Delaware | 1-36413 | 72-1252419 |
(State or other jurisdiction | (Commission | (IRS Employer |
of incorporation) | File Number) | Identification No.) |
One Leadership Square | ||
211 North Robinson Avenue | ||
Suite 150 | ||
Oklahoma City, Oklahoma 73102 | ||
(Address of principal executive offices) | ||
(Zip Code) | ||
Registrant's telephone number, including area code: (405) 525-7788 |
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
(d) Exhibits | ||
Exhibit Number | Description | |
99.1 | Press release issued by Enable Midstream Partners, LP dated August 3, 2016. |
Enable Midstream Partners, LP | |
By: | Enable GP, LLC, |
its general partner | |
By: | /s/ Tom Levescy |
Tom Levescy | |
Senior Vice President, Chief Accounting Officer and Controller |
Contacts: | Media | Investor | |
Brian Alford | Matt Beasley | ||
(405) 553-6984 | (405) 558-4600 |
• | Significant rig activity continues across Enable’s footprint with 29 rigs drilling wells contractually dedicated to Enable’s gas gathering and processing systems |
• | Bradley II Plant was placed in service which doubles the processing capacity at the Bradley Processing Complex and supports growing Anadarko basin processed volumes |
• | Announced a quarterly cash distribution of $0.318 per unit on all outstanding common and subordinated units and a quarterly cash distribution of $0.625 per unit on all outstanding Series A Preferred Units |
• | Reaffirmed the partnership’s previously provided 2016 outlook |
• | Gathering and processing segment revenues were $387 million for second quarter 2016, a decrease of $35 million compared to $422 million for second quarter 2015. The decrease in gathering and processing segment revenues was primarily due lower gathered volumes, lower natural gas prices and losses attributable to changes in the fair value of condensate and NGL derivatives. |
• | Transportation and storage segment revenues were $225 million for second quarter 2016, a decrease of $43 million compared to $268 million for second quarter 2015. The decrease in transportation and storage segment revenues was primarily due to losses attributable to changes in the fair value of natural gas derivatives and lower natural gas sales associated with lower sales volumes and lower average sales price. |
• | Gathering and processing segment gross margin was $156 million for second quarter 2016, a decrease of $25 million compared to $181 million for second quarter 2015. The decrease in gathering and processing segment margin was primarily related to losses attributable to changes in fair value of condensate and NGL derivatives, lower processed volumes and lower NGL prices. These decreases were partially offset by higher processed volumes in the Anadarko basin and higher crude oil gathered volumes in the Williston basin. |
• | Transportation and storage segment gross margin was $119 million for second quarter 2016, a decrease of $14 million compared to $133 million for second quarter 2015. The decrease in transportation and storage segment gross margin was primarily related to losses attributable to changes in the fair value of natural gas derivatives and lower firm transportation revenues. These decreases were partially offset by an increase in gains on system optimization activities and higher margin on transportation services for local distribution companies. |
$ in millions, except volume numbers | 2016 Outlook |
Natural Gas Gathered Volumes (TBtu/d) | 3.1 – 3.5 |
Natural Gas Processed Volumes (TBtu/d) | 1.9 – 2.1 |
Crude Oil – Gathered Volumes (MBbl/d) | 26.0 – 30.0 |
Net Income Attributable to Common and Subordinated Unit Holders | $240 – $310 |
Interest Expense (GAAP) | $100 – $110 |
Adjusted EBITDA | $780 – $840 |
Preferred Equity Distributions(1) | $32 |
Adjusted Interest Expense | $110 – $120 |
Maintenance Capital | $105 – $125 |
Distributable Cash Flow | $535 – $565 |
Distribution Coverage Ratio | 1.0x or greater |
1. | Outlook includes fourth quarter 2016 distribution that will be paid in first quarter 2017 |
• | Approximately $300 million for gathering pipeline, compression and related capital |
• | Approximately $50 million for processing plants |
• | Approximately $25 million for transportation and storage projects, including an EGT expansion project |
• | Enable’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports as soon as reasonably practicable after Enable electronically files that material with or furnish it to the SEC; |
• | press releases on quarterly distributions, quarterly earnings, and other developments; |
• | governance information, including Enable’s governance guidelines, committee charters, and code of ethics and business conduct; |
• | information on events and presentations, including an archive of available calls, webcasts, and presentations; |
• | news and other announcements that Enable may post from time to time that investors may find useful or interesting; and |
• | opportunities to sign up for email alerts and RSS feeds to have information pushed in real time. |
• | 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. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(In millions, except per unit data) | |||||||||||||||
Revenues (including revenues from affiliates): | |||||||||||||||
Product sales | $ | 266 | $ | 335 | $ | 511 | $ | 686 | |||||||
Service revenue | 263 | 255 | 527 | 520 | |||||||||||
Total Revenues | 529 | 590 | 1,038 | 1,206 | |||||||||||
Cost and Expenses (including expenses from affiliates): | |||||||||||||||
Cost of natural gas and natural gas liquids (excluding depreciation and amortization shown separately) | 254 | 277 | 449 | 569 | |||||||||||
Operation and maintenance | 93 | 108 | 188 | 212 | |||||||||||
General and Administrative | 27 | 23 | 47 | 49 | |||||||||||
Depreciation and amortization | 83 | 76 | 164 | 149 | |||||||||||
Taxes other than income taxes | 15 | 13 | 30 | 30 | |||||||||||
Total Cost and Expenses | 472 | 497 | 878 | 1,009 | |||||||||||
Operating Income | 57 | 93 | 160 | 197 | |||||||||||
Other Income (Expense): | |||||||||||||||
Interest expense (including expenses from affiliates) | (25 | ) | (23 | ) | (48 | ) | (43 | ) | |||||||
Equity in earnings of equity method affiliates | 7 | 7 | 14 | 14 | |||||||||||
Other, net | — | 1 | — | 2 | |||||||||||
Total Other Income (Expense) | (18 | ) | (15 | ) | (34 | ) | (27 | ) | |||||||
Income Before Income Taxes | 39 | 78 | 126 | 170 | |||||||||||
Income tax expense | — | 1 | 1 | 2 | |||||||||||
Net Income | $ | 39 | $ | 77 | $ | 125 | $ | 168 | |||||||
Less: Net income attributable to noncontrolling interest | — | — | — | — | |||||||||||
Net Income attributable to limited partners | $ | 39 | $ | 77 | $ | 125 | $ | 168 | |||||||
Less: Series A Preferred Unit distributions | 4 | — | 4 | — | |||||||||||
Net Income attributable to common and subordinated units | $ | 35 | $ | 77 | $ | 121 | $ | 168 | |||||||
Basic earnings per unit | |||||||||||||||
Common units | $ | 0.08 | $ | 0.18 | $ | 0.29 | $ | 0.40 | |||||||
Subordinated units | $ | 0.08 | $ | 0.18 | $ | 0.29 | $ | 0.40 | |||||||
Diluted earnings per unit | |||||||||||||||
Common units | $ | 0.08 | $ | 0.18 | $ | 0.28 | $ | 0.40 | |||||||
Subordinated units | $ | 0.08 | $ | 0.18 | $ | 0.29 | $ | 0.40 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(In millions) | |||||||||||||||
Reconciliation of Gross Margin to Revenues: | |||||||||||||||
Consolidated | |||||||||||||||
Revenues | $ | 529 | $ | 590 | $ | 1,038 | $ | 1,206 | |||||||
Cost of natural gas and natural gas liquids (excluding depreciation and amortization) | 254 | 277 | 449 | 569 | |||||||||||
Gross margin | $ | 275 | $ | 313 | $ | 589 | $ | 637 | |||||||
Reportable Segments | |||||||||||||||
Gathering and Processing | |||||||||||||||
Revenues | $ | 387 | $ | 422 | $ | 720 | $ | 823 | |||||||
Cost of natural gas and natural gas liquids (excluding depreciation and amortization) | 231 | 241 | 396 | 463 | |||||||||||
Gross margin | $ | 156 | $ | 181 | $ | 324 | $ | 360 | |||||||
Transportation and Storage | |||||||||||||||
Revenues | $ | 225 | $ | 268 | $ | 471 | $ | 576 | |||||||
Cost of natural gas and natural gas liquids (excluding depreciation and amortization) | 106 | 135 | 205 | 298 | |||||||||||
Gross margin | $ | 119 | $ | 133 | $ | 266 | $ | 278 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(In millions, except distribution coverage ratio) | |||||||||||||||
Reconciliation of Adjusted EBITDA and distributable cash flow to net income attributable to limited partners and calculation of distribution coverage ratio: | |||||||||||||||
Net income attributable to limited partners | $ | 39 | $ | 77 | $ | 125 | $ | 168 | |||||||
Add: | |||||||||||||||
Depreciation and amortization expense | 83 | 76 | 164 | 149 | |||||||||||
Interest expense, net of interest income | 25 | 23 | 48 | 43 | |||||||||||
Income tax expense | — | 1 | 1 | 2 | |||||||||||
EBITDA | $ | 147 | $ | 177 | $ | 338 | $ | 362 | |||||||
Add: | |||||||||||||||
Distributions from equity method affiliates(1) | 7 | 15 | 27 | 27 | |||||||||||
Non-cash equity based compensation | 3 | 3 | 5 | 6 | |||||||||||
Other non-cash losses(2) | 46 | 12 | 58 | 26 | |||||||||||
Less: | |||||||||||||||
Other non-cash gains(3) | — | — | (3 | ) | — | ||||||||||
Equity in earnings of equity method affiliates | (7 | ) | (7 | ) | (14 | ) | (14 | ) | |||||||
Adjusted EBITDA | $ | 196 | $ | 200 | $ | 411 | $ | 407 | |||||||
Less: | |||||||||||||||
Series A Preferred Unit distributions(4) | (9 | ) | — | (13 | ) | — | |||||||||
Adjusted interest expense(5) | (26 | ) | (28 | ) | (49 | ) | (50 | ) | |||||||
Maintenance capital expenditures | (17 | ) | (33 | ) | (30 | ) | (72 | ) | |||||||
Current income taxes | — | — | (1 | ) | (1 | ) | |||||||||
Distributable cash flow | $ | 144 | $ | 139 | $ | 318 | $ | 284 | |||||||
Distributions related to common and subordinated unitholders(6) | $ | 134 | $ | 132 | $ | 268 | $ | 266 | |||||||
Distribution coverage ratio | 1.07 | 1.05 | 1.18 | 1.07 |
(1) | Distributions from equity method affiliates includes a $7 million and $7 million return on investment and a zero and $8 million return of investment for the three months ended June 30, 2016 and 2015, respectively. Distributions from equity method affiliates includes a $14 million and $19 million return on investment and a $13 million and $8 million return of investment for the six months ended June 30, 2016 and 2015, respectively. Equity in earnings of equity method affiliates, net of distributions only includes those distributions representing a return on investment. |
(2) | Other non-cash losses includes changes in the fair value of derivatives, lower of cost or net realizable value adjustments, loss on sale of assets, and write-downs of materials and supplies. |
(3) | Other non-cash gains include lower of the cost or net realizable value adjustment recoveries upon the sale of the related inventory. |
(4) | This amount represents the quarterly cash distributions on the Series A Preferred Units declared for the three and six months ended June 30, 2016. In accordance with the Partnership Agreement, the Series A Preferred Unit distributions are deemed to have been paid out of available cash with respect to the quarter immediately preceding the quarter in which the distribution is made. |
(5) | See below for a reconciliation of Adjusted interest expense to Interest expense. |
(6) | Represents cash distributions declared for common and subordinated units outstanding as of each respective period. Amounts for 2016 reflect estimated cash distributions for common and subordinated units outstanding for the quarter ended June 30, 2016. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(In millions) | |||||||||||||||
Reconciliation of Adjusted EBITDA to net cash provided by operating activities: | |||||||||||||||
Net cash provided by operating activities | $ | 172 | $ | 96 | $ | 289 | $ | 284 | |||||||
Interest expense, net of interest income | 25 | 23 | 48 | 43 | |||||||||||
Income tax expense | — | 1 | 1 | 2 | |||||||||||
Deferred income tax expense | — | (1 | ) | — | (1 | ) | |||||||||
Equity in earnings of equity method affiliates, net of distributions(1) | — | (8 | ) | — | (13 | ) | |||||||||
Non-cash equity based compensation | (3 | ) | (3 | ) | (5 | ) | (6 | ) | |||||||
Other non-cash items | (6 | ) | 6 | (6 | ) | 7 | |||||||||
Changes in operating working capital which (provided) used cash: | |||||||||||||||
Accounts receivable | 2 | (2 | ) | (22 | ) | (2 | ) | ||||||||
Accounts payable | (3 | ) | 61 | 84 | 70 | ||||||||||
Other, including changes in noncurrent assets and liabilities | (40 | ) | 4 | (51 | ) | (22 | ) | ||||||||
EBITDA | $ | 147 | $ | 177 | $ | 338 | $ | 362 | |||||||
Add: | |||||||||||||||
Non-cash equity based compensation | 3 | 3 | 5 | 6 | |||||||||||
Distributions from equity method affiliates(1) | 7 | 15 | 27 | 27 | |||||||||||
Other non-cash losses(2) | 46 | 12 | 58 | 26 | |||||||||||
Less: | |||||||||||||||
Other non-cash gains(3) | — | — | (3 | ) | — | ||||||||||
Equity in earnings of equity method affiliates | (7 | ) | (7 | ) | (14 | ) | (14 | ) | |||||||
Adjusted EBITDA | $ | 196 | $ | 200 | $ | 411 | $ | 407 |
(1) | Distributions from equity method affiliates includes a $7 million and $7 million return on investment and a zero and $8 million return of investment for the three months ended June 30, 2016 and 2015, respectively. Distributions from equity method affiliates includes a $14 million and $19 million return on investment and a $13 million and $8 million return of investment for the six months ended June 30, 2016 and 2015, respectively. Equity in earnings of equity method affiliates, net of distributions only includes those distributions representing a return on investment. |
(2) | Other non-cash losses includes changes in the fair value of derivatives, lower of cost or net realizable value adjustments, loss on sale of assets, and write-downs of materials and supplies. |
(3) | Other non-cash gains include lower of the cost or net realizable value adjustment recoveries upon the sale of the related inventory. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(In millions) | |||||||||||||||
Reconciliation of Adjusted interest expense to Interest expense: | |||||||||||||||
Interest Expense | $ | 25 | $ | 23 | $ | 48 | $ | 43 | |||||||
Add: | |||||||||||||||
Amortization of premium on long-term debt | 1 | 1 | 3 | 2 | |||||||||||
Capitalized interest on expansion capital | 1 | 3 | 1 | 6 | |||||||||||
Less: | |||||||||||||||
Amortization of debt costs | (1 | ) | 1 | (3 | ) | (1 | ) | ||||||||
Adjusted interest expense | $ | 26 | $ | 28 | $ | 49 | $ | 50 |
2016 Outlook | ||
(In millions) | ||
Reconciliation of Adjusted EBITDA and distributable cash flow to net income attributable to limited partners: | ||
Net income attributable to common and subordinated units | $240 - $310 | |
Add: | ||
Series A Preferred Unit distributions | 22 | |
Net income attributable to limited partners | $262 - $332 | |
Add: | ||
Depreciation and amortization expense | 330 - 340 | |
Interest expense, net of interest income | 100 - 110 | |
Income tax expense | 0 - 5 | |
EBITDA | $692 - $787 | |
Add: | ||
Distributions from equity method affiliates | 40 - 45 | |
Non-cash equity based compensation | 5 - 10 | |
Other non-cash losses(1) | 30 - 60 | |
Less: | ||
Other non-cash gains(2) | — | |
Equity in earnings of equity method affiliates | (25 - 30) | |
Adjusted EBITDA | $780 - $840 | |
Less: | ||
Series A Preferred Unit distributions(3) | 32 | |
Adjusted interest expense | 110 - 120 | |
Maintenance capital expenditures | 105 - 125 | |
Current income taxes | — | |
Distributable cash flow | $535 - $565 |
(1) | Other non-cash losses includes changes in the fair value of derivatives, lower of cost or net realizable value adjustments, loss on sale of assets, and write-downs of materials and supplies. |
(2) | Other non-cash gains include lower of the cost or net realizable value adjustment recoveries upon the sale of the related inventory. |
(3) | Outlook includes the fourth quarter 2016 distribution that will be paid in first quarter 2017 |
2016 Outlook | ||
(In millions) | ||
Reconciliation of Adjusted interest expense to Interest expense: | ||
Interest Expense | $100 - $110 | |
Add: | ||
Amortization of premium on long-term debt | 6 | |
Capitalized interest on expansion capital | 0 - 10 | |
Less: | ||
Amortization of debt costs | (0 - 5) | |
Adjusted interest expense | $110 - $120 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||
Operating Data: | |||||||||||
Gathered volumes—TBtu | 282 | 291 | 560 | 577 | |||||||
Gathered volumes—TBtu/d | 3.10 | 3.19 | 3.07 | 3.19 | |||||||
Natural gas processed volumes—TBtu | 161 | 167 | 323 | 318 | |||||||
Natural gas processed volumes—TBtu/d | 1.76 | 1.84 | 1.78 | 1.76 | |||||||
NGLs produced—MBbl/d(1) | 83.09 | 74.19 | 78.36 | 69.56 | |||||||
NGLs sold—MBbl/d(1)(2) | 83.80 | 75.91 | 80.15 | 71.68 | |||||||
Condensate sold—MBbl/d | 6.08 | 5.43 | 6.26 | 5.70 | |||||||
Crude Oil - Gathered volumes—MBbl/d | 25.52 | 9.00 | 27.18 | 7.87 | |||||||
Transported volumes—TBtu | 446 | 456 | 911 | 970 | |||||||
Transportation volumes—TBtu/d | 4.87 | 4.97 | 4.99 | 5.34 | |||||||
Interstate firm contracted capacity—Bcf/d | 6.95 | 7.22 | 7.06 | 7.52 | |||||||
Intrastate average deliveries—TBtu/d | 1.72 | 1.83 | 1.70 | 1.83 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||
Anadarko | |||||||||||
Gathered volumes—TBtu/d | 1.62 | 1.63 | 1.62 | 1.55 | |||||||
Natural gas processed volumes—TBtu/d | 1.44 | 1.41 | 1.43 | 1.33 | |||||||
NGLs produced—MBbl/d(1) | 69.64 | 58.63 | 64.17 | 53.60 | |||||||
Arkoma | |||||||||||
Gathered volumes—TBtu/d | 0.65 | 0.67 | 0.63 | 0.70 | |||||||
Natural gas processed volumes—TBtu/d | 0.10 | 0.11 | 0.10 | 0.11 | |||||||
NGLs produced—MBbl/d(1) | 5.03 | 4.96 | 5.01 | 4.96 | |||||||
Ark-La-Tex | |||||||||||
Gathered volumes—TBtu/d | 0.83 | 0.89 | 0.82 | 0.94 | |||||||
Natural gas processed volumes—TBtu/d | 0.22 | 0.32 | 0.25 | 0.32 | |||||||
NGLs produced—MBbl/d(1) | 8.42 | 10.60 | 9.18 | 11.00 |
(1) | Excludes condensate. |
(2) | NGLs sold includes volumes of NGLs withdrawn from inventory or purchased for system balancing purposes. |
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