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 | 28 |
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. 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. | ||
Amarillo Rattler | On April 30, 2021, we completed the acquisition of Amarillo Rattler, LLC, the owner of a gathering and | |
Acquisition | processing system located in the Midland Basin. | |
AR Facility | An accounts receivable securitization facility of up to $500 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 and | ||
sustainability agent. | ||
ASC | The Financial Accounting Standards Board Accounting Standards Codification. | |
ASC 718 | ASC 718, Compensation-Stock Compensation. | |
ASC 815 | ASC 815, Derivatives and Hedging. | |
ASC 820 | ASC 820, Fair Value Measurements. | |
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. | ||
Barnett Shale | A natural gas producing shale reservoir located in North Texas. | |
Barnett Shale | On July 1, 2022, we acquired all of the equity interest in the gathering and processing assets of Crestwood | |
Acquisition | Equity Partners LP located in the Barnett Shale. | |
Bbl | Barrel. | |
Bbtu | Billion British thermal units. | |
Bcf | Billion cubic feet. | |
Beginning TSR Price | The beginning total shareholder return ("TSR") price, which is the closing unit 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. | ||
CCS | Carbon capture, transportation, and sequestration. | |
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. | ||
Central Oklahoma | On December 19, 2022, we acquired gathering and processing assets located in Central Oklahoma, including | |
Acquisition | approximately 900 miles of lean and rich gas gathering pipeline and two processing plants with 280 MMcf/d of | |
total processing capacity. | ||
CO2 | Carbon dioxide. | |
Commission | U.S. Securities and Exchange Commission. | |
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. | ||
ENLC | EnLink Midstream, LLC together with its consolidated subsidiaries. | |
ENLC Class C Common | A class of non-economic ENLC common units equal to the number of Series B Preferred Units in order to | |
Units | provide certain voting rights with respect to ENLC to the holders of such Series B Preferred Units. | |
ENLK | EnLink Midstream Partners, LP or, when applicable, EnLink Midstream Partners, LP together with its | |
consolidated subsidiaries. | ||
FCDTCs | Futures and Cleared Derivatives Transactions Customer Agreements. | |
Federal Reserve | The Board of Governors of the Federal Reserve System of the United States. | |
GAAP | Generally accepted accounting principles in the United States of America. | |
Gal | Gallon. |
2
GCF | Gulf Coast Fractionators, which owns an NGL fractionator in Mont Belvieu, Texas. We own 38.75% of GCF. |
The GCF assets were temporarily idled to reduce operating expenses in 2021, but are expected to resume | |
operations in 2024. | |
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. |
LIBOR | U.S. Dollar London Interbank Offered Rate. |
Matterhorn JV | A joint venture with WhiteWater Midstream, LLC, Devon Energy Corporation, and MPLX LP. The Matterhorn |
JV is expected to construct a pipeline designed to transport up to 2.5 Bcf/d of natural gas through approximately | |
490 miles of 42-inch pipeline from the Waha Hub in West Texas to Katy, Texas. | |
Midland Basin | A large sedimentary basin in West Texas. |
MMbbls | Million barrels. |
MMbtu | Million British thermal units. |
MMcf | Million cubic feet. |
MMgals | Million gallons. |
MVC | Minimum volume commitment. |
NGL | Natural gas liquid. |
NGP | NGP Natural Resources XI, LP. |
Operating Partnership | EnLink Midstream Operating, LP, a Delaware limited partnership and wholly owned subsidiary of ENLK. |
OPIS | Oil Price Information Service. |
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 primarily in West Texas and New |
Mexico. | |
POL contracts | Percentage-of-liquids contracts. |
POP contracts | Percentage-of-proceeds contracts. |
Revolving Credit | A $1.40 billion unsecured revolving credit facility entered into by ENLC, which includes a $500.0 million letter |
Facility | of credit subfacility. The Revolving Credit Facility is guaranteed by ENLK. |
Series B Preferred Unit | ENLK's Series B Cumulative Convertible Preferred Unit. |
Series C Preferred Unit | ENLK's Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Unit. |
SOFR | Secured overnight financing rate. |
SPV | EnLink Midstream Funding, LLC, a bankruptcy-remote special purpose entity that is an indirect subsidiary of |
ENLC. | |
STACK | Sooner Trend Anadarko Basin Canadian and Kingfisher Counties in Oklahoma. |
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PART I-FINANCIAL INFORMATION
Item 1. Financial Statements
ENLINK MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
Consolidated Balance Sheets (In millions, except unit data)
March 31, 2023 | December 31, 2022 | ||||
ASSETS | (Unaudited) | ||||
Current assets: | |||||
Cash and cash equivalents | $ | 72.8 | $ | 22.6 | |
Accounts receivable: | |||||
Trade receivables (1) | 86.3 | 89.2 | |||
Accrued revenue and other | 537.5 | 636.0 | |||
Related party | 294.1 | 217.4 | |||
Fair value of derivative assets | 68.5 | 68.4 | |||
Other current assets | 93.9 | 167.3 | |||
Total current assets | 1,153.1 | 1,200.9 | |||
Property and equipment, net of accumulated depreciation of $4,898.8 and $4,774.5, | 6,543.4 | 6,556.0 | |||
respectively | |||||
Intangible assets, net of accumulated amortization of $955.5 and $923.6, | 889.3 | 921.2 | |||
respectively | |||||
Investment in unconsolidated affiliates | 140.4 | 90.2 | |||
Fair value of derivative assets | 13.6 | 2.9 | |||
Other assets, net | 100.2 | 97.0 | |||
Total assets | $ | 8,840.0 | $ | 8,868.2 | |
LIABILITIES AND PARTNERS' EQUITY | |||||
Current liabilities: | |||||
Accounts payable and drafts payable | $ | 111.4 | $ | 126.9 | |
Accrued gas, NGLs, condensate, and crude oil purchases (2) | 360.0 | 476.0 | |||
Fair value of derivative liabilities | 41.1 | 42.9 | |||
Other current liabilities | 173.1 | 198.6 | |||
Total current liabilities | 685.6 | 844.4 | |||
Long-term debt, net of unamortized issuance cost (3) | 4,828.0 | 4,723.5 | |||
Other long-term liabilities | 96.6 | 94.0 | |||
Deferred tax liability | 3.6 | 3.6 | |||
Fair value of derivative liabilities | 18.3 | 2.7 | |||
Partners' equity: | |||||
Common unitholders (144,358,720 units issued and outstanding) | 1,384.1 | 1,373.5 | |||
Series B Preferred Unitholders (54,168,359 units issued and outstanding) | 798.6 | 799.2 | |||
Series C Preferred Unitholders (376,500 and 381,000 units issued and outstanding, | 376.5 | 380.4 | |||
respectively) | |||||
General partner interest (1,594,974 equivalent units outstanding) | 221.0 | 220.2 | |||
Accumulated other comprehensive loss | (1.6) | - | |||
Non-controlling interest | 429.3 | 426.7 | |||
Total partners' equity | 3,207.9 | 3,200.0 | |||
Commitments and contingencies (Note 14) | |||||
Total liabilities and partners' equity | $ | 8,840.0 | $ | 8,868.2 | |
____________________________
- There was no allowance for bad debt at March 31, 2023. Includes allowance for bad debt of $0.1 million at December 31, 2022.
- Includes related party accounts payable balances of $1.2 million and $2.5 million at March 31, 2023 and December 31, 2022, respectively.
- Includes related party debt, net of unamortized issuance cost, of $2,180.6 million and $1,932.3 million at March 31, 2023 and December 31, 2022, respectively.
See accompanying notes to consolidated financial statements.
4
ENLINK MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
Consolidated Statements of Operations
(In millions)
Three Months Ended
March 31,
2023 | 2022 | ||||
(Unaudited) | |||||
Revenues: | |||||
Product sales | $ | 1,476.3 | $ | 2,043.9 | |
Midstream services | 279.3 | 215.0 | |||
Gain (loss) on derivative activity | 11.9 | (31.2) | |||
Total revenues | 1,767.5 | 2,227.7 | |||
Operating costs and expenses: | |||||
Cost of sales, exclusive of operating expenses and depreciation and amortization (1) | 1,271.9 | 1,794.5 | |||
Operating expenses | 132.4 | 120.9 | |||
Depreciation and amortization | 160.4 | 152.9 | |||
(Gain) loss on disposition of assets | (0.4) | 5.1 | |||
General and administrative | 29.3 | 29.0 | |||
Total operating costs and expenses | 1,593.6 | 2,102.4 | |||
Operating income | 173.9 | 125.3 | |||
Other income (expense): | |||||
Interest expense, net of interest income (2) | (68.5) | (55.1) | |||
Loss from unconsolidated affiliate investments | (0.1) | (1.1) | |||
Other income (expense) | (0.1) | 0.1 | |||
Total other expense | (68.7) | (56.1) | |||
Income before non-controlling interest and income taxes | 105.2 | 69.2 | |||
Income tax expense | (0.1) | (0.2) | |||
Net income | 105.1 | 69.0 | |||
Net income attributable to non-controlling interest | 10.9 | 7.3 | |||
Net income attributable to ENLK | $ | 94.2 | $ | 61.7 | |
____________________________
- Includes related party cost of sales of $1.5 million and $10.6 million for the three months ended March 31, 2023 and 2022, respectively.
- Includes related party interest expense of $32.6 million and $16.0 million for the three months ended March 31, 2023 and 2022, respectively.
See accompanying notes to consolidated financial statements.
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EnLink Midstream LLC published this content on 03 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 May 2023 21:17:54 UTC.