Enable Midstream Partners, LP (NYSE: ENBL) (the "Partnership”) today
announced financial results for third quarter 2014. Net income
attributable to the Partnership was $139 million for third quarter 2014,
an increase of $35 million, or 34 percent, compared to $104 million for
third quarter 2013.
Adjusted EBITDA for third quarter 2014 was $231 million, an increase of
$26 million, or 13 percent, compared to $205 million for third quarter
2013.
Distributable cash flow (DCF) for third quarter 2014 was $161 million,
an increase of $27 million, or 20 percent, compared to $134 million for
third quarter 2013.
MANAGEMENT PERSPECTIVE
“During the third quarter, we continued to execute on our growth plans,”
said Lynn Bourdon, the Partnership’s CEO. “We added significant
gathering infrastructure in the SCOOP and approved the construction of a
new processing plant that will bring our total Anadarko processing
capacity to over 1.8 billion cubic feet per day. We also added new
producer acreage dedications in the SCOOP and extended contracts with
Laclede, an 85-year customer of Enable Mississippi River Transmission
(MRT).”
PARTNERSHIP INCREASES QUARTERLY DISTRIBUTION
On Oct. 24, 2014, the board of directors of the Partnership’s general
partner declared a quarterly cash distribution of $0.3025 per unit on
all outstanding common and subordinated units for the quarter ended
Sept. 30, 2014. The distribution represents an increase of approximately
2.5 percent over the prior quarter distribution on a full-quarter basis
and will be paid Nov. 14, 2014, to unitholders of record at the close of
business on Nov. 4, 2014.
BUSINESS HIGHLIGHTS
Producers remain active within and near the Partnership’s footprint.
Based on rig estimates from Drillinginfo, as of October 21, 2014,
more than 400 rigs were active in the counties in which the Partnership
operates or has announced plans to operate. The Partnership also
continues to contract additional acreage dedications in the South
Central Oklahoma Oil Province (SCOOP), with SCOOP-area acreage
dedications now totaling approximately 1.1 million gross acres.
To accommodate increased rich gas production, the Partnership continues
to invest in gathering and processing infrastructure. Through the third
quarter of 2014, the Partnership has added almost 90,000 HP of
compression in the SCOOP. The Partnership’s Bradley Plant remains on
schedule for a first quarter 2015 start-up and a recently announced new
200 MMcf/d plant remains on schedule for a fourth quarter 2015 start-up.
In the transportation and storage segment, the Partnership extended
MRT's firm transportation and storage contracts with Laclede Gas
Company, MRT’s largest customer, through 2017 and 2018 at existing
contract demand levels.
KEY OPERATING STATISTICS
Natural gas gathering volumes were 3.32 TBtu/d in the third quarter of
2014, a decrease of 5 percent compared to 3.48 TBtu/d for third quarter
2013. The decrease was due primarily to lower gathered volumes on the
Ark-La-Tex and Arkoma systems, partially offset by higher gathered
volumes on the Anadarko system reflecting increased production from the
liquids-rich SCOOP play. Much of the decrease on the Ark-La-Tex and
Arkoma systems is expected to be offset by payments under minimum volume
commitment contracts.
Natural gas processed volumes were 1.60 TBtu/d in the third quarter of
2014, an increase of 7 percent compared to 1.49 TBtu/d for third quarter
2013. The increase was primarily related to processed volume growth on
the Anadarko system, including growth from the SCOOP play.
Gross NGL production was 68.11 MBbl/d in the third quarter of 2014, an
increase of 8 percent compared to 63.16 MBbl/d for third quarter 2013.
The increase was primarily related to processed volume growth on the
Anadarko system.
Crude oil gathered volumes were 4.51 MBbl/d in the third quarter of
2014. The Partnership’s first crude gathering system started initial
operations in November 2013.
Interstate transportation firm contracted capacity was 7.50 Bcf/d in the
third quarter of 2014, a decrease of less than 1 percent compared to
7.56 Bcf/d for third quarter 2013.
Intrastate transportation average deliveries were 1.66 TBtu/d in the
third quarter of 2014, which was flat compared to 1.66 TBtu/d for third
quarter 2013.
THIRD QUARTER FINANCIAL PERFORMANCE
Gross margin was $364 million for third quarter 2014, an increase of $31
million compared to $333 million for third quarter 2013.
Gathering and processing gross margin was $222 million for third quarter
2014, an increase of $29 million compared to $193 million for third
quarter 2013. The increase in gathering and processing gross margin was
primarily a result of higher processed volumes on the Anadarko system.
Transportation and storage gross margin was $143 million for third
quarter 2014, an increase of $2 million compared to $141 million for
third quarter 2013. The increase in transportation and storage gross
margin was primarily a result of system optimization and operational
synergies offset by a decrease in storage demand fees.
Operation and maintenance expense was $128 million for third quarter
2014, an increase of $4 million compared to $124 million for third
quarter 2013. The increase was primarily due to increased payroll
expenses to support business growth offset by lower corporate service
costs.
Depreciation and amortization expense was $69 million for third quarter
2014, an increase of $2 million compared to $67 million for third
quarter 2013. The increase was primarily due to additional assets placed
into service, including the McClure Plant and the Bakken crude oil
gathering system.
Taxes other than income taxes were $14 million for third quarter 2014, a
decrease of $1 million compared to $15 million for third quarter 2013.
The decrease was primarily due to lower ad valorem tax assessments
partially offset by new assets placed into service.
Interest expense was $20 million for third quarter 2014, an increase of
$7 million compared to $13 million for third quarter 2013. The increase
was primarily due to higher interest rates associated with the $1.65
billion of senior notes issued in May 2014 compared to the interest
rates associated with the $1.3 billion in term loan facilities these
notes were used to repay.
Capital expenditures were $248 million for third quarter 2014, compared
to $197 million for third quarter 2013. Expansion capital expenditures
were $205 million for third quarter 2014, compared to $143 million for
third quarter 2013. Maintenance capital expenditures were $47 million
for third quarter 2014, compared to $54 million for third quarter 2013.
OUTLOOK
The Partnership reaffirms the previously announced adjusted EBITDA, DCF
and per-unit distribution growth outlook for 2014 and 2015. See the
Partnership’s second quarter 2014 earnings press release for other key
factors and assumptions underlying its 2014 and 2015 outlook.
The Partnership’s expectations for its 2014 expansion capital
expenditures have been updated and are shown in the table below. The
Partnership’s expectations for expansion capital expenditures for 2015
through 2017 remain unchanged from the previously announced amounts in
the Partnership’s second quarter 2014 earnings press release.
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$ in millions
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2014
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2015
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2016-2017
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Total
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Contracted Expansion(1)
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$675 - $725
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$800 - $1,000
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$700 - $1,000
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$2,175 - $2,725
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Identified Opportunities(2)
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$20 - $25
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$225 - $425
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$800 - $1,000
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$1,045 - $1,450
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Total
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$695 - $750
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$1,025 - $1,425
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$1,500 - $2,000
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$3,220 - $4,175
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1. Contracted Expansion includes gathering, compression and processing
infrastructure to support projected volume growth from current contracts
and acreage dedications, including infrastructure in the SCOOP, Bakken,
Greater Granite Wash and Cotton Valley plays
2. Identified Opportunities include:
-
Transportation and G&P projects in late-stage negotiation
-
Additional Bakken crude gathering expansions and Bakken gas gathering
and processing
-
Anadarko gas gathering and processing expansions and Anadarko crude
gathering
-
Transportation projects, including new end-user service and market
access pipeline opportunities
EARNINGS CONFERENCE CALL AND WEBCAST
A conference call discussing third quarter results is scheduled today at
9:00 a.m. Eastern. The dial-in number to access the conference call is
866-952-1908 and the conference call ID is ENBLQ314. Investors may also
listen to the call via the Partnership’s website at http://investors.enablemidstream.com/.
Replays of the conference call will be available on the Partnership’s
website.
ABOUT ENABLE MIDSTREAM PARTNERS
The Partnership owns, operates and develops strategically located
natural gas and crude oil infrastructure assets. The company’s assets
include approximately 11,000 miles of gathering pipelines, 12 major
processing plants with approximately 2.1 billion cubic feet per day of
processing capacity, approximately 7,900 miles of interstate pipelines
(including Southeast Supply Header, LLC of which the company owns 49.90
percent), approximately 2,300 miles of intrastate pipelines and eight
storage facilities comprising 86.5 billion cubic feet of storage
capacity. For more information visit EnableMidstream.com.
NON-GAAP FINANCIAL MEASURES
The Partnership has included the non-GAAP financial measures gross
margin, Adjusted EBITDA and distributable cash flow in this press
release based on information in its financial statements.
Gross margin, Adjusted EBITDA and distributable cash flow are
supplemental financial measures that management and external users of
the Partnership’s financial statements, such as industry analysts,
investors, lenders and rating agencies may use, to assess:
-
The Partnership’s operating performance as compared to those of other
publicly traded partnerships in the midstream energy industry, without
regard to capital structure or historical cost basis;
-
The ability of the Partnership’s assets to generate sufficient cash
flow to make distributions to its partners;
-
The Partnership’s ability to incur and service debt and fund capital
expenditures; and
-
The viability of acquisitions and other capital expenditure projects
and the returns on investment of various investment opportunities.
This press release includes a reconciliation of gross margin to
revenues, Adjusted EBITDA and distributable cash flow to net income
attributable to controlling interest, and Adjusted EBITDA to net cash
provided by operating activities, the most directly comparable GAAP
financial measures, on a historical basis and pro forma basis, as
applicable, for each of the periods indicated. The Partnership believes
that the presentation of gross margin, Adjusted EBITDA and distributable
cash flow provides information useful to investors in assessing its
financial condition and results of operations. Gross margin, Adjusted
EBITDA and distributable cash flow should not be considered as
alternatives to net income, operating income, revenue, cash from
operations or any other measure of financial performance or liquidity
presented in accordance with GAAP. Gross margin, Adjusted EBITDA and
distributable cash flow have important limitations as an analytical tool
because they exclude some but not all items that affect the most
directly comparable GAAP measures. Additionally, because gross margin,
Adjusted EBITDA and distributable cash flow may be defined differently
by other companies in the Partnership’s industry, its definitions of
gross margin, Adjusted EBITDA and distributable cash flow may not be
comparable to similarly titled measures of other companies, thereby
diminishing their utility.
FORWARD-LOOKING STATEMENTS
This press release may contain “forward-looking statements” within the
meaning of the securities laws. All statements, other than statements of
historical fact, regarding the Partnership’s strategy, future
operations, financial position, estimated revenues, projected costs,
prospects, plans and objectives of management are forward-looking
statements. These statements often include the words “could,” “believe,”
“anticipate,” “intend,” “estimate,” “expect,” “project,” “forecast” and
similar expressions and are intended to identify forward-looking
statements, although not all forward-looking statements contain such
identifying words. These forward-looking statements are based on the
Partnership’s current expectations and assumptions about future events
and are based on currently available information as to the outcome and
timing of future events. The Partnership assumes no obligation to and
does not intend to update any forward-looking statements included
herein. When considering forward-looking statements, you should keep in
mind the risk factors and other cautionary statements described under
the heading “Risk Factors” included in our SEC filings. The Partnership
cautions you that these forward-looking statements are subject to all of
the risks and uncertainties, most of which are difficult to predict and
many of which are beyond its control, incident to the ownership,
operation and development of natural gas and crude oil infrastructure
assets. These risks include, but are not limited to, contract renewal
risk, commodity price risk, environmental risks, operating risks,
regulatory changes and the other risks described under “Risk Factors” in
our SEC filings. Should one or more of these risks or uncertainties
occur, or should underlying assumptions prove incorrect, the
Partnership’s actual results and plans could differ materially from
those expressed in any forward-looking statements.
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Enable Midstream Partners, LP
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Condensed Combined and Consolidated Statements of Income
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(unaudited)
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Historical
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Three Months Ended September 30,
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Nine Months Ended September 30,
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2014
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2013
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2014
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2013
|
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(In millions)
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|
|
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|
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|
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|
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Revenues
|
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$
|
803
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|
|
|
$
|
792
|
|
|
|
|
$
|
2,632
|
|
|
|
$
|
1,665
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|
Cost of Goods Sold, excluding depreciation and amortization
|
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|
|
439
|
|
|
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459
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|
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1,550
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827
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|
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|
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Operating Expenses:
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Operation and maintenance
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128
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124
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383
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|
|
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302
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Depreciation and amortization
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|
|
69
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|
|
|
|
67
|
|
|
|
|
|
205
|
|
|
|
|
148
|
|
|
|
Impairment
|
|
|
|
1
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|
|
|
|
12
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|
|
|
|
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1
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|
|
|
12
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Taxes other than income taxes
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|
|
14
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|
|
|
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15
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|
|
|
|
41
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|
|
|
|
37
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|
|
|
|
Total Operating Expenses
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|
|
212
|
|
|
|
|
218
|
|
|
|
|
|
630
|
|
|
|
|
499
|
|
|
Operating Income
|
|
|
|
152
|
|
|
|
|
115
|
|
|
|
|
|
452
|
|
|
|
|
339
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|
|
|
|
|
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Other Income (Expense):
|
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|
|
|
|
|
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|
|
|
|
|
|
|
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Interest expense
|
|
|
|
(20
|
)
|
|
|
|
(13
|
)
|
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|
|
|
(50
|
)
|
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|
|
(53
|
)
|
|
|
Equity in earnings of equity method affiliates
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5
|
|
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|
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3
|
|
|
|
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12
|
|
|
|
|
12
|
|
|
|
Interest income - affiliated companies
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-
|
|
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|
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1
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|
|
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-
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9
|
|
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Other, net
|
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3
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|
|
|
|
-
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(2
|
)
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-
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Total Other Income (Expense)
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(12
|
)
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(9
|
)
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(40
|
)
|
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|
|
(32
|
)
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|
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|
|
|
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Income Before Income Taxes
|
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|
|
140
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|
|
|
|
106
|
|
|
|
|
|
412
|
|
|
|
|
307
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|
|
|
Income tax expense (benefit)
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
|
2
|
|
|
|
|
(1,195
|
)
|
|
Net Income
|
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$
|
139
|
|
|
|
$
|
105
|
|
|
|
|
|
410
|
|
|
|
|
1,502
|
|
|
|
Less: Net income attributable to noncontrolling interest
|
|
|
|
-
|
|
|
|
|
1
|
|
|
|
|
|
2
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income attributable to Enable Midstream Partners, LP
|
|
|
$
|
139
|
|
|
|
$
|
104
|
|
|
|
|
$
|
408
|
|
|
|
$
|
1,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
Enable Midstream Partners, LP
|
|
Non-GAAP Financial Measures
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|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
|
|
2013
|
|
|
|
|
|
|
2014
|
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
(In millions)
|
|
Reconciliation of gross margin to revenues:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
$
|
803
|
|
|
|
|
$
|
792
|
|
|
|
|
|
$
|
2,632
|
|
|
|
$
|
1,665
|
|
|
|
Cost of Goods Sold, excluding depreciation and amortization
|
|
|
|
439
|
|
|
|
|
|
459
|
|
|
|
|
|
|
1,550
|
|
|
|
|
827
|
|
|
|
Gross margin
|
|
|
|
$
|
364
|
|
|
|
|
$
|
333
|
|
|
|
|
|
$
|
1,082
|
|
|
|
$
|
838
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA and distributable cash flow
to net income attributable to controlling interest:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Enable Midstream Partners, LP
|
|
|
$
|
139
|
|
|
|
|
$
|
104
|
|
|
|
|
|
$
|
408
|
|
|
|
$
|
1,500
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense
|
|
|
|
69
|
|
|
|
|
|
67
|
|
|
|
|
|
|
205
|
|
|
|
|
148
|
|
|
|
Interest expense, net of interest income
|
|
|
|
20
|
|
|
|
|
|
12
|
|
|
|
|
|
|
50
|
|
|
|
|
44
|
|
|
|
Income tax expense
|
|
|
|
1
|
|
|
|
|
|
1
|
|
|
|
|
|
|
2
|
|
|
|
|
(1,195
|
)
|
|
|
EBITDA
|
|
|
|
|
$
|
229
|
|
|
|
|
$
|
184
|
|
|
|
|
|
$
|
665
|
|
|
|
$
|
497
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on extinquishment of debt
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
|
4
|
|
|
|
|
-
|
|
|
|
Distributions from equity method affiliates (1)
|
|
|
|
7
|
|
|
|
|
|
3
|
|
|
|
|
|
|
13
|
|
|
|
|
20
|
|
|
|
Other non-cash losses
|
|
|
|
8
|
|
|
|
|
|
9
|
|
|
|
|
|
|
8
|
|
|
|
|
12
|
|
|
|
Impairment
|
|
|
|
|
1
|
|
|
|
|
|
12
|
|
|
|
|
|
|
1
|
|
|
|
|
12
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-cash gains
|
|
|
|
(9
|
)
|
|
|
|
|
-
|
|
|
|
|
|
|
(9
|
)
|
|
|
|
-
|
|
|
|
Equity in earnings of equity method affiliates
|
|
|
|
(5
|
)
|
|
|
|
|
(3
|
)
|
|
|
|
|
|
(12
|
)
|
|
|
|
(12
|
)
|
|
|
Adjusted EBITDA
|
|
|
|
$
|
231
|
|
|
|
|
$
|
205
|
|
|
|
|
|
$
|
670
|
|
|
|
$
|
529
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted interest expense, net (2)
|
|
|
|
(23
|
)
|
|
|
|
|
(17
|
)
|
|
|
|
|
|
(60
|
)
|
|
|
|
(51
|
)
|
|
|
Maintenance capital expenditures
|
|
|
|
(47
|
)
|
|
|
|
|
(54
|
)
|
|
|
|
|
|
(107
|
)
|
|
|
|
(117
|
)
|
|
|
Distributable cash flow
|
|
|
$
|
161
|
|
|
|
|
$
|
134
|
|
|
|
|
|
$
|
503
|
|
|
|
$
|
361
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes $198 million in special distributions for the return
of investment in SESH for the nine month period ended September
30, 2014.
|
|
|
(2) Adjusted interest expense, net excludes the effect of the
amortization of the premium on Enogex's fixed rate senior notes.
|
|
|
This exclusion is the primary reason for the difference between
"Interest expense, net" and "Adjusted interest expense, net."
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enable Midstream Partners, LP
|
|
Non-GAAP Financial Measures (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
|
|
|
(In millions)
|
|
Reconciliation of Adjusted EBITDA to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
$
|
269
|
|
|
$
|
184
|
|
|
|
|
$
|
561
|
|
|
$
|
472
|
|
|
|
Interest expense, net of interest income
|
|
|
|
20
|
|
|
|
12
|
|
|
|
|
|
50
|
|
|
|
44
|
|
|
|
Net (income) loss attributable to noncontrolling interest
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
|
|
(2
|
)
|
|
|
(2
|
)
|
|
|
Income tax expense (benefit)
|
|
|
|
1
|
|
|
|
1
|
|
|
|
|
|
2
|
|
|
|
(1,195
|
)
|
|
|
Deferred income tax (expense) benefit
|
|
|
|
-
|
|
|
|
2
|
|
|
|
|
|
1
|
|
|
|
1,197
|
|
|
|
Equity in earnings of equity method affiliates (net of
distributions) (1)
|
|
|
|
(2
|
)
|
|
|
-
|
|
|
|
|
|
(1
|
)
|
|
|
(8
|
)
|
|
|
Impairment
|
|
|
|
|
(1
|
)
|
|
|
(12
|
)
|
|
|
|
|
(1
|
)
|
|
|
(12
|
)
|
|
|
Other non-cash items
|
|
|
|
(5
|
)
|
|
|
(1
|
)
|
|
|
|
|
(11
|
)
|
|
|
(2
|
)
|
|
|
Changes in operating working capital which (provided) used cash:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
(20
|
)
|
|
|
21
|
|
|
|
|
|
11
|
|
|
|
39
|
|
|
|
Accounts payable
|
|
|
|
(5
|
)
|
|
|
(19
|
)
|
|
|
|
|
96
|
|
|
|
(10
|
)
|
|
|
Other, including changes in non-current assets and liabilities
|
|
|
|
(28
|
)
|
|
|
(3
|
)
|
|
|
|
|
(41
|
)
|
|
|
(26
|
)
|
|
|
EBITDA
|
|
|
|
$
|
229
|
|
|
$
|
184
|
|
|
|
|
$
|
665
|
|
|
$
|
497
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on extinguishment of debt
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
4
|
|
|
|
-
|
|
|
|
Distributions from equity method affiliates
|
|
|
|
7
|
|
|
|
3
|
|
|
|
|
|
13
|
|
|
|
20
|
|
|
|
Impairment
|
|
|
|
1
|
|
|
|
12
|
|
|
|
|
|
1
|
|
|
|
12
|
|
|
|
Other non-cash losses
|
|
|
|
8
|
|
|
|
9
|
|
|
|
|
|
8
|
|
|
|
12
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-cash gains
|
|
|
|
(9
|
)
|
|
|
-
|
|
|
|
|
|
(9
|
)
|
|
|
-
|
|
|
|
Equity in earnings of equity method affiliates
|
|
|
|
(5
|
)
|
|
|
(3
|
)
|
|
|
|
|
(12
|
)
|
|
|
(12
|
)
|
|
|
Adjusted EBITDA
|
|
|
$
|
231
|
|
|
$
|
205
|
|
|
|
|
$
|
670
|
|
|
$
|
529
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes $198 million in special distributions for the return of
investment in SESH for the nine month period ended September 30,
2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enable Midstream Partners, LP
|
|
Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operational Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural Gas - Gathered volumes - TBtu
|
|
|
306
|
|
|
320
|
|
|
|
913
|
|
|
790
|
|
|
Natural Gas - Gathered volumes - TBtu/d
|
|
|
3.32
|
|
|
3.48
|
|
|
|
3.34
|
|
|
2.89
|
|
|
Natural gas processed volumes - TBtu
|
|
|
147
|
|
|
137
|
|
|
|
418
|
|
|
264
|
|
|
Natural gas processed volumes - TBtu/d
|
|
|
1.60
|
|
|
1.49
|
|
|
|
1.53
|
|
|
0.97
|
|
|
NGLs produced - MBbls/d(1)
|
|
|
68.11
|
|
|
63.16
|
|
|
|
67.63
|
|
|
38.92
|
|
|
NGLs sold - MBbls/d(1) (3)
|
|
|
68.87
|
|
|
63.35
|
|
|
|
69.60
|
|
|
39.17
|
|
|
Condensate sold - MBbls/d
|
|
|
3.52
|
|
|
2.26
|
|
|
|
4.31
|
|
|
1.47
|
|
|
Crude Oil - Gathered volumes - MBbl/d(2)
|
|
|
4.51
|
|
|
-
|
|
|
|
2.37
|
|
|
-
|
|
|
Transported volumes - TBtu
|
|
|
418
|
|
|
417
|
|
|
|
1,373
|
|
|
1,183
|
|
|
Transported volumes - TBtu/d
|
|
|
4.54
|
|
|
4.53
|
|
|
|
5.02
|
|
|
4.32
|
|
|
Interstate firm contracted capacity - TBtu/d
|
|
|
7.50
|
|
|
7.56
|
|
|
|
8.69
|
|
|
7.74
|
|
|
Intrastate average deliveries - TBtu/d
|
|
|
1.66
|
|
|
1.66
|
|
|
|
1.62
|
|
|
0.88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes Condensate.
|
|
|
(2) Initial operation of the system began on November 1, 2013.
|
|
|
(3) NGLs sold includes volumes of NGLs withdrawn from inventory or
purchased for system balancing purposes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enable Midstream Partners, LP
|
|
Supplemental Disclosures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain information contained in this release relates to periods
that began prior to the acquisition of Enogex LLC (Enogex) by Enable
Midstream Partners, LP. The Partnership believes that combined
historical data with Enogex, along with certain pro forma
adjustments, is relevant and meaningful, enhances the discussion of
periods presented and is useful to the reader to better understand
trends in the Partnership's operations. The pro forma adjustments,
as discussed in the footnotes below, only give effect to events that
are (1) directly attributable to the formation of the Partnership;
(2) factually supportable; and (3) expected to have a continuing
effect on the consolidated results of the Partnership.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following information is for informational purposes only and
should not be considered indicative of future results. The following
pro forma financial data was derived from the Parternship's combined
financial information, Enogex consolidated financial information and
certain adjustments described below. Further, management does not
believe that the pro forma financial data is necessarily indicative
of the financial data that would have been reported by the
Partnership had the acquisition of Enogex closed prior to the
historical period presented, future results of the Partnership, or
other transactions that resulted in the formation of the Partnership.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enable Midstream Partners, LP
|
|
Unaudited Supplemental Pro Forma Condensed Combined Statement of
Income
|
|
For the Nine Months Ended September 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enable Midstream Partners, LP
|
|
Enogex
|
|
|
Pro Forma
|
|
|
|
Enable Midstream Partners, LP
|
|
|
|
|
|
|
Historical
|
|
Historical
|
|
|
Adjustments
|
|
|
|
Pro Forma
|
|
|
|
|
|
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
$
|
1,665
|
|
|
|
$
|
630
|
|
|
|
$
|
1
|
|
A
|
|
|
$
|
2,296
|
|
|
Cost of Goods Sold, excluding depreciation and amortization
|
|
|
|
827
|
|
|
|
|
489
|
|
|
|
|
(4
|
)
|
A
|
|
|
|
1,312
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operation and maintenance
|
|
|
|
302
|
|
|
|
|
64
|
|
|
|
|
-
|
|
|
|
|
|
366
|
|
|
|
Depreciation and amortization
|
|
|
|
148
|
|
|
|
|
37
|
|
|
|
|
20
|
|
A
|
|
|
|
205
|
|
|
|
Impairment
|
|
|
|
12
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
12
|
|
|
|
Taxes other than income taxes
|
|
|
|
37
|
|
|
|
|
8
|
|
|
|
|
-
|
|
|
|
|
|
45
|
|
|
|
|
Total Operating Expenses
|
|
|
|
499
|
|
|
|
|
109
|
|
|
|
|
20
|
|
|
|
|
|
628
|
|
|
Operating Income
|
|
|
|
339
|
|
|
|
|
32
|
|
|
|
|
(15
|
)
|
|
|
|
|
356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
(53
|
)
|
|
|
|
(10
|
)
|
|
|
|
31
|
|
B
|
|
|
(35
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
B
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7
|
)
|
C
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
D
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
A
|
|
|
|
|
|
Equity in earnings of equity method affiliates
|
|
|
|
12
|
|
|
|
|
-
|
|
|
|
|
(3
|
)
|
F
|
|
|
|
9
|
|
|
|
Interest income - affiliated companies
|
|
|
|
9
|
|
|
|
|
-
|
|
|
|
|
(9
|
)
|
B
|
|
|
-
|
|
|
|
Other, net
|
|
|
|
-
|
|
|
|
|
9
|
|
|
|
|
-
|
|
|
|
|
|
9
|
|
|
|
|
Total Other Income (Expense)
|
|
|
|
(32
|
)
|
|
|
|
(1
|
)
|
|
|
|
16
|
|
|
|
|
|
(17
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Income Taxes
|
|
|
|
307
|
|
|
|
|
31
|
|
|
|
|
1
|
|
|
|
|
|
339
|
|
|
|
Income tax expense (benefit)
|
|
|
|
(1,195
|
)
|
|
|
|
-
|
|
|
|
|
1,196
|
|
E
|
|
|
1
|
|
|
Net Income
|
|
|
$
|
1,502
|
|
|
|
$
|
31
|
|
|
|
$
|
(1,195
|
)
|
|
|
|
$
|
338
|
|
|
|
Less: Net income attributable to
noncontrolling interest
|
|
|
|
2
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income attributable to Enable Midstream Partners, LP
|
|
|
$
|
1,500
|
|
|
|
$
|
31
|
|
|
|
$
|
(1,195
|
)
|
|
|
|
$
|
336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enable Midstream Partners, LP
|
|
Supplemental Disclosures (continued)
|
|
|
|
|
|
|
|
|
|
(A)
|
This adjustment reflects the acquisition of Enogex on May 1, 2013:
|
|
|
|
Revenue. The impact of removing the historical amortization
and the historical recognition of deferred revenues at May 1, 2013
results in a net increase to revenue of $1 million during the nine
months ended September 30, 2013.
|
|
|
|
|
|
|
|
Cost of Goods Sold, Excluding Depreciation and Amortization.
The impact of recognizing liabilities for loss contract at May 1,
2013 results in a reduction to cost of goods sold, excluding
depreciation and amortization, of $4 million during the nine months
ended September 30, 2013.
|
|
|
|
|
|
|
|
Depreciation and Amortization. As a result of applying
purchase accounting to the acquisition of Enogex, property, plant
and equipment and identifiable intangible assets were recorded at
their fair value, resulting in additional depreciation and
amortization expense. The impact of the step-up on depreciation
expense is $20 million during the nine months ended September 30,
2013.
|
|
|
|
|
|
|
|
Interest Expense. The pro forma impact of the amortization of
the premium, less the historical recognition of the premium,
discount and deferred charges on interest expense, net of historical
capitalized interest, is $3 million during the nine months ended
September 30, 2013.
|
|
|
|
|
|
|
|
|
|
(B)
|
Interest Expense. This adjustment reflects the settlement
on May 1, 2013 of certain notes receivable—affiliated companies
and notes payable—affiliated companies with CenterPoint Energy and
OGE Energy, historically held by the Partnership and Enogex,
respectively, by a total of $24 million during the nine months
ended September 30, 2013.
|
|
|
|
|
|
(C)
|
Interest Expense. This adjustment reflects the entrance into
the $1.05 billion Term Loan Facility on May 1, 2013: this issuance
results in an increase in interest expense of $7 million during the
nine months ended September 30, 2013.
|
|
|
|
|
|
(D)
|
Interest Expense. This adjustment reflects the entrance into
the Revolving Credit Facility on May 1, 2013: this issuance results
in an increase in interest expense of $1 million during the nine
months ended September 30, 2013.
|
|
|
|
|
|
(E)
|
Income Tax Expense. Upon conversion to a limited partnership
on May 1, 2013, the Partnership’s earnings are no longer subject to
income tax (other than Texas state margin taxes) and are taxable at
the individual partner level. The pro forma adjustment to income
taxes for the nine months ended September 30, 2013 removes $1.2
billion of historical income tax expense.
|
|
|
|
|
|
(F)
|
Equity in earnings of equity method affiliates. The 25.05%
interest in SESH distributed to CenterPoint Energy results in a pro
forma reduction to earnings of equity method affiliates of $3
million during the nine months ended September 30, 2013.
|
|
|
|
|
|
|
|
|
|
|
|
|
Enable Midstream Partners, LP
|
|
Supplemental Condensed Combined and Consolidated Statements of
Income
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
|
Historical
|
|
|
Pro Forma
|
|
|
|
|
|
|
2014
|
|
|
|
|
2013
|
|
|
|
|
|
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
$
|
2,632
|
|
|
|
$
|
2,296
|
|
|
Cost of Goods Sold, excluding depreciation and amortization
|
|
|
|
1,550
|
|
|
|
|
1,312
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
Operation and maintenance
|
|
|
|
383
|
|
|
|
|
366
|
|
|
|
Depreciation and amortization
|
|
|
|
205
|
|
|
|
|
205
|
|
|
|
Impairment
|
|
|
|
1
|
|
|
|
|
12
|
|
|
|
Taxes other than income taxes
|
|
|
|
41
|
|
|
|
|
45
|
|
|
|
Total Operating Expenses
|
|
|
|
630
|
|
|
|
|
628
|
|
|
Operating Income
|
|
|
|
452
|
|
|
|
|
356
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
(50
|
)
|
|
|
|
(35
|
)
|
|
|
Equity in earnings of equity method affiliates
|
|
|
|
12
|
|
|
|
|
9
|
|
|
|
Interest income - affiliated companies
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
Other, net
|
|
|
|
(2
|
)
|
|
|
|
9
|
|
|
|
Total Other Income (Expense)
|
|
|
|
(40
|
)
|
|
|
|
(17
|
)
|
|
|
|
|
|
|
|
|
|
|
Income Before Income Taxes
|
|
|
|
412
|
|
|
|
|
339
|
|
|
|
Income tax expense (benefit)
|
|
|
|
2
|
|
|
|
|
1
|
|
|
Net Income
|
|
|
|
410
|
|
|
|
|
338
|
|
|
|
Less: Net income attributable to noncontrolling interest
|
|
|
|
2
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
Net Income attributable to Enable Midstream Partners, LP
|
|
|
$
|
408
|
|
|
|
$
|
336
|
|
|
|
|
|
|
|
|
|
|
Enable Midstream Partners, LP
|
|
Supplemental Non-GAAP Financial Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
|
|
|
Historical
|
|
|
Pro Forma
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
(In millions)
|
|
Reconciliation of gross margin to revenues:
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
$
|
2,632
|
|
|
|
$
|
2,296
|
|
|
|
Cost of Goods Sold, excluding depreciation and amortization
|
|
|
|
1,550
|
|
|
|
|
1,312
|
|
|
|
Gross margin
|
|
|
|
|
$
|
1,082
|
|
|
|
$
|
984
|
|
|
Reconciliation of Adjusted EBITDA and distributable cash flow
to net income attributable to controlling interest:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Enable Midstream Partners, LP
|
|
|
$
|
408
|
|
|
|
$
|
336
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense
|
|
|
|
205
|
|
|
|
|
205
|
|
|
|
Interest expense, net of interest income
|
|
|
|
50
|
|
|
|
|
35
|
|
|
|
Income tax expense
|
|
|
|
2
|
|
|
|
|
1
|
|
|
|
EBITDA
|
|
|
|
|
$
|
665
|
|
|
|
$
|
577
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
Loss on extinquishment of debt
|
|
|
|
4
|
|
|
|
|
-
|
|
|
|
Distributions from equity method affiliates (1)
|
|
|
|
13
|
|
|
|
|
16
|
|
|
|
Impairment
|
|
|
|
|
1
|
|
|
|
|
12
|
|
|
|
Other non-cash losses
|
|
|
|
8
|
|
|
|
|
16
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of equity method affiliates
|
|
|
|
(12
|
)
|
|
|
|
(9
|
)
|
|
|
Other non-cash gains
|
|
|
|
(9
|
)
|
|
|
|
-
|
|
|
|
Gain on disposition
|
|
|
|
-
|
|
|
|
|
(10
|
)
|
|
|
Adjusted EBITDA
|
|
|
|
|
$
|
670
|
|
|
|
$
|
602
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
Adjusted interest expense, net (2)
|
|
|
|
(60
|
)
|
|
|
|
(44
|
)
|
|
|
Maintenance capital expenditures
|
|
|
|
(107
|
)
|
|
|
|
(127
|
)
|
|
|
Distributable cash flow
|
|
|
|
$
|
503
|
|
|
|
$
|
431
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes $198 million in special distributions for the return of
investment in SESH for the nine month period ended September 30,
2014.
|
|
|
(2) Adjusted interest expense, net excludes the effect of the
amortization of the premium on Enogex's fixed rate senior notes.
|
|
|
This exclusion is the primary reason for the difference between
"Interest expense, net" and "Adjusted interest expense, net."
|
|
|
|
|
|
|
|
|
|
|
Enable Midstream Partners, LP
|
|
Supplemental Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
|
|
Historical
|
|
Pro Forma
|
|
|
|
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
Operational Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural Gas - Gathered volumes - TBtu
|
|
913
|
|
975
|
|
|
Natural Gas - Gathered volumes - TBtu/d
|
|
3.34
|
|
3.56
|
|
|
Natural gas processed volumes - TBtu
|
|
418
|
|
392
|
|
|
Natural gas processed volumes - TBtu/d
|
|
1.53
|
|
1.43
|
|
|
NGLs produced - MBbls/d(1)
|
|
67.63
|
|
58.88
|
|
|
NGLs sold - MBbls/d(1) (3)
|
|
69.60
|
|
59.11
|
|
|
Condensate sold - MBbls/d
|
|
4.31
|
|
2.91
|
|
|
Crude Oil - Gathered volumes - MBbl/d(2)
|
|
2.37
|
|
-
|
|
|
Transported volumes - TBtu
|
|
1,373
|
|
1,378
|
|
|
Transported volumes - TBtu/d
|
|
5.02
|
|
5.04
|
|
|
Interstate firm contracted capacity - TBtu/d
|
|
8.69
|
|
7.74
|
|
|
Intrastate average deliveries - TBtu/d
|
|
1.62
|
|
1.59
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes Condensate.
|
|
|
|
|
|
|
|
(2) Initial operation of the system began on November 1, 2013.
|
|
|
|
(3) NGLs sold includes volumes of NGLs withdrawn from inventory or
purchased for system balancing purposes.
|
|
|
|
|
Copyright Business Wire 2014