Dominion Midstream Partners Announces Fourth-Quarter 2016 Earnings

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

100.2

31.7

224.2

178.0

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

-

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

$  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.