Enable Midstream Partners, LP Fourth Quarter 2019 Conference Call February 19, 2020
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, 2019 (“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 (DCF) 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, DCF and Distribution coverage ratio are supplemental financial measures that management and external users of Enable’s financial statements, such as industry analysts, investors, lenders a nd 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 DCF 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, DCF 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, DCF 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, DCF 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, DCF and Distribution coverage ratio may be defined differently by other companies in Enable’s indu stry, Enable’s definitions of these measures may not be comparable to similarly titled measures of other companies, thereby diminis hing their utility. 3
2019 Enable Highlights Commercial and Operational Achievements • Achieved record full-year natural gas gathered, natural gas processed, natural gas transported, and crude oil and condensate gathered volumes 1 • Significantly increased crude oil and condensate gathered volumes in both the Anadarko and Williston Basins • Extended the weighted-average remaining firm transportation contract life for EGT, MRT and EOIT from 3.6 years at year-end 2018 to 4.1 years at year-end 2019 2 • Agreed to rate case settlement terms with 100% of MRT’s firm capacity customers that participated in the pipeline’s recent rate cases • Announced the Merge, Arkoma, SCOOP and STACK (MASS) natural gas transportation project and continued to develop the Gulf Run Pipeline project Financial Achievements • Higher fourth quarter and full-year 2019 Adjusted EBITDA and DCF compared to fourth quarter and full-year 2018 • Achieved the upper end of 2019 outlook for Adjusted EBITDA and DCF • Focused on capital efficiency , driving expansion capital below the 2019 outlook range • Unionville Storage Increased the cash return to common unitholders by raising the quarterly distribution by approximately 4% 3 Northern Louisiana Since Enable’s formation in May 2013 1. 2. Contract life weighted by volumes; contracts associated with the MRT rate cases are subject to FERC approval 4 3. The partnership increased the quarterly distribution rate from $.3180/unit to $.3305/unit, an increase of approximately 4%, beginning with the Q2-19 distribution
2019: A Year of Continued Execution 5.31 6.18 5.56 4.72 5.04 Transported Total Gathered 4.88 Tbtu/d Equivalent 1 3.71 3.28 Volumes Volumes Tbtu/d +27% since 2016 +62% since 2016 2016 2017 2018 2019 2016 2017 2018 2019 Business Growth, Cost Discipline and Efficient Capital Deployment “Enabled” the Self-Funding of Nearly 80% of the 2019 Capital Program After Distributions 2 1.38x 1.38x $1,147 $1,074 1.20x 1.18x Adjusted Distribution $924 $873 $ in millions EBITDA 3 Coverage 4 +31% since 2016 +17% since 2016 2016 2017 2018 2019 2016 2017 2018 2019 Enable’s total crude oil and condensate volumes have been converted to an MMBtu equivalent using a conversion factor of 5.80 MMBtus per gathered barrel 1. 2. Self-funding calculated as FY2019 DCF plus FY2019 maintenance capital minus FY2019 common unit distributions. FY2019 Capital Program self-funding percentage calculated by dividing self-funding amount by total FY2019 capital expenditures 5 3. Non-GAAP financial measure are reconciled to the nearest GAAP financial measures in the Appendix 4. Non-GAAP measure calculated as DCF divided by distributions related to common and subordinated units
Financially Strong and Disciplined 2020F Gross Margin Profile 2 Strong Financial Position Cost Discipline ~93% Fee-Based or Hedged 37% 4.89x 4.82x $1,681 $1,800 $1,612 4.56x 4.51x 4.51x 37% $1,600 $1,422 7% 3.83x 4% Debt-to-EBITDA $1,255 $1,400 35% 33% $1,200 33% 31% 31% $1,000 50% 31% $800 $600 39% 29% $400 27% $200 $0 25% ENBL Peer A Peer B Peer C Peer D Peer E 2016 2017 2018 2019 Fee-Based Volume Dependent Fee-Based Demand 1 3 4 Gross Margin O&M & G&A % Gross Margin ENBL Peer A Commodity-Based Hedged Commodity-Based Unhedged Highlights • Continued focus on operating efficiency and cost discipline • Favorable contract structures with significant fee-based and demand-fee margins • Committed to aligning expansion capital expenditures with the business environment • Significant liquidity and investment-grade credit metrics 1. Non-GAAP financial measures are reconciled to the nearest GAAP financial measures in the Appendix Gross margin profile represents hedges as of Feb. 14, 2020, and Enable’s latest internal 2020 forecast and price assumptions 2. 6 3. ENBL leverage is calculated as Total Debt / Adjusted EBITDA and is based off of FY2019 Actuals 4. Source: Bloomberg. Current (as of Feb. 7, 2020) Total Debt / FY2019 Adjusted EBITDA average analyst estimates; Peers include DCP, ENLC, OKE, WES and WMB; Peers shown on graph in order of ascending Debt-to-EBITDA rather than alphabetical order
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