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| 8-K - 8-K - CNX Midstream Partners LP | a8kcover-q42017pressrelease.htm |
NEWS RELEASE |
CNX Midstream Reports Fourth Quarter and Full Year 2017 Results and Announces 2018 Guidance
PITTSBURGH, PA (January 30, 2018) — CNX Midstream Partners LP (NYSE:CNXM) (“CNX Midstream” or the “Partnership”) today reported financial and operational results for the three months and the full year ended December 31, 2017.(1) The Partnership also announced financial guidance for 2018.
Fourth Quarter Results
Highlights of fourth quarter 2017 results attributable to the Partnership as compared to the fourth quarter of 2016 include:
• | Net income of $27.0 million as compared to $24.8 million |
• | Average daily throughput volumes of 961 billion Btu per day (BBtu/d) as compared to 933 BBtu/d |
• | Net cash provided by operating activities of $40.9 million as compared to $37.2 million |
• | Adjusted EBITDA(2) of $32.4 million as compared to $29.1 million |
• | Distributable cash flow (DCF)(2) of $27.7 million as compared to $24.7 million |
• | Distribution coverage ratio(2) of 1.29x on an as declared basis |
Full Year 2017 Results
Highlights of full year 2017 results attributable to the Partnership as compared to full year 2016 include:
• | Net income of $115.0 million as compared to $96.5 million |
• | Net cash provided by operating activities of $155.6 million as compared to $160.1 million |
• | Adjusted EBITDA(2) of $136.1 million as compared to $110.5 million |
• | Distributable cash flow (DCF)(2) of $117.0 million as compared to $96.2 million |
Management Comment
"Our fourth quarter results were in-line with expectations and capped another year of growth and strong financial and operating performance for CNX Midstream," said Nicholas J. DeIuliis , Chief Executive Officer of CNX Midstream GP LLC (the "General Partner"). "For the full year 2017, CNXM reported a 19% increase in net income, a 23% increase in Adjusted EBITDA , and distributable cash flow grew by 22% over 2016 results. Our cash distribution with respect to the fourth quarter of $0.3133 per unit represents a 15% increase over the distribution paid with respect to the fourth quarter of 2016."
Quarterly Distribution
As previously announced, the Board of Directors of the General Partner declared a quarterly cash distribution of $0.3133 per unit with respect to the fourth quarter of 2017. The distribution payment will be made on February 14, 2018 to unitholders of record on February 5, 2018. The distribution, which equates to an annual rate of $1.2532 per unit, represents an increase of 3.6% over the third quarter of 2017 and an increase of 15% over the distribution paid with respect to the fourth quarter of 2016.
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Capital Investment and Resources
CNX Midstream's allocated fourth quarter 2017 share of investment in expansion projects was $7.6 million. Total expansion capital investment at the three development companies in which CNX Midstream holds controlling interests was $9.0 million. CNX Midstream's respective share of maintenance capital expenditures for the three development companies for fourth quarter 2016 was $3.5 million. Maintenance capital expenditures in the aggregate for the development companies in which CNX Midstream holds controlling interests totaled $4.5 million.
As of December 31, 2017, CNX Midstream had outstanding borrowings of $149.5 million under its $250 million revolving credit facility.
2018 Guidance
Based on current expectations, management is providing the following guidance for 2018. Full year 2018 Adjusted EBITDA(2) attributable to the Partnership is expected to be in the range of $130 to $145 million and full year DCF(2) attributable to the Partnership is expected to be in the range of $111 to $126 million. Management currently anticipates that 2018 capital expenditures attributable to the Partnership will be in the range of $70 to $80 million, of which approximately $12 to $14 million will be for maintenance capital.
CNX Midstream’s financial guidance is based on numerous assumptions about future events and conditions and, therefore, could vary materially from actual results. These estimates, including capital expenditure plans, are meant to provide guidance only and are subject to revision for acquisitions or operating environment changes.
Fourth Quarter and Full Year 2017 Financial and Operational Results Conference Call
A conference call and webcast, during which management will discuss fourth quarter and full year 2017 financial and operational results and guidance for 2018, is scheduled for January 30, 2018 at 11:30 a.m. Eastern Time. Prepared remarks by members of management will be followed by a question and answer period. Interested parties may listen via webcast at http://services.choruscall.com/links/cnxm180130.html. Participants who would like to ask questions may join the conference by phone at 888-349-0097 (international 412-902-0126) five to ten minutes prior to the scheduled start time (reference the CNX Midstream call). An on-demand replay of the webcast will be also be available at http://services.choruscall.com/links/cnxm180130.html shortly after the conclusion of the conference call. A telephonic replay will be available through February 13, 2018 by dialing 877-344-7529 (international: 412-317-0088) and using the conference playback number 10116239.
_______________
(1) | Unless otherwise indicated, the reporting measures included in this news release reflect the unallocated total activity of the three development companies that have been jointly owned by the Partnership and CNX Gathering LLC (“CNX Gathering”) since completion of the Partnership’s initial public offering ("IPO") in September 2014. Effective November 16, 2016, the Partnership acquired the remaining 25% controlling interest in the Anchor Systems, which brought its controlling interest in that system to 100%. The Partnership's current financial interests in the development companies are: 100% in the Anchor Systems, 5% in the Growth Systems, and 5% in the Additional Systems. Because the Partnership owns a controlling interest in each of the three development companies, it fully consolidates their financial results. CNX Gathering is an entity 100% owned by CNX Resources Corporation that owns noncontrolling interests in two of the Partnership’s development companies. |
(2) | Adjusted EBITDA, DCF and distribution coverage ratio are not Generally Accepted Accounting Principles (“GAAP”) measures. Definitions and reconciliations of these non-GAAP measures to their nearest comparable GAAP reporting measures appear in the financial tables which follow. |
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Contacts:
Investor Relations:
Steve Milbourne
724-485-4408
stevemilbourne@cnx.com
Media:
Brian Aiello
724-485-3078
brianaiello@cnx.com
* * * * *
CNX Midstream Partners is a growth-oriented master limited partnership that owns, operates, develops and acquires gathering and other midstream energy assets to service natural gas production in the Appalachian Basin in Pennsylvania and West Virginia. Our assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. More information is available at our website www.cnxmidstream.com.
* * * * *
This press release is intended to be a qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of CNX Midstream’s distributions to non-U.S. investors as being attributed to income that is effectively connected with a United States trade or business. Accordingly, CNX Midstream's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate. Nominees, and not CNX Midstream, are treated as withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
* * * * *
This press release contains forward-looking statements within the meaning of the federal securities laws. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words “will,” “believe,” “expect,” “anticipate,” “intend,” “estimate” and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. You should not place undue reliance on forward-looking statements. Forward-looking statements include, among others, statements regarding the payment of our quarterly distribution for the quarter ended December 31, 2017 and our anticipated 2018 financial performance. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, and there can be no assurance that actual outcomes and results will not differ materially from those expected by our management. You should not place undue reliance on forward-looking statements. Although forward-looking statements reflect our good faith beliefs at the time they are made, they involve known and unknown risks, uncertainties and other factors. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following: CNX and HG Energy II Appalachia, LLC currently account for substantially all of our revenue; if either or both of them change their business strategies, or otherwise significantly reduce the volumes of natural gas and condensate transported through our gathering systems, we could be materially and adversely affected; under our gathering agreements, our customers may transfer their leasehold, working and mineral fee interests in their dedicated acreage, and provide for the release of dedicated acreage in certain situations; we may not generate sufficient distributable cash flow to make the payment of the minimum quarterly distribution to our unitholders; our cash flow will depend entirely on the performance of our operating subsidiaries and their ability to distribute cash to us; our midstream systems are exclusively located in the Appalachian Basin, making us vulnerable to risks associated with operating in a single geographic area; we may be unable to grow by acquiring the noncontrolling interests in, or assets of, our operating subsidiaries owned by CNX Gathering, which could limit our ability to increase our distributable cash flow; to maintain and grow our business, we will be required to make substantial capital expenditures and these capital expenditures may not result in revenue increases and may be subject to regulatory, environmental, political, legal and economic risks, which could adversely affect our business and our ability to distribute cash to our unitholders; if we are unable to obtain needed capital or financing on satisfactory terms, our ability to make cash distributions may be diminished or our financial leverage could increase; our exposure to commodity price risk may change over time and we cannot guarantee the terms of any existing or future agreements
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for our midstream services with third parties or with CNX; restrictions in our revolving credit facility, and other debt agreements that we may enter into in the future, could adversely affect our business, and ability to make quarterly cash distributions to our unitholders; we and our customers may incur significant liability under, or costs and expenditures to comply with, environmental and worker health and safety regulations, which are complex and subject to frequent change; we may not own in fee the land on which our pipelines and facilities are located, which could result in disruptions to our operations; a shortage of equipment and skilled labor could reduce equipment availability and labor productivity and increase labor and equipment costs, which could have a material adverse effect on our business and results of operations; we do not have any officers or employees and rely on officers of our general partner and employees of CNX; terrorist attacks or cyber-attacks could have a material adverse effect on our business, financial condition or results of operations; our general partner and its affiliates, including CNX, have conflicts of interest with us and limited fiduciary duties to us and our unitholders, and they may favor their own interests to our detriment and that of our unitholders; our general partner’s discretion in establishing cash reserves may reduce the amount of cash we have available to distribute to unitholders; affiliates of our general partner, including CNX and CNX Gathering, may compete with us, and neither our general partner nor its affiliates have any obligation to present business opportunities to us except with respect to rights of first offer contained in our omnibus agreement; our tax treatment depends on our status as a partnership for federal income tax purposes; as a result of investing in our common units, you may become subject to state and local taxes and return filing requirements in jurisdictions where we operate or own or acquire properties.
Although forward-looking statements reflect our good faith beliefs at the time they are made, they involve known and unknown risks, uncertainties and other factors. For more information concerning factors that could cause actual results to differ materially from those conveyed in the forward-looking statements, including, among others, that our business plans may change as circumstances warrant, please refer to the “Risk Factors” and “Forward-Looking Statements” sections of our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.
.
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CNX MIDSTREAM PARTNERS LP
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per unit data)
(unaudited)
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenue | |||||||||||||||
Gathering revenue — related party | $ | 37,369 | $ | 57,827 | $ | 184,693 | $ | 239,211 | |||||||
Gathering revenue — third party | 24,329 | — | 49,155 | — | |||||||||||
Total Revenue | 61,698 | 57,827 | 233,848 | 239,211 | |||||||||||
Expenses | |||||||||||||||
Operating expense — third party | 7,718 | 6,084 | 26,640 | 30,405 | |||||||||||
Operating expense — related party | 4,472 | 7,140 | 25,513 | 29,771 | |||||||||||
General and administrative expense — third party | 2,391 | 1,978 | 5,506 | 5,174 | |||||||||||
General and administrative expense — related party | 2,597 | 4,135 | 10,961 | 10,656 | |||||||||||
Loss on asset sales | — | — | 3,914 | 10,083 | |||||||||||
Depreciation expense | 5,717 | 5,818 | 22,692 | 21,201 | |||||||||||
Interest expense | 1,201 | 694 | 4,560 | 1,799 | |||||||||||
Total Expense | 24,096 | 25,849 | 99,786 | 109,089 | |||||||||||
Net Income | 37,602 | 31,978 | 134,062 | 130,122 | |||||||||||
Less: Net income attributable to noncontrolling interest | 10,581 | 7,130 | 19,069 | 33,636 | |||||||||||
Net Income Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP | $ | 27,021 | $ | 24,848 | $ | 114,993 | $ | 96,486 | |||||||
Calculation of Limited Partner Interest in Net Income: | |||||||||||||||
Net Income Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP | $ | 27,021 | $ | 24,848 | $ | 114,993 | $ | 96,486 | |||||||
Less: General partner interest in net income, including incentive distribution rights | 1,676 | 1,093 | 5,614 | 2,526 | |||||||||||
Limited partner interest in net income | $ | 25,345 | $ | 23,755 | $ | 109,379 | $ | 93,960 | |||||||
Net income per limited partner unit - Basic | $ | 0.40 | $ | 0.38 | $ | 1.72 | $ | 1.59 | |||||||
Net Income per limited partner unit - Diluted | $ | 0.40 | $ | 0.38 | $ | 1.72 | $ | 1.58 | |||||||
Limited partner unit outstanding - Basic | 63,588 | 61,799 | 63,582 | 59,207 | |||||||||||
Limited partner unit outstanding - Diluted | 63,660 | 61,911 | 63,634 | 59,289 | |||||||||||
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CNX MIDSTREAM PARTNERS LP
CONSOLIDATED BALANCE SHEETS
(in thousands, except number of units)
(Unaudited) | |||||||
December 31, 2017 | December 31, 2016 | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash | $ | 3,194 | $ | 6,421 | |||
Receivables — related party | 13,104 | 22,434 | |||||
Receivables — third party | 8,251 | — | |||||
Other current assets | 2,169 | 2,181 | |||||
Total Current Assets | 26,718 | 31,036 | |||||
Property and Equipment: | |||||||
Property and equipment | 972,841 | 930,732 | |||||
Less — accumulated depreciation | 73,563 | 52,172 | |||||
Property and Equipment — Net | 899,278 | 878,560 | |||||
Other assets | 593 | 8,961 | |||||
TOTAL ASSETS | $ | 926,589 | $ | 918,557 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities: | |||||||
Accounts payable | $ | 23,602 | $ | 18,007 | |||
Accounts payable — related party | 2,376 | 8,289 | |||||
Total Current Liabilities | 25,978 | 26,296 | |||||
Other Liabilities: | |||||||
Revolving credit facility | 149,500 | 167,000 | |||||
Total Liabilities | 175,478 | 193,296 | |||||
Partners' Capital and Noncontrolling Interest: | |||||||
Common units - (63,588,152 units issued and outstanding at December 31, 2017 and 34,363,371 units issued and outstanding at December 31, 2016) | 389,427 | 418,352 | |||||
Subordinated units (29,163,121 units issued and outstanding at December 31, 2016) | — | (65,986 | ) | ||||
General partner interest | 4,328 | (2,311 | ) | ||||
Partners' capital attributable to CNX Midstream Partners LP | 393,755 | 350,055 | |||||
Noncontrolling interest | 357,356 | 375,206 | |||||
Total Partners' Capital and Noncontrolling Interest | 751,111 | 725,261 | |||||
TOTAL LIABILITIES AND PARTNERS' CAPITAL | $ | 926,589 | $ | 918,557 | |||
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CNX MIDSTREAM PARTNERS LP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended December 31, | |||||||
2017 | 2016 | ||||||
(Unaudited) | |||||||
Cash Flows from Operating Activities: | |||||||
Net Income | $ | 134,062 | $ | 130,122 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation expense and amortization of debt issuance costs | 22,860 | 21,364 | |||||
Unit-based compensation | 1,176 | 775 | |||||
Loss on asset sales | 3,914 | 10,083 | |||||
Other | 771 | 695 | |||||
Changes in assets and liabilities: | |||||||
Receivables — related party | 9,330 | 7,265 | |||||
Receivables — third party | (8,251 | ) | — | ||||
Other current and non-current assets | 162 | (144 | ) | ||||
Accounts payable | (2,520 | ) | (16,691 | ) | |||
Accounts payable - related party | (5,954 | ) | 6,620 | ||||
Net Cash Provided by Operating Activities | 155,550 | 160,089 | |||||
Cash Flows from Investing Activities: | |||||||
Capital expenditures | (48,366 | ) | (50,660 | ) | |||
Proceeds from sale of assets | 21,531 | 5,332 | |||||
Net Cash Used in Investing Activities | (26,835 | ) | (45,328 | ) | |||
Cash Flows from Financing Activities: | |||||||
Distributions to general partner and noncontrolling interest holders, net | (36,889 | ) | (2,344 | ) | |||
Quarterly distribution to unitholders | (77,117 | ) | (59,690 | ) | |||
Net (payment) proceeds on revolving credit facility | (17,500 | ) | 93,500 | ||||
Vested units withheld for unitholder taxes | (436 | ) | (23 | ) | |||
Acquisition of remaining 25.0% noncontrolling interest in the Anchor Systems | — | (140,000 | ) | ||||
Net Cash Used In Financing Activities | (131,942 | ) | (108,557 | ) | |||
Net (Decrease) Increase in Cash | (3,227 | ) | 6,204 | ||||
Cash at Beginning of Period | 6,421 | 217 | |||||
Cash at End of Period | $ | 3,194 | $ | 6,421 | |||
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CNX MIDSTREAM PARTNERS LP
SUPPLEMENTAL STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended December 31, | |||||||
2017 | 2016 | ||||||
Cash Flows from Operating Activities: | |||||||
Net income | $ | 37,602 | $ | 31,978 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation expense and amortization of debt issuance costs | 5,759 | 5,857 | |||||
Unit-based compensation | 277 | 198 | |||||
Other | 91 | 115 | |||||
Changes in assets and liabilities: | |||||||
Receivables — related party | (1,307 | ) | (2,146 | ) | |||
Receivables — third party | (492 | ) | — | ||||
Other current and non-current assets | (426 | ) | (750 | ) | |||
Accounts payable | (646 | ) | (4,728 | ) | |||
Accounts payable — related party | 55 | 6,627 | |||||
Net Cash Provided by Operating Activities | 40,913 | 37,151 | |||||
Cash Flows from Investing Activities: | |||||||
Capital expenditures | (13,461 | ) | (10,194 | ) | |||
Proceeds from sale of assets | — | 5,095 | |||||
Net Cash Used in Investing Activities | (13,461 | ) | (5,099 | ) | |||
Cash Flows from Financing Activities: | |||||||
Contributions from general partner | 1 | — | |||||
Quarterly distribution to unitholders | (20,573 | ) | (15,827 | ) | |||
Net (payment) proceeds on revolver credit facility | (7,500 | ) | 126,000 | ||||
Vested units withheld for unitholder taxes | (25 | ) | — | ||||
Acquisition of remaining 25.0% noncontrolling interest in the Anchor Systems | — | (140,000 | ) | ||||
Net Cash Used In Financing Activities | (28,097 | ) | (29,827 | ) | |||
Net (Decrease) Increase in Cash | (645 | ) | 2,225 | ||||
Cash at Beginning of Period | 3,839 | 4,196 | |||||
Cash at End of Period | $ | 3,194 | $ | 6,421 | |||
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CNX MIDSTREAM PARTNERS LP
RECONCILIATION OF NET INCOME TO EBITDA AND DISTRIBUTABLE CASH FLOW
(in thousands)
(unaudited)
Definition of Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA
We define EBITDA as net income (loss) before net interest expense, depreciation and amortization, and Adjusted EBITDA as EBITDA adjusted for non-cash items which should not be included in the calculation of distributable cash flow. EBITDA and Adjusted EBITDA are used as supplemental financial measures by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
• | our operating performance as compared to those of other companies in the midstream energy industry, without regard to financing methods, historical cost basis or capital structure; |
• | the ability of our assets to generate sufficient cash flow to make distributions to our partners; |
• | our 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. |
We believe that the presentation of EBITDA and Adjusted EBITDA provides information that is useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to EBITDA and Adjusted EBITDA are net income and net cash provided by operating activities. EBITDA and Adjusted EBITDA should not be considered an alternative to net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA and Adjusted EBITDA exclude some, but not all, items that affect net income or net cash, and these measures may vary from those of other companies. As a result, EBITDA and Adjusted EBITDA as presented herein may not be comparable to similarly titled measures of other companies.
Distributable Cash Flow
We define distributable cash flow as Adjusted EBITDA less net income attributable to noncontrolling interest, net cash interest paid and maintenance capital expenditures. Distributable cash flow does not reflect changes in working capital balances.
Distributable cash flow is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
• | the ability of our assets to generate cash sufficient to support our indebtedness and make future cash distributions to our unitholders; and |
• | the attractiveness of capital projects and acquisitions and the overall rates of return on alternative investment opportunities. |
We believe that the presentation of distributable cash flow in this release provides information useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to distributable cash flow are net income and net cash provided by operating activities. Distributable cash flow should not be considered an alternative to net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Distributable cash flow excludes some, but not all, items that affect net income or net cash, and these measures may vary from those of other companies. As a result, our distributable cash flow may not be comparable to similarly titled measures of other companies.
Distribution Coverage Ratio
We define distributable coverage ratio as distributable cash flow divided by cash distributions declared or paid.
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CNX MIDSTREAM PARTNERS LP
RECONCILIATION OF NET INCOME AND NET CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW
(in thousands)
(unaudited)
The following table presents a reconciliation of the non-GAAP measures Adjusted EBITDA and distributable cash flow with the most directly comparable GAAP financial measures of net income and net cash provided by operating activities.
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net Income | $ | 37,602 | $ | 31,978 | $ | 134,062 | $ | 130,122 | |||||||
Depreciation expense | 5,717 | 5,818 | 22,692 | 21,201 | |||||||||||
Interest expense | 1,201 | 694 | 4,560 | 1,799 | |||||||||||
EBITDA | 44,520 | 38,490 | 161,314 | 153,122 | |||||||||||
Non-cash unit-based compensation expense | 277 | 198 | 1,176 | 775 | |||||||||||
Loss on asset sales | — | — | 3,914 | 10,083 | |||||||||||
Adjusted EBITDA | 44,797 | 38,688 | 166,404 | 163,980 | |||||||||||
Less: | |||||||||||||||
Net income attributable to noncontrolling interest | 10,581 | 7,130 | 19,069 | 33,636 | |||||||||||
Depreciation expense attributable to noncontrolling interest | 1,748 | 2,313 | 7,147 | 9,597 | |||||||||||
Other expenses attributable to noncontrolling interest | 108 | 100 | 394 | 621 | |||||||||||
Loss on asset sales attributable to noncontrolling interest | — | — | 3,718 | 9,579 | |||||||||||
Adjusted EBITDA attributable to general and limited partner ownership interest in CNX Midstream Partners LP | $ | 32,360 | $ | 29,145 | $ | 136,076 | $ | 110,547 | |||||||
Less: cash interest paid, net | 1,154 | 628 | 4,387 | 1,310 | |||||||||||
Less: maintenance capital expenditures, net of reimbursements | 3,483 | 3,837 | 14,658 | 13,071 | |||||||||||
Distributable Cash Flow | $ | 27,723 | $ | 24,680 | $ | 117,031 | $ | 96,166 | |||||||
Net Cash Provided by Operating Activities | $ | 40,913 | $ | 37,151 | $ | 155,550 | $ | 160,089 | |||||||
Interest expense | 1,201 | 694 | 4,560 | 1,799 | |||||||||||
Loss on asset sales | — | — | 3,914 | 10,083 | |||||||||||
Other, including changes in working capital | 2,683 | 843 | 2,380 | (7,991 | ) | ||||||||||
Adjusted EBITDA | 44,797 | 38,688 | 166,404 | 163,980 | |||||||||||
Less: | |||||||||||||||
Net income attributable to noncontrolling interest | 10,581 | 7,130 | 19,069 | 33,636 | |||||||||||
Depreciation expense attributable to noncontrolling interest | 1,748 | 2,313 | 7,147 | 9,597 | |||||||||||
Other expenses attributable to noncontrolling interest | 108 | 100 | 394 | 621 | |||||||||||
Loss on asset sales attributable to noncontrolling interest | — | — | 3,718 | 9,579 | |||||||||||
Adjusted EBITDA attributable to general and limited partner ownership interest in CNX Midstream Partners LP | $ | 32,360 | $ | 29,145 | $ | 136,076 | $ | 110,547 | |||||||
Less: cash interest paid, net | 1,154 | 628 | 4,387 | 1,310 | |||||||||||
Less: maintenance capital expenditures, net of reimbursements | 3,483 | 3,837 | 14,658 | 13,071 | |||||||||||
Distributable Cash Flow | $ | 27,723 | $ | 24,680 | $ | 117,031 | $ | 96,166 | |||||||
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The following table presents a reconciliation of the non-GAAP measures Adjusted EBITDA and distributable cash flow by quarter and for the most recently completed twelve month period with the most directly comparable GAAP financial measures, which are net income and net cash provided by operating activities.
(unaudited) | Q1 2017 | Q2 2017 | Q3 2017 | Q4 2017 | Twelve Months Ended December 31, 2017 | ||||||||||||||
Net Income | $ | 33,240 | $ | 29,752 | $ | 33,468 | $ | 37,602 | $ | 134,062 | |||||||||
Depreciation expense | 5,671 | 5,675 | 5,629 | 5,717 | 22,692 | ||||||||||||||
Interest expense | 1,038 | 1,124 | 1,197 | 1,201 | 4,560 | ||||||||||||||
EBITDA | 39,949 | 36,551 | 40,294 | 44,520 | 161,314 | ||||||||||||||
Non-cash unit-based compensation expense | 283 | 367 | 249 | 277 | 1,176 | ||||||||||||||
Loss on asset sales | 673 | 3,241 | — | — | 3,914 | ||||||||||||||
Adjusted EBITDA | 40,905 | 40,159 | 40,543 | 44,797 | 166,404 | ||||||||||||||
Less: | |||||||||||||||||||
Net income attributable to noncontrolling interest | 3,173 | 761 | 4,554 | 10,581 | 19,069 | ||||||||||||||
Depreciation expenses attributable to noncontrolling interest | 1,830 | 1,833 | 1,736 | 1,748 | 7,147 | ||||||||||||||
Other expenses attributable to noncontrolling interest | 82 | 112 | 92 | 108 | 394 | ||||||||||||||
Loss on asset sales attributable to noncontrolling interest | 639 | 3,079 | — | — | 3,718 | ||||||||||||||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP | $ | 35,181 | $ | 34,374 | $ | 34,161 | $ | 32,360 | $ | 136,076 | |||||||||
Less: cash interest paid, net | 1,000 | 1,079 | 1,154 | 1,154 | 4,387 | ||||||||||||||
Less: maintenance capital expenditures, net of reimbursements | 3,881 | 3,715 | 3,579 | 3,483 | 14,658 | ||||||||||||||
Distributable Cash Flow | $ | 30,300 | $ | 29,580 | $ | 29,428 | $ | 27,723 | $ | 117,031 | |||||||||
Net Cash Provided by Operating Activities | $ | 34,176 | $ | 42,258 | $ | 38,203 | $ | 40,913 | $ | 155,550 | |||||||||
Interest expense | 1,038 | 1,124 | 1,197 | 1,201 | 4,560 | ||||||||||||||
Loss on asset sales | 673 | 3,241 | — | — | 3,914 | ||||||||||||||
Other, including changes in working capital | 5,018 | (6,464 | ) | 1,143 | 2,683 | 2,380 | |||||||||||||
Adjusted EBITDA | 40,905 | 40,159 | 40,543 | 44,797 | 166,404 | ||||||||||||||
Less: | |||||||||||||||||||
Net income attributable to noncontrolling interest | 3,173 | 761 | 4,554 | 10,581 | 19,069 | ||||||||||||||
Depreciation expense attributable to noncontrolling interest | 1,830 | 1,833 | 1,736 | 1,748 | 7,147 | ||||||||||||||
Other expenses attributable to noncontrolling interest | 82 | 112 | 92 | 108 | 394 | ||||||||||||||
Loss on asset sales attributable to noncontrolling interest | 639 | 3,079 | — | — | 3,718 | ||||||||||||||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP | $ | 35,181 | $ | 34,374 | $ | 34,161 | $ | 32,360 | $ | 136,076 | |||||||||
Less: cash interest paid, net | 1,000 | 1,079 | 1,154 | 1,154 | 4,387 | ||||||||||||||
Less: maintenance capital expenditures, net of reimbursements | 3,881 | 3,715 | 3,579 | 3,483 | 14,658 | ||||||||||||||
Distributable Cash Flow | $ | 30,300 | $ | 29,580 | $ | 29,428 | $ | 27,723 | $ | 117,031 | |||||||||
Distributions Declared | $ | 18,842 | $ | 19,698 | $ | 20,573 | $ | 21,489 | $ | 80,602 | |||||||||
Distribution Coverage Ratio - Declared | 1.61 | x | 1.50 | x | 1.43 | x | 1.29 | x | 1.45 | x | |||||||||
Distributable Cash Flow | $ | 30,300 | $ | 29,580 | $ | 29,428 | $ | 27,723 | $ | 117,031 | |||||||||
Distributions Paid | $ | 18,004 | $ | 18,842 | $ | 19,698 | $ | 20,573 | $ | 77,117 | |||||||||
Distribution Coverage Ratio - Paid | 1.68 | x | 1.57 | x | 1.49 | x | 1.35 | x | 1.52 | x | |||||||||
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The following table presents a reconciliation of the non-GAAP measures of the Partnership's projected adjusted EBITDA and projected distributable cash flow with the most directly comparable GAAP financial measure, which is projected net income. The following projections represent the approximate midpoint of the announced full year 2018 expected guidance ranges of adjusted EBITDA ($130-$145 million) and full year distributable cash flow ($111-$126 million) attributable to the Partnership. CNX Midstream’s financial guidance is based on numerous assumptions about future events and conditions and, therefore, could vary materially from actual results. These estimates are meant to provide guidance only and are subject to revision for acquisitions or operating environment changes.
(unaudited) (in millions) | Forecast 2018 Estimate | ||
Net Income | $ | 142 | |
Depreciation expense | 23 | ||
Interest expense | 6 | ||
EBITDA | 171 | ||
Non-cash unit-based compensation expense | 1 | ||
Adjusted EBITDA | 172 | ||
Less: | |||
Net income attributable to noncontrolling interest | 27 | ||
Depreciation and other expenses attributable to noncontrolling interest | 7 | ||
Adjusted EBITDA Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP | $ | 138 | |
Less: cash interest paid, net | 6 | ||
Less: maintenance capital expenditures, net of reimbursements | 13 | ||
Distributable Cash Flow | $ | 119 | |
The Partnership is unable to project net cash provided by operating activities or provide the related reconciliation of projected net cash provided by operating activities to projected distributable cash flow, the most comparable financial measure calculated in accordance with GAAP, because net cash provided by operating activities includes the impact of changes in operating assets and liabilities. Changes in operating assets and liabilities relate to the timing of the Partnership’s cash receipts and disbursements that may not relate to the period in which the operating activities occurred, and the Partnership is unable to project these timing differences with any reasonable degree of accuracy.
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Development Companies Jointly Owned by CNX Gathering LLC and CNX Midstream Partners LP
Operating Income Summary, Selected Operating Statistics and Capital Investment
(in thousands)
(unaudited)
Three Months Ended December 31, 2017 | |||||||||||||||
Development Company | |||||||||||||||
Anchor | Growth | Additional | TOTAL | ||||||||||||
Income Summary | |||||||||||||||
Revenue | $ | 44,830 | $ | 1,942 | $ | 14,926 | $ | 61,698 | |||||||
Expenses | 18,364 | 1,422 | 4,310 | 24,096 | |||||||||||
Net Income | 26,466 | 520 | 10,616 | 37,602 | |||||||||||
Less: Net income attributable to noncontrolling interest | — | 494 | 10,087 | 10,581 | |||||||||||
Net Income Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP | $ | 26,466 | $ | 26 | $ | 529 | $ | 27,021 | |||||||
Operating Statistics - Gathered Volumes | |||||||||||||||
Dry gas (BBtu/d) | 567 | 45 | 16 | 628 | |||||||||||
Wet gas (BBtu/d) | 369 | 4 | 313 | 686 | |||||||||||
Condensate (Bcfe/d) | 5 | — | 25 | 30 | |||||||||||
Total Gathered Volumes | 941 | 49 | 354 | 1,344 | |||||||||||
Total Volumes Net to CNX Midstream Partners LP | 941 | 2 | 18 | 961 | |||||||||||
Capital Investment | |||||||||||||||
Maintenance capital | $ | 3,430 | $ | 185 | $ | 884 | $ | 4,499 | |||||||
Expansion capital | 7,512 | (418 | ) | 1,868 | 8,962 | ||||||||||
Total Capital Investment | $ | 10,942 | $ | (233 | ) | $ | 2,752 | $ | 13,461 | ||||||
Capital Investment Net to CNX Midstream Partners LP | |||||||||||||||
Maintenance capital | $ | 3,430 | $ | 9 | $ | 44 | $ | 3,483 | |||||||
Expansion capital | 7,512 | (21 | ) | 93 | 7,584 | ||||||||||
Total Capital Investment Net to CNX Midstream Partners LP | $ | 10,942 | $ | (12 | ) | $ | 137 | $ | 11,067 | ||||||
Page 13
Development Companies Jointly Owned by CNX Gathering LLC and CNX Midstream Partners LP
Operating Income Summary, Selected Operating Statistics and Capital Investment
(in thousands)
(unaudited)
Three Months Ended December 31, 2016 | |||||||||||||||
Development Company | |||||||||||||||
Anchor | Growth | Additional | TOTAL | ||||||||||||
Income Summary | |||||||||||||||
Revenue | $ | 48,728 | $ | 2,173 | $ | 6,926 | $ | 57,827 | |||||||
Expenses | 20,013 | 1,593 | 4,243 | 25,849 | |||||||||||
Net Income | 28,715 | 580 | 2,683 | 31,978 | |||||||||||
Less: Net income attributable to noncontrolling interest | 4,030 | 551 | 2,549 | 7,130 | |||||||||||
Net Income Attributable to General and Limited Partner Ownership Interest in CNX Midstream Partners LP | $ | 24,685 | $ | 29 | $ | 134 | $ | 24,848 | |||||||
Operating Statistics - Gathered Volumes | |||||||||||||||
Dry gas (BBtu/d) | 665 | 59 | 26 | 750 | |||||||||||
Wet gas (BBtu/d) | 387 | 5 | 155 | 547 | |||||||||||
Condensate (Bcfe/d) | 4 | — | 4 | 8 | |||||||||||
Total Gathered Volumes | 1,056 | 64 | 185 | 1,305 | |||||||||||
Total Volumes Net to CNX Midstream Partners LP | 921 | 3 | 9 | 933 | |||||||||||
Capital Investment | |||||||||||||||
Maintenance capital | $ | 4,328 | $ | 271 | $ | 715 | $ | 5,314 | |||||||
Expansion capital | 5,696 | 125 | (941 | ) | 4,880 | ||||||||||
Total Capital Investment | $ | 10,024 | $ | 396 | $ | (226 | ) | $ | 10,194 | ||||||
Capital Investment Net to CNX Midstream Partners LP | |||||||||||||||
Maintenance capital | $ | 3,787 | $ | 14 | $ | 36 | $ | 3,837 | |||||||
Expansion capital | 4,803 | 6 | (47 | ) | 4,762 | ||||||||||
Total Capital Investment Net to CNX Midstream Partners LP | $ | 8,590 | $ | 20 | $ | (11 | ) | $ | 8,599 | ||||||
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