Dominion Midstream Partners Announces Fourth-Quarter 2016 Earnings

- Net Income attributable to the partnership of $36.5 million
- Adjusted EBITDA of $45.8 million for fourth-quarter 2016
- Management affirms targeted 22% annual distribution growth through 2020

RICHMOND, Va., Feb. 1, 2017 /PRNewswire/ -- Dominion Midstream Partners, LP (NYSE: DM) reported unaudited net income attributable to the partnership of $36.5 million for the three months ended Dec. 31, 2016.  Adjusted earnings before interest, income taxes, depreciation and amortization (Adjusted EBITDA) was $45.8 million, and distributable cash flow was $37.7 million for the quarter. On Dec. 1, 2016, Dominion Midstream successfully completed the acquisition of Questar Pipeline, LLC, from Dominion Resources, Inc. (NYSE: D).

Dominion Midstream uses Adjusted EBITDA and distributable cash flow as the primary performance measurements of its earnings and results for public communications with analysts and investors.  Dominion Midstream also uses Adjusted EBITDA and distributable cash flow internally for budgeting, reporting to the Board of Directors and other purposes. Management believes Adjusted EBITDA and distributable cash flow provide a more meaningful representation of the partnership's financial performance and liquidity.   Schedules B and D of this press release include reconciliations to the most directly comparable GAAP measures. 

QUARTERLY DISTRIBUTION

On Jan. 25, 2017, the Board of Directors declared a quarterly distribution of $0.2605 per common and subordinated unit, payable on Feb. 15, 2017, to such unitholders of record at the close of business Feb. 6, 2017.

CONFERENCE CALL TODAY

Dominion Midstream and Dominion Resources will jointly host a fourth-quarter earnings conference call at 10 a.m. ET on Wednesday, Feb. 1, 2017.  Management will discuss its fourth-quarter financial results and other matters of interest to the financial community.

Domestic callers should dial (877) 410-5657.  International callers should dial (334) 323-9872.  The passcode for the conference call is "Dominion."  Participants should dial in 10 to 15 minutes prior to the scheduled start time.  Members of the media also are invited to listen.

A live webcast of the conference call, including accompanying slides, will be available on the partnership's investor information page at www.dommidstream.com/investors.

A replay of the conference call will be available beginning about 1 p.m. ET Feb. 1, 2017 and lasting until 11 p.m. ET Feb. 8, 2017.  Domestic callers may access the recording by dialing (877) 919-4059.  International callers should dial (334) 323-0140.  The PIN for the replay is 61568881.  Additionally, a replay of the webcast will be available on the investor information pages by the end of the day Feb. 1, 2017.
 

ABOUT DOMINION MIDSTREAM

Dominion Midstream is a Delaware limited partnership formed by Dominion Resources, Inc., to grow a portfolio of natural gas terminaling, processing, storage, transportation and related assets.  It is headquartered in Richmond, Va. For more information about Dominion Midstream, visit its website at www.dommidstream.com.

 

Dominion Midstream Partners, LP

Schedule A- Consolidated Statements of Income*

(Unaudited)

               
 

 Three Months Ended 

 

 Year Ended 

 

 December 31, 

 

 December 31, 

 

2016

 

2015

 

2016

 

2015

(millions, except per unit data)

             

Operating Revenue

$  177.5

 

$  82.7

 

$  441.3

 

$  369.6

Operating Expenses

             

Purchased gas

33.4

 

1.8

 

41.7

 

54.6

Other operations and maintenance

34.3

 

13.6

 

95.3

 

56.7

Depreciation and amortization

24.0

 

10.0

 

56.6

 

40.4

Other taxes

8.5

 

6.3

 

30.6

 

26.3

Total operating expenses

100.2

 

31.7

 

224.2

 

178.0

Income from operations

77.3

 

51.0

 

217.1

 

191.6

Earnings from equity method investees

8.0

 

6.6

 

23.0

 

6.6

Other income

1.0

 

0.4

 

3.2

 

1.0

Interest and related charges

6.6

 

0.3

 

7.3

 

0.6

Income from operations including noncontrolling interest before income taxes

79.7

 

57.7

 

236.0

 

198.6

Income tax expense

5.1

 

-

 

6.3

 

2.1

Net income including noncontrolling interest and predecessors

$    74.6

 

$  57.7

 

$  229.7

 

$  196.5

Less: Net income attributable to DCG Predecessor1

-

 

-

 

-

 

2.3

Less: Net income attributable to Questar Pipeline Predecessor2

8.7

 

-

 

5.5

 

-

Net income including noncontrolling interest

65.9

 

57.7

 

224.2

 

194.2

Less: Net income attributable to noncontrolling interest

29.4

 

32.6

 

117.8

 

121.7

Net income attributable to partners

$    36.5

 

$  25.1

 

$  106.4

 

$    72.5

               

Net income attributable to partners' ownership interest

             

  Preferred unitholders' interest in net income

$      3.2

 

$      -

 

$      3.2

 

$         -

  General partner's interest in net income

0.6

 

0.2

 

2.3

 

(0.5)

  Common unitholders' interest in net income

23.8

 

14.6

 

63.9

 

41.3

  Subordinated unitholder's interest in net income

8.9

 

10.3

 

37.0

 

31.7

               
               

Net income per limited partner unit (basic and diluted)

             

  Common Units

$    0.38

 

$  0.32

 

$    1.30

 

$    1.08

  Subordinated Units 

$    0.34

 

$  0.32

 

$    1.17

 

$    1.00

               

1Represents amounts for the period from January 31, 2015 through March 31, 2015.

2Represents amounts for the period from September 16, 2016 through November 30, 2016.

               

* The notes contained in Dominion 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 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

 

Year Ended

     

December 31,

 

December 31,

     

2016

 

2015

 

2016

 

2015

(millions)

                   

Net income including noncontrolling interest and predecessors

     

$    74.6

 

$  57.7

 

$  229.7

 

$  196.5

Add:

                   

   Depreciation and amortization

     

24.0

 

10.0

 

56.6

 

40.4

   Interest and related charges

     

6.6

 

0.3

 

7.3

 

0.6

   Income tax expense

     

5.1

 

-

 

6.3

 

2.1

EBITDA

     

$  110.3

 

$  68.0

 

$  299.9

 

$  239.6

Distributions from equity method investees

     

7.2

 

2.6

 

25.1

 

2.6

Less:

                   

   Earnings from equity method investees

     

8.0

 

6.6

 

23.0

 

6.6

   EBITDA attributable to DCG Predecessor1

     

-

 

-

 

-

 

5.7

   EBITDA attributable to Questar Pipeline Predecessor2

     

26.8

 

-

 

28.0

 

-

   EBITDA attributable to noncontrolling interest

     

36.9

 

40.4

 

148.2

 

154.3

Adjusted EBITDA

     

$    45.8

 

$  23.6

 

$  125.8

 

$    75.6

                     
   

1Represents amounts for the period from January 31, 2015 through March 31, 2015.

 

2Represents amounts for the period from September 16, 2016 through November 30, 2016.

 
                     

* The notes contained in Dominion 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 Midstream Partners, LP

Schedule C- Summary of Consolidated Statements of Cash Flows*

(Unaudited)

                 
   

 Three Months Ended 

 

 Year Ended 

   

 December 31, 

 

 December 31, 

   

2016

 

2015

 

2016

 

2015

(millions)

               

Cash flows from operating activities:

               

     Net income including noncontrolling interest and predecessors

 

$         74.6

 

$      57.7

 

$229.7

 

$196.5

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

               
 

(14.6)

 

(9.8)

 

58.9

 

47.0

Net cash provided by operating activities

 

$         60.0

 

$      47.9

 

$288.6

 

$243.5

                 

Cash flows from investing activities:

               

Net cash used in investing activities

 

$  (1,163.2)

 

$  (432.3)

 

$(2,122.8)

 

$ (1,282.7)

                 

Cash flows from financing activities:

               

Net cash provided by financing activities

 

$   1,064.7

 

$  312.4

 

$1,838.8

 

$898.8

                 

Cash and cash equivalents at  beginning of period

 

78.1

 

107.0

 

35.0

 

175.4

Cash and cash equivalents at end of period

 

$         39.6

 

$      35.0

 

$ 39.6

 

$       35.0

                 
         

* The notes contained in Dominion 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 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

 

Year Ended

   

December 31,

 

December 31,

 

2016

 

2015

 

2016

 

2015

(millions)

               

Net cash provided by operating activities

 

$  60.0

 

$  47.9

 

$  288.6

 

$  243.5

Less:

               

   Cash attributable to noncontrolling interest

 

17.9

 

25.5

 

150.5

 

154.4

   Cash attributable to DCG Predecessor1

 

-

 

-

 

-

 

10.4

   Cash attributable to Questar Pipeline Predecessor2

 

1.1

 

-

 

19.7

 

-

Other changes in working capital and noncash adjustments

 

4.8

 

1.2

 

7.4

 

(3.1)

Adjusted EBITDA

 

$  45.8

 

$  23.6

 

$  125.8

 

$    75.6

Adjustments to cash3:

               

   Less: Distributions to preferred unitholders

 

$  (3.2)

 

$      -

 

$    (3.2)

 

$         -

   Plus: Deferred revenue

 

3.0

 

4.0

 

5.0

 

8.0

   Less: Amortization of regulatory liability

 

(0.7)

 

(0.7)

 

(2.8)

 

(2.1)

   Less: Maintenance capital expenditures

 

(5.2)

 

(3.4)

 

(16.0)

 

(9.4)

   Plus: Acquisition costs funded by Dominion

 

1.2

 

-

 

1.6

 

0.7

   Less: Interest expense and AFUDC equity

 

(3.3)

 

(0.5)

 

(4.8)

 

(1.4)

   Plus: Non-cash director compensation

 

0.1

 

0.1

 

0.3

 

0.2

Distributable cash flow

 

$  37.7

 

$  23.1

 

$  105.9

 

$    71.6

                 

1Represents amounts for the period from January 31, 2015 through March 31, 2015.

2Represents amounts for the period from September 16, 2016 through November 30, 2016.

3Beginning in the first quarter of 2016, distributable cash flow no longer reflects an adjustment for the timing difference between cash paid for property taxes and the amount recognized into expense. All prior periods presented have been recalculated to reflect a consistent approach.  Previously, distributable cash flow for the three and twelve months ended December 31, 2015 was $24.7 million and $75.7 million, respectively.

                 

* The notes contained in Dominion 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 Questar Pipeline Acquisition, 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 Midstream Partners, LP

Schedule E- Selected Financial Data*

(Unaudited)

                 
                 
   

Three Months Ended

 

Year Ended

   

December 31,

 

December 31,

   

2016

 

2015

 

2016

 

2015

(millions)

               
                 

Adjusted EBITDA

 

$  45.8

 

$  23.6

 

$  125.8

 

$  75.6

Adjustments to cash1:

               

   Less: Distributions to preferred unitholders

 

(3.2)

 

-

 

(3.2)

 

-

   Plus: Deferred revenue

 

3.0

 

4.0

 

5.0

 

8.0

   Less: Amortization of regulatory liability

 

(0.7)

 

(0.7)

 

(2.8)

 

(2.1)

   Less: Maintenance capital expenditures

 

(5.2)

 

(3.4)

 

(16.0)

 

(9.4)

   Plus: Acquisition costs funded by Dominion

 

1.2

 

-

 

1.6

 

0.7

   Less: Interest expense and AFUDC equity

 

(3.3)

 

(0.5)

 

(4.8)

 

(1.4)

   Plus: Non-cash director compensation

 

0.1

 

0.1

 

0.3

 

0.2

Distributable Cash Flow

 

$  37.7

 

$  23.1

 

$  105.9

 

$  71.6

                 

Distributions:

               

   Incentive distribution rights

 

$    1.7

 

$    0.2

 

$      3.9

 

$    0.2

   Common unitholders

 

17.5

 

9.8

 

53.8

 

32.3

   Subordinated unitholder

 

8.3

 

6.8

 

30.9

 

24.8

Total distributions

 

$  27.5

 

$  16.8

 

$    88.6

 

$  57.3

                 

Coverage Ratio

 

1.37x

 

1.38x

 

1.20x

 

1.25x

1Beginning in the first quarter of 2016, distributable cash flow no longer reflects an adjustment for the timing difference between cash paid for property taxes and the amount recognized into expense. All prior periods presented have been recalculated to reflect a consistent approach.  Previously, distributable cash flow for the three and twelve months ended December 31, 2015 was $24.7 million and $75.7 million, respectively.

                 

* The notes contained in Dominion 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.

   

 

SOURCE Dominion Midstream Partners

For further information: Media: Ryan Frazier, (804) 819-2521 or C.Ryan.Frazier@dom.com, Financial analysts: Kristy Babcock, (804) 819-2492 or Kristy.R.Babcock@dom.com