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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended
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June 30, 2019
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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72-1252419
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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499 West Sheridan Avenue,
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Suite 1500
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Oklahoma City,
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Oklahoma
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73102
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of each class
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Trading symbol(s)
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Name of each exchange on which registered
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Common Units Representing Limited Partner Interests
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ENBL
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New York Stock Exchange
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Large accelerated filer
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x
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Accelerated filer
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o
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Non-accelerated filer
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o
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page
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•
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our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports as soon as reasonably practicable after we electronically file that material with or furnish it to the SEC;
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•
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press releases on quarterly distributions, quarterly earnings, and other developments;
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•
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governance information, including our governance guidelines, committee charters, and code of ethics and business conduct;
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•
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information on events and presentations, including an archive of available calls, webcasts, and presentations;
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•
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news and other announcements that we may post from time to time that investors may find useful or interesting; and
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•
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opportunities to sign up for email alerts and RSS feeds to have information pushed in real time.
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2019 Notes.
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$500 million aggregate principal amount of the Partnership’s 2.400% senior notes due 2019.
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2019 Term Loan Agreement.
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$1 billion unsecured term loan agreement dated January 29, 2019, by and among Enable Midstream Partners, LP and Bank of America, N.A., as administrative agent, and the several lenders from time to time party thereto.
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2024 Notes.
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$600 million aggregate principal amount of the Partnership’s 3.900% senior notes due 2024.
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2027 Notes.
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$700 million aggregate principal amount of the Partnership’s 4.400% senior notes due 2027.
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2028 Notes.
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$800 million aggregate principal amount of the Partnership’s 4.950% senior notes due 2028.
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2044 Notes.
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$550 million aggregate principal amount of the Partnership’s 5.000% senior notes due 2044.
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Adjusted EBITDA.
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A non-GAAP measure calculated as net income attributable to limited partners plus depreciation and amortization expense, interest expense, net of interest income, income tax expense, distributions received from equity method affiliate in excess of equity earnings, non-cash equity-based compensation, change in fair value of derivatives not designated as hedging instruments, certain other non-cash gains and losses (including gains and losses on sales of assets and write-downs of materials and supplies) and impairments, less the noncontrolling interest allocable to Adjusted EBITDA.
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Adjusted interest expense.
|
A non-GAAP measure calculated as interest expense plus interest income, amortization of premium on long-term debt and capitalized interest on expansion capital, less amortization of debt costs and discount on long-term debt.
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Annual Report.
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Annual Report on Form 10-K for the year ended December 31, 2018.
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ASC.
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Accounting Standards Codification.
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ASU.
|
Accounting Standards Update.
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Atoka.
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Atoka Midstream LLC, in which the Partnership owns a 50% interest, which provides gathering and processing services to customers in the Arkoma Basin in Oklahoma.
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ATM Program.
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The offer and sale, from time to time, of common units representing limited partner interest having an aggregate offering price of up to $200 million in quantities, by sales methods and at prices determined by market conditions and other factors at the time of such sales, pursuant to that certain ATM Equity Offering Sales Agreement, entered into on May 12, 2017.
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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.
|
Billion cubic feet per day.
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Board of Directors.
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The board of directors of Enable GP, LLC.
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Btu.
|
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.
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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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DCF.
|
Distributable Cash Flow, a non-GAAP measure calculated as Adjusted EBITDA, as further adjusted for Series A Preferred Unit distributions, distributions for phantom and performance units, Adjusted interest expense, maintenance capital expenditures and current income taxes.
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Distribution coverage ratio.
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A non-GAAP measure calculated as DCF divided by distributions related to common unitholders.
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DOT.
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Department of Transportation.
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EGR
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Enable Gulf Run Transmission, LLC, a Delaware limited liability company, a wholly owned subsidiary of the Partnership.
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EGT.
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Enable Gas Transmission, LLC, a wholly owned subsidiary of the Partnership that operates an approximately 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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EOCS.
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Enable Oklahoma Crude Services, LLC, formerly Velocity Holdings, LLC, a wholly owned subsidiary of the Partnership that provides crude oil and condensate gathering services in the SCOOP and STACK plays of the Anadarko Basin in Oklahoma.
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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 an approximately 2,200-mile intrastate pipeline that provides natural gas transportation and storage services to customers in Oklahoma.
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EOIT Senior Notes.
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$250 million 6.25% senior notes due 2020.
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ESCP.
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Enable South Central Pipeline, LLC, formerly Velocity Pipeline Partners, LLC, a Delaware limited liability company, in which the Partnership, through EOCS, owns a 60% joint venture interest in a 26-mile pipeline system with a third party which owns and operates a refinery connected to the EOCS system.
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Exchange Act.
|
Securities Exchange Act of 1934, as amended.
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FASB.
|
Financial Accounting Standards Board.
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FERC.
|
Federal Energy Regulatory Commission.
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GAAP.
|
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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Gross margin.
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A non-GAAP measure calculated as Total revenues minus Cost of natural gas and natural gas liquids, excluding depreciation and amortization.
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ICE.
|
Intercontinental Exchange.
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LDC.
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Local distribution company involved in the delivery of natural gas to consumers within a specific geographic area.
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LIBOR.
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London Interbank Offered Rate.
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MBbl.
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Thousand barrels.
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MBbl/d.
|
Thousand barrels per day.
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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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Moody’s.
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Moody’s Investor Services.
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MRT.
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Enable Mississippi River Transmission, LLC, a wholly owned subsidiary of the Partnership that operates a 1,600-mile interstate pipeline that provides natural gas transportation and storage services principally in Texas, Arkansas, Louisiana, Missouri and Illinois.
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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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NYSE.
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New York Stock Exchange.
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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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Fifth Amended and Restated Agreement of Limited Partnership of Enable Midstream Partners, LP dated as of November 14, 2017.
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PHMSA.
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Pipeline and Hazardous Materials Safety Administration.
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Revolving Credit Facility.
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$1.75 billion senior unsecured revolving credit facility.
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S&P.
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Standard & Poor’s Rating Services.
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SCOOP.
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South Central Oklahoma Oil Province.
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SEC.
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Securities and Exchange Commission.
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Series A Preferred Units.
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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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STACK.
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Sooner Trend (oil field), Anadarko (basin), Canadian and Kingfisher (counties).
|
TBtu.
|
Trillion British thermal units.
|
TBtu/d.
|
Trillion British thermal units per day.
|
WTI.
|
West Texas Intermediate.
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•
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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;
|
•
|
our ability to complete internal growth projects on time and on budget;
|
•
|
the price and availability of debt and equity financing;
|
•
|
strategic decisions by CenterPoint Energy and OGE Energy regarding their ownership of us and Enable GP;
|
•
|
operating hazards and other risks incidental to transporting, storing, gathering and processing natural gas, NGLs, crude oil and midstream products;
|
•
|
natural disasters, weather-related delays, casualty losses and other matters beyond our control;
|
•
|
interest rates;
|
•
|
the timing and extent of changes in labor and material prices;
|
•
|
labor relations;
|
•
|
large customer defaults;
|
•
|
changes in the availability and cost of capital;
|
•
|
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 current or future litigation; and
|
•
|
other factors set forth in this report and our other filings with the SEC, including our Annual Report.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions, except per unit data)
|
||||||||||||||
Revenues (including revenues from affiliates (Note 13)):
|
|
|
|
|
|
|
|
|
|
|
|
||||
Product sales
|
$
|
393
|
|
|
$
|
501
|
|
|
$
|
836
|
|
|
$
|
944
|
|
Service revenues
|
342
|
|
|
304
|
|
|
694
|
|
|
609
|
|
||||
Total Revenues
|
735
|
|
|
805
|
|
|
1,530
|
|
|
1,553
|
|
||||
Cost and Expenses (including expenses from affiliates (Note 13)):
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of natural gas and natural gas liquids (excluding depreciation and amortization shown separately)
|
317
|
|
|
444
|
|
|
695
|
|
|
819
|
|
||||
Operation and maintenance
|
99
|
|
|
97
|
|
|
202
|
|
|
191
|
|
||||
General and administrative
|
25
|
|
|
26
|
|
|
51
|
|
|
53
|
|
||||
Depreciation and amortization
|
110
|
|
|
96
|
|
|
215
|
|
|
192
|
|
||||
Taxes other than income tax
|
17
|
|
|
16
|
|
|
35
|
|
|
33
|
|
||||
Total Cost and Expenses
|
568
|
|
|
679
|
|
|
1,198
|
|
|
1,288
|
|
||||
Operating Income
|
167
|
|
|
126
|
|
|
332
|
|
|
265
|
|
||||
Other Income (Expense):
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(48
|
)
|
|
(36
|
)
|
|
(94
|
)
|
|
(69
|
)
|
||||
Equity in earnings of equity method affiliate
|
4
|
|
|
7
|
|
|
7
|
|
|
13
|
|
||||
Other, net
|
1
|
|
|
(2
|
)
|
|
1
|
|
|
—
|
|
||||
Total Other Expense
|
(43
|
)
|
|
(31
|
)
|
|
(86
|
)
|
|
(56
|
)
|
||||
Income Before Income Tax
|
124
|
|
|
95
|
|
|
246
|
|
|
209
|
|
||||
Income tax benefit
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Net Income
|
$
|
124
|
|
|
$
|
95
|
|
|
$
|
247
|
|
|
$
|
209
|
|
Less: Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Net Income Attributable to Limited Partners
|
$
|
124
|
|
|
$
|
95
|
|
|
$
|
246
|
|
|
$
|
209
|
|
Less: Series A Preferred Unit distributions (Note 7)
|
9
|
|
|
9
|
|
|
18
|
|
|
18
|
|
||||
Net Income Attributable to Common Units (Note 6)
|
$
|
115
|
|
|
$
|
86
|
|
|
$
|
228
|
|
|
$
|
191
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic earnings per unit (Note 6)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common units
|
$
|
0.26
|
|
|
$
|
0.20
|
|
|
$
|
0.52
|
|
|
$
|
0.44
|
|
Diluted earnings per unit (Note 6)
|
|
|
|
|
|
|
|
|
|
||||||
Common units
|
$
|
0.26
|
|
|
$
|
0.20
|
|
|
$
|
0.52
|
|
|
$
|
0.44
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Net income
|
$
|
124
|
|
|
$
|
95
|
|
|
$
|
247
|
|
|
$
|
209
|
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
||||||||
Unrealized losses on derivative instruments
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
||||
Reclassification of derivative losses to net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other comprehensive loss
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
||||
Comprehensive income
|
121
|
|
|
95
|
|
|
244
|
|
|
209
|
|
||||
Less: Comprehensive income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Comprehensive income attributable to Limited Partners
|
$
|
121
|
|
|
$
|
95
|
|
|
$
|
243
|
|
|
$
|
209
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Current Assets:
|
|
||||||
Cash and cash equivalents
|
$
|
9
|
|
|
$
|
8
|
|
Restricted cash
|
1
|
|
|
14
|
|
||
Accounts receivable, net of allowance for doubtful accounts (Note 1)
|
229
|
|
|
290
|
|
||
Accounts receivable—affiliated companies
|
20
|
|
|
19
|
|
||
Inventory
|
46
|
|
|
50
|
|
||
Gas imbalances
|
26
|
|
|
29
|
|
||
Other current assets
|
45
|
|
|
39
|
|
||
Total current assets
|
376
|
|
|
449
|
|
||
Property, Plant and Equipment:
|
|
|
|
||||
Property, plant and equipment
|
13,102
|
|
|
12,899
|
|
||
Less accumulated depreciation and amortization
|
2,197
|
|
|
2,028
|
|
||
Property, plant and equipment, net
|
10,905
|
|
|
10,871
|
|
||
Other Assets:
|
|
|
|
||||
Intangible assets, net
|
632
|
|
|
663
|
|
||
Goodwill
|
98
|
|
|
98
|
|
||
Investment in equity method affiliate
|
308
|
|
|
317
|
|
||
Other
|
90
|
|
|
46
|
|
||
Total other assets
|
1,128
|
|
|
1,124
|
|
||
Total Assets
|
$
|
12,409
|
|
|
$
|
12,444
|
|
Current Liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
148
|
|
|
$
|
288
|
|
Accounts payable—affiliated companies
|
3
|
|
|
4
|
|
||
Current portion of long-term debt
|
254
|
|
|
500
|
|
||
Short-term debt
|
681
|
|
|
649
|
|
||
Taxes accrued
|
40
|
|
|
31
|
|
||
Gas imbalances
|
18
|
|
|
22
|
|
||
Other
|
126
|
|
|
121
|
|
||
Total current liabilities
|
1,270
|
|
|
1,615
|
|
||
Other Liabilities:
|
|
|
|
||||
Accumulated deferred income taxes, net
|
4
|
|
|
5
|
|
||
Regulatory liabilities
|
24
|
|
|
23
|
|
||
Other
|
79
|
|
|
54
|
|
||
Total other liabilities
|
107
|
|
|
82
|
|
||
Long-Term Debt
|
3,473
|
|
|
3,129
|
|
||
Commitments and Contingencies (Note 14)
|
|
|
|
||||
Partners’ Equity:
|
|
|
|
||||
Series A Preferred Units (14,520,000 issued and outstanding at June 30, 2019 and December 31, 2018)
|
362
|
|
|
362
|
|
||
Common units (435,073,301 issued and outstanding at June 30, 2019 and 433,232,411 issued and outstanding at December 31, 2018, respectively)
|
7,163
|
|
|
7,218
|
|
||
Accumulated other comprehensive loss
|
(3
|
)
|
|
—
|
|
||
Noncontrolling interest
|
37
|
|
|
38
|
|
||
Total Partners’ Equity
|
7,559
|
|
|
7,618
|
|
||
Total Liabilities and Partners’ Equity
|
$
|
12,409
|
|
|
$
|
12,444
|
|
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Cash Flows from Operating Activities:
|
|
||||||
Net income
|
$
|
247
|
|
|
$
|
209
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
215
|
|
|
192
|
|
||
Deferred income taxes
|
(1
|
)
|
|
—
|
|
||
Loss on sale/retirement of assets
|
2
|
|
|
—
|
|
||
Equity in earnings of equity method affiliate
|
(7
|
)
|
|
(13
|
)
|
||
Return on investment in equity method affiliate
|
7
|
|
|
13
|
|
||
Equity-based compensation
|
9
|
|
|
8
|
|
||
Amortization of debt costs and discount (premium)
|
—
|
|
|
(1
|
)
|
||
Changes in other assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
58
|
|
|
(9
|
)
|
||
Accounts receivable—affiliated companies
|
(1
|
)
|
|
(3
|
)
|
||
Inventory
|
4
|
|
|
(2
|
)
|
||
Gas imbalance assets
|
3
|
|
|
8
|
|
||
Other current assets
|
(3
|
)
|
|
(15
|
)
|
||
Other assets
|
6
|
|
|
(5
|
)
|
||
Accounts payable
|
(111
|
)
|
|
(19
|
)
|
||
Accounts payable—affiliated companies
|
(1
|
)
|
|
—
|
|
||
Gas imbalance liabilities
|
(4
|
)
|
|
4
|
|
||
Other current liabilities
|
15
|
|
|
22
|
|
||
Other liabilities
|
(11
|
)
|
|
16
|
|
||
Net cash provided by operating activities
|
427
|
|
|
405
|
|
||
Cash Flows from Investing Activities:
|
|
|
|
||||
Capital expenditures
|
(252
|
)
|
|
(375
|
)
|
||
Proceeds from sale of assets
|
—
|
|
|
8
|
|
||
Proceeds from insurance
|
—
|
|
|
1
|
|
||
Return of investment in equity method affiliate
|
9
|
|
|
8
|
|
||
Other, net
|
(9
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(252
|
)
|
|
(358
|
)
|
||
Cash Flows from Financing Activities:
|
|
|
|
||||
Increase (decrease) in short-term debt
|
32
|
|
|
(78
|
)
|
||
Proceeds from long-term debt, net of issuance costs
|
850
|
|
|
787
|
|
||
Repayment of long-term debt
|
(500
|
)
|
|
(450
|
)
|
||
Repayment of Revolving Credit Facility
|
(250
|
)
|
|
—
|
|
||
Distributions
|
(296
|
)
|
|
(295
|
)
|
||
Cash paid for employee equity-based compensation
|
(23
|
)
|
|
(9
|
)
|
||
Net cash used in financing activities
|
(187
|
)
|
|
(45
|
)
|
||
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash
|
(12
|
)
|
|
2
|
|
||
Cash, Cash Equivalents and Restricted Cash at Beginning of Period
|
22
|
|
|
19
|
|
||
Cash, Cash Equivalents and Restricted Cash at End of Period
|
$
|
10
|
|
|
$
|
21
|
|
|
Six Months Ended June 30, 2019
|
||||||||||||||||||||||||
|
Series A
Preferred
Units
|
|
Common
Units
|
|
Accumulated Other Comprehensive Loss
|
|
Noncontrolling
Interest
|
|
Total Partners’
Equity
|
||||||||||||||||
|
Units
|
|
Value
|
|
Units
|
|
Value
|
|
Value
|
|
Value
|
|
Value
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||||
Balance as of December 31, 2018
|
15
|
|
|
$
|
362
|
|
|
433
|
|
|
$
|
7,218
|
|
|
$
|
—
|
|
|
$
|
38
|
|
|
$
|
7,618
|
|
Net income
|
—
|
|
|
9
|
|
|
—
|
|
|
113
|
|
|
—
|
|
|
1
|
|
|
123
|
|
|||||
Distributions
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
(138
|
)
|
|
—
|
|
|
(1
|
)
|
|
(148
|
)
|
|||||
Equity-based compensation, net of units for employee taxes
|
—
|
|
|
—
|
|
|
2
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||||
Balance as of March 31, 2019
|
15
|
|
|
$
|
362
|
|
|
435
|
|
|
$
|
7,183
|
|
|
$
|
—
|
|
|
$
|
38
|
|
|
$
|
7,583
|
|
Net income
|
—
|
|
|
9
|
|
|
—
|
|
|
115
|
|
|
—
|
|
|
—
|
|
|
124
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Distributions
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
(138
|
)
|
|
—
|
|
|
(1
|
)
|
|
(148
|
)
|
|||||
Equity-based compensation, net of units for employee taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Balance as of June 30, 2019
|
15
|
|
|
$
|
362
|
|
|
435
|
|
|
$
|
7,163
|
|
|
$
|
(3
|
)
|
|
$
|
37
|
|
|
$
|
7,559
|
|
|
Six Months Ended June 30, 2018
|
||||||||||||||||||||||||
|
Series A
Preferred
Units
|
|
Common
Units
|
|
Accumulated Other Comprehensive Loss
|
|
Noncontrolling
Interest
|
|
Total Partners’
Equity
|
||||||||||||||||
|
Units
|
|
Value
|
|
Units
|
|
Value
|
|
Value
|
|
Value
|
|
Value
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||||
Balance as of December 31, 2017
|
15
|
|
|
$
|
362
|
|
|
433
|
|
|
$
|
7,280
|
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
7,654
|
|
Net income
|
—
|
|
|
9
|
|
|
—
|
|
|
105
|
|
|
—
|
|
|
—
|
|
|
114
|
|
|||||
Distributions
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
(139
|
)
|
|
—
|
|
|
(1
|
)
|
|
(149
|
)
|
|||||
Balance as of March 31, 2018
|
15
|
|
|
$
|
362
|
|
|
433
|
|
|
$
|
7,246
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
7,619
|
|
Net income
|
—
|
|
|
9
|
|
|
—
|
|
|
86
|
|
|
—
|
|
|
—
|
|
|
95
|
|
|||||
Distributions
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
(137
|
)
|
|
—
|
|
|
—
|
|
|
(146
|
)
|
|||||
Equity-based compensation, net of units for employee taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Balance as of June 30, 2018
|
15
|
|
|
$
|
362
|
|
|
433
|
|
|
$
|
7,198
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
7,571
|
|
|
Three Months Ended June 30, 2019
|
||||||||||||||
|
Gathering and
Processing |
|
Transportation
and Storage |
|
Eliminations
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Product sales:
|
|
|
|
|
|
|
|
||||||||
Natural gas
|
$
|
94
|
|
|
$
|
108
|
|
|
$
|
(95
|
)
|
|
$
|
107
|
|
Natural gas liquids
|
237
|
|
|
5
|
|
|
(5
|
)
|
|
237
|
|
||||
Condensate
|
33
|
|
|
—
|
|
|
—
|
|
|
33
|
|
||||
Total revenues from natural gas, natural gas liquids, and condensate
|
364
|
|
|
113
|
|
|
(100
|
)
|
|
377
|
|
||||
Gain on derivative activity
|
15
|
|
|
1
|
|
|
—
|
|
|
16
|
|
||||
Total Product sales
|
$
|
379
|
|
|
$
|
114
|
|
|
$
|
(100
|
)
|
|
$
|
393
|
|
Service revenues:
|
|
|
|
|
|
|
|
||||||||
Demand revenues
|
$
|
68
|
|
|
$
|
123
|
|
|
$
|
—
|
|
|
$
|
191
|
|
Volume-dependent revenues
|
140
|
|
|
15
|
|
|
(4
|
)
|
|
151
|
|
||||
Total Service revenues
|
$
|
208
|
|
|
$
|
138
|
|
|
$
|
(4
|
)
|
|
$
|
342
|
|
Total Revenues
|
$
|
587
|
|
|
$
|
252
|
|
|
$
|
(104
|
)
|
|
$
|
735
|
|
|
Three Months Ended June 30, 2018
|
||||||||||||||
|
Gathering and
Processing |
|
Transportation
and Storage |
|
Eliminations
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Product sales:
|
|
|
|
|
|
|
|
||||||||
Natural gas
|
$
|
106
|
|
|
$
|
143
|
|
|
$
|
(107
|
)
|
|
$
|
142
|
|
Natural gas liquids
|
336
|
|
|
6
|
|
|
(6
|
)
|
|
336
|
|
||||
Condensate
|
37
|
|
|
—
|
|
|
—
|
|
|
37
|
|
||||
Total revenues from natural gas, natural gas liquids, and condensate
|
479
|
|
|
149
|
|
|
(113
|
)
|
|
515
|
|
||||
Loss on derivative activity
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
||||
Total Product sales
|
$
|
465
|
|
|
$
|
149
|
|
|
$
|
(113
|
)
|
|
$
|
501
|
|
Service revenues:
|
|
|
|
|
|
|
|
||||||||
Demand revenues
|
$
|
52
|
|
|
$
|
113
|
|
|
$
|
—
|
|
|
$
|
165
|
|
Volume-dependent revenues
|
124
|
|
|
15
|
|
|
—
|
|
|
139
|
|
||||
Total Service revenues
|
$
|
176
|
|
|
$
|
128
|
|
|
$
|
—
|
|
|
$
|
304
|
|
Total Revenues
|
$
|
641
|
|
|
$
|
277
|
|
|
$
|
(113
|
)
|
|
$
|
805
|
|
|
Six Months Ended June 30, 2019
|
||||||||||||||
|
Gathering and
Processing |
|
Transportation
and Storage |
|
Eliminations
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Product sales:
|
|
|
|
|
|
|
|
||||||||
Natural gas
|
$
|
222
|
|
|
$
|
270
|
|
|
$
|
(236
|
)
|
|
$
|
256
|
|
Natural gas liquids
|
507
|
|
|
11
|
|
|
(11
|
)
|
|
507
|
|
||||
Condensate
|
67
|
|
|
—
|
|
|
—
|
|
|
67
|
|
||||
Total revenues from natural gas, natural gas liquids, and condensate
|
796
|
|
|
281
|
|
|
(247
|
)
|
|
830
|
|
||||
Gain on derivative activity
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||
Total Product sales
|
$
|
802
|
|
|
$
|
281
|
|
|
$
|
(247
|
)
|
|
$
|
836
|
|
Service revenues:
|
|
|
|
|
|
|
|
||||||||
Demand revenues
|
$
|
128
|
|
|
$
|
254
|
|
|
$
|
—
|
|
|
$
|
382
|
|
Volume-dependent revenues
|
287
|
|
|
33
|
|
|
(8
|
)
|
|
312
|
|
||||
Total Service revenues
|
$
|
415
|
|
|
$
|
287
|
|
|
$
|
(8
|
)
|
|
$
|
694
|
|
Total Revenues
|
$
|
1,217
|
|
|
$
|
568
|
|
|
$
|
(255
|
)
|
|
$
|
1,530
|
|
|
Six Months Ended June 30, 2018
|
||||||||||||||
|
Gathering and
Processing |
|
Transportation
and Storage |
|
Eliminations
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Product sales:
|
|
|
|
|
|
|
|
||||||||
Natural gas
|
$
|
212
|
|
|
$
|
274
|
|
|
$
|
(216
|
)
|
|
$
|
270
|
|
Natural gas liquids
|
615
|
|
|
13
|
|
|
(13
|
)
|
|
615
|
|
||||
Condensate
|
73
|
|
|
—
|
|
|
—
|
|
|
73
|
|
||||
Total revenues from natural gas, natural gas liquids, and condensate
|
900
|
|
|
287
|
|
|
(229
|
)
|
|
958
|
|
||||
Gain (loss) on derivative activity
|
(17
|
)
|
|
2
|
|
|
1
|
|
|
(14
|
)
|
||||
Total Product sales
|
$
|
883
|
|
|
$
|
289
|
|
|
$
|
(228
|
)
|
|
$
|
944
|
|
Service revenues:
|
|
|
|
|
|
|
|
||||||||
Demand revenues
|
$
|
102
|
|
|
$
|
233
|
|
|
$
|
—
|
|
|
$
|
335
|
|
Volume-dependent revenues
|
247
|
|
|
34
|
|
|
(7
|
)
|
|
274
|
|
||||
Total Service revenues
|
$
|
349
|
|
|
$
|
267
|
|
|
$
|
(7
|
)
|
|
$
|
609
|
|
Total Revenues
|
$
|
1,232
|
|
|
$
|
556
|
|
|
$
|
(235
|
)
|
|
$
|
1,553
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Accounts Receivable:
|
|
|
|
||||
Customers
|
$
|
229
|
|
|
$
|
297
|
|
Contract assets (1)
|
6
|
|
|
6
|
|
||
Non-customers
|
14
|
|
|
6
|
|
||
Total Accounts Receivable (2)
|
$
|
249
|
|
|
$
|
309
|
|
(1)
|
Contract assets reflected in Total Accounts Receivable include accrued minimum volume commitments. Contract assets are primarily attributable to revenues associated with estimated shortfall volumes on certain annual minimum volume commitment arrangements. Total Accounts Receivable does not include $5 million of contracts assets related to firm service transportation contracts with tiered rates, which are reflected in Other Assets.
|
(2)
|
Total Accounts Receivable includes Accounts receivables, net of allowance for doubtful accounts and Accounts receivable—affiliated companies.
|
|
June 30,
2019 |
|
December 31,
2018 |
|
Amounts recognized in revenues
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Deferred revenues
|
$
|
49
|
|
|
$
|
48
|
|
|
$
|
21
|
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023 and After
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Deferred revenues
|
$
|
23
|
|
|
$
|
6
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
10
|
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023 and After
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Transportation and Storage
|
$
|
239
|
|
|
$
|
397
|
|
|
$
|
220
|
|
|
$
|
166
|
|
|
$
|
806
|
|
Gathering and Processing
|
125
|
|
|
164
|
|
|
136
|
|
|
138
|
|
|
460
|
|
|||||
Total remaining performance obligations
|
$
|
364
|
|
|
$
|
561
|
|
|
$
|
356
|
|
|
$
|
304
|
|
|
$
|
1,266
|
|
|
Three Months Ended June 30, 2019
|
||||||||||
|
Gathering and
Processing |
|
Transportation
and Storage |
|
Total
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Lease Expense:
|
|
|
|
|
|
||||||
Lease Cost:
|
|
|
|
|
|
||||||
Operating lease cost
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Short-term lease cost
|
4
|
|
|
—
|
|
|
4
|
|
|||
Total Lease Cost
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
Six Months Ended June 30, 2019
|
||||||||||
|
Gathering and
Processing |
|
Transportation
and Storage |
|
Total
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Lease Expense:
|
|
|
|
|
|
||||||
Lease Cost:
|
|
|
|
|
|
||||||
Operating lease cost
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
5
|
|
Short-term lease cost
|
10
|
|
|
1
|
|
|
11
|
|
|||
Total Lease Cost
|
$
|
15
|
|
|
$
|
1
|
|
|
$
|
16
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024 and After
|
|
Total
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Noncancellable operating leases
|
$
|
11
|
|
|
$
|
12
|
|
|
$
|
7
|
|
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
15
|
|
|
$
|
57
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2020-2021
|
|
2022-2023
|
|
After 2023
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Noncancellable operating leases
|
$
|
14
|
|
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
14
|
|
|
$
|
40
|
|
Purchase price allocation:
|
|
||
Assets acquired:
|
|
||
Cash
|
$
|
1
|
|
Current Assets
|
3
|
|
|
Property, plant and equipment
|
124
|
|
|
Intangibles
|
259
|
|
|
Goodwill
|
86
|
|
|
Liabilities assumed:
|
|
||
Current liabilities
|
1
|
|
|
Less: Non-Controlling Interest at fair value
|
28
|
|
|
Total identifiable net assets
|
$
|
444
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions, except per unit data)
|
||||||||||||||
Net income
|
$
|
124
|
|
|
$
|
95
|
|
|
$
|
247
|
|
|
$
|
209
|
|
Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Series A Preferred Unit distributions
|
9
|
|
|
9
|
|
|
18
|
|
|
18
|
|
||||
General partner interest in net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income available to common unitholders
|
$
|
115
|
|
|
$
|
86
|
|
|
$
|
228
|
|
|
$
|
191
|
|
|
|
|
|
|
|
|
|
||||||||
Net income allocable to common units
|
$
|
115
|
|
|
$
|
86
|
|
|
$
|
228
|
|
|
$
|
191
|
|
Dilutive effect of Series A Preferred Unit distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Diluted net income allocable to common units
|
$
|
115
|
|
|
$
|
86
|
|
|
$
|
228
|
|
|
$
|
191
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per unit
|
|
|
|
|
|
|
|
||||||||
Common units
|
$
|
0.26
|
|
|
$
|
0.20
|
|
|
$
|
0.52
|
|
|
$
|
0.44
|
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted average number of common units outstanding (1)
|
437
|
|
|
435
|
|
|
436
|
|
|
434
|
|
||||
Dilutive effect of Series A Preferred Units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Dilutive effect of performance units
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Diluted weighted average number of common units outstanding
|
437
|
|
|
436
|
|
|
436
|
|
|
435
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per unit
|
|
|
|
|
|
|
|
||||||||
Common units
|
$
|
0.26
|
|
|
$
|
0.20
|
|
|
$
|
0.52
|
|
|
$
|
0.44
|
|
(1)
|
Basic weighted average number of outstanding common units includes approximately one million time-based phantom units for each of the three and six months ended June 30, 2019 and 2018, respectively.
|
Three Months Ended
|
|
Record Date
|
|
Payment Date
|
|
Per Unit Distribution
|
|
Total Cash Distribution
|
||||
June 30, 2019 (1)
|
|
August 20, 2019
|
|
August 27, 2019
|
|
$
|
0.3305
|
|
|
$
|
144
|
|
March 31, 2019
|
|
May 21, 2019
|
|
May 29, 2019
|
|
0.318
|
|
|
138
|
|
||
December 31, 2018
|
|
February 19, 2019
|
|
February 26, 2019
|
|
0.318
|
|
|
138
|
|
||
September 30, 2018
|
|
November 16, 2018
|
|
November 29, 2018
|
|
0.318
|
|
|
138
|
|
||
June 30, 2018
|
|
August 21, 2018
|
|
August 28, 2018
|
|
0.318
|
|
|
138
|
|
||
March 31, 2018
|
|
May 22, 2018
|
|
May 29, 2018
|
|
0.318
|
|
|
138
|
|
(1)
|
The Board of Directors declared this $0.3305 per common unit cash distribution on August 2, 2019, to be paid on August 27, 2019 to common unitholders of record at the close of business on August 20, 2019.
|
Three Months Ended
|
|
Record Date
|
|
Payment Date
|
|
Per Unit Distribution
|
|
Total Cash Distribution
|
||||
June 30, 2019
|
|
August 2, 2019
|
|
August 14, 2019
|
|
$
|
0.625
|
|
|
$
|
9
|
|
March 31, 2019
|
|
April 29, 2019
|
|
May 15, 2019
|
|
0.625
|
|
|
9
|
|
||
December 31, 2018
|
|
February 8, 2019
|
|
February 14, 2019
|
|
0.625
|
|
|
9
|
|
||
September 30, 2018
|
|
November 6, 2018
|
|
November 14, 2018
|
|
0.625
|
|
|
9
|
|
||
June 30, 2018
|
|
August 1, 2018
|
|
August 14, 2018
|
|
0.625
|
|
|
9
|
|
||
March 31, 2018
|
|
May 1, 2018
|
|
May 15, 2018
|
|
0.625
|
|
|
9
|
|
(1)
|
The Board of Directors declared a $0.625 per Series A Preferred Unit cash distribution on August 2, 2019, to be paid on August 14, 2019, to Series A Preferred unitholders of record at the close of business on August 2, 2019.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Equity in Earnings of Equity Method Affiliate
|
$
|
4
|
|
|
$
|
7
|
|
|
$
|
7
|
|
|
$
|
13
|
|
Distributions from Equity Method Affiliate (1)
|
$
|
4
|
|
|
$
|
8
|
|
|
$
|
16
|
|
|
$
|
21
|
|
(1)
|
Distributions from equity method affiliate includes a $4 million and $7 million return on investment and a zero and $1 million return of investment for the three months ended June 30, 2019 and 2018, respectively. Distributions from equity method affiliate includes a $7 million and $13 million return on investment and a $9 million and $8 million return of investment for the six months ended June 30, 2019 and 2018, respectively.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Income Statements:
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
27
|
|
|
$
|
28
|
|
|
$
|
54
|
|
|
$
|
56
|
|
Operating income
|
$
|
11
|
|
|
$
|
16
|
|
|
$
|
22
|
|
|
$
|
33
|
|
Net income
|
$
|
7
|
|
|
$
|
13
|
|
|
$
|
14
|
|
|
$
|
25
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Outstanding Principal
|
|
Premium (Discount)
|
|
Total Debt
|
|
Outstanding Principal
|
|
Premium (Discount)
|
|
Total Debt
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Commercial Paper
|
$
|
681
|
|
|
$
|
—
|
|
|
$
|
681
|
|
|
$
|
649
|
|
|
$
|
—
|
|
|
$
|
649
|
|
Revolving Credit Facility
|
—
|
|
|
—
|
|
|
—
|
|
|
250
|
|
|
—
|
|
|
250
|
|
||||||
2019 Term Loan Agreement
|
850
|
|
|
—
|
|
|
850
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
2019 Notes
|
—
|
|
|
—
|
|
|
—
|
|
|
500
|
|
|
—
|
|
|
500
|
|
||||||
2024 Notes
|
600
|
|
|
—
|
|
|
600
|
|
|
600
|
|
|
—
|
|
|
600
|
|
||||||
2027 Notes
|
700
|
|
|
(2
|
)
|
|
698
|
|
|
700
|
|
|
(2
|
)
|
|
698
|
|
||||||
2028 Notes
|
800
|
|
|
(6
|
)
|
|
794
|
|
|
800
|
|
|
(6
|
)
|
|
794
|
|
||||||
2044 Notes
|
550
|
|
|
—
|
|
|
550
|
|
|
550
|
|
|
—
|
|
|
550
|
|
||||||
EOIT Senior Notes
|
250
|
|
|
4
|
|
|
254
|
|
|
250
|
|
|
7
|
|
|
257
|
|
||||||
Total debt
|
$
|
4,431
|
|
|
$
|
(4
|
)
|
|
$
|
4,427
|
|
|
$
|
4,299
|
|
|
$
|
(1
|
)
|
|
$
|
4,298
|
|
Less: Short-term debt (1)
|
|
|
|
|
681
|
|
|
|
|
|
|
649
|
|
||||||||||
Less: Current portion of long-term debt (2)
|
|
|
|
|
254
|
|
|
|
|
|
|
500
|
|
||||||||||
Less: Unamortized debt expense (3)
|
|
|
|
|
19
|
|
|
|
|
|
|
20
|
|
||||||||||
Total long-term debt
|
|
|
|
|
$
|
3,473
|
|
|
|
|
|
|
$
|
3,129
|
|
(1)
|
Short-term debt includes $681 million and $649 million of outstanding commercial paper as of June 30, 2019 and December 31, 2018, respectively.
|
(2)
|
As of June 30, 2019, Current portion of long-term debt included $254 million outstanding balance of the EOIT Senior Notes due March 15, 2020. As of December 31, 2018, Current portion of long-term debt included $500 million outstanding balance of the 2019 Notes due May 15, 2019.
|
(3)
|
As of June 30, 2019 and December 31, 2018, there was an additional $5 million and $6 million, respectively, of unamortized debt expense related to the Revolving Credit Facility included in Other assets, not included above.
|
•
|
NGL put options, NGL futures and swaps, and WTI crude oil futures, swaps and swaptions are used to manage the Partnership’s NGL and condensate exposure associated with its processing agreements;
|
•
|
natural gas futures and swaps, natural gas options, natural gas swaptions and natural gas commodity purchases and sales are used to manage the Partnership’s natural gas price exposure associated with its gathering, processing, transportation and storage assets, contracts and asset management activities.
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||
|
Gross Notional Volume
|
||||||||||
|
Purchases
|
|
Sales
|
|
Purchases
|
|
Sales
|
||||
Natural gas— TBtu (1)
|
|
|
|
|
|
|
|
||||
Financial fixed futures/swaps
|
12
|
|
|
25
|
|
|
16
|
|
|
28
|
|
Financial basis futures/swaps
|
13
|
|
|
41
|
|
|
18
|
|
|
29
|
|
Financial swaptions (3)
|
—
|
|
|
3
|
|
|
—
|
|
|
1
|
|
Physical purchases/sales
|
—
|
|
|
9
|
|
|
—
|
|
|
11
|
|
Crude oil (for condensate)— MBbl (2)
|
|
|
|
|
|
|
|
||||
Financial futures/swaps
|
—
|
|
|
765
|
|
|
—
|
|
|
945
|
|
Financial swaptions (3)
|
—
|
|
|
30
|
|
|
—
|
|
|
30
|
|
Natural gas liquids— MBbl (4)
|
|
|
|
|
|
|
|
||||
Financial futures/swaps
|
1,980
|
|
|
2,370
|
|
|
270
|
|
|
2,535
|
|
(1)
|
As of June 30, 2019, 78.3% of the natural gas contracts had durations of one year or less and 21.7% had durations of more than one year and less than two years. As of December 31, 2018, 74.0% of the natural gas contracts had durations of one year or less, 24.2% had durations of more than one year and less than two years and 1.8% had durations of more than two years.
|
(2)
|
As of June 30, 2019, 84.9% of the crude oil (for condensate) contracts had durations of one year or less and 15.1% had durations of more than one year and less than two years. As of December 31, 2018, 76.9% of the crude oil (for condensate) contracts had durations of one year or less and 23.1% had durations of more than one year and less than two years.
|
(3)
|
The notional contains a combined derivative instrument consisting of a fixed price swap and a sold option, which gives the counterparties the right, but not the obligation, to increase the notional quantity hedged under the fixed price swap until the option expiration date. The notional volume represents the volume prior to option exercise.
|
(4)
|
As of June 30, 2019, 93.8% of the natural gas liquids contracts had durations of one year or less and 6.2% had durations of more than one year and less than two years. As of December 31, 2018, 86.1% of the natural gas liquid contracts had durations of one year or less and 13.9% had durations of more than one year and less than two years.
|
|
June 30, 2019
|
December 31, 2018
|
|||||
|
Gross Notional Value
|
||||||
|
(In millions)
|
||||||
Interest rate swaps
|
$
|
200
|
|
|
$
|
—
|
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
|
Fair Value
|
||||||||||||||
Instrument
|
Balance Sheet Location
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
(In millions)
|
||||||||||||||
Natural gas
|
|
|
|
|
|
|
|
||||||||||
Financial futures/swaps
|
Other Current
|
|
$
|
11
|
|
|
$
|
6
|
|
|
$
|
3
|
|
|
$
|
5
|
|
Financial futures/swaps
|
Other
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Physical purchases/sales
|
Other Current
|
|
4
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Physical purchases/sales
|
Other
|
|
2
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Crude oil (for condensate)
|
|
|
|
|
|
|
|
|
|
||||||||
Financial futures/swaps
|
Other Current
|
|
2
|
|
|
9
|
|
|
9
|
|
|
3
|
|
||||
Financial futures/swaps
|
Other
|
|
—
|
|
|
5
|
|
|
2
|
|
|
—
|
|
||||
Natural gas liquids
|
|
|
|
|
|
|
|
|
|
||||||||
Financial futures/swaps
|
Other Current
|
|
23
|
|
|
5
|
|
|
10
|
|
|
1
|
|
||||
Financial futures/swaps
|
Other
|
|
6
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Total gross commodity derivatives (1)
|
|
|
$
|
48
|
|
|
$
|
27
|
|
|
$
|
33
|
|
|
$
|
11
|
|
(1)
|
See Note 11 for a reconciliation of the Partnership’s commodity derivatives fair value to the Partnership’s Condensed Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018.
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
|
Fair Value
|
||||||||||||||
Instrument
|
Balance Sheet Location
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
(In millions)
|
||||||||||||||
Interest rate swaps
|
Other Current
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swaps
|
Other
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Total gross interest rate derivatives (1)
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
All interest rate derivative instruments that were designated as cash flow hedges are considered Level 2 as of June 30, 2019.
|
|
Amounts Recognized in Income
|
||||||||||||||
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Natural gas
|
|
|
|
|
|
|
|
||||||||
Financial futures/swaps (losses) gains
|
$
|
9
|
|
|
$
|
(1
|
)
|
|
$
|
8
|
|
|
$
|
(5
|
)
|
Physical purchases/sales gains
|
1
|
|
|
2
|
|
|
—
|
|
|
5
|
|
||||
Crude oil (for condensate)
|
|
|
|
|
|
|
|
||||||||
Financial futures/swaps losses
|
(10
|
)
|
|
(6
|
)
|
|
(21
|
)
|
|
(10
|
)
|
||||
Natural gas liquids
|
|
|
|
|
|
|
|
||||||||
Financial futures/swaps (losses) gains
|
16
|
|
|
(9
|
)
|
|
19
|
|
|
(4
|
)
|
||||
Interest Rates
|
|
|
|
|
|
|
|
||||||||
Financial futures/swaps (losses) gains
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
16
|
|
|
$
|
(14
|
)
|
|
$
|
6
|
|
|
$
|
(14
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Change in fair value of commodity derivatives
|
$
|
11
|
|
|
$
|
(10
|
)
|
|
$
|
(1
|
)
|
|
$
|
(12
|
)
|
Realized gain (loss) on commodity derivatives
|
5
|
|
|
(4
|
)
|
|
7
|
|
|
(2
|
)
|
||||
Gain (loss) on commodity derivative activity
|
$
|
16
|
|
|
$
|
(14
|
)
|
|
$
|
6
|
|
|
$
|
(14
|
)
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Debt
|
|
|
|
|
|
|
|
||||||||
Revolving Credit Facility (Level 2) (1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
250
|
|
|
$
|
250
|
|
2019 Term Loan Agreement (Level 2)
|
850
|
|
|
850
|
|
|
—
|
|
|
—
|
|
||||
2019 Notes (Level 2)
|
—
|
|
|
—
|
|
|
500
|
|
|
497
|
|
||||
2024 Notes (Level 2)
|
600
|
|
|
609
|
|
|
600
|
|
|
571
|
|
||||
2027 Notes (Level 2)
|
698
|
|
|
703
|
|
|
698
|
|
|
642
|
|
||||
2028 Notes (Level 2)
|
794
|
|
|
837
|
|
|
794
|
|
|
764
|
|
||||
2044 Notes (Level 2)
|
550
|
|
|
511
|
|
|
550
|
|
|
445
|
|
||||
EOIT Senior Notes (Level 2)
|
254
|
|
|
256
|
|
|
257
|
|
|
256
|
|
(1)
|
Borrowing capacity is effectively reduced by our borrowings outstanding under the commercial paper program. $681 million and $649 million of commercial paper was outstanding as of June 30, 2019 and December 31, 2018, respectively.
|
June 30, 2019
|
Commodity Contracts
|
|
Gas Imbalances (1)
|
||||||||||||
|
Assets
|
|
Liabilities
|
|
Assets (2)
|
|
Liabilities (3)
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Quoted market prices in active market for identical assets (Level 1)
|
$
|
10
|
|
|
$
|
21
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Significant other observable inputs (Level 2)
|
38
|
|
|
6
|
|
|
13
|
|
|
7
|
|
||||
Unobservable inputs (Level 3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total fair value
|
48
|
|
|
27
|
|
|
13
|
|
|
7
|
|
||||
Netting adjustments
|
(27
|
)
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
21
|
|
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
7
|
|
December 31, 2018
|
Commodity Contracts
|
|
Gas Imbalances (1)
|
||||||||||||
|
Assets
|
|
Liabilities
|
|
Assets (2)
|
|
Liabilities (3)
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Quoted market prices in active market for identical assets (Level 1)
|
$
|
4
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Significant other observable inputs (Level 2)
|
29
|
|
|
2
|
|
|
18
|
|
|
17
|
|
||||
Unobservable inputs (Level 3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total fair value
|
33
|
|
|
11
|
|
|
18
|
|
|
17
|
|
||||
Netting adjustments
|
(9
|
)
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
24
|
|
|
$
|
2
|
|
|
$
|
18
|
|
|
$
|
17
|
|
(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. There were no netting adjustments as of June 30, 2019 and December 31, 2018.
|
(2)
|
Gas imbalance assets exclude fuel reserves for under retained fuel due from shippers of $13 million and $11 million at June 30, 2019 and December 31, 2018, 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 $11 million and $5 million at June 30, 2019 and December 31, 2018, 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.
|
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
||||
Cash Payments:
|
|
|
|
||||
Interest, net of capitalized interest
|
$
|
95
|
|
|
$
|
65
|
|
Income taxes, net of refunds
|
1
|
|
|
1
|
|
||
Non-cash transactions:
|
|
|
|
||||
Accounts payable related to capital expenditures
|
31
|
|
|
42
|
|
||
Lease liabilities arising from the application of ASC 842
|
42
|
|
|
—
|
|
|
June 30,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Cash and cash equivalents
|
$
|
9
|
|
|
$
|
7
|
|
Restricted cash
|
1
|
|
|
14
|
|
||
Cash, cash equivalents and restricted cash shown in the Condensed Consolidated Statements of Cash Flows
|
$
|
10
|
|
|
$
|
21
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Gas transportation and storage service revenues — CenterPoint Energy
|
$
|
23
|
|
|
$
|
24
|
|
|
$
|
56
|
|
|
$
|
57
|
|
Natural gas product sales — CenterPoint Energy
|
3
|
|
|
2
|
|
|
4
|
|
|
8
|
|
||||
Gas transportation and storage service revenues — OGE Energy
|
13
|
|
|
9
|
|
|
26
|
|
|
18
|
|
||||
Natural gas product sales — OGE Energy
|
—
|
|
|
1
|
|
|
1
|
|
|
2
|
|
||||
Total revenues — affiliated companies
|
$
|
39
|
|
|
$
|
36
|
|
|
$
|
87
|
|
|
$
|
85
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Cost of natural gas purchases — CenterPoint Energy
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Cost of natural gas purchases — OGE Energy
|
7
|
|
|
5
|
|
|
13
|
|
|
8
|
|
||||
Total cost of natural gas purchases — affiliated companies
|
$
|
7
|
|
|
$
|
5
|
|
|
$
|
13
|
|
|
$
|
10
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Corporate Services — CenterPoint Energy
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Seconded Employee Costs — OGE Energy
|
5
|
|
|
7
|
|
|
11
|
|
|
15
|
|
||||
Corporate Services — OGE Energy
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Total corporate services and seconded employee costs
|
$
|
5
|
|
|
$
|
8
|
|
|
$
|
11
|
|
|
$
|
17
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Performance units
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
5
|
|
|
$
|
5
|
|
Restricted units
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Phantom units
|
3
|
|
|
1
|
|
|
4
|
|
|
2
|
|
||||
Total compensation expense
|
$
|
5
|
|
|
$
|
3
|
|
|
$
|
9
|
|
|
$
|
8
|
|
|
2019
|
||
Number of units granted
|
610,170
|
|
|
Fair value of units granted
|
$
|
19.95
|
|
Expected distribution yield
|
8.38
|
%
|
|
Expected price volatility
|
34.2
|
%
|
|
Risk-free interest rate
|
2.54
|
%
|
|
Expected life of units (in years)
|
3
|
|
|
2019
|
|
Phantom Units granted
|
585,733
|
|
Fair value of phantom units granted
|
$14.04 - $15.04
|
|
Performance 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
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions, except unit data)
|
||||||||||||||
Units outstanding at December 31, 2018
|
2,109,835
|
|
|
$
|
14.33
|
|
|
1,447,590
|
|
|
$
|
12.38
|
|
||
Granted (1)
|
610,170
|
|
|
19.95
|
|
|
585,733
|
|
|
15.02
|
|
||||
Vested (2)
|
(1,113,159
|
)
|
|
10.45
|
|
|
(550,426
|
)
|
|
8.19
|
|
||||
Forfeited
|
(47,433
|
)
|
|
18.65
|
|
|
(47,463
|
)
|
|
14.76
|
|
||||
Units outstanding at June 30, 2019
|
1,559,413
|
|
|
$
|
19.17
|
|
|
1,435,434
|
|
|
$
|
14.98
|
|
||
Aggregate intrinsic value of units outstanding at June 30, 2019
|
$
|
21
|
|
|
|
|
$
|
20
|
|
|
|
(1)
|
Performance units represents the target number of performance units granted. The actual number of performance units earned, if any, is dependent upon performance and may range from 0% to 200% of the target.
|
(2)
|
Performance units vested as of June 30, 2019 include 1,097,846 units from the 2016 annual grant, which were approved by the Board of Directors in 2016 and paid out at 200%, or 2,195,692 units on March 1, 2019, based on the level of achievement of a performance goal established by the Board of Directors over the performance period of January 1, 2016 through December 31, 2018.
|
|
June 30, 2019
|
||||
|
Unrecognized Compensation Cost
(In millions)
|
|
Weighted Average Period for Recognition
(In years)
|
||
Performance Units
|
$
|
17
|
|
|
1.75
|
Phantom Units
|
13
|
|
|
1.77
|
|
Total
|
$
|
30
|
|
|
|
Three Months Ended June 30, 2019
|
Gathering and
Processing
|
|
Transportation (1)
and Storage |
|
Eliminations
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Product sales
|
$
|
379
|
|
|
$
|
114
|
|
|
$
|
(100
|
)
|
|
$
|
393
|
|
Service revenues
|
208
|
|
|
138
|
|
|
(4
|
)
|
|
342
|
|
||||
Total Revenues
|
587
|
|
|
252
|
|
|
(104
|
)
|
|
735
|
|
||||
Cost of natural gas and natural gas liquids (excluding depreciation and amortization shown separately)
|
297
|
|
|
123
|
|
|
(103
|
)
|
|
317
|
|
||||
Operation and maintenance, General and administrative
|
75
|
|
|
50
|
|
|
(1
|
)
|
|
124
|
|
||||
Depreciation and amortization
|
78
|
|
|
32
|
|
|
—
|
|
|
110
|
|
||||
Taxes other than income tax
|
10
|
|
|
7
|
|
|
—
|
|
|
17
|
|
||||
Operating income
|
$
|
127
|
|
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
167
|
|
Total Assets
|
$
|
9,881
|
|
|
$
|
5,775
|
|
|
$
|
(3,247
|
)
|
|
$
|
12,409
|
|
Capital expenditures
|
$
|
90
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
109
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Three Months Ended June 30, 2018
|
Gathering and
Processing
|
|
Transportation (1)
and Storage |
|
Eliminations
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Product sales
|
$
|
465
|
|
|
$
|
149
|
|
|
$
|
(113
|
)
|
|
$
|
501
|
|
Service revenues
|
176
|
|
|
128
|
|
|
—
|
|
|
304
|
|
||||
Total Revenues
|
641
|
|
|
277
|
|
|
(113
|
)
|
|
805
|
|
||||
Cost of natural gas and natural gas liquids (excluding depreciation and amortization shown separately)
|
411
|
|
|
147
|
|
|
(114
|
)
|
|
444
|
|
||||
Operation and maintenance, General and administrative
|
76
|
|
|
47
|
|
|
—
|
|
|
123
|
|
||||
Depreciation and amortization
|
63
|
|
|
33
|
|
|
—
|
|
|
96
|
|
||||
Taxes other than income tax
|
10
|
|
|
6
|
|
|
—
|
|
|
16
|
|
||||
Operating income
|
$
|
81
|
|
|
$
|
44
|
|
|
$
|
1
|
|
|
$
|
126
|
|
Total assets as of December 31, 2018
|
$
|
9,874
|
|
|
$
|
5,805
|
|
|
$
|
(3,235
|
)
|
|
$
|
12,444
|
|
Capital expenditures
|
$
|
143
|
|
|
$
|
42
|
|
|
$
|
—
|
|
|
$
|
185
|
|
(1)
|
See Note 8 for discussion regarding ownership interests in SESH and related equity earnings included in the transportation and storage segment for the three and six months ended June 30, 2019 and 2018.
|
Six Months Ended June 30, 2019
|
Gathering and
Processing
|
|
Transportation (1)
and Storage
|
|
Eliminations
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Product sales
|
$
|
802
|
|
|
$
|
281
|
|
|
$
|
(247
|
)
|
|
$
|
836
|
|
Service revenues
|
415
|
|
|
287
|
|
|
(8
|
)
|
|
694
|
|
||||
Total Revenues
|
1,217
|
|
|
568
|
|
|
(255
|
)
|
|
1,530
|
|
||||
Cost of natural gas and natural gas liquids (excluding depreciation and amortization shown separately)
|
657
|
|
|
292
|
|
|
(254
|
)
|
|
695
|
|
||||
Operation and maintenance, General and administrative
|
159
|
|
|
95
|
|
|
(1
|
)
|
|
253
|
|
||||
Depreciation and amortization
|
152
|
|
|
63
|
|
|
—
|
|
|
215
|
|
||||
Taxes other than income tax
|
21
|
|
|
14
|
|
|
—
|
|
|
35
|
|
||||
Operating income
|
$
|
228
|
|
|
$
|
104
|
|
|
$
|
—
|
|
|
$
|
332
|
|
Total Assets
|
$
|
9,881
|
|
|
$
|
5,775
|
|
|
$
|
(3,247
|
)
|
|
$
|
12,409
|
|
Capital expenditures
|
$
|
197
|
|
|
$
|
55
|
|
|
$
|
—
|
|
|
$
|
252
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Six Months Ended June 30, 2018
|
Gathering and
Processing
|
|
Transportation (1)
and Storage
|
|
Eliminations
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Product sales
|
$
|
883
|
|
|
$
|
289
|
|
|
$
|
(228
|
)
|
|
$
|
944
|
|
Service revenues
|
349
|
|
|
267
|
|
|
(7
|
)
|
|
609
|
|
||||
Total Revenues
|
1,232
|
|
|
556
|
|
|
(235
|
)
|
|
1,553
|
|
||||
Cost of natural gas and natural gas liquids (excluding depreciation and amortization shown separately)
|
769
|
|
|
286
|
|
|
(236
|
)
|
|
819
|
|
||||
Operation and maintenance, General and administrative
|
152
|
|
|
93
|
|
|
(1
|
)
|
|
244
|
|
||||
Depreciation and amortization
|
125
|
|
|
67
|
|
|
—
|
|
|
192
|
|
||||
Taxes other than income tax
|
20
|
|
|
13
|
|
|
—
|
|
|
33
|
|
||||
Operating income
|
$
|
166
|
|
|
$
|
97
|
|
|
$
|
2
|
|
|
$
|
265
|
|
Total assets as of December 31, 2018
|
$
|
9,874
|
|
|
$
|
5,805
|
|
|
$
|
(3,235
|
)
|
|
$
|
12,444
|
|
Capital expenditures
|
$
|
291
|
|
|
$
|
84
|
|
|
$
|
—
|
|
|
$
|
375
|
|
(1)
|
See Note 8 for discussion regarding ownership interests in SESH and related equity earnings included in the transportation and storage segment for the three and six months ended June 30, 2019 and 2018.
|
Three Months Ended June 30, 2019
|
Gathering and
Processing |
|
Transportation
and Storage |
|
Eliminations
|
|
Enable
Midstream Partners, LP |
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Product sales
|
$
|
379
|
|
|
$
|
114
|
|
|
$
|
(100
|
)
|
|
$
|
393
|
|
Service revenues
|
208
|
|
|
138
|
|
|
(4
|
)
|
|
342
|
|
||||
Total Revenues
|
587
|
|
|
252
|
|
|
(104
|
)
|
|
735
|
|
||||
Cost of natural gas and natural gas liquids (excluding depreciation and amortization shown separately)
|
297
|
|
|
123
|
|
|
(103
|
)
|
|
317
|
|
||||
Gross margin (1)
|
290
|
|
|
129
|
|
|
(1
|
)
|
|
418
|
|
||||
Operation and maintenance, General and administrative
|
75
|
|
|
50
|
|
|
(1
|
)
|
|
124
|
|
||||
Depreciation and amortization
|
78
|
|
|
32
|
|
|
—
|
|
|
110
|
|
||||
Taxes other than income tax
|
10
|
|
|
7
|
|
|
—
|
|
|
17
|
|
||||
Operating income
|
$
|
127
|
|
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
167
|
|
Equity in earnings of equity method affiliate
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
4
|
|
Three Months Ended June 30, 2018
|
Gathering and
Processing |
|
Transportation
and Storage |
|
Eliminations
|
|
Enable
Midstream Partners, LP |
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Product sales
|
$
|
465
|
|
|
$
|
149
|
|
|
$
|
(113
|
)
|
|
$
|
501
|
|
Service revenues
|
176
|
|
|
128
|
|
|
—
|
|
|
304
|
|
||||
Total Revenues
|
641
|
|
|
277
|
|
|
(113
|
)
|
|
805
|
|
||||
Cost of natural gas and natural gas liquids (excluding depreciation and amortization shown separately)
|
411
|
|
|
147
|
|
|
(114
|
)
|
|
444
|
|
||||
Gross margin (1)
|
230
|
|
|
130
|
|
|
1
|
|
|
361
|
|
||||
Operation and maintenance, General and administrative
|
76
|
|
|
47
|
|
|
—
|
|
|
123
|
|
||||
Depreciation and amortization
|
63
|
|
|
33
|
|
|
—
|
|
|
96
|
|
||||
Taxes other than income tax
|
10
|
|
|
6
|
|
|
—
|
|
|
16
|
|
||||
Operating income
|
$
|
81
|
|
|
$
|
44
|
|
|
$
|
1
|
|
|
$
|
126
|
|
Equity in earnings of equity method affiliate
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
Six Months Ended June 30, 2019
|
Gathering and
Processing |
|
Transportation
and Storage |
|
Eliminations
|
|
Enable
Midstream Partners, LP |
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Product sales
|
$
|
802
|
|
|
$
|
281
|
|
|
$
|
(247
|
)
|
|
$
|
836
|
|
Service revenues
|
415
|
|
|
287
|
|
|
(8
|
)
|
|
694
|
|
||||
Total Revenues
|
1,217
|
|
|
568
|
|
|
(255
|
)
|
|
1,530
|
|
||||
Cost of natural gas and natural gas liquids (excluding depreciation and amortization shown separately)
|
657
|
|
|
292
|
|
|
(254
|
)
|
|
695
|
|
||||
Gross margin (1)
|
560
|
|
|
276
|
|
|
(1
|
)
|
|
835
|
|
||||
Operation and maintenance, General and administrative
|
159
|
|
|
95
|
|
|
(1
|
)
|
|
253
|
|
||||
Depreciation and amortization
|
152
|
|
|
63
|
|
|
—
|
|
|
215
|
|
||||
Taxes other than income tax
|
21
|
|
|
14
|
|
|
—
|
|
|
35
|
|
||||
Operating income
|
$
|
228
|
|
|
$
|
104
|
|
|
$
|
—
|
|
|
$
|
332
|
|
Equity in earnings of equity method affiliate
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
Six Months Ended June 30, 2018
|
Gathering and
Processing |
|
Transportation
and Storage |
|
Eliminations
|
|
Enable
Midstream Partners, LP |
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Product sales
|
$
|
883
|
|
|
$
|
289
|
|
|
$
|
(228
|
)
|
|
$
|
944
|
|
Service revenues
|
349
|
|
|
267
|
|
|
(7
|
)
|
|
609
|
|
||||
Total Revenues
|
1,232
|
|
|
556
|
|
|
(235
|
)
|
|
1,553
|
|
||||
Cost of natural gas and natural gas liquids (excluding depreciation and amortization shown separately)
|
769
|
|
|
286
|
|
|
(236
|
)
|
|
819
|
|
||||
Gross margin (1)
|
463
|
|
|
270
|
|
|
1
|
|
|
734
|
|
||||
Operation and maintenance, General and administrative
|
152
|
|
|
93
|
|
|
(1
|
)
|
|
244
|
|
||||
Depreciation and amortization
|
125
|
|
|
67
|
|
|
—
|
|
|
192
|
|
||||
Taxes other than income tax
|
20
|
|
|
13
|
|
|
—
|
|
|
33
|
|
||||
Operating income
|
$
|
166
|
|
|
$
|
97
|
|
|
$
|
2
|
|
|
$
|
265
|
|
Equity in earnings of equity method affiliate
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
13
|
|
(1)
|
Gross margin is a non-GAAP measure and is reconciled to its most directly comparable financial measures calculated and presented below under the caption Reconciliations of Non-GAAP Financial Measures.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||
|
|
|
|
|
|
|
|
|||
Operating Data:
|
|
|||||||||
Natural gas gathered volumes—TBtu
|
420
|
|
|
403
|
|
829
|
|
|
788
|
|
Natural gas gathered volumes—TBtu/d
|
4.62
|
|
|
4.43
|
|
4.58
|
|
|
4.35
|
|
Natural gas processed volumes—TBtu (1)
|
231
|
|
|
212
|
|
460
|
|
|
412
|
|
Natural gas processed volumes—TBtu/d (1)
|
2.54
|
|
|
2.33
|
|
2.54
|
|
|
2.27
|
|
NGLs produced—MBbl/d (1)(2)
|
130.10
|
|
|
130.65
|
|
134.13
|
|
|
120.44
|
|
NGLs sold—MBbl/d (2)(3)
|
136.34
|
|
|
130.07
|
|
138.20
|
|
|
119.79
|
|
Condensate sold—MBbl/d
|
7.60
|
|
|
6.72
|
|
7.97
|
|
|
6.84
|
|
Crude oil and condensate gathered volumes—MBbl/d
|
119.34
|
|
|
30.55
|
|
113.65
|
|
|
27.70
|
|
Transported volumes—TBtu
|
554
|
|
|
484
|
|
1,154
|
|
|
1,005
|
|
Transported volumes—TBtu/d
|
6.04
|
|
|
5.28
|
|
6.36
|
|
|
5.53
|
|
Interstate firm contracted capacity—Bcf/d
|
6.38
|
|
|
5.72
|
|
6.45
|
|
|
5.89
|
|
Intrastate average deliveries—TBtu/d
|
2.06
|
|
|
1.99
|
|
2.19
|
|
|
2.05
|
|
(1)
|
Includes volumes under third-party processing arrangements.
|
(2)
|
Excludes condensate.
|
(3)
|
NGLs sold includes volumes of NGLs withdrawn from inventory or purchased for system balancing purposes.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Anadarko
|
|
|
|
|
|
|
|
||||
Gathered volumes—TBtu/d
|
2.33
|
|
|
2.14
|
|
2.34
|
|
|
2.08
|
|
|
Natural gas processed volumes—TBtu/d (1)
|
2.08
|
|
|
1.91
|
|
2.10
|
|
|
1.87
|
|
|
NGLs produced—MBbl/d (1)(2)
|
112.19
|
|
|
113.75
|
|
116.30
|
|
|
104.77
|
|
|
Crude oil and condensate gathered volumes—MBbl/d
|
79.96
|
|
|
—
|
|
|
78.26
|
|
|
—
|
|
Arkoma
|
|
|
|
|
|
|
|
||||
Gathered volumes—TBtu/d
|
0.49
|
|
|
0.56
|
|
0.49
|
|
|
0.55
|
|
|
Natural gas processed volumes—TBtu/d (1)
|
0.10
|
|
|
0.11
|
|
0.10
|
|
|
0.10
|
|
|
NGLs produced—MBbl/d (1)(2)
|
7.02
|
|
|
7.60
|
|
6.63
|
|
|
6.29
|
|
|
Ark-La-Tex
|
|
|
|
|
|
|
|
||||
Gathered volumes—TBtu/d
|
1.80
|
|
|
1.73
|
|
1.75
|
|
|
1.72
|
|
|
Natural gas processed volumes—TBtu/d
|
0.36
|
|
|
0.31
|
|
0.34
|
|
|
0.30
|
|
|
NGLs produced—MBbl/d (2)
|
10.89
|
|
|
9.30
|
|
11.20
|
|
|
9.38
|
|
|
Williston
|
|
|
|
|
|
|
|
||||
Crude oil gathered volumes—MBbl/d
|
39.38
|
|
|
30.55
|
|
35.39
|
|
|
27.70
|
|
(1)
|
Includes volumes under third-party processing arrangements.
|
(2)
|
Excludes condensate.
|
•
|
revenues from NGL sales decreased $96 million primarily due to a decrease in the average realized sales price from lower average market prices for all NGL products and higher volumes subject to fee deductions for NGLs sold under certain third-party processing arrangements, partially offset by higher processed volumes, and
|
•
|
revenues from natural gas sales decreased $10 million due to lower average natural gas sales prices, partially offset by higher sales volumes.
|
•
|
changes in the fair value of natural gas, condensate and NGL derivatives increased $20 million.
|
•
|
natural gas gathering revenues increased $17 million due to higher fees and gathered volumes in the Anadarko and Ark-La-Tex Basins,
|
•
|
crude oil, condensate and produced water gathering revenues increased $11 million primarily due to an increase related to the November 2018 acquisition of EOCS and an increase in volumes in the Williston Basin, partially offset by lower average rates,
|
•
|
processing service revenues increased $2 million resulting from higher processed volumes in the Anadarko and Ark-La-Tex Basins, partially offset by lower consideration received from percent-of-proceeds, percent-of-liquids and keep-whole processing arrangements due to a decrease in the average realized price, and
|
•
|
a $2 million increase in intercompany management fees.
|
•
|
changes in the fair value of natural gas, condensate and NGL derivatives increased $20 million,
|
•
|
natural gas gathering fees increased $17 million due to higher fees and gathered volumes in the Anadarko and Ark-La-Tex Basins,
|
•
|
crude oil, condensate and produced water gathering revenues increased $11 million primarily due to an increase related to the November 2018 acquisition of EOCS and an increase in volumes in the Williston Basin, partially offset by lower average rates,
|
•
|
revenues from NGL sales less the cost of NGLs increased $15 million due to higher processed volumes, partially offset by lower average sales prices,
|
•
|
processing service fees increased $2 million resulting from higher processed volumes in the Anadarko and Ark-La-Tex Basins, partially offset by lower consideration received from percent-of-proceeds, percent-of-liquids and keep-whole processing arrangements due to a decrease in the average realized price and
|
•
|
a $2 million increase in intercompany management fees.
|
•
|
revenues from natural gas sales less the cost of natural gas decreased approximately $7 million due to lower average natural gas sales prices, partially offset by higher sales volumes.
|
•
|
revenues from NGL sales decreased $102 million primarily due to a decrease in the average realized sales price from lower average market prices for all NGL products other than ethane and higher volumes subject to fee deductions for NGLs sold under certain third-party processing arrangements, partially offset by higher processed volumes.
|
•
|
changes in the fair value of natural gas, condensate and NGL derivatives increased $9 million, and
|
•
|
revenues from natural gas sales increased $12 million due to higher sales volumes, partially offset by lower average natural gas sales prices.
|
•
|
natural gas gathering revenues increased $42 million due to higher fees and gathered volumes in the Anadarko and Ark-La-Tex Basins,
|
•
|
crude oil, condensate and produced water gathering revenues increased $18 million primarily due to an increase related to the November 2018 acquisition of EOCS and an increase in volumes in the Williston Basin, partially offset by lower average rates,
|
•
|
processing service revenues increased $5 million resulting from higher processed volumes in the Anadarko and Ark-La-Tex Basins, partially offset by lower consideration received from percent-of-proceeds, percent-of-liquids and keep-whole processing arrangements due to a decrease in the average realized price and
|
•
|
a $1 million increase in intercompany management fees.
|
•
|
natural gas gathering fees increased $42 million due to higher fees and gathered volumes in the Anadarko and Ark-La-Tex Basins,
|
•
|
revenues from NGL sales less the cost of NGLs increased $26 million due to higher processed volumes, partially offset by lower average sales prices for all NGL products other than ethane,
|
•
|
crude oil, condensate and produced water gathering revenues increased $18 million primarily due to an increase related to the November 2018 acquisition of EOCS and an increase in volumes in the Williston Basin, partially offset by lower average rates,
|
•
|
changes in the fair value of natural gas, condensate and NGL derivatives increased $9 million,
|
•
|
processing service fees increased $5 million resulting from higher processed volumes in the Anadarko and Ark-La-Tex Basins, partially offset by lower consideration received from percent-of-proceeds, percent-of-liquids and keep-whole processing arrangements due to a decrease in the average realized price, and
|
•
|
a $1 million increase in intercompany management fees.
|
•
|
revenues from natural gas sales less the cost of natural gas decreased approximately $4 million due to lower average natural gas sales prices, partially offset by higher sales volumes.
|
•
|
revenues from natural gas sales decreased $35 million primarily due to lower sales volumes and lower average sales prices and
|
•
|
revenues from NGL sales decreased $1 million due to a decrease in lower average sales prices, partially offset by higher volumes.
|
•
|
changes in the fair value of natural gas derivatives increased $1 million.
|
•
|
firm transportation and storage services increased $10 million due to new intrastate and interstate transportation contracts.
|
•
|
system management activities decreased $6 million,
|
•
|
storage decreased $4 million primarily due to a lower of cost or net realizable value adjustment on natural gas inventory, and
|
•
|
revenues from NGL sales less the cost of NGLs decreased $2 million due to a decrease in average NGL prices, partially offset by higher volumes.
|
•
|
firm transportation and storage services increased $10 million due to new intrastate and interstate transportation contracts and
|
•
|
changes in the fair value of natural gas derivatives increased $1 million.
|
•
|
changes in the fair value of natural gas derivatives increased $2 million.
|
•
|
revenues from natural gas sales decreased $8 million primarily due to lower average sales prices and
|
•
|
revenues from NGL sales decreased $2 million due to a decrease in lower average sales prices, partially offset by an increase in volumes.
|
•
|
firm transportation and storage services increased $21 million due to new intrastate and interstate transportation contracts.
|
•
|
volume-dependent transportation revenues decreased $1 million primarily due to a decrease in commodity fees and interruptible volumes related to power-plant customers, partially offset by new interstate contracts.
|
•
|
firm transportation and storage services increased $21 million due to new intrastate and interstate transportation contracts, and
|
•
|
changes in the fair value of natural gas derivatives increased $2 million.
|
•
|
system management activities decreased $9 million,
|
•
|
storage decreased $4 million primarily due to a lower of cost or net realizable value adjustment on natural gas inventory,
|
•
|
revenues from NGL sales less the cost of NGLs decreased $3 million due to a decrease in average NGL prices, partially offset by higher volumes, and
|
•
|
volume-dependent transportation decreased $1 million primarily due to a decrease in commodity fees and interruptible volumes related to power-plant customers, partially offset by new interstate contracts.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Operating Income
|
$
|
167
|
|
|
$
|
126
|
|
|
$
|
332
|
|
|
$
|
265
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(48
|
)
|
|
(36
|
)
|
|
(94
|
)
|
|
(69
|
)
|
||||
Equity in earnings of equity method affiliate
|
4
|
|
|
7
|
|
|
7
|
|
|
13
|
|
||||
Other, net
|
1
|
|
|
(2
|
)
|
|
1
|
|
|
—
|
|
||||
Total Other Expense
|
(43
|
)
|
|
(31
|
)
|
|
(86
|
)
|
|
(56
|
)
|
||||
Income Before Income Taxes
|
124
|
|
|
95
|
|
|
246
|
|
|
209
|
|
||||
Income tax benefit
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Net Income
|
$
|
124
|
|
|
$
|
95
|
|
|
$
|
247
|
|
|
$
|
209
|
|
Less: Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Net Income Attributable to Limited Partners
|
$
|
124
|
|
|
$
|
95
|
|
|
$
|
246
|
|
|
$
|
209
|
|
Less: Series A Preferred Unit distributions
|
9
|
|
|
9
|
|
|
18
|
|
|
18
|
|
||||
Net Income Attributable to Common Units
|
$
|
115
|
|
|
$
|
86
|
|
|
$
|
228
|
|
|
$
|
191
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Reconciliation of Gross margin to Total Revenues:
|
|
|
|
|
|
|
|
||||||||
Consolidated
|
|
|
|
|
|
|
|
||||||||
Product sales
|
$
|
393
|
|
|
$
|
501
|
|
|
$
|
836
|
|
|
$
|
944
|
|
Service revenues
|
342
|
|
|
304
|
|
|
694
|
|
|
609
|
|
||||
Total Revenues
|
735
|
|
|
805
|
|
|
1,530
|
|
|
1,553
|
|
||||
Cost of natural gas and natural gas liquids (excluding depreciation and amortization)
|
317
|
|
|
444
|
|
|
695
|
|
|
819
|
|
||||
Gross margin
|
$
|
418
|
|
|
$
|
361
|
|
|
$
|
835
|
|
|
$
|
734
|
|
|
|
|
|
|
|
|
|
||||||||
Reportable Segments
|
|
|
|
|
|
|
|
||||||||
Gathering and Processing
|
|
|
|
|
|
|
|
||||||||
Product sales
|
$
|
379
|
|
|
$
|
465
|
|
|
$
|
802
|
|
|
$
|
883
|
|
Service revenues
|
208
|
|
|
176
|
|
|
415
|
|
|
349
|
|
||||
Total Revenues
|
587
|
|
|
641
|
|
|
1,217
|
|
|
1,232
|
|
||||
Cost of natural gas and natural gas liquids (excluding depreciation and amortization)
|
297
|
|
|
411
|
|
|
657
|
|
|
769
|
|
||||
Gross margin
|
$
|
290
|
|
|
$
|
230
|
|
|
$
|
560
|
|
|
$
|
463
|
|
|
|
|
|
|
|
|
|
||||||||
Transportation and Storage
|
|
|
|
|
|
|
|
||||||||
Product sales
|
$
|
114
|
|
|
$
|
149
|
|
|
$
|
281
|
|
|
$
|
289
|
|
Service revenues
|
138
|
|
|
128
|
|
|
287
|
|
|
267
|
|
||||
Total Revenues
|
252
|
|
|
277
|
|
|
568
|
|
|
556
|
|
||||
Cost of natural gas and natural gas liquids (excluding depreciation and amortization)
|
123
|
|
|
147
|
|
|
292
|
|
|
286
|
|
||||
Gross margin
|
$
|
129
|
|
|
$
|
130
|
|
|
$
|
276
|
|
|
$
|
270
|
|
(1)
|
For purposes of this table, the Partnership includes the value of all natural gas and NGL commodities received as payment as commodity-based.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions, except Distribution coverage ratio)
|
||||||||||||||
Reconciliation of Adjusted EBITDA and DCF to net income attributable to limited partners and calculation of Distribution coverage ratio:
|
|
|
|
|
|
|
|
||||||||
Net income attributable to limited partners
|
$
|
124
|
|
|
$
|
95
|
|
|
$
|
246
|
|
|
$
|
209
|
|
Depreciation and amortization expense
|
110
|
|
|
96
|
|
|
215
|
|
|
192
|
|
||||
Interest expense, net of interest income
|
47
|
|
|
36
|
|
|
93
|
|
|
69
|
|
||||
Income tax benefit
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Distributions received from equity method affiliate in excess of equity earnings
|
—
|
|
|
1
|
|
|
9
|
|
|
8
|
|
||||
Non-cash equity-based compensation
|
5
|
|
|
3
|
|
|
9
|
|
|
8
|
|
||||
Change in fair value of derivatives (1)
|
(11
|
)
|
|
10
|
|
|
1
|
|
|
12
|
|
||||
Other non-cash losses (2)
|
6
|
|
|
4
|
|
|
7
|
|
|
4
|
|
||||
Noncontrolling Interest Share of Adjusted EBITDA
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Adjusted EBITDA
|
$
|
281
|
|
|
$
|
245
|
|
|
$
|
578
|
|
|
$
|
502
|
|
Series A Preferred Unit distributions (3)
|
(9
|
)
|
|
(9
|
)
|
|
(18
|
)
|
|
(18
|
)
|
||||
Distributions for phantom and performance units (4)
|
—
|
|
|
(1
|
)
|
|
(9
|
)
|
|
(4
|
)
|
||||
Adjusted interest expense (5)
|
(49
|
)
|
|
(38
|
)
|
|
(96
|
)
|
|
(73
|
)
|
||||
Maintenance capital expenditures
|
(26
|
)
|
|
(26
|
)
|
|
(50
|
)
|
|
(40
|
)
|
||||
DCF
|
$
|
197
|
|
|
$
|
171
|
|
|
$
|
405
|
|
|
$
|
367
|
|
|
|
|
|
|
|
|
|
||||||||
Distributions related to common unitholders (6)
|
$
|
144
|
|
|
$
|
138
|
|
|
$
|
282
|
|
|
$
|
276
|
|
|
|
|
|
|
|
|
|
||||||||
Distribution coverage ratio
|
1.37
|
|
|
1.24
|
|
|
1.44
|
|
|
1.33
|
|
(1)
|
Change in fair value of derivatives includes changes in the fair value of derivatives that are not designated as hedging instruments.
|
(2)
|
Other non-cash losses includes loss on sale of assets and write-downs of materials and supplies.
|
(3)
|
This amount represents the quarterly cash distributions on the Series A Preferred Units declared for the three and six months ended June 30, 2019 and 2018. 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.
|
(4)
|
Distributions for phantom and performance units represent distribution equivalent rights paid in cash. Phantom unit distribution equivalent rights are paid during the vesting period and performance unit distribution equivalent rights are paid at vesting.
|
(5)
|
See below for a reconciliation of Adjusted interest expense to Interest expense.
|
(6)
|
Represents cash distributions declared for common units outstanding as of each respective period. Amounts for 2019 reflect estimated cash distributions for common units outstanding for the quarter ended June 30, 2019.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Reconciliation of Adjusted EBITDA to net cash provided by operating activities:
|
|
|
|
|
|
|
|
||||||||
Net cash provided by operating activities
|
$
|
212
|
|
|
$
|
239
|
|
|
$
|
427
|
|
|
$
|
405
|
|
Interest expense, net of interest income
|
47
|
|
|
36
|
|
|
93
|
|
|
69
|
|
||||
Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Current income taxes
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other non-cash items (1)
|
4
|
|
|
5
|
|
|
4
|
|
|
4
|
|
||||
Proceeds from insurance
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Changes in operating working capital which (provided) used cash:
|
|
|
|
|
|
|
|
||||||||
Accounts receivable
|
(28
|
)
|
|
35
|
|
|
(57
|
)
|
|
12
|
|
||||
Accounts payable
|
57
|
|
|
(41
|
)
|
|
112
|
|
|
19
|
|
||||
Other, including changes in noncurrent assets and liabilities
|
(1
|
)
|
|
(41
|
)
|
|
(10
|
)
|
|
(28
|
)
|
||||
Return of investment in equity method affiliate
|
—
|
|
|
1
|
|
|
9
|
|
|
8
|
|
||||
Change in fair value of derivatives (2)
|
(11
|
)
|
|
10
|
|
|
1
|
|
|
12
|
|
||||
Adjusted EBITDA
|
$
|
281
|
|
|
$
|
245
|
|
|
$
|
578
|
|
|
$
|
502
|
|
(1)
|
Other non-cash items include amortization of debt expense, discount and premium on long-term debt and write-downs of materials and supplies.
|
(2)
|
Change in fair value of derivatives includes changes in the fair value of derivatives that are not designated as hedging instruments.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Reconciliation of Adjusted interest expense to Interest expense:
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
$
|
48
|
|
|
$
|
36
|
|
|
$
|
94
|
|
|
$
|
69
|
|
Interest income
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Amortization of premium on long-term debt
|
2
|
|
|
2
|
|
|
3
|
|
|
3
|
|
||||
Capitalized interest on expansion capital
|
—
|
|
|
2
|
|
|
1
|
|
|
4
|
|
||||
Amortization of debt expense and discount
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
|
(3
|
)
|
||||
Adjusted interest expense
|
$
|
49
|
|
|
$
|
38
|
|
|
$
|
96
|
|
|
$
|
73
|
|
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Net cash provided by operating activities
|
$
|
427
|
|
|
$
|
405
|
|
Net cash used in investing activities
|
$
|
(252
|
)
|
|
$
|
(358
|
)
|
Net cash used in financing activities
|
$
|
(187
|
)
|
|
$
|
(45
|
)
|
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Repayment of 2019 Notes
|
$
|
(500
|
)
|
|
$
|
—
|
|
Repayment of Term Loan Agreement
|
—
|
|
|
(450
|
)
|
||
Increase (decrease) in short-term debt
|
32
|
|
|
(78
|
)
|
||
Proceeds from long-term debt, net of issuance costs
|
850
|
|
|
787
|
|
||
Repayments to Revolving Credit Facility
|
(250
|
)
|
|
—
|
|
||
Distributions
|
(296
|
)
|
|
(295
|
)
|
||
Cash paid for employee equity-based compensation
|
(23
|
)
|
|
(9
|
)
|
•
|
cash on hand;
|
•
|
cash generated from operations;
|
•
|
proceeds from commercial paper issuances;
|
•
|
borrowings under our 2019 Term Loan Agreement
|
•
|
borrowings under our Revolving Credit Facility; and
|
•
|
capital raised through debt and equity markets.
|
|
|
ENABLE MIDSTREAM PARTNERS, LP
|
||
|
|
(Registrant)
|
||
|
|
|
||
|
|
By: ENABLE GP, LLC
|
||
|
|
Its general partner
|
||
|
|
|
|
|
Date:
|
August 6, 2019
|
By:
|
|
/s/ Tom Levescy
|
|
|
|
|
Tom Levescy
|
|
|
|
|
Senior Vice President, Chief Accounting Officer and Controller
|
|
|
|
|
(Principal Accounting 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)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
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
|
d)
|
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)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
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
|
d)
|
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)
|