Enable Midstream Partners, LP (NYSE: ENBL) announced today that it is
continuing to review the potential impact of the Mar. 15, 2018,
announcement by the Federal Energy Regulatory Commission (“FERC”) that
it would reverse a long-standing policy that allows master limited
partnership (“MLP”) interstate natural gas and oil pipelines to recover
an income tax allowance in cost of service rates. Enable is also
monitoring the notice of proposed rulemaking issued concurrently with
the announcement that will address the effects of the revised policy on
the rates of MLP interstate natural gas pipelines.
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ENABLE MIDSTREAM PARTNERS, LP RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
A significant portion of Enable’s revenue and gross margin is derived
from our gathering and processing segment, where the only potential
impact could be on our crude oil gathering lines in the Bakken Shale,
which we believe would not be material. For the year ended Dec. 31,
2017, as reported in our Form 10-K filed in Feb. 2018, 77% of our
revenue and 62% of our gross margin was derived from our gathering and
processing segment.
Further, a significant portion of the rates in our transportation and
storage segment, which is comprised of interstate and intrastate assets,
are unlikely to be impacted by the policy change. For our interstate
natural gas pipelines, as disclosed in our Form 10-K filed in Feb. 2018,
approximately 44% of our aggregate contracted firm transportation
capacity on Enable Gas Transmission (“EGT”) and Enable Mississippi River
Transmission (“MRT”) and approximately 44% of our aggregated contracted
firm storage capacity on EGT and MRT was subscribed under “negotiated
rate” contracts as of Dec. 31, 2017. We believe that these “negotiated
rate” contracts are less likely to be impacted by the policy change. As
disclosed in the Form 2 filed for each of EGT and MRT in Apr. 2017,
approximately 35% and 52% of our transportation volumes were shipped
under “discounted rate” contracts during the year ended Dec. 31, 2016,
respectively. Likewise, we believe that these “discounted rate”
contracts are less likely to be impacted by the policy change. In
addition, a significant portion of the service provided on Enable
Oklahoma Intrastate Transmission, our intrastate transportation and
storage system, is subject to state regulation, which is not impacted by
the policy change. The rule implementing policy change, if finalized,
would be reflected in MRT’s upcoming rate case which in any event will
provide us with the opportunity to adjust rates based on historical
investments and updated contracted capacity levels.
ABOUT ENABLE MIDSTREAM PARTNERS
Enable owns, operates and develops strategically located natural gas and
crude oil infrastructure assets. Enable’s assets include over 13,300
miles of natural gas and crude oil gathering pipelines, approximately
2.6 Bcf/d of processing capacity, approximately 7,800 miles of
interstate pipelines (including Southeast Supply Header, LLC of which
Enable owns 50 percent), approximately 2,200 miles of intrastate
pipelines and eight storage facilities comprising 86.0 billion cubic
feet of storage capacity. For more information, visit http://www.enablemidstream.com.
FORWARD-LOOKING STATEMENTS
Some of the information in this press release may contain
forward-looking statements. Forward-looking statements give our current
expectations, contain projections of results of operations or of
financial condition, or forecasts of future events. Words such as
“could,” “will,” “should,” “may,” “assume,” “forecast,” “position,”
“predict,” “strategy,” “expect,” “intend,” “plan,” “estimate,”
“anticipate,” “believe,” “project,” “budget,” “potential,” or
“continue,” and similar expressions are used to identify forward-looking
statements. Without limiting the generality of the foregoing,
forward-looking statements contained in this press release include our
expectations of plans, strategies, objectives, growth and anticipated
financial and operational performance, including revenue projections,
capital expenditures and tax position. Forward-looking statements can be
affected by assumptions used or by known or unknown risks or
uncertainties. Consequently, no forward-looking statements can be
guaranteed.
A forward-looking statement may include a statement of the assumptions
or bases underlying the forward-looking statement. We believe that we
have chosen these assumptions or bases in good faith and that they are
reasonable. However, when considering these forward-looking statements,
you should keep in mind the risk factors and other cautionary statements
in this press release and in our Annual Report on Form 10-K for the year
ended Dec. 31, 2017. Those risk factors and other factors noted
throughout this press release and in our Annual Report could cause our
actual results to differ materially from those disclosed in any
forward-looking statement. You are cautioned not to place undue reliance
on any forward-looking statements.
NON-GAAP FINANCIAL MEASURES
Enable has included the non-GAAP financial measure Gross margin in this
press release based on information in its condensed consolidated
financial statements.
Gross margin is a supplemental financial measure that management and
external users of Enable’s financial statements, such as industry
analysts, investors, lenders and rating agencies may use, to assess:
-
Enable’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;
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The ability of Enable’s assets to generate sufficient cash flow to
make distributions to its partners;
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Enable’s ability to incur and service debt and fund capital
expenditures; and
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The viability of acquisitions and other capital expenditure projects
and the returns on investment of various investment opportunities.
This press release includes a reconciliation of Gross margin to total
revenues, the most directly comparable GAAP financial measures as
applicable, for each of the periods indicated. Enable believes that the
presentation of Gross margin provides information useful to investors in
assessing its financial condition and results of operations. Gross
margin should not be considered as alternative to total revenue, or any
other measure of financial performance or liquidity presented in
accordance with GAAP. Gross margin has important limitations as an
analytical tool because they exclude some but not all items that affect
the most directly comparable GAAP measure. Additionally, because Gross
margin may be defined differently by other companies in Enable’s
industry, its definition of this measure may not be comparable to
similarly titled measure of other companies, thereby diminishing its
utility.
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