CONSOLIDATED FINANCIAL STATEMENTS OF
ENLINK MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
TABLE OF CONTENTS
Item | Description | Page | ||
2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 29 |
1
DEFINITIONS | ||
The following terms as defined are used in this document: | ||
Defined Term | Definition | |
/d | Per day. | |
2014 Plan | ENLC's 2014 Long-Term Incentive Plan. | |
Adjusted gross margin | Revenue less cost of sales, exclusive of operating expenses and depreciation and amortization related to our | |
operating segments. Adjusted gross margin is a non-GAAP financial measure. See "Item 2. Management's | ||
Discussion and Analysis of Financial Condition and Results of Operations-Non-GAAP Financial Measures" | ||
for additional information. | ||
AR Facility | An accounts receivable securitization facility of up to $350 million entered into by EnLink Midstream Funding, | |
LLC, a bankruptcy-remote special purpose entity and our indirect subsidiary, with PNC Bank, National | ||
Association, as administrative agent and lender, and PNC Capital Markets, LLC, as structuring agent. The AR | ||
Facility is scheduled to terminate on September 24, 2024, unless extended or earlier terminated in accordance | ||
with its terms. | ||
ASC | The FASB Accounting Standards Codification. | |
Ascension JV | Ascension Pipeline Company, LLC, a joint venture between a subsidiary of ENLK and a subsidiary of Marathon | |
Petroleum Corporation in which ENLK 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 ENLK's | ||
Riverside fractionator to Marathon Petroleum Corporation's Garyville refinery. | ||
Bbls | Barrels. | |
Bcf | Billion cubic feet. | |
Beginning TSR Price | The beginning total shareholder return ("TSR") price, which is the closing share price of ENLC on the grant | |
date of the performance award agreement or the previous trading day if the grant date was not a trading day, is | ||
one of the assumptions used to calculate the grant-date fair value of performance award agreements. | ||
Cedar Cove JV | Cedar Cove Midstream LLC, a joint venture between a subsidiary of ENLK and a subsidiary of Kinder Morgan, | |
Inc. in which ENLK owns a 30% interest and Kinder Morgan, Inc. owns a 70% interest. The Cedar Cove JV, | ||
which was formed in November 2016, owns gathering and compression assets in Blaine County, Oklahoma, | ||
located in the STACK play. | ||
CNOW | Central Northern Oklahoma Woodford Shale. | |
CO2 | Carbon dioxide. | |
Commission | U.S. Securities and Exchange Commission. | |
Consolidated Credit | A $1.75 billion unsecured revolving credit facility entered into by ENLC that matures on January 25, 2024, | |
Facility | which includes a $500.0 million letter of credit subfacility. | |
Delaware Basin | A large sedimentary basin in West Texas and New Mexico. | |
Delaware Basin JV | Delaware G&P LLC, a joint venture between a subsidiary of ENLK and an affiliate of NGP in which ENLK | |
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. | ||
Devon | Devon Energy Corporation. | |
ENLC | EnLink Midstream, LLC. | |
ENLK | EnLink Midstream Partners, LP or, when applicable, EnLink Midstream Partners, LP together with its | |
consolidated subsidiaries. Also referred to as the "Partnership." | ||
FASB | Financial Accounting Standards Board. | |
GAAP | Generally accepted accounting principles in the United States of America. | |
Gal | Gallons. | |
GCF | Gulf Coast Fractionators, which owns an NGL fractionator in Mont Belvieu, Texas. ENLK owns 38.75% of | |
GCF. | ||
GIP | Global Infrastructure Management, LLC, an independent infrastructure fund manager, itself, its affiliates, or | |
managed fund vehicles, including GIP III Stetson I, L.P., GIP III Stetson II, L.P., and their affiliates. | ||
ISDAs | International Swaps and Derivatives Association Agreements. | |
Merger | On January 25, 2019, NOLA Merger Sub, LLC (previously a wholly-owned subsidiary of ENLC) merged with | |
and into ENLK with ENLK continuing as the surviving entity and a subsidiary of ENLC. | ||
Midland Basin | A large sedimentary basin in West Texas. | |
MMbbls | Million barrels. | |
MMbtu | Million British thermal units. | |
MMcf | Million cubic feet. | |
MVC | Minimum volume commitment. | |
NGL | Natural gas liquid. |
2
NGP | NGP Natural Resources XI, LP. |
OPEC+ | Organization of the Petroleum Exporting Countries and its broader partners. |
Operating Partnership | EnLink Midstream Operating, LP, a Delaware limited partnership and wholly owned subsidiary of ENLK. |
ORV | ENLK's Ohio River Valley crude oil, condensate stabilization, natural gas compression, and brine disposal |
assets in the Utica and Marcellus shales. | |
Permian Basin | A large sedimentary basin that includes the Midland and Delaware Basins. |
POL contracts | Percentage-of-liquids contracts. |
POP contracts | Percentage-of-proceeds contracts. |
Series B Preferred Units | ENLK's Series B Cumulative Convertible Preferred Units. |
Series C Preferred Units | ENLK's Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units. |
STACK | Sooner Trend Anadarko Basin Canadian and Kingfisher Counties in Oklahoma. |
Term Loan | A term loan originally in the amount of $850.0 million entered into by ENLK on December 11, 2018 with Bank |
of America, N.A., as Administrative Agent, Bank of Montreal and Royal Bank of Canada, as Co-Syndication | |
Agents, Citibank, N.A. and Wells Fargo Bank, National Association, as Co-Documentation Agents, and the | |
lenders party thereto, which ENLC assumed in connection with the Merger and the obligations of which ENLK | |
guarantees. The Term Loan matures on December 10, 2021. |
3
PART I-FINANCIAL INFORMATION
Item 1. Financial Statements
ENLINK MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
Consolidated Balance Sheets (In millions, except unit data)
September 30, 2021 | December 31, 2020 | ||||
ASSETS | (Unaudited) | ||||
Current assets: | |||||
Cash and cash equivalents | $ | 36.1 | $ | 39.6 | |
Accounts receivable: | |||||
Trade, net of allowance for bad debt of $0.3 and $0.5, respectively | 88.5 | 80.6 | |||
Accrued revenue and other | 636.6 | 447.5 | |||
Related party | 45.7 | 43.2 | |||
Fair value of derivative assets | 75.3 | 25.0 | |||
Other current assets | 156.3 | 58.7 | |||
Total current assets | 1,038.5 | 694.6 | |||
Property and equipment, net of accumulated depreciation of $4,215.7 and $3,863.0, | 6,425.1 | 6,652.1 | |||
respectively | |||||
Intangible assets, net of accumulated amortization of $763.2 and $668.8, | 1,081.6 | 1,125.4 | |||
respectively | |||||
Investment in unconsolidated affiliates | 29.0 | 41.6 | |||
Fair value of derivative assets | 2.2 | 4.9 | |||
Note receivable from related party | 170.0 | 170.0 | |||
Other assets, net | 94.8 | 74.1 | |||
Total assets | $ | 8,841.2 | $ | 8,762.7 | |
LIABILITIES AND PARTNERS' EQUITY | |||||
Current liabilities: | |||||
Accounts payable and drafts payable | $ | 103.5 | $ | 60.5 | |
Accrued gas, NGLs, condensate, and crude oil purchases (1) | 529.8 | 291.5 | |||
Fair value of derivative liabilities | 110.9 | 37.1 | |||
Current maturities of long-term debt, from related parties | 150.0 | 349.8 | |||
Other current liabilities | 200.8 | 144.9 | |||
Total current liabilities | 1,095.0 | 883.8 | |||
Long-term debt, including $998.7 and $998.9 from related parties, respectively | 4,242.6 | 4,244.0 | |||
Other long-term liabilities | 92.1 | 94.8 | |||
Deferred tax liability | 5.8 | 6.0 | |||
Fair value of derivative liabilities | 2.3 | 2.5 | |||
Partners' equity: | |||||
Common unitholders (144,358,720 units issued and outstanding) | 1,274.3 | 1,418.1 | |||
Series B Preferred Unitholders (60,650,397 and 60,197,784 units issued and | 899.5 | 896.7 | |||
outstanding, respectively) | |||||
Series C Preferred Unitholders (400,000 units outstanding) | 401.1 | 395.1 | |||
General partner interest (1,594,974 equivalent units outstanding) | 216.0 | 216.0 | |||
Accumulated other comprehensive loss | (5.6) | (20.1) | |||
Non-controlling interest | 618.1 | 625.8 | |||
Total partners' equity | 3,403.4 | 3,531.6 | |||
Commitments and contingencies (Note 13) | |||||
Total liabilities and partners' equity | $ | 8,841.2 | $ | 8,762.7 | |
____________________________
- Includes related party accounts payable balances of $1.9 million and $1.0 million at September 30, 2021 and December 31, 2020, respectively.
See accompanying notes to consolidated financial statements.
4
ENLINK MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
Consolidated Statements of Operations
(In millions)
Three Months Ended | Nine Months Ended | ||||||||||
September 30, | September 30, | ||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||
(Unaudited) | |||||||||||
Revenues: | |||||||||||
Product sales | $ | 1,610.2 | $ | 696.1 | $ | 3,968.7 | $ | 2,121.6 | |||
Midstream services | 211.0 | 237.5 | 629.2 | 716.2 | |||||||
Loss on derivative activity | (33.6) | (5.1) | (155.2) | (8.3) | |||||||
Total revenues | 1,787.6 | 928.5 | 4,442.7 | 2,829.5 | |||||||
Operating costs and expenses: | |||||||||||
Cost of sales, exclusive of operating expenses and depreciation and | 1,400.8 | 549.5 | 3,390.6 | 1,702.5 | |||||||
amortization (1)(2) | |||||||||||
Operating expenses | 106.9 | 94.3 | 260.0 | 283.1 | |||||||
Depreciation and amortization | 153.0 | 160.3 | 455.9 | 481.3 | |||||||
Impairments | - | - | - | 169.9 | |||||||
(Gain) loss on disposition of assets | (0.4) | (1.8) | (0.7) | 2.8 | |||||||
General and administrative | 28.2 | 25.6 | 80.0 | 79.9 | |||||||
Total operating costs and expenses | 1,688.5 | 827.9 | 4,185.8 | 2,719.5 | |||||||
Operating income | 99.1 | 100.6 | 256.9 | 110.0 | |||||||
Other income (expense): | |||||||||||
Interest expense, net of interest income (3) | (56.8) | (55.5) | (170.3) | (166.3) | |||||||
Gain on extinguishment of debt | - | - | - | 32.0 | |||||||
Income (loss) from unconsolidated affiliates | (2.3) | (0.2) | (9.9) | 0.8 | |||||||
Other income | 0.2 | 0.4 | 0.2 | 0.4 | |||||||
Total other expense | (58.9) | (55.3) | (180.0) | (133.1) | |||||||
Income (loss) before non-controlling interest and income taxes | 40.2 | 45.3 | 76.9 | (23.1) | |||||||
Income tax expense | (0.1) | (0.3) | - | (1.8) | |||||||
Net income (loss) | 40.1 | 45.0 | 76.9 | (24.9) | |||||||
Net income attributable to non-controlling interest | 10.5 | 3.4 | 27.7 | 9.3 | |||||||
Net income (loss) attributable to ENLK | $ | 29.6 | $ | 41.6 | $ | 49.2 | $ | (34.2) | |||
____________________________
- Includes related party cost of sales of $4.9 million and $2.0 million for the three months ended September 30, 2021 and 2020, respectively, and excludes all operating expenses as well as depreciation and amortization related to our operating segments of $150.8 million and $158.6 million for the three months ended September 30, 2021 and 2020, respectively.
- Includes related party cost of sales of $11.7 million and $6.2 million for the nine months ended September 30, 2021 and 2020, respectively, and excludes all operating expenses as well as depreciation and amortization related to our operating segments of $449.9 million and $475.5 million for the nine months ended September 30, 2021 and 2020, respectively.
- Includes related party interest expense, net of related party interest income, of $12.8 million and $13.8 million for the three months ended September 30, 2021 and 2020, respectively, and $39.1 million and $46.0 million for the nine months ended September 30, 2021 and 2020, respectively.
See accompanying notes to consolidated financial statements.
5
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EnLink Midstream LLC published this content on 03 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 November 2021 21:08:07 UTC.