Enable Midstream Partners, LP Second Quarter 2019 Conference Call August 6, 2019
Forward-looking Statements Some of the information in this presentation may contain forward-looking statements. Forward-looking statements give our current expectations, contain projections of results of operations or of financial condition, or forecasts of future events. Words such as “could,” “will,” “should,” “may,” “assume,” “forecast,” “position,” “predict,” “strategy,” “expect,” “intend,” “plan,” “estim ate ,” “anticipate,” “believe,” “project,” “budget,” “potential,” or “continue,” and similar expressions are used to identify forward -looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this presentation include our expectations of plans, strategies, objectives, growth and operational performance, including revenue projections, capital expenditures and tax position. Forward-looking statements can be affected by assumptions used or by known or unknown risks or uncertainties. Consequently, no forward-looking statements can be guaranteed. A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. We believe that we have chosen these assumptions or bases in good faith and that they are reasonable. However, when considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements in this presentation and in our Annual Report on Form 10- K for the year ended December 31, 2018 (“Annual Report”). Those risk factors and other factors noted throughout this presentation and in our Annual Report could cause our actual results to differ materially from those disclosed in any forward-looking statement. You are cautioned not to place undue reliance on any forward-looking statements. Forward-looking statements speak only as of the date on which they are made. We expressly disclaim any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. 2
Non-GAAP Financial Measures Gross margin, Adjusted EBITDA, Adjusted interest expense, Distributable cash flow and Distribution coverage ratio are not financial measures presented in accordance with GAAP. Enable has included these non-GAAP financial measures in this presentation based on information in its consolidated financial statements. Gross margin, Adjusted EBITDA, Adjusted interest expense, Distributable cash flow and Distribution coverage ratio are supplemental financial measures that management and external users of Enable’s financial statements, such as industry analyst s, investors, lenders and rating agencies may use, to assess: • Enable’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 Enable’s assets to generate sufficient cash flow to make distributions to its partners; • Enable’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 presentation includes a reconciliation of Gross margin to total revenues, Adjusted EBITDA and Distributable cash flow to net income attributable to limited partners, Adjusted EBITDA to net cash provided by operating activities and Adjusted interest expense to interest expense, the most directly comparable GAAP financial measures, as applicable, for each of the periods indicated. Distribution coverage ratio is a financial performance measure used by management to reflect the relationship between Enable's financial operating performance and cash distributions. Enable believes that the presentation of Gross margin, Adjusted EBITDA, Adjusted interest expense, Distributable cash flow and Distribution coverage ratio provides information useful to investors in assessing its financial condition and results of operations. Gross margin, Adjusted EBITDA, Adjusted interest expense, Distributable cash flow and Distribution coverage ratio should not be considered as alternatives to net income, operating income, revenue, cash flow from operating activities, interest expense or any other measure of financial performance or liquidity presented in accordance with GAAP. Gross margin, Adjusted EBITDA, Adjusted interest expense, Distributable cash flow and Distribution coverage ratio have important limitations as analytical tools because they exclude some but not all items that affect the most directly comparable GAAP measures. Additionally, because Gross margin, Adjusted EBITDA, Adjusted interest expense, Distributable cash flow and Distribution coverage ratio may be defined differently by other companies in Enable’s industry and Enable’s definitions of th ese measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility. 3
Enable Second Quarter 2019 Highlights • Higher natural gas gathered, natural gas processed, crude oil and condensate gathered and natural gas transported volumes compared to second quarter 2018 • Higher quarterly gross margin, net income, Adjusted EBITDA and distributable cash flow (DCF) compared to second quarter 2018 1 • Declared quarterly cash distributions of $0.3305 per unit on all outstanding common units, a one-time increase of approximately 4% compared to first quarter 2019, and $0.625 on all outstanding Series A Preferred Units • Achieved a distribution coverage ratio of 1.37x 2 Westdale Compressor Station 1. Non-GAAP financial measures are reconciled to the nearest GAAP financial measures in the Appendix 2. A non-GAAP measure calculated as distributable cash flow divided by distributions related to common units 4
Business Performance Drives Distribution Increase Steadily Growing Distributable Cash Flow History of Strengthening Distribution Coverage $ in millions 1.45x $810 1.38x 1.30x $760 1.18x 1.20x $740 $660 $639 1.01x $538 1 1 2015 2016 2017 2018 2019E 2015 2016 2017 2018 2019E ~4% Common Unit Distribution Increase Returns Cash to Unitholders • Enable has been growing DCF and distribution coverage each year since 2015 as a result of strong business performance and a focus on cost discipline • Enable has self-funded a significant portion of its expansion capital program since 2015, which has included the completion of new projects and acquisitions in key areas • Given Enable ’ s financial performance, Enable is in a position to return additional cash to investors by increasing its distribution • With this distribution increase, Enable generated a distribution coverage ratio of 1.37x for the quarter and still expects to meet its 2019 outlook target of 1.30x to 1.45x 1. 2019E is based on the 2019 Distributable Cash Flow and Distribution Coverage Outlook provided Nov. 7, 2018, reaffirmed Aug. 6, 2019 2. Calculation is based off of 2019E midpoint 5
Gathering and Processing Highlights Rig Activity Remains Strong • Rig activity remains strong around Enable’s gathering footprint with 44 rigs 1 currently drilling wells expected to be connected to Enable’s gathering systems 27 STACK 44 5 • SCOOP 51% of all active rigs in the SCOOP and STACK plays Active Rigs on are drilling wells expected to be connected to Enable’s Granite Wash Enable’s Footprint 1 gathering systems 1 3 Ark-La-Tex Williston • Operators have reduced the number of days it takes 8 to drill a well in the SCOOP and STACK by an 1 average of 11% between first and second quarter 2019 2 Anadarko Basin • Increased crude oil and condensate gathered volumes compared to Q1-19 • Significant natural gas and crude oil midstream infrastructure positions Enable to capitalize on shifting rig activity from the STACK to the SCOOP Ark-La-Tex Basin • Scale of Ark-La-Tex Basin assets has allowed Enable to benefit from an opportunistic short-term offload agreement •Enable’s Ark -La-Tex Basin assets are well-positioned to supply demand growth from LNG exports Williston Basin • Record quarterly crude oil gathered volumes 3 • DUC count is building as a result of third-party natural gas infrastructure constraints that are expected to be alleviated as new infrastructure comes online later this year Note: SCOOP counties are designated as Caddo, Carter, Garvin, Grady, McClain and Stephens and STACK counties are designated as Blaine, Canadian, Custer, Dewey, Kingfisher, Major and Woodward counties of Oklahoma 6 Rigs per DrillingInfo as of Aug. 5, 2019; represents wells expected to be connected to either Enable’s natural gas gathering or crude oil and condensate 1. gathering systems 2. Source: DrillingInfo Since Enable’s formation in May 2013 3.
Recommend
More recommend
