Dominion Energy Midstream Partners Announces Third-Quarter 2017 Earnings

Dominion Energy Midstream Partners, LP

Schedule A - Consolidated Statements of Income*

(Unaudited)

 Three Months Ended 

 Nine Months Ended 

 September 30, 

 September 30, 

2017

2016

2017

2016

(millions, except per unit data)

Operating Revenue

$  113.0

$  95.2

$  358.9

$  263.8

Operating Expenses

Purchased gas

9.1

3.4

31.1

8.3

Other operations and maintenance

33.2

24.9

102.4

61.0

Depreciation and amortization

26.5

12.4

76.8

32.6

Other taxes

9.3

8.0

27.8

22.1

78.1

48.7

238.1

124.0

34.9

46.5

120.8

139.8

Earnings from equity method investees

6.2

4.9

19.4

15.0

Other income

1.7

0.8

4.3

2.2

Interest and related charges 

7.9

0.8

23.7

0.7

Income from operations including noncontrolling interest before income taxes

$    34.9

$  51.4

$  120.8

$  156.3

Income tax expense

-

1.2

-

1.2

Net income including noncontrolling interest and predecessors

$    34.9

$  50.2

$  120.8

$  155.1

Less: Net loss attributable to Dominion Energy Questar Pipeline Predecessor¹

-

(3.2)

-

(3.2)

Net income including noncontrolling interest

$    34.9

$  53.4

$  120.8

$  158.3

Less: Net income (loss) attributable to noncontrolling interest

(13.7)

29.1

(22.0)

88.4

Net income attributable to partners

$    48.6

$  24.3

$  142.8

$    69.9

Net income attributable to partners' ownership interest

  Preferred unitholders' interest in net income

$      9.5

$      -

$    28.5

$         -

  General partner's interest in net income

4.0

0.7

7.0

1.7

  Common unitholders' interest in net income

23.8

13.8

72.7

40.1

  Subordinated unitholder's interest in net income

11.3

9.8

34.6

28.1

Net income per limited partner unit (basic)

  Common units

$    0.35

$  0.30

$    1.08

$    0.88

  Subordinated units 

$    0.35

$  0.30

$    1.08

$    0.88

Net income per limited partner unit (diluted)

  Common units

$    0.33

$  0.30

$    1.02

$    0.88

  Subordinated units 

$    0.35

$  0.30

$    1.08

$    0.88

¹ Represents amounts for the period from September 16, 2016 through September 30, 2016.

* The notes contained in Dominion Energy Midstream's most recent quarterly report on Form 10-Q or annual report on Form 10-K are an integral part of the Consolidated Financial Statements.

Dominion Energy Midstream Partners, LP

Schedule B - Reconciliation of EBITDA and Adjusted EBITDA to Net Income*

(Unaudited)

The following table presents a reconciliation of EBITDA and Adjusted EBITDA to the most directly comparable GAAP financial measure for each period. 

Three Months Ended 

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

(millions)

Net income including noncontrolling interest and predecessors

$          34.9

$           50.2

$       120.8

$          155.1

Add:

Depreciation and amortization

26.5

12.4

76.8

32.6

Interest and related charges

7.9

0.8

23.7

0.7

Income tax expense

-

1.2

-

1.2

EBITDA

$          69.3

$           64.6

$       221.3

$          189.6

Distributions from equity method investees

8.2

6.2

22.2

17.9

Less:

Earnings from equity method investees

6.2

4.9

19.4

15.0

EBITDA attributable to Dominion Energy Questar Pipeline Predecessor¹

-

1.2

-

1.2

EBITDA attributable to noncontrolling interest

(4.9)

36.8

3.9

111.3

Adjusted EBITDA

$          76.2

$           27.9

$       220.2

$             80.0

¹ Represents amounts for the period from September 16, 2016 through September 30, 2016.

* The notes contained in Dominion Energy Midstream's most recent quarterly report on Form 10-Q or annual report on Form 10-K are an integral part of the Consolidated Financial Statements.

Dominion Energy Midstream Partners, LP

Schedule C - Summary of Consolidated Statements of Cash Flows*

(Unaudited)

 Three Months Ended 

 Nine Months Ended 

 September 30, 

 September 30, 

2017

2016

2017

2016

(millions)

Cash flows from operating activities:

Net income including noncontrolling interest and predecessors

$      34.9

$      50.2

$   120.8

$   155.1

Adjustments to reconcile net income including noncontrolling interest and predecessors to net cash provided by operating activities

37.0

48.0

126.1

73.5

Net cash provided by operating activities

$      71.9

$      98.2

$   246.9

$   228.6

Net cash used in investing activities

$ (190.6)

$ (305.4)

$ (727.7)

$ (959.6)

Net cash provided by financing activities

$   127.0

$   261.1

$   520.0

$   774.1

Cash and cash equivalents at beginning of period

70.5

24.2

39.6

35.0

Cash and cash equivalents at end of period

$      78.8

$      78.1

$      78.8

$      78.1

* The notes contained in Dominion Energy Midstream's most recent quarterly report on Form 10-Q or annual report on Form 10-K are an integral part of the Consolidated Financial Statements.

Dominion Energy Midstream Partners, LP

Schedule D - Reconciliation of Distributable Cash Flow to Net Cash from Operating Activities*

(Unaudited)

The following table presents a reconciliation of distributable cash flow to the most directly comparable GAAP financial measure for each period.  

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

(millions)

Net cash provided by operating activities

$  71.9

$  98.2

$  246.9

$  228.6

Less:

Cash attributable to (from) noncontrolling interest

(1.7)

53.1

18.9

132.6

Cash attributable to Dominion Energy Questar Pipeline Predecessor¹

-

18.6

-

18.6

Other changes in working capital and noncash adjustments

2.6

1.4

(8.3)

2.6

Equity method investee distributions included in investing activities

-

-

0.5

-

Adjusted EBITDA

76.2

27.9

220.2

80.0

Adjustments to cash:

Less:             Distributions to preferred unitholders

(9.5)

-

(28.5)

-

Plus (less):   Deferred revenue

(0.1)

-

(0.4)

2.0

Less:             Amortization of regulatory liability

(0.7)

(0.7)

(2.1)

(2.1)

Less:             Maintenance capital expenditures

(12.8)

(3.0)

(38.7)

(10.8)

Plus:             Acquisition costs funded by Dominion Energy

1.7

0.3

5.9

0.4

Less:             Interest expense and AFUDC equity

(9.1)

(0.5)

(26.0)

(1.5)

Plus:             Non-cash director compensation

0.1

0.1

0.2

0.2

Distributable cash flow

$  45.8

$  24.1

$  130.6

$    68.2

¹ Represents amounts for the period from September 16, 2016 through September 30, 2016.

* The notes contained in Dominion Energy Midstream's most recent quarterly report on Form 10-Q or  annual report on Form 10-K are an integral part of the Consolidated Financial Statements.

HOW WE EVALUATE OUR OPERATIONS

Subsequent to the acquisition of Dominion Energy Questar Pipeline, we define distributable cash flow as Adjusted EBITDA less distributions to preferred unitholders, maintenance capital expenditures and interest expense and adjusted for known timing differences between cash and income.  

Dominion Energy Midstream Partners, LP

Schedule E - Selected Financial Data*

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

(millions, except ratio)

Adjusted EBITDA

$  76.2

$  27.9

$  220.2

$       80.0

Adjustments to cash:

Less:           Distributions to preferred unitholders

(9.5)

-

(28.5)

-

Plus (less): Deferred revenue

(0.1)

-

(0.4)

2.0

Less:           Amortization of regulatory liability

(0.7)

(0.7)

(2.1)

(2.1)

Less:           Maintenance capital expenditures

(12.8)

(3.0)

(38.7)

(10.8)

Plus:           Acquisition costs funded by Dominion Energy

1.7

0.3

5.9

0.4

Less:           Interest expense and AFUDC equity

(9.1)

(0.5)

(26.0)

(1.5)

Plus:           Non-cash director compensation

0.1

0.1

0.2

0.2

Distributable cash flow

$  45.8

$  24.1

$  130.6

$       68.2

Distributions:

Incentive distribution rights

5.7

1.0

12.9

2.1

Common unitholders

20.3

11.3

58.1

32.3

Subordinated unitholder

9.7

7.9

27.7

22.6

Total distributions¹

$  35.7

$  20.2

$    98.7

$       57.0

Coverage ratio

1.28x

1.19x

1.32x

1.20x

¹ Distributions declared to common units is based on units outstanding at September 30, 2017 and 2016, and therefore excludes distributions paid on units issued to the public through November 6, 2017 and November 4, 2016, respectively.

* The notes contained in Dominion Energy Midstream's most recent quarterly report on Form 10-Q or annual report on Form 10-K are an integral part of the Consolidated Financial Statements.

See schedules B and D for reconciliations of non-GAAP measures.