DALLAS, Feb. 14,
2023 /PRNewswire/ -- EnLink Midstream, LLC (NYSE:
ENLC) (EnLink) today reported financial results for the fourth
quarter and full-year 2022 and provided 2023 financial
guidance.
Highlights
- Reported record net income of $194.2
million and $500.7 million for
the fourth quarter of 2022 and full-year 2022, respectively, and
net cash provided by operations of $223.4
million and $1.049 billion for
the fourth quarter and full-year 2022, respectively.
- Generated adjusted EBITDA, net to EnLink, of $337.2 million and $1.285
billion for the fourth quarter of 2022 and full-year 2022,
respectively. Severe winter weather throughout Texas and Oklahoma, along with unscheduled downtime
after an earthquake in the Permian, had a negative impact on
adjusted EBITDA of approximately $11
million in the fourth quarter of 2022.
- Grew full-year 2022 adjusted EBITDA 22% compared to 2021.
- Delivered $55.1 million of free
cash flow after distributions (FCFAD) for the fourth quarter of
2022, driven by strong operational results. For the third
consecutive year, EnLink generated FCFAD in excess of $300 million, with $312.4
million reported for full-year 2022.
- Increased returns to unitholders by increasing the quarterly
distribution approximately 11% to $0.125 and repurchasing $53 million in common units during the fourth
quarter, bringing total common unit repurchases for 2022 to
$200 million1.
- Repurchased $19 million par value
of Series C Preferred Units in the fourth quarter.
- Received an upgrade to investment grade from Fitch Ratings,
subsequent to the end of the quarter. EnLink is now rated BBB- with
a Stable outlook. EnLink remains rated one notch below investment
grade by Moody's Investor Services and S&P Global Ratings with
a positive outlook at S&P Global Ratings.
- Took action to hedge a large majority of exposure to natural
gas prices and Waha basis for 2023 at prices significantly above
current levels, providing increased visibility for 2023 financial
results.
- Expects continued growth in 2023 with adjusted EBITDA growth of
approximately 5% over 2022 at the midpoint of the 2023 guidance
range of $1.305 billion to
$1.405 billion.
- Expects to generate approximately $240
million in FCFAD based on the midpoint of 2023 guidance.
Included in FCFAD guidance are investments in two new projects:
Tiger II, a plant relocation to the Delaware Basin, and the restart of Gulf Coast
Fractionators in Mont Belvieu,
Texas. Both projects are expected to be in service in
2024.
____________________________
|
1
|
Includes $24.6 million
of common units repurchased from GIP pursuant to our Unit
Repurchase Agreement, which settled on February 13,
2023.
|
"EnLink achieved a record-setting 2022 with a number of
significant accomplishments, including reaching the highest annual
net income and adjusted EBITDA in EnLink's history and signing a
first-of-its-kind, definitive CO2 transportation
agreement with ExxonMobil that we expect will reduce industrial
emissions in Louisiana," EnLink
Chief Executive Officer Jesse
Arenivas said. "We are in a great place as a company with a
clear line of sight to continued growth in 2023 and beyond. We
remain focused on maintaining solid financial flexibility,
executing operational excellence initiatives, strategically growing
our base business, and seizing carbon transportation opportunities.
We entered 2023 with great momentum, and we expect it to be another
record year."
Adjusted EBITDA and FCFAD used in this press release are
non-GAAP measures and are explained in greater detail under
"Non-GAAP Financial Information" below.
Fourth Quarter and Full-Year 2022 Results
$MM, unless
noted
|
Fourth Quarter 2022
|
Full-Year
2022
|
Net Income
(1)
|
194
|
501
|
Adjusted EBITDA, net to
EnLink
|
337
|
1,285
|
Net Cash Provided by
Operating Activities
|
223
|
1,049
|
Capex, net to EnLink,
Plant Relocation Costs, & Investment
Contributions
|
137
|
422
|
Free Cash Flow After
Distributions
|
55
|
312
|
Debt to Adjusted
EBITDA, net to EnLink(2) at December 31, 2022
|
3.4x
|
Common Units
Outstanding at February 8, 2023
|
470,636,443
|
(1)
|
Net income is before
non-controlling interest.
|
(2)
|
Calculated according to
credit facility leverage covenant.
|
2023 Financial Guidance
$MM, unless
noted
|
|
2023
Guidance
|
Net Income
(1)
|
|
330 - 430
|
Adjusted EBITDA, net to
EnLink
|
|
1,305 -
1,405
|
Capex, Plant Relocation
Costs, net to EnLink, & Investment Contributions
|
|
485 - 535
|
Growth Capex & Plant
Relocation Costs, net to EnLink
|
|
350 - 380
|
Maintenance Capex, net to
EnLink
|
|
65 - 75
|
Investment
Contributions
|
|
70 - 80
|
Free Cash Flow After
Distributions
|
|
210 - 270
|
Annualized 4Q22
Declared Distribution per Common Unit
|
|
$0.50/unit
|
____________________________
|
(1) Net income is
before non-controlling interest.
|
- Adjusted EBITDA, net to EnLink, for 2023 is forecasted to
continue the trend of solid growth, with implied growth over
full-year 2022 of nearly 5% at the midpoint of guidance.
- Capital expenditures are focused on high-return projects.
EnLink continues to execute a capital-efficient strategy with a
third plant relocation to the Permian. Tiger II will be relocated
from North Texas to the
Delaware Basin and is expected to
have a total net cost to EnLink of $30
million, of which $15 million
would be considered operating expense in accordance with GAAP in
2023, representing a cost savings of approximately 50% over
comparable new-build costs.
- FCFAD of $240 million is
forecasted at the midpoint of guidance. This reflects a modest
decrease in FCFAD compared to 2022 as adjusted EBITDA growth is
offset by capital expenditures on attractive, high-return
projects.
- EnLink's Board of Directors has reauthorized a unit repurchase
program for 2023 and set the amount available for repurchase at
$200 million.
Segment Updates
Permian:
- Segment profit for the fourth quarter of 2022 was $89.0 million. Segment profit included
$11.7 million of operating expenses
related to plant relocation and $0.6
million of unrealized derivative gains. Excluding plant
relocation operating expenses and unrealized derivative activity,
segment profit in the fourth quarter of 2022 decreased
approximately 15% sequentially but grew 27% over the fourth quarter
of 2021. Fourth quarter 2022 results were adversely impacted by
approximately $6 million as a result
of unplanned downtime from an earthquake and severe winter
weather.
- Average natural gas gathering volumes for the fourth quarter of
2022 were approximately 1% lower compared to the third quarter of
2022 but approximately 32% higher compared to the fourth quarter of
2021. Average natural gas processing volumes for the fourth quarter
of 2022 were approximately 3% lower sequentially but approximately
30% higher compared to the prior year period. EnLink continues to
benefit from strong producer drilling activity on its Permian
footprint. The sequential decrease in volumes was a result of
unplanned downtime from an earthquake and severe winter
weather.
- EnLink continues to meet customer activity needs through a
capital-efficient approach. During the fourth quarter of 2022,
EnLink completed Project Phantom, adding 235 million cubic feet per
day (MMcf/d) of processing capacity in the Midland Basin.
- Project Tiger II, as discussed above, is a low-cost,
high-return project to relocate an underutilized natural gas
processing plant from North Texas
to the Delaware Basin. The
relocation is expected to cost approximately $30 million net to EnLink, representing a savings
of approximately 50% over comparable new-build costs, and is
expected to add approximately 150 MMcf/d of natural gas processing
capacity. Similar to EnLink's prior plant relocations, it is
estimated that approximately $15
million of the total project cost net to EnLink will be
recognized as operating expense under GAAP. The relocation is
expected to be completed during the second quarter of 2024 and is
expected to achieve an EBITDA multiple of less than 4x. This plant
was part of the North Texas assets
acquired in the third quarter of 2022 and represents incremental
capital synergies resulting from that transaction.
- Average crude oil gathering volumes for the fourth quarter of
2022 were approximately 10% lower compared to the third quarter of
2022 and were approximately 6% lower compared to the fourth quarter
of 2021.
- Segment profit for 2023 is expected to range from $395 million to $465
million. Excluding plant relocation expenses of $38 million and $30
million for 2022 and 2023, respectively, segment profit is
forecasted to grow approximately 8% over 2022, driven primarily by
strong producer activity in both the Midland and Delaware basins.
Louisiana:
- Segment profit for the fourth quarter of 2022 was $97.8 million, including unrealized derivative
losses of $2.5 million. Excluding
unrealized derivative activity, segment profit in the fourth
quarter of 2022 grew approximately 8% sequentially and 9% over the
fourth quarter of 2021.
- Average natural gas transportation volumes for the fourth
quarter of 2022 were approximately 4% higher compared to the third
quarter of 2022 and approximately 33% higher compared to the fourth
quarter of 2021.
- Average NGL fractionation volumes for the fourth quarter of
2022 were approximately 1% higher compared to the third quarter of
2022 and flat compared to the fourth quarter of 2021.
- Average crude oil volumes handled in EnLink's Ohio River Valley
system for the fourth quarter of 2022 were approximately 5% lower
compared to the third quarter of 2022 but 12% higher compared to
the fourth quarter of 2021.
- EnLink agreed with its partners to restart Gulf Coast
Fractionators, a 145,000 barrel-per-day NGL fractionation facility
in Mont Belvieu, Texas. EnLink
owns a 38.75% interest in the facility with restart costs net to
EnLink of approximately $25 million,
which will be incurred in 2023. The facility is expected to restart
in the first half of 2024.
- Segment profit for 2023 is forecasted to range from
$330 million to $360 million.
Oklahoma:
- Segment profit for the fourth quarter of 2022 was $98.8 million. Segment profit included unrealized
derivative loss of $5.0 million.
Excluding unrealized derivative activity, segment profit in the
fourth quarter of 2022 grew approximately 8% sequentially and 13%
over the fourth quarter of 2021.
- Average natural gas gathering volumes for the fourth quarter of
2022 were approximately 3% higher compared to the third quarter of
2022 and approximately 5% higher compared to the fourth quarter of
2021.
- Average natural gas processing volumes for the fourth quarter
of 2022 were approximately 2% higher when compared to the third
quarter of 2022 and 4% higher compared the fourth quarter of
2021.
- During the quarter, EnLink acquired a small gathering and
processing system at attractive economics that are similar to the
North Texas acquisition completed
in the third quarter of 2022. EnLink anticipates the acquisition
will generate 2023 adjusted EBITDA of approximately $19 million.
- Segment profit for 2023 is projected to range from $410 million to $440
million. Excluding plant relocation expenses of $5 million in 2022, segment profit is forecasted
to grow approximately 8% over 2022, driven in part from the
acquisition.
North Texas:
- Segment profit for the fourth quarter of 2022 was $84.3 million, including unrealized derivative
gains of $8.7 million. Excluding
unrealized derivative activity, segment profit in the fourth
quarter of 2022 decreased approximately 6% sequentially but grew
27% over the fourth quarter of 2021.
- Average natural gas gathering volumes for the fourth quarter of
2022 were 1% higher compared to the third quarter of 2022 and 22%
over the fourth quarter of 2021, driven in part from the
acquisition completed in the third quarter of 2022.
- Average natural gas processing volumes for the fourth quarter
of 2022 were 2% lower compared to the third quarter of 2022 but
were 18% higher compared to the fourth quarter of 2021.
- Segment profit for 2023 is expected to range from $285 million to $305
million.
Fourth Quarter, Full-Year 2022 Earnings Call
Details
EnLink will host a webcast and conference call to
discuss fourth quarter and full-year 2022 results on February 15, 2023, at 8 a.m. Central
time. The conference call will be broadcast via an internet
webcast, which can be accessed on the Investors page of EnLink's
website at http://investors.enlink.com. Interested parties can
access an archived replay of the webcast on EnLink's website for at
least 90 days following the event.
2023 EnLink Investor Day
EnLink will host a 2023
Investor Day in Dallas on
Thursday, February 23, 2023,
beginning at 9 a.m. Central time.
During the event, EnLink's management will give in-depth
presentations covering the company's plans to leverage its diverse
gathering and processing footprint and in-ground assets to meet
growing natural gas demand from industrial and LNG activity, as
well as its growing carbon transportation business that is expected
to support carbon capture and sequestration projects to decarbonize
existing industrial emissions.
About EnLink Midstream
Headquartered in Dallas, EnLink Midstream (NYSE: ENLC) provides
integrated midstream infrastructure services for natural gas, crude
oil, condensate, and NGLs, as well as CO2 transportation
for carbon capture and sequestration (CCS). Our large-scale,
cash-flow-generating asset platforms are in premier production
basins and core demand centers, including the Permian Basin,
Louisiana, Oklahoma, and North
Texas. EnLink is focused on maintaining the financial
flexibility and operational excellence that enables us to
strategically grow and create sustainable value. Visit
www.EnLink.com to learn how EnLink connects energy to life.
Non-GAAP Financial Information
This press release
contains non-generally accepted accounting principles financial
measures that we refer to as adjusted EBITDA and free cash flow
after distributions (FCFAD).
We define adjusted EBITDA as net income (loss) plus (less)
interest expense, net of interest income; depreciation and
amortization; impairments; (income) loss from unconsolidated
affiliate investments; distributions from unconsolidated affiliate
investments; (gain) loss on disposition of assets; (gain) loss on
extinguishment of debt; unit-based compensation; income tax expense
(benefit); unrealized (gain) loss on commodity derivatives; costs
associated with the relocation of processing facilities; accretion
expense associated with asset retirement obligations; transaction
costs; non-cash expense related to changes in the fair value of
contingent consideration; (non-cash rent); and (non-controlling
interest share of adjusted EBITDA from joint ventures).
We define free cash flow after distributions as adjusted EBITDA,
net to ENLC, plus (less) (growth and maintenance capital
expenditures, excluding capital expenditures that were contributed
by other entities and relate to the non-controlling interest share
of our consolidated entities); (interest expense, net of interest
income); (distributions declared on common units); (accrued cash
distributions on Series B Preferred Units and Series C Preferred
Units paid or expected to be paid); (costs associated with the
relocation of processing facilities); non-cash interest
(income)/expense; (contributions to investment in unconsolidated
affiliates); (payments to terminate interest rate swaps); (current
income taxes); and proceeds from the sale of equipment and
land.
EnLink believes these measures are useful to investors because
they may provide users of this financial information with
meaningful comparisons between current results and
previously-reported results and a meaningful measure of the
company's cash flow after it has satisfied the capital and related
requirements of its operations. In addition, adjusted EBITDA is
used as a metric in our short-term incentive program for
compensating employees and in our performance awards for
executives.
Adjusted EBITDA and free cash flow after distributions, 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 EnLink's performance. Furthermore, they should
not be seen as a substitute for metrics prepared in accordance with
GAAP. Reconciliations of these measures to their most directly
comparable GAAP measures are included in the following tables. See
ENLC's filings with the Securities and Exchange Commission for more
information.
Other definitions and explanations of terms used in this
press release
Segment profit (loss) is defined as revenues,
less cost of sales (exclusive of operating expenses and
depreciation and amortization), less operating expenses. Segment
profit (loss) includes non-cash compensation expenses reflected in
operating expenses. See "Item 8. Financial Statements and
Supplementary Data - Note 15 - Segment Information" in ENLC's
Annual Report on Form 10-K for the year ended December 31,
2021, and, when available, "Item 8. Financial Statements and
Supplementary Data - Note 16—Segment Information" in ENLC's Annual
Report on Form 10-K for the year ended December 31, 2022, for
further information about segment profit (loss).
The Ascension JV is a joint venture between a subsidiary of
EnLink and a subsidiary of Marathon Petroleum Corporation in which
EnLink owns a 50% interest and Marathon Petroleum Corporation owns
a 50% interest. The Ascension JV, which began operations in
April 2017, owns an NGL pipeline that
connects EnLink's Riverside
fractionator to Marathon Petroleum Corporation's Garyville refinery.
The Delaware Basin JV is a
joint venture between EnLink and an affiliate of NGP Natural
Resources XI, L.P. ("NGP") in which EnLink owns a 50.1% interest
and NGP owns a 49.9% interest. The Delaware Basin JV, which was formed in
August 2016, owns the Lobo processing
facilities and the Tiger processing plant located in the
Delaware Basin in Texas.
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
herein. Therefore, you should not rely on any of these
forward-looking statements. All statements, other than statements
of historical fact, included in this press release constitute
forward-looking statements, including but not limited to statements
identified by the words "forecast," "may," "believe," "will,"
"should," "plan," "predict," "anticipate," "intend," "estimate,"
"expect," "continue," and similar expressions. Such forward-looking
statements include, but are not limited to, statements about
guidance, projected or forecasted financial and operating
results, future results or growth of our CCS business,
expected financial and operations results associated with
certain projects, acquisitions, or growth capital expenditures,
future operational results of our customers, results in certain
basins, cost savings or operational, environmental, and climate
change initiatives, profitability, financial or leverage metrics,
the impact of weather-related events on us and our financial
results and operations, our future capital structure and credit
ratings, objectives, strategies, 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,
or cash flows include, without limitation (a) potential
conflicts of interest of Global Infrastructure Partners ("GIP")
with us and the potential for GIP to compete with us or favor GIP's
own interests to the detriment of our other unitholders, (b)
adverse developments in the midstream business that may reduce our
ability to make distributions, (c) competition for crude oil,
condensate, natural gas, and NGL supplies and any decrease in the
availability of such commodities, (d) decreases in the volumes that
we gather, process, fractionate, or transport, (e) our ability or
our customers' ability to receive or renew required government or
third party permits and other approvals, (f) increased federal,
state, and local legislation, and regulatory initiatives, as well
as government reviews relating to hydraulic fracturing resulting in
increased costs and reductions or delays in natural gas production
by our customers, (g) climate change legislation and regulatory
initiatives resulting in increased operating costs and reduced
demand for the natural gas and NGL services we provide, (h) changes
in the availability and cost of capital, (i) volatile prices and
market demand for crude oil, condensate, natural gas, and NGLs that
are beyond our control, (j) our debt levels could limit our
flexibility and adversely affect our financial health or limit our
flexibility to obtain financing and to pursue other business
opportunities, (k) operating hazards, natural disasters,
weather-related issues or delays, casualty losses, and other
matters beyond our control, (l) reductions in demand for NGL
products by the petrochemical, refining, or other industries or by
the fuel markets, (m) our dependence on significant customers for a
substantial portion of the natural gas and crude that we gather,
process, and transport, (n) construction risks in our major
development projects, (o) challenges we may face in connection with
our strategy to enter into new lines of business related to the
energy transition, (p) the impact of the coronavirus (COVID-19)
pandemic (including the impact of any new variants of the virus)
and similar pandemics, (q) impairments to goodwill, long-lived
assets and equity method investments, and (r) the effects of
existing and future laws and governmental regulations, and other
uncertainties. These and other applicable uncertainties, factors,
and risks are described more fully in EnLink Midstream, LLC's
filings with the Securities and Exchange Commission, including
EnLink Midstream, LLC's Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q, and Current Reports on Form 8-K. EnLink
Midstream, LLC assumes no obligation to update any forward-looking
statements.
The EnLink management team based the forecasted financial
information included herein on certain information and assumptions,
including, among others, the producer budgets / forecasts to which
EnLink has access as of the date of this press release and the
projects / opportunities expected to require capital expenditures
as of the date of this press release. The assumptions, information,
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 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'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,
LLC
Selected Financial
Data
(All amounts in
millions except per unit amounts)
(Unaudited)
|
|
|
Three Months
Ended
December
31,
|
|
Year
Ended
December
31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Total
revenues
|
$
2,050.3
|
|
$
2,243.2
|
|
$
9,542.1
|
|
$
6,685.9
|
|
|
|
|
|
|
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
Cost of sales,
exclusive of operating expenses and
depreciation and amortization (1)
|
1,542.1
|
|
1,799.3
|
|
7,572.8
|
|
5,189.9
|
Operating
expenses
|
138.3
|
|
102.9
|
|
524.9
|
|
362.9
|
Depreciation and
amortization
|
164.9
|
|
151.6
|
|
639.4
|
|
607.5
|
Impairments
|
—
|
|
0.8
|
|
—
|
|
0.8
|
(Gain) loss on
disposition of assets
|
14.1
|
|
(0.8)
|
|
18.0
|
|
(1.5)
|
General and
administrative
|
33.3
|
|
27.5
|
|
125.2
|
|
107.8
|
Total operating costs
and expenses
|
1,892.7
|
|
2,081.3
|
|
8,880.3
|
|
6,267.4
|
Operating
income
|
157.6
|
|
161.9
|
|
661.8
|
|
418.5
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest expense, net
of interest income
|
(74.0)
|
|
(58.6)
|
|
(245.0)
|
|
(238.7)
|
Loss on extinguishment
of debt
|
—
|
|
—
|
|
(6.2)
|
|
—
|
Loss from
unconsolidated affiliate investments
|
(1.6)
|
|
(1.6)
|
|
(5.6)
|
|
(11.5)
|
Other income
(loss)
|
0.2
|
|
(0.1)
|
|
0.8
|
|
—
|
Total other
expense
|
(75.4)
|
|
(60.3)
|
|
(256.0)
|
|
(250.2)
|
Income before
non-controlling interest and income taxes
|
82.2
|
|
101.6
|
|
405.8
|
|
168.3
|
Income tax benefit
(expense)
|
112.0
|
|
(13.0)
|
|
94.9
|
|
(25.4)
|
Net income
|
194.2
|
|
88.6
|
|
500.7
|
|
142.9
|
Net income attributable
to non-controlling interest
|
34.2
|
|
33.8
|
|
139.4
|
|
120.5
|
Net income attributable
to ENLC
|
$ 160.0
|
|
$ 54.8
|
|
$ 361.3
|
|
$ 22.4
|
Net income attributable
to ENLC per unit:
|
|
|
|
|
|
|
|
Basic common
unit
|
$ 0.34
|
|
$ 0.11
|
|
$ 0.76
|
|
$ 0.05
|
Diluted common
unit
|
$ 0.33
|
|
$ 0.11
|
|
$ 0.74
|
|
$ 0.05
|
|
|
|
|
|
|
|
|
Weighted average common
units outstanding (basic)
|
471.0
|
|
486.7
|
|
478.5
|
|
488.8
|
Weighted average common
units outstanding (diluted)
|
477.7
|
|
493.9
|
|
485.3
|
|
494.3
|
____________________________
|
(1)
|
Includes related party
cost of sales of $2.9 million and $6.2 million for the three months
ended December 31, 2022 and 2021, respectively, and $28.2 million
and $17.9 million for the years ended December 31, 2022 and 2021,
respectively.
|
EnLink Midstream,
LLC
Reconciliation of
Net Income to Adjusted EBITDA
(All amounts in
millions)
(Unaudited)
|
|
|
Three Months
Ended
December
31,
|
|
Year
Ended
December
31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net income
|
$ 194.2
|
|
$ 88.6
|
|
$ 500.7
|
|
$ 142.9
|
Interest expense, net
of interest income
|
74.0
|
|
58.6
|
|
245.0
|
|
238.7
|
Depreciation and
amortization
|
164.9
|
|
151.6
|
|
639.4
|
|
607.5
|
Impairments
|
—
|
|
0.8
|
|
—
|
|
0.8
|
Loss from
unconsolidated affiliate investments
|
1.6
|
|
1.6
|
|
5.6
|
|
11.5
|
Distributions from
unconsolidated affiliate investments
|
0.1
|
|
0.1
|
|
0.7
|
|
3.9
|
(Gain) loss on
disposition of assets
|
14.1
|
|
(0.8)
|
|
18.0
|
|
(1.5)
|
Loss on extinguishment
of debt
|
—
|
|
—
|
|
6.2
|
|
—
|
Unit-based
compensation
|
6.7
|
|
6.0
|
|
30.4
|
|
25.3
|
Income tax expense
(benefit)
|
(112.0)
|
|
13.0
|
|
(94.9)
|
|
25.4
|
Unrealized (gain) loss
on commodity derivatives
|
(1.8)
|
|
(20.5)
|
|
(40.2)
|
|
12.4
|
Costs associated with
the relocation of processing facilities (1)
|
11.7
|
|
1.7
|
|
43.8
|
|
28.3
|
Other (2)
|
—
|
|
(0.4)
|
|
(2.4)
|
|
(0.6)
|
Adjusted EBITDA before
non-controlling interest
|
353.5
|
|
300.3
|
|
1,352.3
|
|
1,094.6
|
Non-controlling
interest share of adjusted EBITDA from joint
ventures (3)
|
(16.3)
|
|
(13.9)
|
|
(67.7)
|
|
(44.9)
|
Adjusted EBITDA, net to
ENLC
|
$ 337.2
|
|
$ 286.4
|
|
$
1,284.6
|
|
$
1,049.7
|
____________________________
|
(1)
|
Represents cost
incurred that are not part of our ongoing operations related to the
relocation of equipment and facilities from the Thunderbird
processing plant and Battle Ridge processing plant in the Oklahoma
segment to the Permian segment. The relocation of equipment and
facilities from the Battle Ridge processing plant was completed in
the third quarter of 2021 and the relocation of equipment and
facilities from the Thunderbird processing plant was completed in
the fourth quarter of 2022.
|
(2)
|
Includes transaction
costs, non-cash expense related to changes in the fair value of
contingent consideration, accretion expense associated with asset
retirement obligations, and non-cash rent, which relates to lease
incentives pro-rated over the lease term.
|
(3)
|
Non-controlling
interest share of adjusted EBITDA from joint ventures includes
NGP's 49.9% share of adjusted EBITDA from the Delaware Basin
JV and Marathon Petroleum Corporation's 50% share of adjusted
EBITDA from the Ascension JV.
|
EnLink Midstream,
LLC
Reconciliation of
Net Cash Provided by Operating Activities to Adjusted
EBITDA
and Free Cash Flow
After Distributions
(All amounts in
millions except ratios and per unit amounts)
(Unaudited)
|
|
|
Three Months
Ended
December
31,
|
|
Year
Ended
December 31,
2022
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net cash provided by
operating activities
|
$
223.4
|
|
$
258.1
|
|
$
1,049.3
|
|
$
857.3
|
Interest expense
(1)
|
70.4
|
|
54.4
|
|
237.6
|
|
221.0
|
Utility credits
(redeemed) earned (2)
|
(3.2)
|
|
(5.6)
|
|
(31.1)
|
|
32.6
|
Payments to terminate
interest rate swaps (3)
|
—
|
|
—
|
|
—
|
|
1.8
|
Accruals for settled
commodity derivative transactions
|
—
|
|
6.7
|
|
(1.9)
|
|
2.1
|
Distributions from
unconsolidated affiliate investment in excess of
earnings
|
0.1
|
|
0.1
|
|
0.7
|
|
3.9
|
Costs associated with
the relocation of processing facilities (4)
|
11.7
|
|
1.7
|
|
43.8
|
|
28.3
|
Other (5)
|
(1.0)
|
|
—
|
|
2.3
|
|
2.4
|
Changes in operating
assets and liabilities which (provided) used cash:
|
|
|
|
|
|
|
|
Accounts receivable,
accrued revenues, inventories, and other
|
(243.0)
|
|
(3.3)
|
|
12.6
|
|
273.5
|
Accounts payable,
accrued product purchases, and other accrued
liabilities
|
295.1
|
|
(11.8)
|
|
39.0
|
|
(328.3)
|
Adjusted EBITDA before
non-controlling interest
|
353.5
|
|
300.3
|
|
1,352.3
|
|
1,094.6
|
Non-controlling
interest share of adjusted EBITDA from joint ventures
(6)
|
(16.3)
|
|
(13.9)
|
|
(67.7)
|
|
(44.9)
|
Adjusted EBITDA, net to
ENLC
|
337.2
|
|
286.4
|
|
1,284.6
|
|
1,049.7
|
Growth capital
expenditures, net to ENLC (7)
|
(94.0)
|
|
(76.2)
|
|
(267.1)
|
|
(165.3)
|
Maintenance capital
expenditures, net to ENLC (7)
|
(11.2)
|
|
(7.0)
|
|
(44.9)
|
|
(26.1)
|
Interest expense, net
of interest income (8)
|
(67.5)
|
|
(58.6)
|
|
(238.5)
|
|
(238.7)
|
Distributions declared
on common units
|
(57.6)
|
|
(55.2)
|
|
(222.5)
|
|
(195.2)
|
ENLK preferred unit
accrued cash distributions (9)
|
(23.1)
|
|
(25.3)
|
|
(93.2)
|
|
(94.3)
|
Costs associated with
the relocation of processing facilities (4)
|
(11.7)
|
|
(1.7)
|
|
(43.8)
|
|
(28.3)
|
Contribution to
investment in unconsolidated affiliates
|
(19.6)
|
|
—
|
|
(65.9)
|
|
—
|
Payments to terminate
interest rate swaps (3)
|
—
|
|
—
|
|
—
|
|
(1.8)
|
Non-cash interest
expense
|
1.4
|
|
2.2
|
|
1.4
|
|
9.5
|
Other (10)
|
1.2
|
|
2.8
|
|
2.3
|
|
4.1
|
Free cash flow after
distributions
|
$
55.1
|
|
$
67.4
|
|
$
312.4
|
|
$
313.6
|
|
|
|
|
|
|
|
|
Actual declared
distribution to common unitholders
|
$
57.6
|
|
$
55.2
|
|
$
222.5
|
|
$
195.2
|
Distribution
coverage
|
4.10x
|
|
3.04x
|
|
4.09x
|
|
3.43x
|
Distributions declared
per ENLC unit
|
$ 0.1250
|
|
$ 0.1125
|
|
$ 0.4625
|
|
$
0.39375
|
____________________________
|
(1)
|
Net of amortization of
debt issuance costs, net discount of senior unsecured notes, and
designated cash flow hedge, which are included in interest expense
but not included in net cash provided by operating activities, and
non-cash interest income, which is netted against interest expense
but not included in adjusted EBITDA.
|
(2)
|
Under our utility
agreements, we are entitled to a base load of electricity and pay
or receive credits, based on market pricing, when we exceed or do
not use the base load amounts. Due to Winter Storm Uri, we received
credits from our utility providers based on market rates for our
unused electricity. These utility credits are recorded as "Other
current assets" or "Other assets, net" on our consolidated balance
sheets depending on the timing of their expected usage, and
amortized as we incur utility expenses.
|
(3)
|
Represents cash paid
for the early terminations of our interest rate swaps due to the
partial repayments of the Term Loan in May 2021 and September 2021
of $100.0 million and $100.0 million, respectively.
|
(4)
|
Represents cost
incurred that are not part of our ongoing operations related to the
relocation of equipment and facilities from the Thunderbird
processing plant and Battle Ridge processing plant in the Oklahoma
segment to the Permian segment. The relocation of equipment and
facilities from the Battle Ridge processing plant was completed in
the third quarter of 2021 and the relocation of equipment and
facilities from the Thunderbird processing plant was completed in
the fourth quarter of 2022.
|
(5)
|
Includes transaction
costs; current income tax expense; and non-cash rent, which relates
to lease incentives pro-rated over the lease term.
|
(6)
|
Non-controlling
interest share of adjusted EBITDA from joint ventures includes
NGP's 49.9% share of adjusted EBITDA from the Delaware Basin JV and
Marathon Petroleum Corporation's 50% share of adjusted EBITDA from
the Ascension JV.
|
(7)
|
Excludes capital
expenditures that were contributed by other entities and relate to
the non-controlling interest share of our consolidated
entities.
|
(8)
|
Excludes
$6.5 million of interest expense related to the redemption of
the mandatorily redeemable non-controlling interest.
|
(9)
|
Represents the cash
distributions earned by the Series B Preferred Units and Series C
Preferred Units, which are not available to common
unitholders.
|
(10)
|
Includes current income
tax expense and proceeds from the sale of surplus or unused
equipment and land, which occurred in the normal operation of our
business.
|
EnLink Midstream,
LLC
Operating
Data
(Unaudited)
|
|
|
Three Months
Ended
December
31,
|
|
Year
Ended
December
31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Midstream
Volumes:
|
|
|
|
|
|
|
|
Permian
Segment
|
|
|
|
|
|
|
|
Gathering and
Transportation (MMBtu/d)
|
1,584,700
|
|
1,201,000
|
|
1,506,600
|
|
1,067,000
|
Processing
(MMBtu/d)
|
1,475,900
|
|
1,139,200
|
|
1,422,200
|
|
1,010,000
|
Crude Oil Handling
(Bbls/d)
|
141,800
|
|
150,100
|
|
156,300
|
|
134,600
|
Louisiana
Segment
|
|
|
|
|
|
|
|
Gathering and
Transportation (MMBtu/d)
|
3,113,900
|
|
2,338,400
|
|
2,828,200
|
|
2,160,800
|
Crude Oil Handling
(Bbls/d)
|
17,600
|
|
15,700
|
|
17,400
|
|
15,900
|
NGL Fractionation
(Gals/d)
|
7,971,200
|
|
7,931,900
|
|
7,957,800
|
|
7,455,600
|
Brine Disposal
(Bbls/d)
|
2,900
|
|
3,200
|
|
3,000
|
|
2,700
|
Oklahoma
Segment
|
|
|
|
|
|
|
|
Gathering and
Transportation (MMBtu/d)
|
1,071,500
|
|
1,018,100
|
|
1,031,200
|
|
992,400
|
Processing
(MMBtu/d)
|
1,085,000
|
|
1,041,200
|
|
1,057,600
|
|
1,010,300
|
Crude Oil Handling
(Bbls/d)
|
28,400
|
|
19,300
|
|
23,800
|
|
20,200
|
North Texas
Segment
|
|
|
|
|
|
|
|
Gathering and
Transportation (MMBtu/d)
|
1,704,300
|
|
1,397,200
|
|
1,547,600
|
|
1,377,400
|
Processing
(MMBtu/d)
|
764,900
|
|
645,700
|
|
705,100
|
|
631,500
|
EnLink Midstream,
LLC
2023 Guidance
Reconciliation of Net Income to Adjusted EBITDA, Distributable Cash
Flow,
and Free Cash Flow
After Distributions
(All amounts in
millions)
(Unaudited)
|
|
|
2023 Outlook
(1)
|
|
Midpoint
|
Net income of EnLink
(2)
|
$
380.0
|
Interest expense, net
of interest income
|
274.0
|
Depreciation and
amortization
|
642.0
|
Income from
unconsolidated affiliate investments
|
6.0
|
Distributions from
unconsolidated affiliate investments
|
—
|
Unit-based
compensation
|
22.0
|
Income taxes
|
85.0
|
Plant relocation costs
(3)
|
15.0
|
Other (4)
|
1.0
|
Adjusted EBITDA before
non-controlling interest
|
1425.0
|
Non-controlling
interest share of adjusted EBITDA (5)
|
(70.0)
|
Adjusted EBITDA, net to
EnLink Midstream, LLC
|
1355.0
|
Interest expense, net
of interest income
|
(274.0)
|
Maintenance capital
expenditures, net to ENLK (6)
|
(70.0)
|
Preferred unit accrued
cash distributions (7)
|
(96.0)
|
Distributable cash
flow
|
915.0
|
Common distributions
declared
|
(235.0)
|
Growth capital
expenditures, net to EnLink and plant relocation costs
(3)(6)
|
(365.0)
|
Unconsolidated
affiliate investment contributions
|
(75.0)
|
Free cash flow after
distributions
|
$
240.0
|
____________________________
|
(1)
|
Represents the
forward-looking net income guidance of EnLink Midstream, LLC for
the year ended December 31, 2023. The forward-looking net income
guidance excludes the potential impact of gains or losses on
derivative activity, gains or losses on disposition of assets,
impairment expense, gains or losses as a result of legal
settlements, gains or losses on extinguishment of debt, the
financial effects of future acquisitions, and proceeds from the
sale of equipment. The exclusion of these items is due to the
uncertainty regarding the occurrence, timing and/or amount of these
events.
|
(2)
|
Net income includes
estimated net income attributable to NGP Natural Resources XI,
L.P.'s ("NGP") 49.9% share of net income from
the Delaware Basin JV and Marathon Petroleum Corp.'s
("Marathon") 50% share of net income from the Ascension
JV.
|
(3)
|
Includes operating
expenses that are not part of our ongoing operations incurred
related to the relocation of equipment and facilities for the Tiger
II processing plant from North Texas to the Delaware JV in the
Permian segment. These costs exclude amounts that are contributed
by other entities and relate to the non-controlling interest share
of our consolidated entities.
|
(4)
|
Includes (i) estimated
accretion expense associated with asset retirement obligations and
(ii) estimated non-cash rent, which relates to lease incentives
pro-rated over the lease term.
|
(5)
|
Non-controlling
interest share of adjusted EBITDA includes estimates for NGP's
49.9% share of adjusted EBITDA from the Delaware Basin JV
and Marathon's 50% share of adjusted EBITDA from the Ascension
JV.
|
(6)
|
Excludes capital
expenditures that are contributed by other entities and relate to
the non-controlling interest share of our consolidated
entities.
|
(7)
|
Represents the cash
distributions earned by the ENLK Series B Preferred Units and ENLK
Series C Preferred Units. Cash distributions to be paid to holders
of the ENLK Series B Preferred Units and ENLK Series C Preferred
Units are not available to common unitholders.
|
EnLink does not provide a reconciliation of forward-looking net
cash provided by operating activities to adjusted EBITDA because
the Company is 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 Company's
control.
Investor Relations: Brian
Brungardt, Director of Investor Relations, 214-721-9353,
brian.brungardt@enlink.com
Media Relations: Megan
Wright, Director of Corporate Communications, 214-721-9694,
megan.wright@enlink.com
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SOURCE EnLink Midstream, LLC