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Delaware
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72-1252419
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(State or jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer
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þ
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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Adjusted EBITDA.
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A non-GAAP measure calculated as net income from continuing operations before interest expense, income tax expense, depreciation and amortization expense and certain other items management believes affect the comparability of operating results.
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Annual Report.
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Annual Report on Form 10-K for the year ended December 31, 2015.
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ASU.
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Accounting Standards Update.
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Barrel.
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42 U.S. gallons of petroleum products.
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Bbl.
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Barrel.
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Bbl/d.
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Barrels per day.
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Bcf/d.
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Billion cubic feet per day.
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Btu.
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British thermal unit. When used in terms of volume, Btu refers to the amount of natural gas required to raise the temperature of one pound of water by one degree Fahrenheit at one atmospheric pressure.
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CenterPoint Energy.
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CenterPoint Energy, Inc., a Texas corporation, and its subsidiaries, other than Enable Midstream Partners, LP for periods prior to formation of the Partnership on May 1, 2013.
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Condensate.
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A natural gas liquid with a low vapor pressure, mainly composed of propane, butane, pentane and heavier hydrocarbon fractions.
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EGT.
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Enable Gas Transmission, LLC, a wholly owned subsidiary of the Partnership that operates a 5,900-mile interstate pipeline that provides natural gas transportation and storage services to customers principally in the Anadarko, Arkoma and Ark-La-Tex basins in Oklahoma, Texas, Arkansas, Louisiana and Kansas.
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Enable GP.
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Enable GP, LLC, a Delaware limited liability company and the general partner of Enable Midstream Partners, LP.
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Enable Midstream Services.
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Enable Midstream Services, LLC, a wholly owned subsidiary of Enable Midstream Partners, LP.
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Enogex.
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Enogex LLC, a Delaware limited liability company.
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EOIT.
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Enable Oklahoma Intrastate Transmission, LLC, formerly Enogex LLC, a wholly owned subsidiary of the Partnership that operates a 2,200-mile intrastate pipeline that provides natural gas transportation and storage services to customers in Oklahoma.
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Exchange Act.
|
Securities Exchange Act of 1934, as amended.
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FASB.
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Financial Accounting Standards Board.
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FERC.
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Federal Energy Regulatory Commission.
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Fractionation.
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The separation of the heterogeneous mixture of extracted NGLs into individual components for end-use sale.
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GAAP.
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Generally accepted accounting principles in the United States.
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Gas imbalance.
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The difference between the actual amounts of natural gas delivered from or received by a pipeline, as compared to the amounts scheduled to be delivered or received.
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General partner.
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Enable GP, LLC, a Delaware limited liability company, the general partner of Enable Midstream Partners, LP.
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Gross margin.
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A non-GAAP measure calculated as revenues minus cost of natural gas and natural gas liquids, excluding depreciation and amortization.
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LIBOR.
|
London Interbank Offered Rate.
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MBbl/d.
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Thousand barrels per day.
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MFA.
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Master Formation Agreement dated as of March 14, 2013.
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MMcf.
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Million cubic feet of natural gas.
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MMcf/d.
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Million cubic feet per day.
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NGLs.
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Natural gas liquids, which are the hydrocarbon liquids contained within natural gas including condensate.
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NYMEX.
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New York Mercantile Exchange.
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Offering.
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Initial public offering of Enable Midstream Partners, LP.
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OGE Energy.
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OGE Energy Corp., an Oklahoma corporation, and its subsidiaries.
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Partnership.
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Enable Midstream Partners, LP, and its subsidiaries.
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Partnership Agreement
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Third Amended and Restated Agreement of Limited Partnership of Enable Midstream Partners, LP dated as of February 18, 2016.
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Purchase Agreement.
|
Purchase Agreement, dated January 28, 2016, by and between the Partnership and CenterPoint Energy, Inc. for the sale by the Partnership and purchase by CenterPoint Energy, Inc. of Series A Preferred Units.
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Revolving Credit Facility.
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$1.75 billion senior unsecured revolving credit facility.
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SEC.
|
Securities and Exchange Commission.
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Securities Act.
|
Securities Act of 1933, as amended.
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Series A Preferred Units.
|
10% Series A Fixed-to-Floating Non-Cumulative Redeemable Perpetual Preferred Units representing limited partner interests in the Partnership.
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SESH.
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Southeast Supply Header, LLC, in which the Partnership owns a 50% interest, that operates an approximately 290-mile interstate natural gas pipeline from Perryville, Louisiana to southwestern Alabama near the Gulf Coast.
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TBtu.
|
Trillion British thermal units.
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TBtu/d.
|
Trillion British thermal units per day.
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WTI.
|
West Texas Intermediate.
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2015 Term Loan Agreement.
|
$450 million unsecured term loan agreement.
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2019 Notes.
|
$500 million 2.400% senior notes due 2019.
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2024 Notes.
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$600 million 3.900% senior notes due 2024.
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2044 Notes.
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$550 million 5.000% senior notes due 2044.
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•
|
changes in general economic conditions;
|
•
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competitive conditions in our industry;
|
•
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actions taken by our customers and competitors;
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•
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the supply and demand for natural gas, NGLs, crude oil and midstream services;
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•
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our ability to successfully implement our business plan;
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•
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our ability to complete internal growth projects on time and on budget;
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•
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the price and availability of debt and equity financing;
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•
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operating hazards and other risks incidental to transporting, storing and gathering natural gas, NGLs, crude oil and midstream products;
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•
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natural disasters, weather-related delays, casualty losses and other matters beyond our control;
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•
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interest rates;
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•
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labor relations;
|
•
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large customer defaults;
|
•
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changes in the availability and cost of capital;
|
•
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changes in tax status;
|
•
|
the effects of existing and future laws and governmental regulations;
|
•
|
changes in insurance markets impacting costs and the level and types of coverage available;
|
•
|
the timing and extent of changes in commodity prices;
|
•
|
the suspension, reduction or termination of our customers’ obligations under our commercial agreements;
|
•
|
disruptions due to equipment interruption or failure at our facilities, or third-party facilities on which our business is dependent;
|
•
|
the effects of future litigation; and
|
•
|
other factors set forth in this report and our other filings with the SEC, including our Annual Report.
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|
Three Months Ended
March 31, |
||||||
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2016
|
|
2015
|
||||
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(In millions, except per unit data)
|
||||||
Revenues (including revenues from affiliates (Note 11)):
|
|
|
|
|
|
||
Product sales
|
$
|
245
|
|
|
$
|
351
|
|
Service revenue
|
264
|
|
|
265
|
|
||
Total Revenues
|
509
|
|
|
616
|
|
||
Cost and Expenses (including expenses from affiliates (Note 11)):
|
|
|
|
|
|
||
Cost of natural gas and natural gas liquids (excluding depreciation and amortization shown separately)
|
195
|
|
|
292
|
|
||
Operation and maintenance
|
95
|
|
|
104
|
|
||
General and Administrative
|
20
|
|
|
26
|
|
||
Depreciation and amortization
|
81
|
|
|
73
|
|
||
Taxes other than income taxes
|
15
|
|
|
17
|
|
||
Total Cost and Expenses
|
406
|
|
|
512
|
|
||
Operating Income
|
103
|
|
|
104
|
|
||
Other Income (Expense):
|
|
|
|
||||
Interest expense (including expenses from affiliates (Note 11))
|
(23
|
)
|
|
(20
|
)
|
||
Equity in earnings of equity method affiliates
|
7
|
|
|
7
|
|
||
Other, net
|
—
|
|
|
1
|
|
||
Total Other Income (Expense)
|
(16
|
)
|
|
(12
|
)
|
||
Income Before Income Taxes
|
87
|
|
|
92
|
|
||
Income tax expense
|
1
|
|
|
1
|
|
||
Net Income
|
$
|
86
|
|
|
$
|
91
|
|
Less: Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
||
Less: Series A Preferred Unit distributions (Note 4)
|
—
|
|
|
—
|
|
||
Net Income attributable to common and subordinated units (Note 3)
|
$
|
86
|
|
|
$
|
91
|
|
|
|
|
|
||||
Basic earnings per unit (Note 3)
|
|
|
|
|
|
||
Common units
|
$
|
0.21
|
|
|
$
|
0.22
|
|
Subordinated units
|
$
|
0.20
|
|
|
$
|
0.21
|
|
Diluted earnings per unit (Note 3)
|
|
|
|
||||
Common units
|
$
|
0.19
|
|
|
$
|
0.22
|
|
Subordinated units
|
$
|
0.20
|
|
|
$
|
0.21
|
|
Basic weighted average number of outstanding (Note 3)
|
|
|
|
|
|
||
Common units
|
214
|
|
|
214
|
|
||
Subordinated units
|
208
|
|
|
208
|
|
||
Diluted weighted average number of outstanding (Note 3)
|
|
|
|
||||
Common units
|
235
|
|
|
214
|
|
||
Subordinated units
|
208
|
|
|
208
|
|
|
Three Months Ended
March 31, |
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Net income
|
$
|
86
|
|
|
$
|
91
|
|
Comprehensive income
|
86
|
|
|
91
|
|
||
Less: Comprehensive income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
||
Comprehensive income attributable to Enable Midstream Partners, LP
|
$
|
86
|
|
|
$
|
91
|
|
|
March 31,
2016 |
|
December 31,
2015 |
||||
|
(In millions)
|
||||||
Current Assets:
|
|
||||||
Cash and cash equivalents
|
$
|
38
|
|
|
$
|
4
|
|
Accounts receivable
|
226
|
|
|
245
|
|
||
Accounts receivable—affiliated companies
|
16
|
|
|
21
|
|
||
Inventory
|
45
|
|
|
53
|
|
||
Gas imbalances
|
20
|
|
|
23
|
|
||
Other current assets
|
35
|
|
|
35
|
|
||
Total current assets
|
380
|
|
|
381
|
|
||
Property, Plant and Equipment:
|
|
|
|
||||
Property, plant and equipment
|
11,395
|
|
|
11,293
|
|
||
Less accumulated depreciation and amortization
|
1,219
|
|
|
1,162
|
|
||
Property, plant and equipment, net
|
10,176
|
|
|
10,131
|
|
||
Other Assets:
|
|
|
|
||||
Intangible assets, net
|
327
|
|
|
333
|
|
||
Investment in equity method affiliates
|
331
|
|
|
344
|
|
||
Other
|
35
|
|
|
37
|
|
||
Total other assets
|
693
|
|
|
714
|
|
||
Total Assets
|
$
|
11,249
|
|
|
$
|
11,226
|
|
Current Liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
153
|
|
|
$
|
248
|
|
Accounts payable—affiliated companies
|
6
|
|
|
9
|
|
||
Short-term debt
|
—
|
|
|
236
|
|
||
Taxes accrued
|
29
|
|
|
30
|
|
||
Gas imbalances
|
7
|
|
|
25
|
|
||
Other
|
85
|
|
|
67
|
|
||
Total current liabilities
|
280
|
|
|
615
|
|
||
Other Liabilities:
|
|
|
|
||||
Accumulated deferred income taxes, net
|
8
|
|
|
8
|
|
||
Notes payable—affiliated companies
|
—
|
|
|
363
|
|
||
Regulatory liabilities
|
18
|
|
|
18
|
|
||
Other
|
22
|
|
|
20
|
|
||
Total other liabilities
|
48
|
|
|
409
|
|
||
Long-Term Debt
|
3,074
|
|
|
2,671
|
|
||
Commitments and Contingencies (Note 12)
|
|
|
|
||||
Partners’ Equity:
|
|
|
|
||||
Series A Preferred Units (14,520,000 issued and outstanding at March 31, 2016 and 0 issued and outstanding at December 31, 2015)
|
362
|
|
|
—
|
|
||
Common units (214,467,409 issued and outstanding at March 31, 2016 and 214,541,422 issued and outstanding at December 31, 2015, respectively)
|
3,692
|
|
|
3,714
|
|
||
Subordinated units (207,855,430 issued and outstanding at March 31, 2016 and December 31, 2015, respectively)
|
3,781
|
|
|
3,805
|
|
||
Noncontrolling interest
|
12
|
|
|
12
|
|
||
Total Partners’ Equity
|
7,847
|
|
|
7,531
|
|
||
Total Liabilities and Partners’ Equity
|
$
|
11,249
|
|
|
$
|
11,226
|
|
|
Three Months Ended
March 31, |
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Cash Flows from Operating Activities:
|
|
||||||
Net income
|
$
|
86
|
|
|
$
|
91
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
81
|
|
|
73
|
|
||
Loss on sale/retirement of assets
|
1
|
|
|
—
|
|
||
Equity in earnings of equity method affiliates, net of distributions
|
—
|
|
|
5
|
|
||
Equity based compensation
|
2
|
|
|
3
|
|
||
Amortization of debt costs and discount (premium)
|
(1
|
)
|
|
(1
|
)
|
||
Changes in other assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
19
|
|
|
2
|
|
||
Accounts receivable—affiliated companies
|
5
|
|
|
(2
|
)
|
||
Inventory
|
8
|
|
|
13
|
|
||
Gas imbalance assets
|
3
|
|
|
8
|
|
||
Other current assets
|
—
|
|
|
6
|
|
||
Other assets
|
1
|
|
|
(2
|
)
|
||
Accounts payable
|
(84
|
)
|
|
18
|
|
||
Accounts payable—affiliated companies
|
(3
|
)
|
|
(21
|
)
|
||
Gas imbalance liabilities
|
(18
|
)
|
|
(5
|
)
|
||
Other current liabilities
|
15
|
|
|
2
|
|
||
Other liabilities
|
2
|
|
|
(2
|
)
|
||
Net cash provided by operating activities
|
117
|
|
|
188
|
|
||
Cash Flows from Investing Activities:
|
|
|
|
||||
Capital expenditures
|
(130
|
)
|
|
(239
|
)
|
||
Investment in equity method affiliates
|
—
|
|
|
(6
|
)
|
||
Return of investment in equity method affiliates
|
13
|
|
|
—
|
|
||
Net cash used in investing activities
|
(117
|
)
|
|
(245
|
)
|
||
Cash Flows from Financing Activities:
|
|
|
|
||||
Proceeds from revolving credit facility
|
495
|
|
|
—
|
|
||
Repayment of revolving credit facility
|
(90
|
)
|
|
—
|
|
||
Increase (decrease) in short-term debt
|
(236
|
)
|
|
183
|
|
||
Repayment of notes payable—affiliated companies
|
(363
|
)
|
|
—
|
|
||
Proceeds from issuance of Series A Preferred Units, net of issuance costs
|
362
|
|
|
—
|
|
||
Distributions
|
(134
|
)
|
|
(130
|
)
|
||
Net cash provided by financing activities
|
34
|
|
|
53
|
|
||
Net Increase (Decrease) in Cash and Cash Equivalents
|
34
|
|
|
(4
|
)
|
||
Cash and Cash Equivalents at Beginning of Period
|
4
|
|
|
12
|
|
||
Cash and Cash Equivalents at End of Period
|
$
|
38
|
|
|
$
|
8
|
|
|
Series A
Preferred
Units
|
|
Common
Units
|
|
Subordinated
Units
|
|
Noncontrolling
Interest
|
|
Total Partners’
Equity
|
|||||||||||||||||||
|
Units
|
|
Value
|
|
Units
|
|
Value
|
|
Units
|
|
Value
|
|
Value
|
|
Value
|
|||||||||||||
|
(In millions)
|
|||||||||||||||||||||||||||
Balance as of December 31, 2014
|
—
|
|
|
$
|
—
|
|
|
214
|
|
|
$
|
4,353
|
|
|
208
|
|
|
$
|
4,439
|
|
|
$
|
31
|
|
|
$
|
8,823
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
48
|
|
|
—
|
|
|
43
|
|
|
—
|
|
|
91
|
|
|||||
Distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
(66
|
)
|
|
—
|
|
|
(64
|
)
|
|
—
|
|
|
$
|
(130
|
)
|
||||
Equity based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
3
|
|
||||
Balance as of March 31, 2015
|
—
|
|
|
$
|
—
|
|
|
214
|
|
|
$
|
4,338
|
|
|
208
|
|
|
$
|
4,418
|
|
|
$
|
31
|
|
|
$
|
8,787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance as of December 31, 2015
|
—
|
|
|
$
|
—
|
|
|
214
|
|
|
$
|
3,714
|
|
|
208
|
|
|
$
|
3,805
|
|
|
$
|
12
|
|
|
$
|
7,531
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|
—
|
|
|
42
|
|
|
—
|
|
|
86
|
|
|||||
Issuance of Series A Preferred Units
|
15
|
|
|
362
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
362
|
|
|||||
Distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
(68
|
)
|
|
—
|
|
|
(66
|
)
|
|
—
|
|
|
(134
|
)
|
|||||
Equity based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
2
|
|
||||
Balance as of March 31, 2016
|
15
|
|
|
$
|
362
|
|
|
214
|
|
|
$
|
3,692
|
|
|
208
|
|
|
$
|
3,781
|
|
|
$
|
12
|
|
|
$
|
7,847
|
|
|
Three Months Ended
March 31, |
||||||
|
2016
|
|
2015
|
||||
|
(In millions, except per unit data)
|
||||||
Net income
|
$
|
86
|
|
|
$
|
91
|
|
Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
||
Series A Preferred Unit distribution
|
—
|
|
|
—
|
|
||
General partner interest in net income
|
—
|
|
|
—
|
|
||
Net income available to common and subordinated unitholders
|
$
|
86
|
|
|
$
|
91
|
|
|
|
|
|
||||
Net income allocable to common units
|
$
|
44
|
|
|
$
|
48
|
|
Net income allocable to subordinated units
|
42
|
|
|
43
|
|
||
Net income available to common and subordinated unitholders
|
$
|
86
|
|
|
$
|
91
|
|
|
|
|
|
||||
Net income allocable to common units
|
$
|
44
|
|
|
$
|
48
|
|
Series A Preferred Unit Distribution
|
—
|
|
|
—
|
|
||
Diluted net income allocable to common units
|
44
|
|
|
48
|
|
||
Diluted net income allocable to subordinated units
|
42
|
|
|
43
|
|
||
Total
|
$
|
86
|
|
|
$
|
91
|
|
|
|
|
|
||||
Basic weighted average number of outstanding
|
|
|
|
||||
Common units
|
214
|
|
|
214
|
|
||
Subordinated units
|
208
|
|
|
208
|
|
||
Total
|
422
|
|
|
422
|
|
||
|
|
|
|
||||
Basic earnings per unit
|
|
|
|
||||
Common units
|
$
|
0.21
|
|
|
$
|
0.22
|
|
Subordinated units
|
$
|
0.20
|
|
|
$
|
0.21
|
|
|
|
|
|
||||
Basic weighted average number of outstanding common units
|
214
|
|
|
214
|
|
||
Dilutive effect of Series A Preferred Units
|
21
|
|
|
—
|
|
||
Diluted weighted average number of outstanding common units
|
235
|
|
|
214
|
|
||
Diluted weighted average number of outstanding subordinated units
|
208
|
|
|
208
|
|
||
Total
|
443
|
|
|
422
|
|
||
|
|
|
|
||||
Diluted earnings per unit
|
|
|
|
||||
Common units
|
$
|
0.19
|
|
|
$
|
0.22
|
|
Subordinated units
|
$
|
0.20
|
|
|
$
|
0.21
|
|
Quarter Ended
|
|
Record Date
|
|
Payment Date
|
|
Per Unit Distribution
|
|
Total Cash Distribution
|
||||
March 31, 2016
(1)
|
|
May 6, 2016
|
|
May 13, 2016
|
|
$
|
0.318
|
|
|
$
|
134
|
|
December 31, 2015
|
|
February 2, 2016
|
|
February 12, 2016
|
|
$
|
0.318
|
|
|
$
|
134
|
|
September 30, 2015
|
|
November 3, 2015
|
|
November 13, 2015
|
|
$
|
0.318
|
|
|
$
|
134
|
|
June 30, 2015
|
|
August 3, 2015
|
|
August 13, 2015
|
|
$
|
0.316
|
|
|
$
|
134
|
|
March 31, 2015
|
|
May 5, 2015
|
|
May 15, 2015
|
|
$
|
0.3125
|
|
|
$
|
132
|
|
(1)
|
The board of directors of Enable GP declared this
$0.318
per common unit cash distribution on
April 26, 2016
, to be paid on
May 13, 2016
, to common and subordinated unitholders of record at the close of business on
May 6, 2016
.
|
•
|
rank senior to the Partnership’s common units with respect to the payment of distributions and distribution of assets upon liquidation, dissolution and winding up;
|
•
|
have no stated maturity;
|
•
|
are not subject to any sinking fund; and
|
•
|
will remain outstanding indefinitely unless repurchased or redeemed by the Partnership or converted into its common units in connection with a change of control.
|
|
Three Months Ended
March 31, |
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Balance as of December 31
|
$
|
344
|
|
|
$
|
348
|
|
Equity in earnings of equity method affiliate
|
7
|
|
|
7
|
|
||
Contributions to equity method affiliate
|
—
|
|
|
6
|
|
||
Distributions from equity method affiliate
(1)
|
(20
|
)
|
|
(12
|
)
|
||
Balance as of March 31
|
$
|
331
|
|
|
$
|
349
|
|
(1)
|
Distributions from equity method affiliates includes a
$7 million
and
$12 million
return on investment and a
$13 million
and
zero
return of investment for the three months ended
March 31, 2016
and
2015
, respectively.
|
|
Three Months Ended
March 31, |
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
SESH
|
$
|
7
|
|
|
$
|
7
|
|
|
Three Months Ended
March 31, |
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
SESH
|
$
|
20
|
|
|
$
|
12
|
|
|
Three Months Ended
March 31, |
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Income Statements:
|
|
|
|
||||
Revenues
|
$
|
29
|
|
|
$
|
29
|
|
Operating income
|
19
|
|
|
18
|
|
||
Net income
|
14
|
|
|
14
|
|
|
March 31,
2016 |
|
December 31,
2015 |
||||
|
(In millions)
|
||||||
Commercial Paper
|
$
|
—
|
|
|
$
|
236
|
|
2015 Term Loan Agreement
|
450
|
|
|
450
|
|
||
Revolving Credit Facility
|
715
|
|
|
310
|
|
||
Notes payable — affiliated companies (Note 11)
|
—
|
|
|
363
|
|
||
2019 Notes
|
500
|
|
|
500
|
|
||
2024 Notes
|
600
|
|
|
600
|
|
||
2044 Notes
|
550
|
|
|
550
|
|
||
EOIT Senior Notes
|
250
|
|
|
250
|
|
||
Premium (Discount) on long-term debt
|
21
|
|
|
23
|
|
||
Total debt
|
3,086
|
|
|
3,282
|
|
||
Less: Short-term debt
(1)
|
—
|
|
|
236
|
|
||
Less: Unamortized debt expense
|
12
|
|
|
12
|
|
||
Less: Notes payable—affiliated companies
|
—
|
|
|
363
|
|
||
Total long-term debt
|
$
|
3,074
|
|
|
$
|
2,671
|
|
(1)
|
Short-term debt includes
$236 million
of commercial paper as of
December 31, 2015
. There were
no
commercial paper borrowings outstanding as of
March 31, 2016
.
|
March 31, 2016
|
Commodity Contracts
|
|
Gas Imbalances
(1)
|
||||||||||||
|
Assets
|
|
Liabilities
|
|
Assets
(2)
|
|
Liabilities
(3)
|
||||||||
|
(In millions)
|
||||||||||||||
Quoted market prices in active market for identical assets (Level 1)
|
$
|
17
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Significant other observable inputs (Level 2)
|
7
|
|
|
—
|
|
|
11
|
|
|
$
|
7
|
|
|||
Unobservable inputs (Level 3)
|
2
|
|
|
3
|
|
|
—
|
|
|
$
|
—
|
|
|||
Total fair value
|
26
|
|
|
6
|
|
|
11
|
|
|
$
|
7
|
|
|||
Netting adjustments
|
(5
|
)
|
|
(5
|
)
|
|
—
|
|
|
$
|
—
|
|
|||
Total
|
$
|
21
|
|
|
$
|
1
|
|
|
$
|
11
|
|
|
$
|
7
|
|
December 31, 2015
|
Commodity Contracts
|
|
Gas Imbalances
(1)
|
||||||||||||
|
Assets
|
|
Liabilities
|
|
Assets
(2)
|
|
Liabilities
(3)
|
||||||||
|
(In millions)
|
||||||||||||||
Quoted market prices in active market for identical assets (Level 1)
|
$
|
17
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Significant other observable inputs (Level 2)
|
10
|
|
|
—
|
|
|
17
|
|
|
20
|
|
||||
Unobservable inputs (Level 3)
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total fair value
|
31
|
|
|
3
|
|
|
17
|
|
|
20
|
|
||||
Netting adjustments
|
(3
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
28
|
|
|
$
|
—
|
|
|
$
|
17
|
|
|
$
|
20
|
|
(1)
|
The Partnership uses the market approach to fair value its gas imbalance assets and liabilities at individual, or where appropriate an average of, current market indices applicable to the Partnership’s operations, not to exceed net realizable value. Gas imbalances held by EOIT are valued using an average of the Inside FERC Gas Market Report for Panhandle Eastern Pipe Line Co. (Texas, Oklahoma Mainline), ONEOK (Oklahoma) and ANR Pipeline (Oklahoma) indices. There were no netting adjustments as of
March 31, 2016
and
December 31, 2015
.
|
(2)
|
Gas imbalance assets exclude fuel reserves for under retained fuel due from shippers of
$10 million
and
$6 million
at
March 31, 2016
and
December 31, 2015
, respectively, which fuel reserves are based on the value of natural gas at the time the imbalance was created and which are not subject to revaluation at fair market value.
|
(3)
|
Gas imbalance liabilities exclude fuel reserves for over retained fuel due to shippers of
$0 million
and
$5 million
at
March 31, 2016
and
December 31, 2015
, respectively, which fuel reserves are based on the value of natural gas at the time the imbalance was created and which are not subject to revaluation at fair market value.
|
|
Commodity Contracts
|
||
|
Natural gas liquids
financial futures/swaps
|
||
|
(In millions)
|
||
Balance as of December 31, 2015
|
$
|
4
|
|
Losses included in earnings
|
(4
|
)
|
|
Settlements
|
(1
|
)
|
|
Balance as of March 31, 2016
|
$
|
(1
|
)
|
|
March 31, 2016
|
||||
Product Group
|
Fair Value
|
|
Forward Curve Range
|
||
|
(In millions)
|
|
(Per gallon)
|
||
Natural gas liquids
|
$
|
(1
|
)
|
|
$0.441 - $0.495
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
|
(In millions)
|
||||||||||||||
Long-Term Debt
|
|
|
|
|
|
|
|
||||||||
Long-term notes payable
—
affiliated companies (Level 2)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
363
|
|
|
$
|
350
|
|
Revolving Credit Facility (Level 2)
(1)
|
715
|
|
|
715
|
|
|
310
|
|
|
310
|
|
||||
2015 Term Loan Agreement (Level 2)
|
450
|
|
|
450
|
|
|
450
|
|
|
450
|
|
||||
EOIT Senior Notes (Level 2)
|
272
|
|
|
218
|
|
|
273
|
|
|
280
|
|
||||
Enable Midstream Partners, LP 2019, 2024 and 2044 Notes (Level 2)
|
1,649
|
|
|
1,302
|
|
|
1,650
|
|
|
1,255
|
|
(1)
|
Borrowing capacity is reduced by our borrowings outstanding under the commercial paper program. There was
zero
and
$236 million
of commercial paper outstanding as of
March 31, 2016
and
December 31, 2015
, respectively.
|
•
|
NGL put options, NGL futures and swaps, and WTI crude futures and swaps for condensate sales are used to manage the Partnership’s NGL and condensate exposure associated with its processing agreements;
|
•
|
natural gas futures and swaps are used to manage the Partnership’s keep-whole natural gas exposure associated with its processing operations and the Partnership’s natural gas exposure associated with operating its gathering, transportation and storage assets; and
|
•
|
natural gas futures and swaps, natural gas options and natural gas commodity purchases and sales are used to manage the Partnership’s natural gas exposure associated with its storage and transportation contracts and asset management activities.
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||||
|
Gross Notional Volume
|
||||||||||
|
Purchases
|
|
Sales
|
|
Purchases
|
|
Sales
|
||||
Natural gas—
TBtu
(1)
|
|
|
|
|
|
|
|
||||
Physical purchases/sales
|
—
|
|
|
48
|
|
|
2
|
|
|
51
|
|
Financial fixed futures/swaps
|
3
|
|
|
44
|
|
|
1
|
|
|
37
|
|
Financial basis futures/swaps
|
5
|
|
|
47
|
|
|
4
|
|
|
38
|
|
Crude oil (for condensate)—
MBbl
(2)
|
|
|
|
|
|
|
|
||||
Financial Futures/swaps
|
—
|
|
|
460
|
|
|
—
|
|
|
506
|
|
Natural gas liquids—
MBbl
(3)
|
|
|
|
|
|
|
|
||||
Financial Futures/swaps
|
—
|
|
|
1,551
|
|
|
75
|
|
|
1,011
|
|
(1)
|
As of
March 31, 2016
,
86.1%
of the natural gas contracts had durations of one year or less and
13.9%
had durations of more than one year and less than two years. As of
December 31, 2015
,
97.7%
of the natural gas contracts had durations of one year or less and
2.3%
had durations of more than one year and less than two years.
|
(2)
|
As of
March 31, 2016
,
93.5%
of the condensate contracts had durations of one year or less and
6.5%
had durations of more than one year and less than two years. As of
December 31, 2015
,
100%
of the crude oil (for condensate) contracts had durations of one year or less.
|
(3)
|
As of
March 31, 2016
,
85.5%
of the natural gas liquids contracts had durations of one year or less and
14.5%
had durations of more than one year and less than two years. As of
December 31, 2015
,
100%
of the natural gas liquid contracts had durations of one year or less.
|
|
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
|
|
Fair Value
|
||||||||||||||
Instrument
|
Balance Sheet Location
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
|
|
|
(In millions)
|
||||||||||||||
Natural gas
|
|
|
|
|
|
|
|
||||||||||
Financial futures/swaps
|
Other Current
|
|
$
|
18
|
|
|
$
|
3
|
|
|
$
|
17
|
|
|
$
|
3
|
|
Physical purchases/sales
|
Other Current
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Crude Oil (for condensate)
|
|
|
|
|
|
|
|
|
|
||||||||
Financial futures/swaps
|
Other Current
|
|
6
|
|
|
—
|
|
|
9
|
|
|
—
|
|
||||
Natural gas liquids
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Futures/swaps
|
Other Current
|
|
2
|
|
|
3
|
|
|
4
|
|
|
—
|
|
||||
Total gross derivatives
(1)
|
|
|
$
|
26
|
|
|
$
|
6
|
|
|
$
|
31
|
|
|
$
|
3
|
|
(1)
|
See Note 8 for a reconciliation of the Partnership’s total derivatives fair value to the Partnership’s Condensed Consolidated Balance Sheets as of
March 31, 2016
and
December 31, 2015
.
|
|
Amounts Recognized in Income
|
||||||
|
Three Months Ended
March 31, |
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Natural gas financial futures/swaps gains (losses)
|
$
|
10
|
|
|
$
|
7
|
|
Natural gas physical purchases/sales gains (losses)
|
(4
|
)
|
|
(4
|
)
|
||
Crude Oil (for condensate) financial futures/swaps gains (losses)
|
1
|
|
|
4
|
|
||
Natural gas liquids financial futures/swaps gains (losses)
|
(4
|
)
|
|
—
|
|
||
Total
|
$
|
3
|
|
|
$
|
7
|
|
|
Three Months Ended
March 31, |
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
||||
Cash Payments:
|
|
|
|
||||
Interest, net of capitalized interest
|
$
|
15
|
|
|
$
|
9
|
|
Income taxes, net of refunds
|
1
|
|
|
—
|
|
||
Non-cash transactions:
|
|
|
|
|
|
||
Accounts payable related to capital expenditures
|
42
|
|
|
51
|
|
|
Three Months Ended
March 31, |
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Gas transportation and storage service revenue — CenterPoint Energy
|
$
|
33
|
|
|
$
|
33
|
|
Natural gas product sales — CenterPoint Energy
|
1
|
|
|
6
|
|
||
Gas transportation and storage service revenue — OGE Energy
|
9
|
|
|
9
|
|
||
Natural gas product sales — OGE Energy
|
1
|
|
|
3
|
|
||
Total revenues — affiliated companies
|
$
|
44
|
|
|
$
|
51
|
|
|
Three Months Ended
March 31, |
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Cost of natural gas purchases — CenterPoint Energy
|
$
|
—
|
|
|
$
|
1
|
|
Cost of natural gas purchases — OGE Energy
|
2
|
|
|
3
|
|
||
Total cost of natural gas purchases — affiliated companies
|
$
|
2
|
|
|
$
|
4
|
|
|
Three Months Ended
March 31, |
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Performance units
|
$
|
1
|
|
|
$
|
1
|
|
Restricted units
|
1
|
|
|
2
|
|
||
Phantom units
|
—
|
|
|
—
|
|
||
Total compensation expense
|
$
|
2
|
|
|
$
|
3
|
|
|
Performance Units
|
|
Restricted Units
|
|
Phantom Units
|
||||||||||||||||||
|
Number
of Units
|
|
Weighted Average Grant-Date Fair Value, Per Unit
|
|
Number
of Units
|
|
Weighted Average Grant-Date Fair Value, Per Unit
|
|
Number
of Units
|
|
Weighted Average Grant-Date Fair Value, Per Unit
|
||||||||||||
|
(In millions, except unit data)
|
||||||||||||||||||||||
Units Outstanding at December 31, 2015
|
814,510
|
|
|
$
|
20.67
|
|
|
581,772
|
|
|
$
|
21.04
|
|
|
9,817
|
|
|
$
|
12.70
|
|
|||
Granted
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Vested
|
(1,685
|
)
|
|
20.72
|
|
|
(78,375
|
)
|
|
22.58
|
|
|
—
|
|
|
—
|
|
||||||
Forfeited
|
(44,408
|
)
|
|
17.69
|
|
|
(49,834
|
)
|
|
19.26
|
|
|
—
|
|
|
—
|
|
||||||
Units Outstanding at March 31, 2016
|
768,417
|
|
|
$
|
20.84
|
|
|
453,563
|
|
|
$
|
20.97
|
|
|
9,817
|
|
|
$
|
12.70
|
|
|||
Aggregate Intrinsic Value of Units Outstanding at March 31, 2016
|
$
|
5
|
|
|
|
|
$
|
3
|
|
|
|
|
$
|
—
|
|
|
|
|
March 31, 2016
|
||||
|
Unrecognized Compensation Cost
(In millions)
|
|
Weighted Average to be Recognized
(In years)
|
||
Performance Units
|
$
|
9
|
|
|
1.80
|
Restricted Units
|
8
|
|
|
1.78
|
|
Phantom Units
|
—
|
|
|
0.24
|
|
Total
|
$
|
17
|
|
|
|
Three Months Ended March 31, 2016
|
Gathering and
Processing
|
|
Transportation
and Storage
(1)
|
|
Eliminations
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Revenues
|
$
|
333
|
|
|
$
|
246
|
|
|
$
|
(70
|
)
|
|
$
|
509
|
|
Cost of natural gas and natural gas liquids
|
165
|
|
|
99
|
|
|
(69
|
)
|
|
195
|
|
||||
Operation and maintenance, General and administrative
|
75
|
|
|
41
|
|
|
(1
|
)
|
|
115
|
|
||||
Depreciation and amortization
|
49
|
|
|
32
|
|
|
—
|
|
|
81
|
|
||||
Impairments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Taxes other than income tax
|
8
|
|
|
7
|
|
|
—
|
|
|
15
|
|
||||
Operating income
|
$
|
36
|
|
|
$
|
67
|
|
|
$
|
—
|
|
|
$
|
103
|
|
Total assets
|
$
|
7,543
|
|
|
$
|
4,888
|
|
|
$
|
(1,182
|
)
|
|
$
|
11,249
|
|
Capital expenditures
|
$
|
121
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
130
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Three Months Ended March 31, 2015
|
Gathering and
Processing
|
|
Transportation
and Storage
(1)
|
|
Eliminations
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Revenues
|
$
|
401
|
|
|
$
|
308
|
|
|
$
|
(93
|
)
|
|
$
|
616
|
|
Cost of natural gas and natural gas liquids
|
222
|
|
|
163
|
|
|
(93
|
)
|
|
292
|
|
||||
Operation and maintenance, General and administrative
|
76
|
|
|
54
|
|
|
—
|
|
|
130
|
|
||||
Depreciation and amortization
|
43
|
|
|
30
|
|
|
—
|
|
|
73
|
|
||||
Impairments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Taxes other than income tax
|
8
|
|
|
9
|
|
|
—
|
|
|
17
|
|
||||
Operating income
|
$
|
52
|
|
|
$
|
52
|
|
|
$
|
—
|
|
|
$
|
104
|
|
Total assets as of December 31, 2015
|
$
|
7,536
|
|
|
$
|
4,976
|
|
|
$
|
(1,286
|
)
|
|
$
|
11,226
|
|
Capital expenditures
|
$
|
215
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
239
|
|
(1)
|
See Note 6 for discussion regarding ownership interests in SESH and related equity earnings included in the Transportation and Storage segment for the
three months ended March 31, 2016
and
2015
.
|
Three Months Ended March 31, 2016
|
Gathering and
Processing
|
|
Transportation
and Storage
|
|
Eliminations
|
|
Enable
Midstream
Partners, LP
|
||||||||
|
(In millions)
|
||||||||||||||
Revenues
|
$
|
333
|
|
|
$
|
246
|
|
|
$
|
(70
|
)
|
|
$
|
509
|
|
Cost of natural gas and natural gas liquids (excluding depreciation and amortization shown separately)
|
165
|
|
|
99
|
|
|
(69
|
)
|
|
195
|
|
||||
Gross margin
(1)
|
168
|
|
|
147
|
|
|
(1
|
)
|
|
314
|
|
||||
Operation and maintenance, General and administrative
|
75
|
|
|
41
|
|
|
(1
|
)
|
|
115
|
|
||||
Depreciation and amortization
|
49
|
|
|
32
|
|
|
—
|
|
|
81
|
|
||||
Taxes other than income tax
|
8
|
|
|
7
|
|
|
—
|
|
|
15
|
|
||||
Operating income
|
$
|
36
|
|
|
$
|
67
|
|
|
$
|
—
|
|
|
$
|
103
|
|
Equity in earnings of equity method affiliates
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
Three Months Ended March 31, 2015
|
Gathering and
Processing
|
|
Transportation
and Storage
|
|
Eliminations
|
|
Enable
Midstream
Partners, LP
|
||||||||
|
(In millions)
|
||||||||||||||
Revenues
|
$
|
401
|
|
|
$
|
308
|
|
|
$
|
(93
|
)
|
|
$
|
616
|
|
Cost of natural gas and natural gas liquids (excluding depreciation and amortization shown separately)
|
222
|
|
|
163
|
|
|
(93
|
)
|
|
292
|
|
||||
Gross margin
(1)
|
179
|
|
|
145
|
|
|
—
|
|
|
324
|
|
||||
Operation and maintenance, General and administrative
|
76
|
|
|
54
|
|
|
—
|
|
|
130
|
|
||||
Depreciation and amortization
|
43
|
|
|
30
|
|
|
—
|
|
|
73
|
|
||||
Taxes other than income tax
|
8
|
|
|
9
|
|
|
—
|
|
|
17
|
|
||||
Operating income
|
$
|
52
|
|
|
$
|
52
|
|
|
$
|
—
|
|
|
$
|
104
|
|
Equity in earnings of equity method affiliates
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
(1)
|
Gross margin is defined and reconciled to its most directly comparable financial measures calculated and presented below under the caption Non-GAAP Financial Measures.
|
|
Three Months Ended
March 31, |
||||
|
2016
|
|
2015
|
||
Operating Data:
|
|
||||
Gathered volumes—TBtu
|
278
|
|
|
286
|
|
Gathered volumes—TBtu/d
|
3.05
|
|
|
3.18
|
|
Natural gas processed volumes—TBtu
|
162
|
|
|
151
|
|
Natural gas processed volumes—TBtu/d
|
1.78
|
|
|
1.68
|
|
NGLs produced—MBbl/d
(1)
|
73.47
|
|
|
65.00
|
|
NGLs sold—MBbl/d
(1)(2)
|
76.31
|
|
|
67.62
|
|
Condensate sold—MBbl/d
|
6.45
|
|
|
5.96
|
|
Crude Oil - Gathered volumes—MBbl/d
|
28.85
|
|
|
6.72
|
|
Transported volumes—TBtu
|
465
|
|
|
514
|
|
Transportation volumes—TBtu/d
|
5.11
|
|
|
5.72
|
|
Interstate firm contracted capacity—Bcf/d
|
7.17
|
|
|
7.82
|
|
Intrastate average deliveries—TBtu/d
|
1.68
|
|
|
1.84
|
|
(1)
|
Excludes condensate.
|
(2)
|
NGLs sold includes volumes of NGLs withdrawn from inventory or purchased for system balancing purposes.
|
|
Three Months Ended
March 31, |
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Operating Income
|
$
|
103
|
|
|
$
|
104
|
|
Other Income (Expense):
|
|
|
|
||||
Interest expense
|
(23
|
)
|
|
(20
|
)
|
||
Equity in earnings of equity method affiliates
|
7
|
|
|
7
|
|
||
Other, net
|
—
|
|
|
1
|
|
||
Total Other Income (Expense)
|
(16
|
)
|
|
(12
|
)
|
||
Income Before Income Taxes
|
87
|
|
|
92
|
|
||
Income tax expense
|
1
|
|
|
1
|
|
||
Net Income
|
$
|
86
|
|
|
$
|
91
|
|
Less: Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
||
Less: Series A Preferred Unit distributions
|
—
|
|
|
—
|
|
||
Net Income attributable to common and subordinated units
|
$
|
86
|
|
|
$
|
91
|
|
|
Three Months Ended
March 31, |
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Other Financial Data:
|
|
|
|
||||
Gross Margin
(1)
|
$
|
314
|
|
|
$
|
324
|
|
Adjusted EBITDA
(1)
|
215
|
|
|
207
|
|
||
Distributable cash flow
(1)
|
174
|
|
|
145
|
|
(1)
|
Gross margin, Adjusted EBITDA and distributable cash flow are defined and reconciled to their most directly comparable financial measures calculated and presented below under the caption Non-GAAP Financial Measures within this Part I, Item 2.
|
•
|
The Partnership’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 the Partnership’s assets to generate sufficient cash flow to make distributions to its partners;
|
•
|
The Partnership’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.
|
|
Three Months Ended
March 31, |
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Reconciliation of Gross Margin to Revenues:
|
|
|
|
||||
Revenues
|
$
|
509
|
|
|
$
|
616
|
|
Cost of natural gas and natural gas liquids (excluding depreciation and amortization)
|
195
|
|
|
292
|
|
||
Gross margin
|
$
|
314
|
|
|
$
|
324
|
|
|
|
|
|
||||
Reconciliation of Adjusted EBITDA and distributable cash flow to net income attributable to common and subordinated units:
|
|
|
|
||||
Net income attributable to common and subordinated units
|
$
|
86
|
|
|
$
|
91
|
|
Add:
|
|
|
|
||||
Depreciation and amortization expense
|
81
|
|
|
73
|
|
||
Interest expense, net of interest income
|
23
|
|
|
20
|
|
||
Income tax expense
|
1
|
|
|
1
|
|
||
EBITDA
|
$
|
191
|
|
|
$
|
185
|
|
Add:
|
|
|
|
||||
Distributions from equity method affiliates
(1)
|
20
|
|
|
12
|
|
||
Non-cash equity based compensation
|
2
|
|
|
3
|
|
||
Other non-cash losses
|
12
|
|
|
14
|
|
||
Less:
|
|
|
|
||||
Other non-cash gains
|
(3
|
)
|
|
—
|
|
||
Equity in earnings of equity method affiliates
|
(7
|
)
|
|
(7
|
)
|
||
Adjusted EBITDA
|
$
|
215
|
|
|
$
|
207
|
|
Less:
|
|
|
|
||||
Adjustment for Series A Preferred Unit distribution, net
(2)
|
(4
|
)
|
|
—
|
|
||
Adjusted interest expense, net
(3)
|
(23
|
)
|
|
(22
|
)
|
||
Maintenance capital expenditures
|
(13
|
)
|
|
(39
|
)
|
||
Current income taxes
|
(1
|
)
|
|
(1
|
)
|
||
Distributable cash flow
|
$
|
174
|
|
|
$
|
145
|
|
|
Three Months Ended
March 31, |
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Reconciliation of Adjusted EBITDA to net cash provided by operating activities:
|
|
|
|
||||
Net cash provided by operating activities
|
$
|
117
|
|
|
$
|
188
|
|
Interest expense, net of interest income
|
23
|
|
|
20
|
|
||
Income tax expense
|
1
|
|
|
1
|
|
||
Equity in earnings of equity method affiliates, net of distributions
(1)
|
—
|
|
|
(5
|
)
|
||
Non-cash equity based compensation
|
(2
|
)
|
|
(3
|
)
|
||
Other non-cash items
|
—
|
|
|
1
|
|
||
Changes in operating working capital which (provided) used cash:
|
|
|
|
||||
Accounts receivable
|
(24
|
)
|
|
—
|
|
||
Accounts payable
|
87
|
|
|
9
|
|
||
Other, including changes in noncurrent assets and liabilities
|
(11
|
)
|
|
(26
|
)
|
||
EBITDA
|
$
|
191
|
|
|
$
|
185
|
|
Add:
|
|
|
|
||||
Non-cash equity based compensation
|
2
|
|
|
3
|
|
||
Distributions from equity method affiliates
(1)
|
20
|
|
|
12
|
|
||
Other non-cash losses
|
12
|
|
|
14
|
|
||
Less:
|
|
|
|
||||
Other non-cash gains
|
(3
|
)
|
|
—
|
|
||
Equity in earnings of equity method affiliates
|
(7
|
)
|
|
(7
|
)
|
||
Adjusted EBITDA
|
$
|
215
|
|
|
$
|
207
|
|
(1)
|
Distributions from equity method affiliates includes a
$7 million
and
$12 million
return on investment and a
$13 million
and
zero
return of investment for the three months ended
March 31, 2016
and 2015, respectively. Equity in earnings of equity method affiliates, net of distributions only includes those distributions representing a return on investment.
|
(2)
|
This amount represents the prorated quarterly cash distribution on the Series A Preferred Units declared on April 26, 2016. In accordance with the
Partnership Agreement
, the Series A Preferred Unit distributions are deemed to have been paid out of available cash with respect to the quarter immediately preceding the quarter in which the distribution is made. This amount is shown net of the amount of Series A Preferred Unit distributions recognized in the Condensed Consolidated Statements of Income.
|
(3)
|
Adjusted interest expense, net excludes the effect of the amortization of the premium on EOIT’s fixed rate senior notes. This exclusion is the primary reason for the difference between “Interest expense, net” and “Adjusted interest expense, net.”
|
|
Three Months Ended
March 31, |
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Net cash provided by operating activities
|
$
|
117
|
|
|
$
|
188
|
|
Net cash used in investing activities
|
(117
|
)
|
|
(245
|
)
|
||
Net cash provided by financing activities
|
34
|
|
|
53
|
|
|
Three Months Ended
March 31, |
||||
|
2016
|
|
2015
|
||
|
(In millions)
|
||||
Net proceeds from Revolving Credit Facility
|
405
|
|
|
—
|
|
Proceeds (repayments) from commercial paper program
|
(236
|
)
|
|
183
|
|
Repayment of notes payable—affiliated companies
|
(363
|
)
|
|
—
|
|
Proceeds from issuance of Series A Preferred Units, net of issuance costs
|
362
|
|
|
—
|
|
Distributions to partners
|
(134
|
)
|
|
(130
|
)
|
•
|
cash on hand;
|
•
|
cash generated from operations;
|
•
|
borrowings under our Revolving Credit Facility; and
|
•
|
capital raised through debt and equity markets.
|
•
|
maintenance capital expenditures, which are cash expenditures (including expenditures for the construction or development of new capital assets or the replacement, improvement or expansion of existing capital assets) made to maintain, over the long-term, our operating capacity or operating income; and
|
•
|
expansion capital expenditures, which are cash expenditures incurred for acquisitions or capital improvements that we expect will increase our operating income or operating capacity over the long term.
|
•
|
the fees and gross margins we realize with respect to the volume of natural gas, NGLs and crude oil that we handle;
|
•
|
the prices of, levels of production of, and demand for natural gas, NGLs and crude oil;
|
•
|
the volume of natural gas, NGLs and crude oil we gather, compress, treat, dehydrate, process, fractionate, transport and store;
|
•
|
the relationship among prices for natural gas, NGLs and crude oil;
|
•
|
cash calls and settlements of hedging positions;
|
•
|
margin requirements on open price risk management assets and liabilities;
|
•
|
the level of competition from other midstream energy companies;
|
•
|
adverse effects of governmental and environmental regulation;
|
•
|
the level of our operation and maintenance expenses and general and administrative costs; and
|
•
|
prevailing economic conditions.
|
•
|
Neither the
Partnership Agreement
nor any other agreement requires CenterPoint Energy or OGE Energy to pursue a business strategy that favors us. The directors and officers of CenterPoint Energy and OGE Energy have a fiduciary duty to make decisions in the best interests of the stockholders of their respective companies, which may be contrary to our interests. CenterPoint Energy and OGE Energy may choose to shift the focus of their investment and growth to areas not served by our assets. In addition, CenterPoint Energy is the holder of our Series A Preferred Units and may favor its interests in voting in favor of actions relating to such units, including voting in favor of making distributions on such Series A Preferred Units even if no distributions are made on the common units.
|
•
|
Our general partner is allowed to take into account the interests of parties other than us, such as CenterPoint Energy and OGE Energy, in resolving conflicts of interest.
|
•
|
Some of the directors of our general partner are also directors of CenterPoint Energy or OGE Energy and will owe fiduciary duties to their respective companies. These individuals may also devote significant time to the business of CenterPoint Energy and OGE Energy.
|
•
|
The
Partnership Agreement
replaces the fiduciary duties that would otherwise be owed to us by our general partner with contractual standards governing its duties, limits our general partner’s liabilities and restricts the remedies available to our unitholders for actions that, without such limitations, might constitute breaches of fiduciary duty.
|
•
|
Except in limited circumstances, our general partner has the power and authority to conduct our business without unitholder approval.
|
•
|
Disputes may arise under our commercial agreements with CenterPoint Energy and OGE Energy.
|
•
|
Our general partner determines the amount and timing of asset purchases and sales, borrowings, issuances of additional partnership units and the creation, reduction or increase of cash reserves, each of which can affect the amount of distributable cash flow.
|
•
|
Our general partner determines the amount and timing of any capital expenditures and whether a capital expenditure is classified as a maintenance capital expenditure, which reduces operating surplus, or an expansion or investment capital expenditure, which does not reduce operating surplus. This determination can affect the amount of cash that is distributed to our unitholders and the ability of the subordinated units to convert to common units.
|
•
|
Our general partner determines which costs incurred by it and its affiliates are reimbursable by us.
|
•
|
Our general partner may cause us to borrow funds in order to permit the payment of cash distributions, even if the purpose or effect of the borrowing is to make a distribution on the subordinated units, to make incentive distributions or to accelerate the expiration of the subordination period.
|
•
|
The
Partnership Agreement
permits us to classify up to $300 million as operating surplus, even if it is generated from asset sales, non-working capital borrowings or other sources that would otherwise constitute capital surplus. This cash
|
•
|
The
Partnership Agreement
does not prohibit our general partner from causing us to pay it or its affiliates for any services rendered to us or entering into additional contractual arrangements with any of these entities on our behalf.
|
•
|
Our general partner intends to limit its liability regarding our contractual and other obligations.
|
•
|
Our general partner may exercise its right to call and purchase all of the common units not owned by it and its affiliates if they own more than
90% of the common units. If our general partner and its affiliates reduce their ownership percentage to below 70% of the outstanding units, the ownership threshold to exercise the call right will be permanently reduced to 80%
.
|
•
|
Our general partner controls the enforcement of the obligations that it and its affiliates owe to us.
|
•
|
Our general partner decides whether to retain separate counsel, accountants or others to perform services for us.
|
•
|
Our general partner may transfer its incentive distribution rights without unitholder approval.
|
•
|
Our general partner may elect to cause us to issue common units to it in connection with a resetting of the target distribution levels related to our general partner’s incentive distribution rights without the approval of the conflicts committee of the Board of Directors or our unitholders. This election may result in lower distributions to our common unitholders in certain situations.
|
•
|
our existing unitholders’ proportionate ownership interest in us will decrease;
|
•
|
the amount of distributable cash flow on each unit may decrease;
|
•
|
because a lower percentage of total outstanding units will be subordinated units, the risk that a shortfall in the payment of the minimum quarterly distribution will be borne by our common unitholders will increase;
|
•
|
because the amount payable to holders of incentive distribution rights is based on a percentage of the total distributable cash flow, the distributions to holders of incentive distribution rights will increase even if the per unit distribution on common units remains the same;
|
•
|
the ratio of taxable income to distributions may increase;
|
•
|
the relative voting strength of each previously outstanding unit may be diminished; and
|
•
|
the market price of the common units may decline.
|
•
|
identify and characterize applicable threats that could impact a high consequence area;
|
•
|
improve data collection, integration, and analysis;
|
•
|
repair and remediate pipelines as necessary; and
|
•
|
implement preventive and mitigating action.
|
Exhibit Number
|
|
Description
|
Report or Registration Statement
|
SEC File or Registration Number
|
Exhibit Reference
|
|
2.1
|
|
|
Master Formation Agreement dated as of March 14, 2013 by and among CenterPoint Energy, Inc., OGE Energy Corp., Bronco Midstream Holdings, LLC and Bronco Midstream Holdings II, LLC
|
Registrant’s registration statement on Form S-1, filed on November 26, 2013
|
File No. 333-192545
|
Exhibit 2.1
|
3.1
|
|
|
Certificate of Limited Partnership of CenterPoint Energy Field Services LP, as amended
|
Registrant’s registration statement on Form S-1, filed on November 26, 2013
|
File No. 333-192545
|
Exhibit 3.1
|
3.2
|
|
|
Third Amended and Restated Agreement of Limited Partnership of Enable Midstream Partners, LP
|
Registrant’s Form 8-K filed February 19, 2016
|
File No. 001-36413
|
Exhibit 3.1
|
4.1
|
|
|
Specimen Unit Certificate representing common units (included with Second Amended and Restated Agreement of Limited Partnership of Enable Midstream Partners, LP as Exhibit A thereto)
|
Registrant’s Form 8-K filed April 22, 2014
|
File No. 001-36413
|
Exhibit 3.1
|
4.2
|
|
|
Indenture, dated as of May 27, 2014, between Enable Midstream Partners, LP and U.S. Bank National Association, as trustee.
|
Registrant’s Form 8-K filed May 29, 2014
|
File No. 001-36413
|
Exhibit 4.1
|
4.3
|
|
|
First Supplemental Indenture, dated as of May 27, 2014, by and among Enable Midstream Partners, LP, CenterPoint Energy Resources Corp., as guarantor, and U.S. Bank National Association, as trustee.
|
Registrant’s Form 8-K filed May 29, 2014
|
File No. 001-36413
|
Exhibit 4.2
|
4.4
|
|
|
Registration Rights Agreement, dated as of May 27, 2014, by and among Enable Midstream Partners, LP, CenterPoint Energy Resources Corp., as guarantor, and RBS Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse Securities (USA) LLC, and RBC Capital Markets, LLC, as representatives of the initial purchasers.
|
Registrant’s Form 8-K filed May 29, 2014
|
File No. 001-36413
|
Exhibit 4.3
|
4.5
|
|
|
Registration Rights Agreement, dated as of February 18, 2016, by and between Enable Midstream Partners, LP and CenterPoint Energy, Inc.
|
Registrant’s Form 8-K filed February 19, 2016
|
File No. 001-36413
|
Exhibit 4.1
|
10.1
|
|
|
Purchase Agreement by and between Enable Midstream Partners, LP and CenterPoint Energy, Inc. dated January 28, 2016
|
Registrant’s Form 8-K filed February 1, 2016
|
File No. 001-36413
|
Exhibit 10.1
|
+10.2
|
|
|
Special Severance Agreement and General Release by and between Enable Midstream Services, LLC and Paul A. Weissgarber
|
|
|
|
+31.1
|
|
|
Rule 13a-14(a)/15d-14(a) Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
+31.2
|
|
|
Rule 13a-14(a)/15d-14(a) Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
+32.1
|
|
|
Section 1350 Certification of principal executive officer
|
|
|
|
+32.2
|
|
|
Section 1350 Certification of principal financial officer
|
|
|
|
+99.1
|
|
|
Guarantee Agreement dated as of May 1, 2013 among CenterPoint Energy Field Services LP and Enogex LLC
|
|
|
|
+101.INS
|
|
|
XBRL Instance Document.
|
|
|
|
+101.SCH
|
|
|
XBRL Taxonomy Schema Document.
|
|
|
|
+101.PRE
|
|
|
XBRL Taxonomy Presentation Linkbase Document.
|
|
|
|
+101.LAB
|
|
|
XBRL Taxonomy Label Linkbase Document.
|
|
|
|
+101.CAL
|
|
|
XBRL Taxonomy Calculation Linkbase Document.
|
|
|
|
+101.DEF
|
|
|
XBRL Definition Linkbase Document.
|
|
|
|
|
|
ENABLE MIDSTREAM PARTNERS, LP
|
||
|
|
(Registrant)
|
||
|
|
|
||
|
|
By: ENABLE GP, LLC
|
||
|
|
Its general partner
|
||
|
|
|
|
|
Date:
|
May 4, 2016
|
By:
|
|
/s/ Tom Levescy
|
|
|
|
|
Tom Levescy
|
|
|
|
|
Senior Vice President, Chief Accounting Officer and Controller
|
|
|
|
|
(Principal Accounting Officer)
|
i.
|
acts which are detrimental or destructive to the General Partner, the Partnership, the Company, or an Affiliate (as determined in the sole discretion of the General Partner, the Partnership, or the Company);
|
ii.
|
any breach of the material terms of this Agreement, including but not limited to engaging in any Unauthorized Communication or breach of the confidentiality provisions of this Agreement; and/or
|
iii.
|
Executive accepts employment with the Company or an Affiliate prior to signing the Waiver and General Release.
|
“COMPANY”
|
Enable Midstream Services, LLC, an Oklahoma limited liability company.
|
|
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
“EXECUTIVE”
|
Signature:
|
|
|
|
|
|
Printed Name:
|
|
|
Signature Date:
|
|
“EXECUTIVE”
|
Signature:
|
|
|
|
|
|
Printed Name:
|
|
|
Signature Date:
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
c)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
|
|
/s/ Rodney J. Sailor
|
|
Rodney J. Sailor
|
|
President and Chief Executive Officer, Enable GP, LLC, the General Partner of Enable Midstream Partners, LP
|
|
(Principal Executive Officer)
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
c)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
|
|
/s/ John P. Laws
|
|
John P. Laws
|
|
Executive Vice President, Chief Financial Officer and Treasurer, Enable GP, LLC, the General Partner of Enable Midstream Partners, LP
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
/s/ Rodney J. Sailor
|
|
Rodney J. Sailor
|
|
President and Chief Executive Officer, Enable GP, LLC, the General Partner of Enable Midstream Partners, LP
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ John P. Laws
|
|
John P. Laws
|
|
Executive Vice President, Chief Financial Officer and Treasurer, Enable GP, LLC, the General Partner of Enable Midstream Partners, LP
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
|
|
|
CENTERPOINT ENERGY FIELD SERVICES LP, as the Parent Guarantor,
|
|
|
|
By: CNP OGE GP LLC, its general partner
|
|
By
|
/s/ Gary Whitlock
|
|
Name: Gary Whitlock
|
|
Title: Acting Chief Financial Officer
|
|
|
ENOGEX LLC,
|
|
|
|
By
|
/s/ Sean Trauschke
|
|
Name: Sean Trauschke
|
|
Title: Chief Financial Officer
|
Acknowledged and agreed to:
|
|
UMB BANK, N.A.
|
|
|
|
By
|
/s/ Sean Trauschke
|
|
Name: Sean Trauschke
|
|
Title: Chief Financial Officer
|