in January 2017.
-- Proceeds from planned and completed asset sales and at-the-market equity
issuances are expected to generate sufficient capital for the
equity-funded portion of ENLK's 2017 growth capital program.
ENLC Full-Year 2017 Financial Guidance Reaffirmed
-- Full-year 2017 net income midpoint for ENLC is projected to be $75
million and cash available for distribution midpoint for ENLC is
projected to be $220 million.
-- ENLC's distribution coverage ratio for 2017 is projected to be in the
range of 1.1 to 1.2. Flat distributions are expected throughout 2017,
with the potential for distribution growth resumption as excess coverage
reaches the high end of the projected range. Management is considering
the potential to recommend the resumption of distribution growth at ENLC
before resuming growth at ENLK in light of excess coverage at ENLC.
-- Growth capital expenditures for ENLC's interest in Central Oklahoma
assets is expected to range from $60 million to $70 million for 2017,
with a mid-single-digit adjusted EBITDA multiple projected to be
achieved from 2017 organic projects.
-- Cash income taxes are projected to be approximately $5 million per year
for each of 2017, 2018 and 2019.
The foregoing guidance information assumes a West Texas Intermediate Crude Oil (WTI) price range of $40 per barrel (bbl) to $60/bbl, with an average price of $50/bbl. Guidance for 2017 also assumes a Henry Hub price range of $2.50 per million British Thermal Units ($/MMBtu) to $3.75/MMBtu, with an average price of $3/MMBtu. Net income, adjusted EBITDA, and cash available for distribution ranges are based on commodity price movement as well as business opportunities and risks. The foregoing guidance information for 2017 is projected, and accordingly, remains subject to changes that could be significant. See the section titled "Forward-Looking Statements" of this press release.
Operational Update:
-- Central Oklahoma:
-- Throughout 2017, EnLink plans to increase gas processing capacity in
Central Oklahoma at the Chisholm complex by 400 MMcf/d. EnLink's
previously announced Chisholm II plant is expected to be operational
in the second quarter of 2017, and the Chisholm III plant is
expected to be operational by the end of 2017. Once the expansions
are completed, EnLink will operate approximately 1 billion cubic
feet per day of processing capacity in Central Oklahoma, and will
continue to be one of the largest gas processing providers in the
STACK. Central Oklahoma is EnLink's fastest growing core area, and
is expected to become EnLink's largest operating region.
-- Delaware Basin:
-- The Partnership formed a strategic joint venture with NGP during
2016. The first joint project was the completion of phase one of the
Lobo II footprint expansion, which included the installation of a
cryogenic natural gas processing facility with capacity of 60 MMcf/d
and approximately 80 miles of natural gas and liquids gathering
pipeline infrastructure in Loving County, Texas, and Lea and Eddy
counties, New Mexico.
-- EnLink recently announced commercial success in the Delaware Basin
with the signing of an additional long-term, fee-based contract with
a large investment-grade producer who is very active in the region.
The new business has accelerated the timing of phase two of the Lobo
II footprint expansion, which includes increasing processing
capacity from 60 MMcf/d to 120 MMcf/d. The volume commitments
associated with this new contract are expected to utilize the
majority of the expanded processing capacity. Phase two is now
underway, and the additional capacity is expected to be operational
during the second quarter of 2017. Once the expansion is complete,
EnLink will operate a total of 155 MMcf/d of processing capacity in
the Delaware Basin.
-- Midland Basin:
-- EnLink's natural gas system is located in the core of the Midland
Basin, and the company completed a cost-effective gas processing
expansion in 2016, which created approximately 30 to 40 percent of
additional capacity to support volume growth as incremental drilling
activity continues throughout 2017. EnLink also has the majority of
infrastructure in place to cost effectively expand the Riptide gas
processing facility by an additional 100 MMcf/d as volumes continue
to grow.
-- The Partnership announced plans in 2016 to construct a new crude oil
gathering system in the Midland Basin called the Greater Chickadee
crude oil gathering project. The project is progressing very well
and has expanded in scope due to the addition of new customers,
volumes and dedicated acreage. The initial phase of the Greater
Chickadee project became operational in early November 2016, and
full-service is on-track to be operational during first quarter
2017.
-- Louisiana:
-- Record volumes were achieved on the Partnership's Louisiana gas
system during the second half of 2016, as demand across the
footprint was strong and the Partnership continued to enhance
operational capacity and capture new business.
-- EnLink's natural gas liquids (NGL) system experienced short-term
weakness in volume throughout 2016. However, this weakness, is
expected to reverse in early 2017, as NGL output increases on the
Partnership's Central Oklahoma system. It is expected that
throughput on the Partnership's Cajun-Sibon pipeline should reach
capacity in the second quarter of 2017, coinciding with the
expansion of the Chisholm complex, which is expected to benefit the
entirety of the company's Louisiana NGL footprint.
-- Barnett Shale:
-- Devon recently announced initial capital investment increases during
2017 related to their Barnett Shale operations, and plans to invest
up to $50 million of capital in the Barnett to optimize base
production and further de-risk future development activity. Devon
announced that its initial investment will focus on horizontal
refrac activity and the initiation of a drilling pilot of five to 10
wells. Devon also noted that additional capital could be allocated
to the Barnett in 2017 as these projects have the potential to
deliver highly competitive returns.
-- During 2016, gathering volume declines were slightly above
expectations, and averaged 8 percent. As forecasted for the mature
basin, volumes declines will continue during 2017, and the projected
reduction for gathering and transmission volumes is around 10
percent when comparing 2016 to 2017, and normalizing for the North
Texas Pipeline sale. EnLink is currently evaluating the benefit that
Devon's announced investment plans will have on volume uplift in the
near to mid-term, however, cash flows from the asset base are
expected to remain stable for 2017 due to the minimum volume
commitments in place. Devon's announcement of new investment
activity is an encouraging step forward to the potential
redevelopment of the legacy field.
Fourth Quarter, Full-Year 2016 Results and 2017 Guidance Call Details
The General Partner and the Partnership will hold a conference call to discuss fourth quarter and full-year 2016 financial results and 2017 guidance information on Wednesday, February 15, 2017, at 9 a.m. Central Time (10 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/10098998 where they will receive their dial-in information upon completion of their 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 provides integrated midstream services across natural gas, crude oil, condensate, and NGL commodities. EnLink operates in several top U.S. basins and is strategically focused on the core growth areas of the Permian's Midland and Delaware basins, Oklahoma's Midcontinent, and Louisiana's Gulf Coast. Headquartered in Dallas, EnLink is publicly traded through EnLink Midstream, LLC (NYSE: ENLC), the General Partner, and EnLink Midstream Partners, LP (NYSE: ENLK), the Master Limited Partnership. Visit www.EnLink.com for more information on how EnLink connects energy to life.
Non-GAAP Financial Information
This press release contains non-generally accepted accounting principle financial measures that we refer to as adjusted EBITDA, distributable cash flow, gross operating margin, and the General Partner's cash available for distribution. We define adjusted EBITDA as net income (loss) plus interest expense, provision for income taxes, depreciation and amortization expense, impairment expense, unit-based compensation, (gain) loss on non-cash derivatives, (gain) loss on disposition of assets, successful transaction costs, accretion expense associated with asset retirement obligations, reimbursed employee costs, non-cash rent and distributions from unconsolidated affiliate investments less payments under onerous performance obligations, non-controlling interest, the General Partner's interest in the adjusted EBITDA of Midstream Holdings prior to the Midstream Holdings drop downs and income (loss) from unconsolidated affiliate investments. We define distributable cash flow as adjusted EBITDA (defined above), net to the Partnership, less interest expense (excluding amortization of the Tall Oak acquisition installment payable discount), adjustments for the mandatorily redeemable non-controlling interest, interest rate swaps, cash taxes and other, and maintenance capital expenditures. We define gross operating margin, as revenues less cost of sales. The General Partner's cash available for distribution is defined as net income (loss) of the General Partner less the net income (loss) of the Partnership, which is consolidated into the General Partner's net income (loss), plus the General Partner's share of distributions from the Partnership, the General Partner's share of EnLink Oklahoma T.O. depreciation expense, the General Partner's deferred income tax expense, the General Partner's interest in the adjusted EBITDA of Midstream Holdings prior to the Midstream Holdings drop downs, the General Partner's corporate goodwill impairment and the General Partner's acquisition transaction costs attributable to its share of the EnLink Oklahoma T.O. acquisition, and less the General Partner's interest in maintenance capital expenditures of Midstream Holdings prior to the Midstream Holdings drop downs.
Adjusted EBITDA of Midstream Holdings is defined as Midstream Holdings' net income plus taxes, depreciation and amortization and distributions from unconsolidated affiliate investments less income from unconsolidated affiliate investments. EnLink Oklahoma T.O.'s adjusted EBITDA means EnLink Oklahoma T.O.'s net income plus depreciation and amortization.
The Partnership's coverage ratio is calculated by dividing distributable cash flow by distributions paid to the General Partner and the unitholders. The General Partner's coverage ratio is calculated by dividing cash available for distribution by distributions paid by the General Partner. Growth capital expenditures generally include capital expenditures made for acquisitions or capital improvements that we expect will increase our asset base, operating income or operating capacity over the long-term. Maintenance capital expenditures are capital expenditures made to replace partially or fully depreciated assets in order to maintain the existing operating capacity of the assets and to extend their useful lives.
The Partnership and General Partner believe these measures are useful to investors because they may provide users of this financial information with meaningful comparisons between current results and prior-reported results and a meaningful measure of the Partnership's and the General Partner'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 the Partnership's credit facility and short-term incentive program for compensating its employees.
Gross operating margin, adjusted EBITDA, distributable cash flow, and cash available for distribution, 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 the Partnership's and the General Partner'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 ENLK's and ENLC's filings with the Securities and Exchange Commission for more information.
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. Such forward-looking statements include, but are not limited to, statements about guidance, projected or forecasted financial and operating results, operational results of our customers, results in certain basins, future rig count information, objectives, project timing, expectations and intentions 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 and cash flows include, without limitation,(a) the dependence on Devon for a substantial portion of the natural gas that we gather, process and transport, (b) developments that materially and adversely affect Devon or our other customers, (c) adverse developments in the midstream business may reduce our ability to make distributions, (d) our vulnerability to having a significant portion of our operations concentrated in the Barnett Shale, (e) the amount of hydrocarbons transported in our gathering and transmission lines and the level of our processing and fractionation operations, (f) impairments to goodwill, long-lived assets and equity method investments, (g) our ability to balance our purchases and sales, (h) fluctuations in oil, natural gas and NGL prices, (i) construction risks in our major development projects, (j) reductions in our credit ratings, (k) our debt levels and restrictions contained in our debt documents, (l) our ability to consummate future acquisitions, successfully integrate any acquired businesses, realize any cost savings and other synergies from any acquisition, (m) changes in the availability and cost of capital, (n) competitive conditions in our industry and their impact on our ability to connect hydrocarbon supplies to our assets, (o) operating hazards, natural disasters, weather-related delays, casualty losses and other matters beyond our control, (p) a failure in our computing systems or a cyber-attack on our systems, and (q) 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 Partners, LP's and EnLink Midstream, LLC's filings with the Securities and Exchange Commission, including EnLink Midstream Partners, LP's and EnLink Midstream, LLC's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Neither EnLink Midstream Partners, LP nor EnLink Midstream, LLC assumes any obligation to update any forward-looking statements.
The assumptions 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 Midstream 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 Midstream'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 Partners, LP
Selected Financial Data
(All amounts in millions except per unit amounts)
Three Months Ended Year Ended
December 31, December 31,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
(Unaudited)
Total revenues $1,224.9 $1,066.5 $4,252.4 $4,452.1
Cost of sales (1) 908.7 757.9 3,015.5 3,245.3
----- ----- ------- -------
Gross operating margin 316.2 308.6 1,236.9 1,206.8
Operating costs and expenses:
Operating expenses (2) 102.2 107.3 398.5 419.9
General and administrative (3) 28.7 30.1 119.3 132.4
(Gain) loss on disposition of
assets 16.1 (2.0) 13.2 1.2
Depreciation and amortization 130.9 99.9 503.9 387.3
Impairments - 764.2 566.3 1,563.4
--- ----- ----- -------
Total operating costs and
expenses 277.9 999.5 1,601.2 2,504.2
----- ----- ------- -------
Operating income (loss) 38.3 (690.9) (364.3) (1,297.4)
Other income (expense):
Interest expense, net of interest
income (50.2) (31.0) (188.1) (102.5)
Income (loss) from unconsolidated
affiliates (19.4) 4.3 (19.9) 20.4
Other income 0.2 0.1 0.3 0.8
--- --- --- ---
Total other expense (69.4) (26.6) (207.7) (81.3)
----- ----- ------ -----
Loss before non-controlling
interest and income taxes (31.1) (717.5) (572.0) (1,378.7)
Income tax benefit (provision) - 3.4 (1.3) 0.5
--- --- ---- ---
Net loss (31.1) (714.1) (573.3) (1,378.2)
Net loss attributable to the non-
controlling interest (2.5) (0.1) (8.1) (0.4)
---- ---- ---- ----
Net loss attributable to EnLink
Midstream Partners, LP $(28.6) $(714.0) $(565.2) $(1,377.8)
====== ======= ======= =========
General partner interest in net
income $10.7 $6.1 $39.5 $58.0
===== ==== ===== =====
Limited partners' interest in net
loss attributable to EnLink
Midstream Partners, LP $(60.0) $(704.7) $(662.1) $(1,405.2)
====== ======= ======= =========
Class C partners' interest in net
loss attributable to EnLink
Midstream Partners, LP $ - $(15.4) $(12.5) $(30.6)
=== === ====== ====== ======
Preferred interest in net income
attributable to EnLink Midstream
Partners, LP $20.7 $ - $69.9 $ -
===== === === ===== === ===
Net loss attributable to EnLink
Midstream Partners, LP per
limited partners' unit:
Basic common unit $(0.18) $(2.17) $(1.99) $(4.66)
====== ====== ====== ======
Diluted common unit $(0.18) $(2.17) $(1.99) $(4.66)
====== ====== ====== ======
(1) Includes related party cost of
sales of $24.1 million and $49.6
million for the three months
ended December 31, 2016 and 2015,
respectively, and $150.1 million
and $141.3 million for the years
ended December 31, 2016 and 2015,
respectively.
(2) Includes related party operating
expenses of $0.1 million and $0.2
million for the three months
ended December 31, 2016 and 2015,
respectively, and $0.5 million
for each of the years ended
December 31, 2016 and 2015.
(3) Includes related party general and
administrative expenses of $0.2
million for the year ended
December 31, 2015.
EnLink Midstream Partners, LP
Reconciliation of Operating Income (Loss) to Gross Operating Margin
(All amounts in millions)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
Operating income (loss) $38.3 $(690.9) $(364.3) $(1,297.4)
Add (deduct):
Operating expenses 102.2 107.3 398.5 419.9
General and administrative
expenses 28.7 30.1 119.3 132.4
(Gain) loss on disposition
of assets 16.1 (2.0) 13.2 1.2
Depreciation and
amortization 130.9 99.9 503.9 387.3
Impairments - 764.2 566.3 1,563.4
--- ----- ----- -------
Gross operating margin $316.2 $308.6 $1,236.9 $1,206.8
====== ====== ======== ========
EnLink Midstream Partners, LP
Reconciliation of Net Income (Loss) to Adjusted EBITDA and
Distributable Cash Flow and Calculation of Coverage Ratio
(All amounts in millions except ratios and per unit amounts)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
Net loss $(31.1) $(714.1) $(573.3) $(1,378.2)
Interest expense 50.2 31.0 188.1 102.5
Depreciation and amortization 130.9 99.9 503.9 387.3
Impairments - 764.2 566.3 1,563.4
(Income) loss from unconsolidated affiliate investments (1) 19.4 (4.3) 19.9 (20.4)
Distribution from unconsolidated affiliate investments (2) 5.5 11.3 25.0 42.7
(Gain) loss on disposition of assets 16.1 (2.0) 13.2 1.2
Unit-based compensation 7.5 7.1 30.0 35.7
Income tax provision (benefit) - (3.4) 1.3 (0.5)
Loss on non-cash derivatives 4.2 0.4 20.1 7.7
Payments under onerous performance obligation offset to other current and long-term
liabilities (4.4) (4.4) (17.9) (17.9)
Other (3) (0.9) 1.4 6.9 11.3
---- --- --- ----
Adjusted EBITDA before non-controlling interest $197.4 $187.1 $783.5 $734.8
------ ------ ------ ------
Non-controlling interest share of adjusted EBITDA (4) (2.7) 0.1 (8.9) 0.4
Transferred interest adjusted EBITDA (5) - (1.1) - (56.9)
--- ---- --- -----
Adjusted EBITDA, net to EnLink Midstream Partners, LP $194.7 $186.1 $774.6 $678.3
====== ====== ====== ======
Interest expense (50.2) (31.0) (188.1) (102.5)
Amortization of EnLink Oklahoma T.O. installment payable discount included in interest
expense (6) 13.3 - 52.3 -
Non-cash adjustment for mandatorily redeemable non-controlling interest - 0.3 0.3 (1.8)
Interest rate swap (7) - - 0.4 (3.6)
Cash taxes and other (0.3) (0.3) (1.9) (2.8)
Maintenance capital expenditures (11.2) (6.3) (30.5) (38.3)
----- ---- ----- -----
Distributable cash flow $146.3 $148.8 $607.1 $529.3
====== ====== ====== ======
Distributions declared per limited partner unit $0.390 $0.390 $1.560 $1.545
Actual declared distribution (8) $149.8 $141.7 $587.5 $520.9
Distribution Coverage 0.98x 1.05x 1.03x 1.02x
(1) The net losses for the three
months and year ended December
31, 2016 include an impairment
loss of $20.1 million related to
our December 2016 agreement to
sell our investment in HEP. This
sale is expected to close in the
first quarter of 2017.
(2) Distributions for the year ended
December 31, 2016 do not include
$32.7 million of distributions
received from HEP during the
third quarter 2016 attributable
to the redemption of preferred
units in HEP that ENLK previously
held. The preferred units were
issued to us by HEP during the
second and third quarters of 2016
for contributions of $29.5
million and $3.2 million,
respectively.
(3) Includes the following: accretion
expense associated with asset
retirement obligations;
reimbursed employee costs from
Devon and LPC, which are costs
reimbursed to us by the previous
employer in connection with the
acquisition or merger; successful
acquisition transaction costs,
which we do not consider in
determining adjusted EBITDA
because operating cash flows are
not used to fund such costs; and
non-cash rent, which relates to
lease incentives pro-rated over
the lease term.
(4) Includes ENLC's 16% share of
adjusted EBITDA from EnLink
Oklahoma T.O., NGP's 49.9% share
of adjusted EBITDA from the
Delaware Basin JV and other minor
non-controlling interests.
(5) Represents recast adjusted EBITDA
from assets acquired from ENLC
and Devon in drop down
transactions during the first
half of 2015 for the period prior
to the date of the drop down
transactions.
(6) Amortization of the EnLink
Oklahoma T.O. installment payable
discount is considered non-cash
interest under our credit
facility since the payment under
the payable is consideration for
the acquisition of the EnLink
Oklahoma T.O. assets.
(7) During the third quarter of 2016
and second quarter of 2015, ENLK
entered into interest rate swap
arrangements to mitigate ENLK's
exposure to interest rate
movements prior to ENLK's note
issuances. The gain on settlement
of the interest rate swaps was
considered excess proceeds for
the note issuance and is
therefore excluded from
distributable cash flow.
(8) The actual declared distribution
does not assume full quarter
distributions on the Class D
units in the first quarter of
2015 or Class E units in the
second quarter of 2015.
EnLink Midstream Partners, LP
Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA
and Distributable Cash Flow
(All amounts in millions)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
Net cash provided by operating
activities $153.4 $137.6 $662.6 $645.6
Interest expense, net (1) 36.6 30.5 135.3 104.0
Current income tax 0.3 0.2 1.9 3.1
Distributions from
unconsolidated affiliate
investment in excess of
earnings (2) 3.0 6.8 21.9 21.1
Other (3) (2.2) 0.3 4.2 10.7
Changes in operating assets
and liabilities which
provided cash:
Accounts receivable, accrued
revenues, inventories and
other 93.5 (95.7) 107.7 (201.6)
Accounts payable, accrued gas
and crude oil purchases and
other (4) (87.2) 107.4 (150.1) 151.9
----- ----- ------ -----
Adjusted EBITDA before non-
controlling interest $197.4 $187.1 $783.5 $734.8
Non-controlling interest
share of adjusted EBITDA (5) (2.7) 0.1 (8.9) 0.4
Transferred interest adjusted
EBITDA (6) - (1.1) - (56.9)
--- ---- --- -----
Adjusted EBITDA, net to EnLink
Midstream Partners, LP $194.7 $186.1 $774.6 $678.3
------ ------ ------ ------
Interest expense (50.2) (31.0) (188.1) (102.5)
Amortization of the EnLink
Oklahoma T.O. installment
payable discount included in
interest expense (7) 13.3 - 52.3 -
Non-cash adjustment for
mandatorily redeemable non-
controlling interest - 0.3 0.3 (1.8)
Interest rate swap (8) - - 0.4 (3.6)
Cash taxes and other (0.3) (0.3) (1.9) (2.8)
Maintenance capital
expenditures (11.1) (6.3) (30.5) (38.3)
----- ---- ----- -----
Distributable cash flow $146.4 $148.8 $607.1 $529.3
====== ====== ====== ======
(1) Net of amortization of debt
issuance costs, discount and
premium, and valuation adjustment
for mandatorily redeemable non-
controlling interest included in
interest expense but not included
in net cash provided by operating
activities.
(2) Distributions for the year ended
December 31, 2016 do not include
$32.7 million of distributions
received from HEP during the
third quarter of 2016
attributable to the redemption of
preferred units in HEP that ENLK
previously held. The preferred
units were issued to us by HEP
during the second and third
quarters of 2016 for
contributions of $29.5 million
and $3.2 million, respectively.
(3) Includes the following: reimbursed
employee costs from Devon and
LPC, which are costs reimbursed
to us by the previous employer in
connection with the acquisition
or merger; and successful
acquisition transaction costs,
which we do not consider in
determining adjusted EBITDA
because operating cash flows are
not used to fund such costs.
(4) Net of payments under onerous
performance obligation offset to
other current and long-term
liabilities.
(5) Includes ENLC's 16% share of
adjusted EBITDA from EnLink
Oklahoma T.O., NGP's 49.9% share
of adjusted EBITDA from the
Delaware Basin JV and other minor
non-controlling interests.
(6) Represents recast adjusted EBITDA
from assets acquired from ENLC
and Devon in drop down
transactions during the first
half of 2015 for the period prior
to the date of the drop down
transactions.
(7) Amortization of the EnLink
Oklahoma T.O. installment payable
discount is considered non-cash
interest under our credit
facility since the payment under
the payable is consideration for
the acquisition of the EnLink
Oklahoma T.O. assets.
(8) During the third quarter of 2016
and second quarter of 2015, ENLK
entered into interest rate swap
arrangements to mitigate ENLK's
exposure to interest rate
movements prior to ENLK's note
issuances. The gain on settlement
of the interest rate swaps was
considered excess proceeds for
the note issuance and is
therefore excluded from
distributable cash flow.
EnLink Midstream Partners, LP
Operating Data
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
Midstream Volumes:
Texas
Gathering and
Transportation (MMBtu/d) 2,518,100 2,806,500 2,622,600 2,849,600
Processing (MMBtu/d) 1,128,200 1,225,000 1,173,100 1,222,700
Louisiana
Gathering and
Transportation (MMBtu/d) 1,897,600 1,614,700 1,676,600 1,468,300
Processing (MMBtu/d) 472,100 574,300 490,300 506,100
NGL Fractionation (Gals/d) 5,204,300 5,994,400 5,197,100 5,771,500
Oklahoma
Gathering and
Transportation (MMBtu/d) 644,200 476,300 626,300 428,600
Processing (MMBtu/d) 584,100 442,000 574,900 359,600
Crude and Condensate
Crude Oil Handling (Bbls/d) 81,200 140,300 94,000 131,500
Brine Disposal (Bbls/d) 3,800 3,900 3,600 3,900
EnLink Midstream, LLC
Selected Financial Data
(All amounts in millions except per unit amounts)
Three Months Ended Year Ended
December 31, December 31,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
(Unaudited)
Total revenues $1,224.9 $1,066.5 $4,252.4 $4,452.1
Cost of sales (1) 908.7 757.9 3,015.5 3,245.3
----- ----- ------- -------
Gross operating margin 316.2 308.6 1,236.9 1,206.8
Operating costs and expenses:
Operating expenses (2) 102.2 107.3 398.5 419.9
General and administrative (3) 27.8 31.2 122.5 136.9
(Gain) loss on disposition of
assets 16.1 (2.0) 13.2 1.2
Depreciation and amortization 130.9 99.9 503.9 387.3
Impairments - 764.2 873.3 1,563.4
--- ----- ----- -------
Total operating costs and
expenses 277.0 1,000.6 1,911.4 2,508.7
----- ------- ------- -------
Operating income (loss) 39.2 (692.0) (674.5) (1,301.9)
Other income (expense):
Interest expense, net of interest
income (50.6) (31.2) (189.5) (103.3)
Income (loss) from unconsolidated
affiliates (19.4) 4.3 (19.9) 20.4
Other income 0.2 0.1 0.3 0.8
--- --- --- ---
Total other expense (69.8) (26.8) (209.1) (82.1)
----- ----- ------ -----
Loss before non-controlling
interest and income taxes (30.6) (718.8) (883.6) (1,384.0)
Income tax benefit (provision) 1.4 (4.6) (4.6) (25.7)
--- ---- ---- -----
Net loss (29.2) (723.4) (888.2) (1,409.7)
Net loss attributable to the non-
controlling interest (25.3) (528.4) (428.2) (1,054.5)
----- ------ ------ --------
Net loss attributable to EnLink
Midstream, LLC $(3.9) $(195.0) $(460.0) $(355.2)
===== ======= ======= =======
Devon investment interest in net
income $ - $1.1 $ - $1.8
=== === ==== === === ====
EnLink Midstream, LLC interest in
net loss $(3.9) $(196.1) $(460.0) $(357.0)
===== ======= ======= =======
Net loss attributable to EnLink
Midstream, LLC per unit:
Basic common unit $(0.02) $(1.18) $(2.56) $(2.17)
====== ====== ====== ======
Diluted common unit $(0.02) $(1.18) $(2.56) $(2.17)
====== ====== ====== ======
(1) Includes related party cost of
sales of $24.1 million and $49.6
million for the three months
ended December 31, 2016 and 2015,
respectively, and $150.1 million
and $141.3 million for the years
ended December 31, 2016 and 2015,
respectively.
(2) Includes related party operating
expenses of $0.1 million and $0.2
million for the three months
ended December 31, 2016 and 2015,
respectively, and $0.5 million
for each of the years ended
December 31, 2016 and 2015.
(3) Includes related party general and
administrative expenses of $0.2
million for the year ended
December 31, 2015.
EnLink Midstream, LLC
Cash Available for Distribution and Calculation of Coverage Ratio
(All amounts in millions except ratios and per unit amounts)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
Distribution declared by ENLK
associated with (1):
General partner interest $0.5 $0.6 $2.1 $2.4
Incentive distribution rights 14.4 13.8 56.8 47.5
ENLK common units owned 34.5 34.5 138.1 104.5
---- ---- ----- -----
Total share of ENLK
distributions declared $49.4 $48.9 $197.0 $154.4
Transferred interest EBITDA
(2) - - - 53.7
Adjusted EBITDA of EnLink
Oklahoma T.O. (3) 3.1 - 9.0 -
Transaction costs (4) - - 0.6 -
--- --- --- ---
Total cash available $52.5 $48.9 $206.6 $208.1
----- ----- ------ ------
Uses of cash:
General and administrative
expenses 1.0 (1.1) (2.8) (4.1)
Current income taxes (5) (0.6) 0.1 (0.6) 0.1
Interest expense (0.4) (0.1) (1.4) (0.8)
Maintenance capital
expenditures (6) (0.1) - (0.1) (4.0)
---- --- ---- ----
Total cash used $(0.1) $(1.1) $(4.9) $(8.8)
----- ----- ----- -----
ENLC cash available for
distribution $52.4 $47.8 $201.7 $199.3
===== ===== ====== ======
Distribution declared per ENLC
unit $0.255 $0.255 $1.020 $1.005
Cash distribution declared $46.5 $46.2 $185.9 $170.2
Distribution coverage 1.13x 1.04x 1.09x 1.17x
(1) Represents distributions to be paid
to ENLC on February 13, 2017 and
distributions paid on November 11,
2016, August 11, 2016, May 12, 2016,
February 11, 2016, November 12,
2015, August 13, 2015 and May 14,
2015.
(2) Represents our interest in Midstream
Holdings' adjusted EBITDA, which was
disbursed to ENLC by Midstream
Holdings on a monthly basis prior to
the transfer of all interests in
Midstream Holdings to the
Partnership in drop down
transactions (the "2015 EMH Drop
Downs"). Midstream Holdings'
adjusted EBITDA is defined as net
income (loss) plus interest expense,
provision for income taxes,
depreciation and amortization
expense, impairment expense, unit-
based compensation, (gain) loss on
non-cash derivatives, (gain) loss
on disposition of assets, successful
transaction costs, accretion expense
associated with asset retirement
obligations, reimbursed employee
costs, non-cash rent, and
distributions from unconsolidated
affiliate investments, less payments
under onerous performance
obligations, non-controlling
interest, and income (loss) from
unconsolidated affiliate
investments.
(3) Represents our interest in EnLink
Oklahoma T.O. adjusted EBITDA, which
is disbursed to ENLC by EnLink
Oklahoma T.O. on a monthly basis.
EnLink Oklahoma T.O. adjusted EBITDA
is defined as earnings before
depreciation and amortization and
provision for income taxes.
(4) Represents acquisition transaction
costs attributable to the Company's
16% interest in EnLink Oklahoma T.O,
which are considered growth capital
expenditures as part of the cost of
the assets acquired.
(5) Represents our stand-alone current
tax expense.
(6) Represents our share of EnLink
Oklahoma T.O.'s maintenance capital
expenditures for the year ended
December 31, 2016 and our interest
in Midstream Holdings' maintenance
capital expenditures prior to the
2015 EMH Drop Downs, which is netted
against the monthly disbursement of
Midstream Holdings' adjusted EBITDA
per (2) above for the year ended
December 31, 2015.
EnLink Midstream, LLC
Reconciliation of Net Income (Loss) of ENLC to ENLC Cash Available for Distribution
(All amounts in millions)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
Net loss of ENLC $(29.2) $(723.4) $(888.2) $(1,409.7)
Less: Net loss attributable
to ENLK (28.6) (714.0) (565.2) (1,377.8)
----- ------ ------ --------
Net loss of ENLC excluding
ENLK $(0.6) $(9.4) $(323.0) $(31.9)
ENLC's share of distributions
from ENLK (1) 49.5 48.9 197.0 154.4
ENLC's interest in EnLink
Oklahoma T.O. depreciation 3.9 - 14.3 -
ENLC's deferred income tax
(benefit) expense (2) (1.9) 7.9 2.8 26.2
Maintenance capital
expenditures (3) (0.1) - (0.1) (4.0)
Transferred interest EBITDA
(4) - - - 53.7
ENLC corporate goodwill
impairment - - 307.0 -
Other items (5) 1.6 0.4 3.7 0.9
--- --- --- ---
ENLC cash available for
distribution $52.4 $47.8 $201.7 $199.3
===== ===== ====== ======
(1) Represents distributions declared
by ENLK and to be paid to ENLC on
February 13, 2017 and
distributions paid by ENLK to
ENLC on November 11, 2016, August
11, 2016, May 12, 2016, February
11, 2016, November 12, 2015,
August 13, 2015 and May 14, 2015.
(2) Represents ENLC's stand-alone
deferred taxes.
(3) For the three months and year
ended December 31, 2016, this
amount represents ENLC's share of
EnLink Oklahoma T.O.'s
maintenance capital expenditures.
For the year ended December 31,
2015, this amount represents
ENLC's interest in maintenance
capital expenditures of Midstream
Holdings prior to the 2015 EMH
Drop Downs during the first half
of 2015.
(4) Represents ENLC's interest in the
adjusted EBITDA of Midstream
Holdings prior to the 2015 EMH
Drop Downs. Adjusted EBITDA of
Midstream Holdings' is defined as
maintenance capital expenditures
prior to the 2015 EMH Drop Downs
netted against the monthly
disbursement of Midstream
Holdings' adjusted EBITDA.
(5) Represents transaction costs
attributable to ENLC's share of
the acquisition of EnLink
Oklahoma T.O. and other non-cash
items not included in cash
available for distributions.
EnLink Midstream Partners, LP
Forward-Looking Reconciliation of Net Income to Adjusted EBITDA and Distributable Cash Flow (1) (2)
(All amounts in millions)
(Unaudited)
2017 Outlook
------------
Low Mid-Point High
--- --------- ----
Net income (3) $80 $100 $120
Interest expense 176 176 176
Depreciation and amortization 570 580 590
Income from unconsolidated affiliate investments (7) (9) (11)
Distribution from unconsolidated affiliate investments 5 10 15
Unit-based compensation 40 43 46
Income taxes 5 5 5
Payments under onerous performance obligation offset to other current and long-term liabilities (18) (18) (18)
Other (4) 4 4 4
--- --- ---
Adjusted EBITDA before non-controlling interest $855 $891 $927
Non-controlling interest share of adjusted EBITDA (5) (40) (41) (42)
--- --- ---
Adjusted EBITDA, net to EnLink Midstream Partners, LP $815 $850 $885
==== ==== ====
Interest expense (176) (176) (176)
Amortization of Tall Oak installment payable discount included in interest expense (6) 26 26 26
Convertible preferred distribution (32) (32) (32)
Cash taxes and other (5) (5) (5)
Maintenance capital expenditures (38) (43) (48)
--- --- ---
Distributable cash flow $590 $620 $650
==== ==== ====
(1) The projected net income guidance
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, gains
or losses on extinguishment of debt
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.
(2) EnLink Midstream does not provide a
reconciliation of forward-looking
Adjusted EBITDA to Net Cash
Provided by Operating Activities
because we are 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 companies'
control.
(3) Net income includes estimated net
income attributable to ENLK's non-
controlling interest in ENLC's 16%
share of net income from EnLink
Oklahoma T.O., NGP's 49.9% share of
net income from the Delaware Basin
JV and Marathon's 50% share of net
income from the Ascension JV.
(4) Includes estimated accretion expense
associated with asset retirement
obligations and estimated non-cash
rent which relates to lease
incentives prorated over the lease
term.
(5) Non-controlling interest share of
adjusted EBITDA includes estimates
for ENLC's 16% share of adjusted
EBITDA from EnLink Oklahoma T.O.,
NGP's 49.9% share of adjusted
EBITDA from the Delaware Basin JV
and Marathon's 50% share of
adjusted EBITDA from the Ascension
JV.
(6) Amortization of the EnLink Oklahoma
T.O. installment payable discount
is considered non-cash interest
under our credit facility since the
payment under the payable is
consideration for the acquisition
of the EnLink Oklahoma T.O. assets.
EnLink Midstream, LLC
Forward-Looking Reconciliation of Net Income of ENLC to ENLC Cash Available for Distribution (1)
(All amounts in millions)
(Unaudited)
2017 Outlook
------------
Low Mid-Point High
--- --------- ----
Net income of ENLC (2) $45 $75 $105
Less: Net income attributable to ENLK 57 85 113
--- --- ---
Net loss of ENLC excluding ENLK $(12) $(10) $(8)
ENLC's share of distributions from ENLK (3) 199 199 199
ENLC's interest in EnLink Oklahoma T.O. depreciation 16 17 18
ENLC deferred income tax expense (4) 12 14 16
Maintenance capital expenditures (5) - - -
--- --- ---
ENLC cash available for distribution $215 $220 $225
==== ==== ====
(1) The projected net income guidance
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, gains
or losses on extinguishment of debt
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.
(2) Net income of ENLC includes
estimated net income attributable
to ENLC's non-controlling interest
in ENLK.
(3) Represents quarterly distributions
estimated to be paid to ENLC by
ENLK during 2017.
(4) Represents ENLC's estimated stand-
alone deferred taxes.
(5) Maintenance capital expenditures
attributable to ENLC's share of
EnLink Oklahoma T.O. are projected
to be immaterial during 2017.
Investor Contact: Kate Walsh, Vice President of Investor Relations, 214-721-9696, kate.walsh@enlink.com
Media Contact: Jill McMillan, Vice President of Public & Industry Affairs, 214-721-9271, jill.mcmillan@enlink.com
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/enlink-midstream-reports-fourth-quarter-and-full-year-2016-results-reaffirms-2017-guidance-and-provides-operational-update-300407414.html
SOURCE EnLink Midstream
