EnLink Midstream Reports Second Quarter 2014 Results
DALLAS--(BUSINESS WIRE)-- The EnLink Midstream companies, EnLink Midstream Partners, LP (NYSE:ENLK) (the Partnership) and EnLink Midstream, LLC (NYSE:ENLC) (the General Partner), today reported results for the second quarter of 2014.
Second Quarter 2014 — EnLink Midstream Partners, LP Financial Results
The Partnership realized adjusted EBITDA of $111.6 million, distributable cash flow of $93.8 million and net income of $41.4 million for the second quarter of 2014. The Partnership's second quarter of 2014 gross operating margin was $262.1 million and operating income was $93.1 million. Adjusted EBITDA, distributable cash flow and gross operating margin are explained in greater detail under “Non-GAAP Financial Information,” and reconciliations of these measures to their most directly comparable GAAP measures are included in the tables at the end of this news release.
“We are pleased to report outstanding second quarter results,” said Barry E. Davis, EnLink Midstream President and Chief Executive Officer. “Our performance this quarter exemplifies the many benefits of our strong financial foundation, our growing footprint of assets and our innovative sponsorship from Devon. We continue to execute on our strategic goals and we announced new growth projects which will expand our asset base. Based on the results of the business, we raised distributions this quarter for unitholders of both ENLK and ENLC. As we look ahead, we are confident in our ability to continue creating significant value for our unitholders and customers alike.”
The Partnership’s operating and reporting segments are based principally upon geographic regions served and consist of the following: the Texas segment, which includes natural gas gathering, processing, transmission and fractionation operations located in north Texas and west Texas; the Louisiana segment, which includes pipelines, processing plants and NGL assets located in Louisiana; the Oklahoma segment, which includes natural gas gathering and processing operations located in Oklahoma; and the ORV segment, which includes rail, truck, pipeline and barge facilities to deliver crude and condensate and brine disposal wells in the Ohio River Valley.
Each business segment’s contribution to the Partnership’s second quarter 2014 gross operating margin is below:
- The Texas segment contributed $153.0 million of gross operating margin.
- The Louisiana segment contributed $48.3 million of gross operating margin.
- The Oklahoma segment contributed $47.2 million of gross operating margin.
- The ORV segment contributed $15.2 million of gross operating margin.
The Partnership’s second quarter 2014 operating expenses were $71.5 million; general and administrative expenses were $24.8 million; depreciation and amortization expense was $72.7 million; interest expense was $13.0 million; and income from equity investment was $4.5 million.
Net income per limited partner common unit for the second quarter of 2014 was $0.17.
Second Quarter 2014 — EnLink Midstream, LLC Financial Results
The General Partner reported net income of $28.8 million. The General Partner’s cash available for distribution was $69.1 million, which resulted in a 1.91x coverage ratio, on the declared distribution of $0.22 per General Partner unit for the quarter. Cash available for distribution is explained in greater detail under "Non-GAAP Financial Information," and a reconciliation of this measure to its most directly comparable GAAP measure is included in the tables at the end of this news release.
Excluding cash and debt held by the Partnership and E2, the compression and stabilization company in which the General Partner has invested, the General Partner had cash on hand of approximately $15.1 million and $155.0 million of borrowings available under its bank credit facility as of June 30, 2014.
EnLink Midstream to Hold Earnings Conference Call on August 6, 2014
EnLink Midstream, LLC (NYSE: ENLC) (the General Partner) and EnLink Midstream Partners, LP (NYSE: ENLK) (the Partnership) will hold a conference call to discuss second quarter 2014 financial results and newly announced growth projects on Wednesday, August 6, 2014, at 9:00 a.m. Central time (10:00 a.m. Eastern time).
The dial-in number for the call is 1-866-520-1073. Callers outside the United States should dial 1-810-740-4841. The conference identification passcode is 64735258 for all callers. Participants are advised to dial in to the call at least 10 minutes prior to the call time to register. Participants may preregister for the call at http://www.directeventreg.com/registration/event/64735258. Pre-registrants will be issued a pin number to use when dialing in to the live call, which will provide quick access to the conference by bypassing the operator upon connection.
Interested parties also can access the live webcast and archived replay of the call on the Investors page of EnLink Midstream’s website at www.EnLink.com.
About the EnLink Midstream Companies
EnLink Midstream is a leading midstream provider formed through the combination of Crosstex Energy and substantially all of the U.S. midstream assets of Devon Energy. EnLink Midstream is publicly traded through two entities: EnLink Midstream, LLC (NYSE: ENLC), the publicly traded general partner entity, and EnLink Midstream Partners, LP (NYSE: ENLK), the master limited partnership.
EnLink Midstream’s assets are located in many of North America’s premier oil and gas regions, including the Barnett Shale, Permian Basin, Cana-Woodford Shale, Arkoma-Woodford Shale, Eagle Ford Shale, Haynesville Shale, Gulf Coast region, Utica Shale and Marcellus Shale. Based in Dallas, Texas, EnLink Midstream’s assets include approximately 7,300 miles of gathering and transportation pipelines, 12 processing plants with 3.3 billion cubic feet per day of net processing capacity, six fractionators with 180,000 barrels per day of net fractionation capacity, as well as barge and rail terminals, product storage facilities, brine disposal wells, an extensive crude oil trucking fleet and equity investments in certain private midstream companies.
Additional information about the EnLink companies can be found at www.EnLink.com.
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 cash available for distribution. We define adjusted EBITDA as net income plus interest expense, provision for income taxes, depreciation and amortization expense, stock-based compensation, (gain) loss on noncash derivatives, transaction costs, distribution of equity investment and non-controlling interest, and income (loss) on equity investment. Distributable cash flow is defined as earnings before certain noncash charges and the gain on the sale of assets less maintenance capital expenditures. Gross operating margin is defined as revenue minus the cost of purchased gas, NGL, condensate and crude oil. We define cash available for distribution as distributions due to the General Partner from the Partnership and from its 50% interest in EnLink Midstream Holdings, LP ("Midstream Holdings"), less specific general and administrative costs as a separate public reporting entity, the interest costs associated with debt and taxes attributable to earnings.
The amounts included in the calculation of these measures are computed in accordance with generally accepted accounting principles (GAAP) with the exception of maintenance capital expenditures and adjusted EBITDA of Midstream Holdings. 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. Adjusted EBITDA of Midstream Holdings is defined as earnings before depreciation.
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.
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 measures of liquidity or 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.
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 risks and uncertainties that could cause actual activities, performance, outcomes and results to differ materially than those indicated. Such forward-looking statements include, but are not limited to, statements about future financial and operating results, objectives, 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) the risk that EnLink Midstream will not be integrated successfully or that such integration will take longer than anticipated, (c) the possibility that expected synergies will not be realized, or will not be realized within the expected timeframe, (d) our lack of asset diversification, (e) our vulnerability to having a significant portion of our operations concentrated in the Barnett Shale, (f) the amount of hydrocarbons transported in our gathering and transmission lines and the level of our processing and fractionation operations, (g) fluctuations in oil, natural gas and NGL prices, (h) construction risks in our major development projects, (i) our ability to consummate future acquisitions, successfully integrate any acquired businesses, realize any cost savings and other synergies from any acquisition, (j) changes in the availability and cost of capital, (k) competitive conditions in our industry and their impact on our ability to connect hydrocarbon supplies to our assets, (l) operating hazards, natural disasters, weather-related delays, casualty losses and other matters beyond our control, and (m) 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 these forward-looking statements.
| EnLink Midstream Partners, LP | |||||
| Selected Financial Data | |||||
| (All amounts in millions except per unit amounts) | |||||
| Three Months Ended | |||||
| June 30, 2014 | |||||
| (Unaudited) | |||||
| Revenues: | |||||
| Revenues | $ | 751.8 | |||
| Revenues - affiliates | 173.8 | ||||
| Loss on derivative activity | (1.6 | ) | |||
| Total revenues | 924.0 | ||||
| Purchased gas, NGLs, condensate and crude oil | 661.9 | ||||
| Gross operating margin | 262.1 | ||||
| Operating costs and expenses: | |||||
| Operating expenses | 71.5 | ||||
| General and administrative | 24.8 | ||||
| Depreciation and amortization | 72.7 | ||||
| Total operating costs and expenses | 169.0 | ||||
| Operating income | 93.1 | ||||
| Other income (expense): | |||||
| Interest expense, net of interest income | (13.0 | ) | |||
| Income from equity investment | 4.5 | ||||
| Gain on extinguishment of debt | 0.8 | ||||
| Other expense | (0.1 | ) | |||
| Total other income (expense) | (7.8 | ) | |||
| Income from continuing operations before non-controlling interest and income taxes | 85.3 | ||||
| Income tax provision | (1.2 | ) | |||
| Net income | 84.1 | ||||
| Net income attributable to the non-controlling interest | 42.7 | ||||
| Net income attributable to EnLink Midstream Partners, LP | $ | 41.4 | |||
| General partner interest in net income | $ | 3.1 | |||
| Limited partners’ interest in net income attributable to EnLink Midstream Partners, LP | $ | 38.3 | |||
| Net income attributable to EnLink Midstream Partners, LP per limited partners’ unit: | |||||
| Basic per common unit | $ | 0.17 | |||
| Diluted per common unit | $ | 0.17 | |||
| EnLink Midstream Partners, LP | |||||
| Reconciliation of Net Income to Adjusted EBITDA and Distributable Cash Flow | |||||
| (All amounts in millions except ratios and per unit amounts) | |||||
| Three Months Ended | |||||
| June 30, 2014 | |||||
| (Unaudited) | |||||
| Net income | $ | 84.1 | |||
| Interest expense, net | 13.0 | ||||
| Depreciation and amortization | 72.7 | ||||
| Loss from equity investment | (4.5 | ) | |||
| Distribution from equity investment | 3.0 | ||||
| Stock-based compensation | 5.7 | ||||
| Income taxes | 1.2 | ||||
| Other (1) | (3.6 | ) | |||
| Adjusted EBITDA before non-controlling interest | $ | 171.6 | |||
| Non-controlling interest share of adjusted EBITDA | (60.0 | ) | |||
| Adjusted EBITDA net to EnLink Midstream Partners, LP | $ | 111.6 | |||
| Interest expense | (12.8 | ) | |||
| Cash taxes and other | (0.7 | ) | |||
| Maintenance capital expenditures | (4.3 | ) | |||
| Distributable cash flow | $ | 93.8 | |||
| Actual declared distribution | 90.9 | ||||
| Distribution coverage |
1.03 |
x |
|||
| Distributions declared per limited partner unit | $ | 0.365 | |||
| (1) | Includes financial derivatives marked-to-market, other non-cash items and transition costs related to the merger to form EnLink Midstream. |
| EnLink Midstream Partners, LP | |||
| Operating Data | |||
| Three Months Ended | |||
| June 30, 2014 | |||
| Midstream Volumes: | |||
| Texas | |||
| Gathering and Transportation (MMBtu/d) | 2,994,400 | ||
| Processing (MMBtu/d) | 1,156,700 | ||
| Louisiana | |||
| Gathering and Transportation (MMBtu/d) | 429,600 | ||
| Processing (MMBtu/d) | 591,900 | ||
| NGL Fractionation (Gals/d) | 4,377,300 | ||
| Oklahoma | |||
| Gathering and Transportation (MMBtu/d) | 512,500 | ||
| Processing (MMBtu/d) | 458,400 | ||
| ORV | |||
| Crude Oil Handling (Bbls/d) (1) | 16,300 | ||
| Brine Disposal (Bbls/d) | 5,200 | ||
| (1) | Includes crude oil handling by both the ORV and Louisiana segments. |
| EnLink Midstream, LLC | |||||
| Selected Financial Data | |||||
| (All amounts in millions except per unit amounts) | |||||
| Three Months Ended | |||||
| June 30, 2014 | |||||
| (Unaudited) | |||||
| Revenues: | |||||
| Revenues | $ | 755.0 | |||
| Revenues - affiliates | 173.8 | ||||
| Loss on derivative activity | (1.6 | ) | |||
| Total revenues | 927.2 | ||||
| Purchased gas, NGLs, condensate and crude oil | 661.9 | ||||
| Gross operating margin | 265.3 | ||||
| Operating costs and expenses: | |||||
| Operating expenses | 72.6 | ||||
| General and administrative | 26.6 | ||||
| Depreciation and amortization | 74.2 | ||||
| Total operating costs and expenses | 173.4 | ||||
| Operating income | 91.9 | ||||
| Other income (expense): | |||||
| Interest expense, net of interest income | (14.1 | ) | |||
| Income from equity investment | 4.5 | ||||
| Gain on extinguishment of debt | 0.8 | ||||
| Other expense | (0.1 | ) | |||
| Total other income (expense) | (8.9 | ) | |||
| Income from continuing operations before non-controlling interest and income taxes | 83.0 | ||||
| Income tax provision | (18.5 | ) | |||
| Net income | 64.5 | ||||
| Net income attributable to the non-controlling interest | 35.7 | ||||
| Net income attributable to EnLink Midstream, LLC | $ | 28.8 | |||
| Net income attributable to EnLink Midstream, LLC per limited partners' unit: | |||||
| Basic per common unit | $ | 0.18 | |||
| Diluted per common unit | $ | 0.18 | |||
| EnLink Midstream, LLC | |||||
| Cash Available for Distribution | |||||
| (All amounts in millions except ratios and per unit amounts) | |||||
| Three Months Ended | |||||
| June 30, 2014 | |||||
| (Unaudited) | |||||
| Distribution declared by ENLK associated with (1): | |||||
| General partner interest | $ | 0.6 | |||
| Incentive distribution rights | 5.9 | ||||
| ENLK common units owned | 6.0 | ||||
| Total share of ENLK distributions declared | $ | 12.5 | |||
| Adjusted EBITDA of Midstream Holdings (2) | 60.0 | ||||
| Total cash available | $ | 72.5 | |||
| Uses of cash: | |||||
| General and administrative expenses | (0.8 | ) | |||
| Interest expense | (0.8 | ) | |||
| Maintenance capital expenditures (3) | (1.8 | ) | |||
| Total cash used | $ | (3.4 | ) | ||
| ENLC cash available for distribution | $ | 69.1 | |||
| Distribution declared per ENLC unit | $ | 0.22 | |||
| Cash distribution declared | $ | 36.2 | |||
| Distribution coverage |
1.91 |
x |
|||
| (1) | Represents distributions declared by ENLK and to be paid to ENLC on August 13, 2014. | |
| (2) |
Represents ENLC's 50% interest in Midstream Holdings' adjusted EBITDA, which is disbursed on a monthly basis to ENLC by Midstream Holdings. Midstream Holdings' adjusted EBITDA is defined as earnings before depreciation. ENLC's share of Midstream Holdings' adjusted EBITDA is comprised of its 50% share in Midstream Holdings' net income of $42.7 million plus its 50% share in Midstream Holdings' depreciation of $17.3 million. |
|
| (3) | Represents ENLC's interest in Midstream Holdings' maintenance capital expenditures which is netted against the monthly disbursement of Midstream Holdings' adjusted EBITDA per (2) above. |
| EnLink Midstream, LLC | |||||
| Reconciliation of Net Income of ENLC to ENLC Cash Available for Distribution | |||||
| (All amounts in millions except per unit amounts) | |||||
| Three Months Ended | |||||
| June 30, 2014 | |||||
| (Unaudited) | |||||
| Net income of ENLC | $ | 64.5 | |||
| Less: Net income attributable to ENLK | (41.4 | ) | |||
| Net Income of ENLC Excluding ENLK | $ | 23.1 | |||
| ENLC's share of distributions declared from ENLK (1) | 12.5 | ||||
| ENLC's interest in Midstream Holdings' depreciation (2) | 17.3 | ||||
| ENLC income tax expense (3) | 17.3 | ||||
| Depreciation attributable to E2 | 1.5 | ||||
| Maintenance capital expenditures (4) | (1.8 | ) | |||
| Other items (5) | (0.8 | ) | |||
| ENLC cash available for distribution | $ | 69.1 | |||
| (1) | Represents distributions declared by ENLK and to be paid to ENLC on August 13, 2014. | |
| (2) | Represents ENLC's interest in Midstream Holdings' depreciation which is reflected as a non-cash deduction in the net income of ENLC excluding ENLK. | |
| (3) | Represents ENLC's stand-alone deferred taxes. | |
| (4) | Represents ENLC's interest in Midstream Holdings' maintenance capital expenditures which is netted against the monthly disbursement of Midstream Holdings' adjusted EBITDA. | |
| (5) | Represents E2's adjusted EBITDA and other non-cash items not included in cash available for distributions. |
EnLink Midstream
Jill McMillan, 214-721-9271
Director
of Communications and Investor Relations
Jill.McMillan@enlink.com
Source: EnLink Midstream
Released August 5, 2014