Enable Midstream Partners, LP Fourth Quarter 2016 Conference Call February 21, 2017
Forward-looking Statements This presentation and the oral statements made in connection herewith may contain “forward - looking statements” within the meaning of the securities laws. All statements, other than statements of historical fact, regarding Enable Midstream Partners’ (“Enable”) 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 Enable’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. Enable assumes no obligation to and does not intend to update any forward-looking statements included herein. When considering forward-looking statements, which include statements regarding future commodity prices, future capital expenditures and our financial and operational outlook for 2017, among others, you should keep in mind the risk factors and other cautionary statements described under the heading “Risk Factors” and elsewhere in our SEC filings. Enable 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” and elsewhere in our SEC filings. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, Enable’s actual results and plans could differ materially from those expressed in any forward -looking statements. 2
Non-GAAP Financial Measures Enable has included the non-GAAP financial measures Gross margin, Adjusted EBITDA, Adjusted interest expense, Distributable cash flow and distribution coverage ratio in this presentation based on information in its condensed 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 analysts, 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, its definitions of these measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility. 3
Business Performance Drives Q4-16 Results Fourth Quarter 2016 Operational Results Fourth Quarter 2016 Financial Results Q4-16 Q4-15 Gathered Volumes Processed Volumes In millions, except per unit and ratio data TBtu/d TBtu/d Net Income Attributable to $68 $65 Limited Partners 1.85 3.19 Net Income Attributable to 3.04 Common and Subordinated $59 $65 1.75 Units 4.9% 5.7% Net cash provided by operating Growth Growth $223 $235 activities Q4-15 Q4-16 Q4-15 Q4-16 Adjusted EBITDA 1 $218 $172 Distributable cash flow (DCF) 1 $132 $100 Operation & Maintenance and Transportation Volumes Distribution coverage ratio 2 General & Administrative 0.96x 0.75x TBtu/d Expenses (O&M and G&A) Cash distribution per common $ in millions $0.318 $0.318 and subordinated unit $131 4.77 Cash distribution per Series A $122 $0.625 N/A 4.55 Preferred Unit Expansion capital $44 $168 6.9% 4.8% Reduction Growth Q4-15 Q4-16 Q4-15 Q4-16 1. Adjusted EBITDA and DCF are non-GAAP financial measures and are reconciled to the nearest GAAP financial measures in the appendix 2. A non-GAAP measure calculated as DCF divided by distributions related to common and subordinated units 4
Achieved Full-Year 2016 Objectives Achieved Key 2016 Objectives Improved Distribution Coverage Ratio Exceeded 2016 financial guidance 1 for Adjusted + $100 MM in DCF in excess of 2016 distributions EBITDA and DCF Reduced O&M and G&A expenses by $57 million from 1.18x 2015 to 2016 1.01x Sized 2016 expansion capital to meet customer needs Demonstrated capital markets access with a common equity and preferred equity offering Improving cost of capital 2015 2016 Lowered Total debt / Adjusted EBITDA 2 Significant Fee-based Margin and Diverse Business Mix + $1.1 B in revolver capacity 3 2016 Gross Margin Profile 4.10x 3.44x G&P T&S 58% 42% 87% Fee-based Year-end 2015 Year-end 2016 2016 guidance originally provided in Enable’s fourth quarter 2015 financial results press release dated February 17, 2016 1. Calculated as Total Debt/LTM Adj. EBITDA from each quarter; Enable’s LTM Adj. EBITDA was $801 million in Q4-15 and $873 million in Q4-16 2. 5 3. As of December 31, 2016, available liquidity calculated as Revolving Credit Facility of $1.75B less principal advances of $636MM less $3MM in letters of credit
Commercial Successes Recent successes in both the gathering and processing and transportation and storage segments have strengthened Enable’s commercial and financial position Previously Announced Q4-16 Commercial Successes Signed a new 10-year, fee-based G&P contract in the STACK play that replaced a contract with a percent- • Gathering and of-proceeds (POP) processing arrangement Processing Added over 60,000 gross acres of dedication to Enable in the STACK • Signed a new 20-year, 228,000 dekatherms per day (Dth/d) intrastate firm transportation service • agreement with Oklahoma Gas & Electric Transportation and Storage Extended a 126,000 Dth/d interstate firm service agreement for 4 additional years • Extended a 305,000 Dth/d intrastate firm service agreement for 1 additional year • Increase Fee-based Margin Recent Reduce Commodity Exposure Commercial Successes Extend Average Contract Life Benefits Support Continued Capital Deployment 6
Volume Trends Driven by Strong Rig Activity in Major Oil and Gas Plays Dedicated Rigs G&P Volume Growth T&S Volume Growth ~ 6% ~ 9% Anadarko Between 22 – 28 From Q4-15 to Q4-16 x Gathered Processed Volume growth in Anadarko Basin ~ 5% from Q4-15 to Q4-16 Transportation Ark-La-Tex ~ 16% Volume growth from Q4-15 to Q4-16 Between 4 – 10 Gathered x Volume growth in Ark-La-Tex Basin From Q4-15 to Q4-16 from Q4-15 to Q4-16 Rig Activity Remains Strong G&P Volumes Growing Year-on-Year T&S Volumes Growing Year-on-Year TBtu/d TBtu/d Dedicated Rig Count 1 3 1.67 1.57 1.52 4.77 1.39 4.55 0.94 25 0.81 23 23 22 22 10 8 5 4 4 Q4- Q1- Q2- Q3- Q4- Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q4-15 Q4-16 Anadarko - Anadarko - Ark-La-Tex - 15 16 16 16 16 Gathered Processed Gathered Ark-La-Tex Anadarko - Other Anadarko - SCOOP / STACK Q4-15 Q4-16 Contractually dedicated rigs to Enable per Enable’s quarterly earnings press releases 1. 7
Financial Results
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