first quarter 2018 earnings call - noble...
TRANSCRIPT
www.nblmidstream.com
First Quarter 2018 Earnings Call
May 2018
www.nblmidstream.com
Forward Looking Statements
This presentation contains certain “forward-looking statements” within the meaning of federal securities law. Words such as“anticipates”, “believes”, “expects”, “intends”, “will”, “should”, “may”, “estimates”, and similar expressions may be used to identifyforward-looking statements. Forward-looking statements are not statements of historical fact and reflect the Partnership’scurrent views about future events. No assurances can be given that the forward-looking statements contained in this newsrelease will occur as projected and actual results may differ materially from those projected. Forward-looking statements arebased on current expectations, estimates and assumptions that involve a number of risks and uncertainties that could causeactual results to differ materially from those projected. These risks include, without limitation, our customers’ ability to meet theirdrilling and development plans, changes in general economic conditions, competitive conditions in the Partnership’s industry,actions taken by third-party operators, gatherers, processors and transporters, the demand for crude oil and natural gasgathering and processing services, the Partnership’s ability to successfully implement its business plan, the Partnership’s ability tocomplete internal growth projects on time and on budget, the price and availability of debt and equity financing, the availabilityand price of crude oil and natural gas to the consumer compared to the price of alternative and competing fuels, and other risksinherent in the Partnership’s business, including those described under “Risk Factors” and “Forward-Looking Statements” in thePartnership's most recent Annual Report on Form 10-K and in other reports on we file with the Securities and ExchangeCommission (“SEC”). These reports are also available from the Partnership’s office or website, www.nblmidstream.com. Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. NobleMidstream does not assume any obligation to update forward-looking statements should circumstances, management’sestimates, or opinions change.
2
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Strong Execution
Gathering Throughput & Fresh Water Delivery In-line or Exceeding Guidance
First Quarter 2018 Highlights
3
Recent Developments May Black Diamond Nominations of 58 MBbl/d
May Nominations at Advantage of 120 MBbl/d
Collier CGF in Delaware Basin Nearing Completion
DPU Growth4.7% Increase Above 4Q17
24% Increase Over 1Q17
36% Above MQD
Financial Discipline1Q Distribution Coverage Ratio 2.3x 2
1Q Annualized Leverage 2.0x 2, 3
Credit Facility Upsized to $800 MM Plus $350 MM Accordion
Growth Projects DeliveredDelaware CGFs On Schedule:
Coronado Completed March 30
Billy Miner II Online April 20
FWD Delivered at Green River in DJ Basin in March
1Q1 Volumes vs 4Q: Oil, Gas & Produced Water Gathering +22%
Fresh Water Delivery +24% Throughput from Advantage Pipeline +47%
1. Oil gathering reflects two months contribution from acquisition of Black Diamond Gathering which closed on 1/31/182. Distribution Coverage Ratio and Leverage are Non-GAAP measures, see definition provided in appendix hereto3. Defined as 1Q Debt / 1Q EBITDA * 4 ($435 million / $54 million *4)
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First Quarter 2018 Results
4
In-line or exceeding guidance across the majority of categories
1. Figures are Non-GAAP, see definition provided in appendix hereto2. 2.2x as reported; 2.4x adjusted for December equity issuance and prior to any Black Diamond acquisition contribution
Actuals 1Q Guidance1Q v 4Q
Gross Volumes: 4Q17 1Q18
Oil Gathered (MBbl/d) 93 130 120 - 135 40%
Gas Gathered (MMcf/d) 175 191 190 - 200 9%
MBoe/d 122 162 152 - 168 33%
PW Gathered (MBw/d) 49 47 42 - 50 -4%
FW Delivered (MBw/d) 135 168 130 - 150 24%
Net Income ($MM) 46 39 42 - 48 -15%
Gross EBITDA ($MM)¹ 52 58 55 - 61 12%
Net EBITDA ($MM)¹ 48 54 52 - 58 13%
DCF ($MM)¹ 43 47 44 - 50 9%
Distribution Coverage Ratio 2.2x/2.4x² 2.3x 2.1x - 2.4x
Gross Capex ($MM) 136 249 225 - 250
Net Capex ($MM) 62 128 110 - 125
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40
54
$40
Gathering EBITDA =G2 Total EBITDA
Peer-Leading Distribution Coverage1 Continues
Gathering EBITDA
1Q 2018 NBLX Net EBITDA and Distribution Coverage 1,2
Total EBITDA
Implied Distribution Coverage of 4Q Distribution
x
2.3x
1. Figures are Non-GAAP; see definition in Appendix hereto2. G&A allocated to gathering and freshwater delivery based on proportionate share of EBITDA; coverage figures reflect full net maintenance capital totals3. Assumes 20% distribution growth target
5
1.6x
1Q Gathering Net EBITDA1 of $40 MM, an 8% Increase Above 4Q 1.6x Distribution Coverage Ratio1 excluding Fresh Water
Gathering net EBITDA represented 74% of total net EBITDA
Full-Year 2018 Guidance: 20% Distribution Growth with Distribution Coverage Ratio1 of 1.9x –2.1x1
$ in millions
Fresh Water Delivery EBITDA
Gathering volumes driving growth
2.1x 1.9x - 2.1x
$1.81
$2.19
0.00
0.50
1.00
1.50
2.00
2.50
.x
.5x
1.x
1.5x
2.x
2.5x
3.x
3.5x
4.x
4.5x
2017 2018E
Distribution Coverage Ratio1,3 & DPU
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Strong Execution Driving Visible Growth
6
89
200 - 235
162
190 - 210
0
50
100
150
200
250
300
2017 2018E 1Q18 2Q18E
Oil and Gas GatheringMBoe/d
24
80 -110
47
75 - 90
0102030405060708090
100110120130
2017 2018E 1Q18 2Q18E
Produced Water GatheringMBw/d
156 130 -190168
110 - 130
0
50
100
150
200
2017 2018E 1Q18 2Q18E
Fresh Water DeliveryMBw/d
Close and Integrate Black Diamond Gathering
Consistent milestones and catalysts throughout the year
Begin Mustang Fresh Water Delivery at Green River DevCo
Start-up Coronado CGF in Delaware Basin
Commence Operations at Billy Miner II CGF in Delaware Basin
Commence Delaware Basin Compression Services for NBL
Complete Collier CGF in Delaware Basin in MayOn
Track
Start-up Green River Spec Oil, Gas and Water System by Mid-yearOn Track
Operational Scorecard
Expand Advantage Capacity to 200 MBbl/d by end of 3Q18On
Track
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Net Income Guidance of $175 - $210, or 17% Above 2017
Revised net income reflects higher expected DD&A due to Black Diamond Gathering acquisition
45% Annual Adjusted Net EBITDA1 Growth Anticipated at Guidance Midpoint ($215 - $235 MM)
Decline in Adjusted Net EBITDA1 from 1Q18E to 2Q18E due to development timing, continued conservatism forecasting FWD volumes and customer completion operations shift from Colorado River (100% owned) to Green River (25% owned)
~20% Increase in Net EBITDA1 in 2H18 Compared to 1H18 Provides Visibility and Momentum into 2019
2H18 vs. 2H17 net EBITDA1 anticipated to be up 30%
1H18
2H18E
2018EGross
Capital
1H18 Capital Drives Expected Robust 2H18 Performance
7
2H18 expected growth reflects growth project and customer activity timing
1. Figures are Non-GAAP, see definition provided in appendix; 2018 EBITDA estimates adjusted for $7.5 million in Black Diamond Gathering transaction expenses expected in 1H18E
First Half Weighted Capital Drives Momentum into 2019
$94
$115 - $130
0
10
20
30
40
50
60
70
80
90
100
110
120
130
140
150
2H17 2H18E
+30%
Net Adjusted EBITDA ($MM)¹
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DJ Basin Delaware Basin
DevCo% Ownership
Colorado River100%
Laramie River²100%
Green River25%
Blanco River40%
Trinity River100%
Expected 2018 Capital Investment
• Gathering system well connections
• New Wells Ranch gas offload
• Gathering systemwell connections
• Multiple DSU’s for FWD
• Black Diamond capital
• Completion of Mustang backbone infrastructure
• Gathering system well connections
• Buildout of 3 CGFs• Gathering system
well connections
• Expansion of Advantage throughputcapacity to 200 MBbl/d
• Compression
2018 Capital Budget Detail
8
Colorado
River
4%
Laramie
River²
29%
Green
River
13%Other
Blanco
River
45%
Trinity
River
8%
Gross Capital1
$500 - 535MM
1. Excludes acquisition capital2. Includes Black Diamond Gathering capital
Colorado
River
8%
Laramie
River²
37%
Green
River
6%Other
Blanco
River
34%
Trinity
River
15%
Net Capital1
(attributable to the Partnership)
$270 - 285MM
Growth capital focused on Blanco River and Laramie River DevCos
No Impact to 2018 Budget from U.S. Steel Tariff
www.nblmidstream.com 9
90 MBbl/d of Crude Oil Capacity (115 MBoe/d) from 5 CGFs Planned to be Operational by Mid-2018
5th planned CGF, Collier, nearing completion
CGF Capacity at Mid-Year Provides Long Runway for Sponsor Planned Volume Growth
All CGFs Connected and Flowing Through Advantage Pipeline
Substantial Capital Efficiency Expected in 2019 Once Backbone Infrastructure is Complete
Near-Term Delaware Basin CGF Projects
Daily Capacity
Oil (MBbl/d)
Gas(MMcf/d)
PW(MBw/d)
Est. Online
#1 Billy Miner I 15 30 30 Online
#2 Jesse James 15 30 30 Online
#3 Coronado * 20 30 60 Online
#4 Billy Miner II 20 30 60 Online
#5 Collier * 20 30 60 1H 2018
Delaware Basin: Blanco River
* expandable to 30 MBbl/d and 60 MMcf/d with minimal equipment additions
Significant 2018 growth driver
Blanco River Activity 4Q17 1Q18
Oil & Gas Gathered (MBoe/d) 15 19
PW Gathered (MBw/d) 24 26
FW Delivered (MBw/d) - -
Gross Organic Capital ($MM) 95 154
Net Organic Capital ($MM) 38 62
Well Connections 9 9
Average Lateral Length (ft) ~6,400 ~7,700
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Delaware Basin: Trinity River
10
April Nominations of 108 MBbl/d; May Nominations of ~120 MBbl/d
2018 Volumes Now Anticipated to Average in Excess of 100 MBbl/d
Additional Upside Opportunities Currently Being Negotiated
Opportunities for additional acreage dedications and volume commitments
Leverage asset footprint with minimal capital required
Advantage Pipeline Positioned to Benefit from Tightness in Delaware Basin Takeaway Capacity
Additional pump ordered to expand system capacity to 200 MBbl/d by end of 3Q18
New Build Compression Started at Coronado and Billy Miner II, Installation at Collier Under Way
18,000 HP of owned compression installed by mid-year
30
60
88
>100
0
20
40
60
80
100
120
Apr-17 4Q17 1Q18 2018E
Value creation continues at Advantage with record volumes
Advantage Pipeline
Additional upside
opportunities under
negotiation
Advantage Pipeline Oil Throughput (MBbl/d)
Trinity River Activity 4Q17 1Q18
Gross Organic Capital($MM)
0 27
Net Organic Capital($MM)
0 27
Advantage Throughput*(MBbl/d)
60 88
Owned Compression HP 6,000 12,000
Compression
*Excluded from total throughput due to accounting treatment as investment income
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DJ Basin: Laramie River
11
Successful Integration of Black Diamond Gathering Operations
Tallgrass Outlet In-Service, Completing Connectivity to Every DJ Downstream Takeaway Option
Realizing Operational and Financial Synergies
Connection of wholly owned system at Lucerne Terminal complete
Planned Green River connection at Milton Terminal
Potential addition of complementary services, including storage
Significant Undedicated Acreage in Catchment Area Remaining
2018 Exit Volumes Expected to be Higher than Acquisition Case
May nominations of 58 MBbl/d
Planning for Significant 2H18 Activity and Throughput Ramp
Planned System Integration with Downstream Outlets and Black Diamond Gathering
Significant third-party activity acceleration underway
Laramie River Activity 4Q17 1Q18
Oil & Gas Gathered (MBoe/d) 16 49
PW Gathered (MBw/d) 4.5 5
FW Delivered (MBw/d) 34 44
Gross Organic Capital ($MM) 11 41
Net Organic Capital ($MM) 11 31
Well Connections 12 74
Average Lateral Length (ft) ~6,800 ~7,600
Black Diamond Gathering
Wholly Owned Infrastructure
* Includes two months of contribution from Black Diamond Gathering
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DJ Basin: Colorado River
12
DevCo Represents 4% of Gross 2018E Capital Budget and ~55% of 2018E Gross EBITDA1
Backbone infrastructure in place
Activity highly focused on capital efficient well connects
Total NBLX Wells Ranch System Capacity Expanded to 200 MMcf/d
Upstream Results Continue to Perform Well Versus NBLX Expectations
No Fresh Water Delivery Volumes in 2Q18 Due to NBL Activity Shift to Mustang (Green River)
Mature Infrastructure Highlights Capital Efficiency: $3 MM in 1Q18 Capital for 31 Well Connections for Oil, Gas, and Produced Water
Significant free cash generation
Colorado River Activity 4Q17 1Q18
Oil & Gas Gathered (MBoe/d) 92 94
PW Gathered (MBw/d) 20 16
FW Delivered (MBw/d) 67 102
Gross Organic Capital ($MM) 7 3
Net Organic Capital ($MM) 7 3
Well Connections 21 31
Average Lateral Length (ft) ~9,500 ~7,400
Wells Ranch Infrastructure
1. Figures are Non-GAAP; see definition in Appendix
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DJ Basin: Green River
13
Fresh Water Delivery Began in March
Two NBL completion crews operating in Mustang during 2Q18
Spec Oil, Gas and Produced Water Backbone Gathering Infrastructure On Track for Mid-Year Startup
Gathering volumes anticipated mid-year 2018
Planned Oil Connection into Black Diamond Milton Terminal
Development Drilling and Row Concept in Southern Portion of Mustang Drives Highly Efficient Infrastructure Spend from the Start
Full Infrastructure Build Out Includes ~250 Miles of Pipelines (Oil, Gas, PW and FW)
~$500 MM Total Development Capital Over 10 Years
Anticipate 4.5x to 5.5x organic build multiples
Mustang Infrastructure Design
Infrastructure build out to support NBL’s Mustang Area
Green River Activity 4Q17 1Q18
Oil & Gas Gathered (MBoe/d) - -
PW Gathered (MBw/d) - -
FW Delivered (MBw/d) - 22
Gross Organic Capital ($MM) 23 24
Net Organic Capital ($MM) 6 6
Well Connections - -
Average Lateral Length (ft) - -
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Fresh Water Mix Creates Quarterly Fluctuations in Net Financials
1. Figures are Non-GAAP; see definition in Appendix
Enhanced Completions Continue to Drive Robust Fresh Water Demand per Well
NBL Mustang and Wells Ranch standard design of 1,800 lbs/ft
Future Volumes and Net EBITDA1 will Reflect Mix Shift to Green River (25% Owned) from Colorado River (100% Owned)
Fresh Water Delivery to NBL’s Mustang Development Commenced in March
Two NBL completion crews in Mustang (Green River) in 2Q18
Balance between Wells Ranch (Colorado River) and Mustang (Green River) in 2H18
No fresh water delivery activity at East Pony (San Juan River) currently forecasted for 2018
Zero Colorado River fresh water delivery volumes anticipated in 2Q18
Colorado
River
San Juan
River
Laramie River
2017
Colorado
River
Green
River
Laramie
River
2018
Gross Fresh Water Volume Mix by DevCo
14
Forecasted FWD Completion Crews 1Q18 2Q18E 3Q18E 4Q18E
Colorado River (100% Owned) 1.7 0 1.3 1.5
Green River (25% Owned) 0.3 2.0 1.3 1.5
Laramie River (100% Owned) 1.0 1.0 1.5 2.0
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2Q18 and 2018 Guidance Detail
15
Quarterly Full Year
1Q¹Actuals
2Q Estimate¹
2017 Actuals
Updated 2018E¹
Gro
ss V
olu
me
s
Oil Gathered (MBbl/d) 130 160 - 175 66 165 - 190
Gas Gathered (MMcf/d) 191 195 - 215 139 215 - 265
Oil and Gas Gathered (MBoe/d) 162 190 - 210 89 200 - 235
Produced Water Gathered (MBw/d) 47 75 - 90 24 80 - 110
Fresh Water Delivered (MBw/d) 168 110 - 130 156 130 - 190
Fin
an
cia
ls (
$M
M)
(1)
Net Income 39 34 - 39 164 175 - 210
Adjusted Gross EBITDA2,3 58 58 - 63 179 275 - 315
Adjusted EBITDA2,3 54 46 - 51 155 215 - 235
Distributable Cash Flow2 47 37 - 42 138 180 - 195
Distribution Coverage Ratio 2,4 2.3x 1.7x – 1.9x 2.1x 1.9x - 2.1x
Gross Capex5 249 145 - 165 390 500 - 535
Net Capex 5 128 60 - 70 225 270 - 285
1. Black Diamond Gathering contribution included for period following January 31, 2018 close2. Includes Non-GAAP measures; see definition in Appendix hereto3. 1Q18 , 2Q18 and 2018 Adjusted for in Black Diamond transaction expenses not capitalized4. Estimates include forecasted DPU growth of 4.7% quarterly, or 20% annual5. Excludes acquisition capital
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Leading Long-Term Outlook
16
Organic – No Drop Downs 2017-2020E 2018E 2019-2022E
Old New New
Distribution per Unit 20% 20% 20%
Coverage (in all years) (1) > 1.3x 1.9 – 2.1x > 1.3x
Leverage (in all years) < 2.5x < 2.5x < 2.0x
ROACE (1, 3) NA > 15% 13 – 16%
DCF Funding % of Capex and Distributions (4) NA ~50%
~90% (cumulative)
1. Non-GAAP measures, definition provided in appendix2. Reflects combined Black Diamond, Advantage, and 2017 drop-down net acquisition cost divided by net EBTIDA; definition of EBITDA provided in appendix3. Return on average capital employed: earnings before interest and taxes divided by (average total assets – average current liabilities); see definition provided in appendix4. % of distributions + capex funded by distributable cash flow
Substantial organic growth with large existing drop-down inventory
Material Upside to Improved Outlook
Prudent Commodity Price View: Based on $50/Bbl and $3/McfPrice Deck vs. Current Strip
Continued Business Development Success, Leveraging Asset Footprints
Permian Crude / Y-Grade Project and Other Long-Haul
Significant and Growing Drop-Down Inventory
~90%% of distributions + capex
covered by DCF¹ 2019-2022E (cumulative) in organic base
plan
~6x(2)
combined adjusted EBITIDA¹ acquisition multiple by 2020E
ROACE(1,3)
2018: >15% Long-Term: 13 - 16%
Extending and improving long-term distribution growth, coverage, and
leverage
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Steel Tariff and FERC Tax Allowance Policy Change: Immaterial Impact
17
Current Tariff: 25% on Steel, 10% on Aluminum
Domestic and foreign line pipe pricing increase following announcement
Remaining uncertainty around permanent exemptions
No Impact to 2018 Budget Expected:
Steel for DJ Basin and Delaware Basin capital projects procured in late 2017/early 2018 prior to tariff announcement
Beyond 2018, Worst Case Sensitivity Analysis Indicates Just ~3-5% Increase in Overall Project Costs
U.S. Steel Tariff
FERC Income Tax Allowance Policy Change
FERC Ruled to No Longer Allow Income Taxes to be Included in Cost-of-Service Rates for Interstate Pipelines Structured as Partnerships
Immaterial Impact as Noble Midstream Does Not Have Cost-of-Service Pipeline Rates
Current NBLX rate structure: negotiated rates
Gathering Systems and Advantage Pipeline are Under State Regulation or Operate Under FERC Waivers
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Appendix
18
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NBLX Asset Map: DJ Basin
19
Black Diamond (54.4%) 1
Dedicated Acres: 141k2
Laramie River DevCo (100%)• Oil Gathering
Area: East PonyDedicated Acres: 44k
Colorado River DevCo (100%)• Oil Gathering
San Juan River DevCo (25%)• FW Delivery
Area: MustangDedicated Acres: 75k
Green River DevCo (25%)• Oil Gathering• Gas Gathering• PW Gathering• FW Delivery
Area: Wells RanchDedicated Acres: 78k
Colorado River DevCo (100%)• Oil Gathering• Gas Gathering• PW Gathering• FW Delivery
Area: Greeley CrescentDedicated Acres: 65k
Laramie River DevCo (100%)• Oil Gathering• PW Gathering• FW Delivery
Area: BroncoDedicated Acres: 36k
Gunnison River DevCo (5%)• Oil Gathering• PW Gathering• FW Delivery
1. Acquisition closed January 31, 20182. Reflects expansion of PDC Energy acreage dedication to Black Diamond Gathering system
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NBLX Asset Map: Delaware Basin
20
Area: Delaware BasinDedicated Acres: 111k
Blanco River DevCo (40%)• Oil Gathering• Gas Gathering• PW Gathering
Trinity River DevCo (100%)• HP Gas Compression
Advantage JV (50%)NBL Dedicated Acres: 47k
Trinity River DevCo (100%)• Oil Transmission
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50%
NBLX Structure
21
GreenRiver
San JuanRiver
Gunnison River
ColoradoRiver
LaramieRiver
TrinityRiver
BlancoRiver
ControllingInterest
Noble MidstreamServices, LLC
Public Unitholders (LP)
White Cliffs Pipeline L.L.C.
ROFR Assets:• East Pony Gas Gathering• East Pony Gas Processing• Eagle Ford Shale Midstream• Additional DJ Acreage• Additional Delaware Basin
Services
Noble EnergyNYSE: NBL
Noble MidstreamPartners LPNYSE: NBLX
Noble Midstream GP LLC45.5% Limited
Partner Interest
100%
100%100%100%5%25%25%40%
75% 95%
3.33% Non-OperatingMembership Interest
54.5% LimitedPartner Interest
100%
Non-Economic GeneralPartner Interest
AdvantageJV
60% 75%
Black Diamond
Non-ControllingInterest
54.4%
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Non-GAAP Financial Measures
22
This presentation includes Adjusted EBITDA, Distributable Cash Flow, Distribution Coverage Ratio and ROACE, all of which are non-GAAP measures which may be used periodically by management when discussing our financial results with investors and analysts.
We define Adjusted EBITDA as net income before income taxes, net interest expense, depreciation and amortization and unit-based compensation. Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess: our operating performance as compared to those of other companies in the midstream energy industry, without regard to financing methods, historical cost basis or capital structure; the ability of our assets to generate sufficient cash flow to make distributions to our partners; our ability to incur and service debt and fund capital expenditures; and the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities. We define Distributable Cash Flow as Adjusted EBITDA less estimated maintenance capital expenditures and cash interest expense. Distributable Cash Flow is used by management to evaluate our overall performance. Our partnership agreement requires us to distribute all cash on a quarterly basis, and Distributable Cash Flow is one of the factors used by the board of directors of our general partner to help determine the amount of available cash that is available to our unitholders for a given period. We calculate our Distribution Coverage Ratio as Distributable Cash Flow divided by total distributions declared. The Distribution Coverage Ratio is used by management to illustrate our ability to make our distributions each quarter.
We define ROACE as earnings before interest and taxes divided by (average total assets – average current liabilities). ROACE is used by management to measure the efficiency of the utilization of the capital that we employ.
We believe that the presentation of Adjusted EBITDA, Distributable Cash Flow, Distribution Coverage Ratio and ROACE provide information useful to investors in assessing our financial condition and results of operations. The GAAP measure most directly comparable to Adjusted EBITDA, Distributable Cash Flow, Distribution Coverage Ratio and ROACE is Net Income. Adjusted EBITDA, Distributable Cash Flow, Distribution Coverage Ratio and ROACE should not be considered alternatives to net income or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA, Distributable Cash Flow, Distribution Coverage Ratio and ROACE exclude some, but not all, items that affect net income, and these measures may vary from those of other companies. As a result, Adjusted EBITDA, Distributable Cash Flow, Distribution Coverage Ratio and ROACE as presented herein may not be comparable to similarly titled measures of other companies.
Noble Midstream does not provide guidance on the reconciling items between forecasted Net Income, forecasted Adjusted EBITDA, forecasted Distributable Cash Flow and forecasted Distribution Coverage Ratio due to the uncertainty regarding timing and estimates of these items. Noble Midstream provides a range for the forecasts of Net Income, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio to allow for the variability in timing and uncertainty of estimates of reconciling items between forecasted Net Income, forecasted Adjusted EBITDA, forecasted Distributable Cash Flow and forecasted Distribution Coverage Ratio. Therefore, the Partnership cannot reconcile forecasted Net Income to forecasted Adjusted EBITDA, forecasted Distributable Cash Flow or forecasted Distribution Coverage Ratio without unreasonable effort.
In addition to Net Income, the GAAP measure most directly comparable to Adjusted EBITDA and Distributable Cash Flow is net cash provided by operating activities. Adjusted EBITDA and Distributable Cash Flow should not be considered alternatives to net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Due to the forward-looking nature of net cash provided by operating activities, management cannot reliably predict certain of the necessary components of the most directly comparable forward-looking GAAP measures, such as future impairments and future changes in working capital. Accordingly, Noble Midstream is unable to present a quantitative reconciliation of the aforementioned forward-looking non-GAAP financial measures to net cash provided by operating activities. Amounts excluded from these non-GAAP measures in future periods could be significant.
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Non-GAAP Reconciliation
23
$ in millions 1Q 2Q 3Q 4Q FY 1Q 2QE FY
Net Income 35$ 39$ 44$ 46$ 164$ 39 34 - 39 175 - 210
Add: Depreciation and Amortization 2 2 4 4 13 11 19 75 - 80
Add: Interest Expense, Net of Amount Capitalized 0 0 1 1 1 1 3 15 - 16
Add: Income Tax Provision - - 0 (0) 0 0.1 - -
Add: Unit-Based Compensation 0 0 0 0 1 0.3 0.3 2
Add: Transaction Expenses 6 1.5 7.5
EBITDA 37$ 42$ 48$ 52$ 179$ 58 58 - 63 275 - 315
Less: EBITDA Attributable to Noncontrolling Interests 11 8 2 3 24 4 12 60 - 80
EBITDA Attributable to NBLX 26$ 34$ 46$ 48$ 155$ 54 46 - 51 215 - 235
Less: Maintenance Capital Expenditures & Cash Interest 3 4 5 5 17 7 9 35-40
DCF Attributable to NBLX 24$ 30$ 41$ 43$ 138$ 47 37 - 42 180- 195
Distribution Coverage 1.8x 1.9x 2.4x 2.2x 2.1x 2.3x 1.7x - 1.9x 1.9x - 2.1x
2017 2018
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1001 Noble Energy WayHouston, TX 77070
Contact Information
Megan Repine
Investor Relations
832.639.7380