DALLAS, Feb. 6, 2018 /PRNewswire/ -- The EnLink
Midstream companies (EnLink), EnLink Midstream,
LLC (NYSE: ENLC), the General Partner, and EnLink
Midstream Partners, LP (NYSE: ENLK), the Master Limited
Partnership, today announced 2018 financial and operational
guidance.
Highlights
- ENLK fourth-quarter 2017 results are expected to be near the
midpoint of the net income range of $74
million to $90 million.
- ENLK fourth-quarter 2017 results are expected to be at the
high-end of previously disclosed annualized adjusted EBITDA
run-rate guidance range of $925
million to $950 million.
Adjusted EBITDA is a non-GAAP measure and is explained in greater
detail under "Non-GAAP Financial Information."
- ENLK is projecting to grow net income by 116 percent and
projecting to increase adjusted EBITDA midpoint by nearly 15
percent in 2018 as compared to 2017 guidance midpoint.
- EnLink projects Oklahoma
volumes and segment profit to grow between 30 to 40 percent during
2018, as compared to annualized reported results for the third
quarter of 2017.
"EnLink's growth outlook is robust, as sustained producer
activity and increased drilling efficiencies are expected to drive
cash flow and volume growth across our systems," said Michael
J. Garberding, EnLink President and Chief Executive Officer. "Our
near-term growth in key supply basins translates directly into
growth for our demand-driven position along the Gulf Coast, and we
are focusing our 2018 organic projects on investing
highly-efficient capital to expand in our most active areas."
ENLK 2018 Guidance
- Net income is projected to range from $255 million to $315
million.
- Adjusted EBITDA is projected to range from $950 million to $1.02
billion, representing a nearly 15 percent increase in the
2018 midpoint of $985 million
compared to the 2017 guidance midpoint affirmed on October 31, 2017.
- Distributable cash flow is projected to range from $630 million to $680
million. Distributable cash flow is a non-GAAP measure and
is explained in greater detail under "Non-GAAP Financial
Information."
- Distribution coverage is projected to range from 1.00x to
1.10x, assuming unchanged distributions throughout 2018.
- Debt to adjusted EBITDA ratio is projected to range from 4.20x
to 3.70x. ENLK has no debt maturities in 2018, and less than
$500 million of long-term debt
maturities over the next five years (not accounting for its
revolving credit facility). ENLK remains committed to maintaining
an investment grade balance sheet and strong liquidity
position.
- Oklahoma segment profit and
average gas gathering, transmission and processing volumes are
projected to increase by 30 percent to 40 percent as compared to
annualized segment profit and volumes for the third quarter of 2017
as reported on October 31, 2017.
- Growth capital expenditures funded exclusively by ENLK are
projected to range from $585 million
to $715 million, and are primarily
forecasted to be driven by ongoing investments in the company's key
growth regions, including Oklahoma, the Permian Basin, and Louisiana. ENLK expects to realize adjusted
EBITDA multiples on organic capital investments in the
mid-single-digit range, reflecting attractive returns in-line with
historical levels. Total growth capital expenditures, including
contributions from joint venture partners and ENLC, are projected
to range from $700 million to
$860 million. Both ENLK and total
growth capital expenditure ranges exclude the final $250 million installment payment, paid in early
January 2018, related to the
completed acquisition of the Central
Oklahoma assets in 2016.
ENLC 2018 Guidance
- Net income is projected to range from $233 million to $291
million.
- Cash available for distribution is projected to range from
$230 million to $240 million, representing an increase of
approximately seven percent compared to previously announced 2017
midpoint guidance affirmed on October 31,
2017. Cash available for distribution is a non-GAAP measure
and is explained in greater detail under "Non-GAAP Financial
Information."
- Distribution coverage is projected to range from 1.16x to
1.22x, assuming ENLC's previously announced guidance of five
percent annual growth in declared distributions for 2018, as
compared to declared distributions for 2017. Distribution coverage
guidance includes the impact of funding assumptions further
described below.
- Cash available for distribution contribution from ENLC's 16
percent ownership in EnLink Oklahoma Gas Processing, LP ("EnLink
Oklahoma T.O.") is projected to range from $40 million to $50
million.
- Growth capital expenditures funded exclusively by ENLC are
projected to range from $45 million
to $55 million. ENLC is projecting to
self-fund approximately 75 percent of these growth capital
expenditures with excess cash after giving effect to expected
distribution growth, with the remaining 25 percent expected to be
funded with debt.
EnLink's 2018 financial and operational guidance assumes a West
Texas Intermediate crude oil average price of $60 per
barrel and a Henry Hub average price of $3 per million
British Thermal Units. Net income and adjusted EBITDA ranges
assume commodity price movement, as well as business opportunities
and risks. EnLink's 2018 guidance information is projected
and, accordingly, remains subject to changes that could be
significant. Please reference the section titled
"Forward-Looking Statements" of this press release for further
information and disclosures.
EnLink Midstream to Hold 2018 Financial and Operational
Guidance Call on February 7,
2018
The General Partner and the Master Limited Partnership will hold a
conference call to discuss 2018 financial and operational guidance
on Wednesday, February 7, 2018, at
11 a.m. Central Time (12 p.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/10116272 where they will
receive their 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 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
principles (GAAP) financial measures that we refer to as adjusted
EBITDA, distributable cash flow available to common unitholders
("distributable cash flow"), and the General Partner's cash
available for distribution.
We define adjusted EBITDA as net income (loss) plus interest
expense, provision (benefit) for income taxes, depreciation and
amortization expense, impairments, unit-based compensation, (gain)
loss on non-cash derivatives, (gain) loss on disposition of assets,
(gain) loss on extinguishment of debt, successful acquisition
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.
We define distributable cash flow as adjusted EBITDA (as defined
above), net to the Partnership, less interest expense (excluding
amortization of the EnLink Oklahoma Gas Processing LP (together
with its subsidiaries, "EnLink Oklahoma T.O.") acquisition
installment payable discount), litigation settlement adjustment,
adjustments for the redeemable non-controlling interest, interest
rate swaps, current income taxes and other non-distributable cash
flows, accrued cash distributions on Series B Preferred Units and
Series C Preferred Units paid or expected to be paid, and
maintenance capital expenditures, excluding maintenance capital
expenditures that were contributed by other entities and relate to
the non-controlling interest share of our consolidated
entities.
The General Partner's cash available for distribution is defined
as net income (loss) of the General Partner less the net income
(loss) attributable to the Partnership, which is consolidated into
the General Partner's net income (loss), plus the General Partner's
(i) share of distributions from the Partnership, (ii) share of
EnLink Oklahoma T.O. non-cash expenses, (iii) deferred income tax
(benefit) expense, (iv) corporate goodwill impairment, (v)
acquisition transaction costs attributable to its share of the
EnLink Oklahoma T.O. acquisition, less the General Partner's
interest in maintenance capital expenditures of EnLink Oklahoma
T.O. and less third-party non-controlling interest share of net
income (loss) from consolidated affiliates.
The Partnership's Distribution Coverage is calculated by
dividing distributable cash flow by distributions declared to the
General Partner and the unitholders. The General Partner's
Distribution Coverage is calculated by dividing cash available for
distribution by distributions declared 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 include 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.
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 (gain) loss
on litigation settlement. Segment profit (loss) includes non-cash
compensation expenses reflected in operating expenses. See "Item 1.
Financial Statements– Note 14 Segment Information" in ENLK's
Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, for further information about
segment profit (loss).
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
satisfaction of the capital and related requirements of their
respective 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.
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 for the periods that are presented in this press
release 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. All statements, other than statements of
historical fact, included in this presentation 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,
operational results of our customers, results in certain basins,
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) 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) conducting certain of our operations through
joint ventures, (k) reductions in our credit ratings, (l) our
debt levels and restrictions contained in our debt documents,
(m) our ability to consummate future acquisitions,
successfully integrate any acquired businesses, realize any cost
savings and other synergies from any acquisition, (n) changes
in the availability and cost of capital, (o) competitive
conditions in our industry and their impact on our ability to
connect hydrocarbon supplies to our assets, (p) operating
hazards, natural disasters, weather-related delays, casualty losses
and other matters beyond our control, (q) a failure in our
computing systems or a cyber-attack on our systems, and
(r) 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
|
Fourth Quarter
2017 Forward-Looking Reconciliation of Net Income to Adjusted
EBITDA
|
(All amounts in
millions)
|
(Unaudited)
|
|
|
Q4 2017 Outlook
(1)
|
|
Low
|
|
Midpoint
|
|
High
|
Net Income
(2)(3)
|
$
|
74
|
|
|
$
|
82
|
|
|
$
|
90
|
|
Interest expense, net
of interest income
|
49
|
|
|
49
|
|
|
49
|
|
Depreciation and
amortization
|
135
|
|
|
137
|
|
|
141
|
|
Income from
unconsolidated affiliate investments
|
(4)
|
|
|
(4)
|
|
|
(5)
|
|
Distribution from
unconsolidated affiliate investments
|
2
|
|
|
3
|
|
|
3
|
|
Unit-based
compensation
|
9
|
|
|
9
|
|
|
9
|
|
Income taxes
(3)
|
(24)
|
|
|
(24)
|
|
|
(24)
|
|
Payments under
onerous performance obligation offset to other current and
long-term liabilities
|
(5)
|
|
|
(5)
|
|
|
(5)
|
|
Other (4)
|
2
|
|
|
2
|
|
|
2
|
|
Adjusted EBITDA
before non-controlling interest
|
$
|
238
|
|
|
$
|
249
|
|
|
$
|
260
|
|
Non-controlling
interest share of adjusted EBITDA (5)
|
(13)
|
|
|
(14)
|
|
|
(15)
|
|
Adjusted EBITDA, net
to EnLink Midstream Partners, LP
|
$
|
225
|
|
|
$
|
235
|
|
|
$
|
245
|
|
|
|
(1)
|
The forward-looking
net income guidance excludes the potential impacts 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.
|
|
|
|
EnLink Midstream does
not provide a reconciliation of forward-looking Net Cash Provided
by Operating Activities to adjusted EBITDA because the companies
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.
|
|
|
(2)
|
Net income includes
estimated net income attributable to ENLK's non-controlling
interest in (i) ENLC's 16.1% share of net income from EnLink
Oklahoma T.O., (ii) NGP's 49.9% share of net income from the
Delaware Basin JV, and (iii) Marathon Petroleum's 50% share of net
income from the Ascension JV.
|
|
|
(3)
|
Amounts include a $25
million deferred tax benefit due to federal tax rate reductions
from the tax legislation enacted in December 2017, which was not
reflected in the previously disclosed Q4 2017 Outlook.
|
|
|
(4)
|
Includes non-cash
rent, which relates to lease incentives pro-rated over the lease
term, gains and losses on settled interest rate swaps designated as
hedges related to debt issuances, which are recorded in other
comprehensive income (loss), and reimbursed employee costs from
Devon and LPC, which are costs reimbursed to us by previous
employers pursuant to acquisition or merger.
|
|
|
(5)
|
Non-controlling
interest share of adjusted EBITDA includes ENLC's 16.1% share of
adjusted EBITDA from EnLink Oklahoma T.O., NGP's 49.9% share of
adjusted EBITDA from the Delaware Basin JV, Marathon Petroleum's
50% share of adjusted EBITDA from the Ascension JV, and other minor
non-controlling interests.
|
EnLink Midstream
Partners, LP
|
Forward-Looking
Reconciliation of Net Income to Adjusted EBITDA and Distributable
Cash Flow (1)
|
(All amounts in
millions)
|
(Unaudited)
|
|
|
2018
Outlook
|
|
Low
|
|
Midpoint
|
|
High
|
Net income
(2)
|
$
|
255
|
|
|
$
|
285
|
|
|
$
|
315
|
|
Interest expense, net
of interest income
|
175
|
|
|
179
|
|
|
183
|
|
Depreciation and
amortization
|
554
|
|
|
564
|
|
|
574
|
|
Income from
unconsolidated affiliate investments
|
(19)
|
|
|
(20)
|
|
|
(21)
|
|
Distribution from
unconsolidated affiliate investments
|
16
|
|
|
17
|
|
|
18
|
|
Unit-based
compensation
|
42
|
|
|
37
|
|
|
32
|
|
Income
taxes
|
4
|
|
|
5
|
|
|
6
|
|
Payments under
onerous performance obligation offset to other current and
long-term liabilities
|
(18)
|
|
|
(18)
|
|
|
(18)
|
|
Adjusted EBITDA
before non-controlling interest
|
$
|
1,009
|
|
|
$
|
1,049
|
|
|
$
|
1,089
|
|
Non-controlling
interest share of adjusted EBITDA (3)
|
(59)
|
|
|
(64)
|
|
|
(69)
|
|
Adjusted EBITDA, net
to EnLink Midstream Partners, LP
|
$
|
950
|
|
|
$
|
985
|
|
|
$
|
1,020
|
|
Interest expense, net
of interest income
|
(175)
|
|
|
(179)
|
|
|
(183)
|
|
Preferred unit
accrued cash distributions
|
(89)
|
|
|
(89)
|
|
|
(89)
|
|
Current taxes and
other
|
(1)
|
|
|
(5)
|
|
|
(8)
|
|
Maintenance capital
expenditures, net to EnLink Midstream Partners, LP
|
(55)
|
|
|
(57)
|
|
|
(60)
|
|
Distributable cash
flow
|
$
|
630
|
|
|
$
|
655
|
|
|
$
|
680
|
|
|
|
(1)
|
The forecasted net
income guidance for the year ended December 31, 2018 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.
|
|
|
|
EnLink Midstream does
not provide a reconciliation of forward-looking Net Cash Provided
by Operating Activities to Adjusted EBITDA because the companies
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.
|
|
|
(2)
|
Net income includes
estimated net income attributable to ENLK's non-controlling
interest in ENLC's 16.1% share of net income from EnLink Oklahoma
T.O., NGP Natural Resources XI, L.P.'s ("NGP") 49.9% share of net
income from the Delaware Basin JV and Marathon Petroleum's 50%
share of net income from the Ascension JV.
|
|
|
(3)
|
Non-controlling
interest share of adjusted EBITDA includes ENLC's 16.1% share of
adjusted EBITDA from EnLink Oklahoma T.O., NGP's 49.9% share of
adjusted EBITDA from the Delaware Basin JV, Marathon Petroleum's
50% share of adjusted EBITDA from the Ascension JV, and other minor
non-controlling interests.
|
EnLink Midstream,
LLC
|
Forward-Looking
Reconciliation of Net Income of ENLC to ENLC Cash Available for
Distribution (1)
|
(All amounts in
millions)
|
(Unaudited)
|
|
|
2018
Outlook
|
|
Low
|
|
Midpoint
|
|
High
|
Net income of ENLC
(2)
|
$
|
233
|
|
|
$
|
262
|
|
|
$
|
291
|
|
Less: Net income
attributable to ENLK (3)
|
(225)
|
|
|
(250)
|
|
|
(275)
|
|
Net income of ENLC
excluding ENLK
|
$
|
8
|
|
|
$
|
12
|
|
|
$
|
16
|
|
ENLC's share of
distributions from ENLK (4)
|
201
|
|
|
201
|
|
|
201
|
|
ENLC's interest in
EnLink Oklahoma T.O. depreciation
|
19
|
|
|
19
|
|
|
19
|
|
Non-controlling
interest share of ENLK's net income (5)
|
(11)
|
|
|
(11)
|
|
|
(11)
|
|
ENLC deferred income
tax expense (6)
|
14
|
|
|
15
|
|
|
16
|
|
Maintenance capital
expenditures (7)
|
(1)
|
|
|
(1)
|
|
|
(1)
|
|
ENLC cash available
for distribution
|
$
|
230
|
|
|
$
|
235
|
|
|
$
|
240
|
|
|
|
(1)
|
The forecasted net
income guidance for the year ended December 31, 2018 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)
|
Net income
attributable to ENLK is net of the estimated non-controlling
interest share attributable to the Delaware Basin JV, Ascension JV
and EnLink Oklahoma T.O.
|
|
|
(4)
|
Represents quarterly
distributions estimated to be paid to ENLC by ENLK for
2018.
|
|
|
(5)
|
Represents estimated
net income for NGP's 49.9% share of the Delaware Basin JV, Marathon
Petroleum's 50% share of the Ascension JV and other minor
non-controlling interests.
|
|
|
(6)
|
Represents ENLC's
estimated stand-alone deferred taxes for 2018.
|
|
|
(7)
|
Represents estimated
2018 maintenance capital expenditures attributable to ENLC's share
of EnLink Oklahoma T.O.
|
Investor Relations: Kate
Walsh, Vice President of Investor Relations, 214-721-9696,
kate.walsh@enlink.com
Media Relations: Jill
McMillan, Vice President of Public & Industry
Affairs, 214-721-9271, jill.mcmillan@enlink.com
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