Enable Midstream Partners, LP MLPA 2016 Investor Conference June 3, 2016
Forward-looking Statements This presentation and the oral statements made in connection herewith may contain forward-looking statements within the meaning of the securities laws. All statements, other than statements of historical fact, regarding Enable Midstream Partners ( Enable ) strategy, future operations, financial position, estimated revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. These statements often include the words could, believe, anticipate, intend, estimate, expect, project, forecast and similar expressions and are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on Enable s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. Enable assumes no obligation to and does not intend to update any forward-looking statements included herein. When considering forward-looking statements, which include statements regarding future commodity prices, future capital expenditures and our financial and operational outlook for 2016, among others, you should keep in mind the risk factors and other cautionary statements described under the heading Risk Factors and elsewhere in our SEC filings. Enable cautions you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond its control, incident to the ownership, operation and development of natural gas and crude oil infrastructure assets. These risks include, but are not limited to, contract renewal risk, commodity price risk, environmental risks, operating risks, regulatory changes and the other risks described under Risk Factors and elsewhere in our SEC filings. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, Enable s actual results and plans could differ materially from those expressed in any forward-looking statements. 2
Forward-Looking Non-GAAP Financial Measures Enable has included forward-looking non-gaap financial measures Adjusted EBITDA and Distributable Cash Flow in this presentation. These non-gaap financial measures are derived by excluding and including certain amounts, expense or income, from the corresponding financial measures determined in accordance with GAAP. The determination of the amounts that are excluded or included from these non-gaap financial measures is a matter of management judgment and depends upon, among other factors, the use of derivative contacts to manage Enable's commodity and financial market risks. Enable is unable to present a quantitative reconciliation of the aforementioned forward-looking non-gaap financial measures to their most directly comparable forward-looking GAAP financial measures because Enable cannot reliably predict the future natural gas, NGL and crude oil prices at which these derivative contracts will transact. Historically, Enable has computed Adjusted EBITDA and Distributable Cash Flow as follows, and such computations may occur in future periods and could be significant in amount. Adjusted EBITDA is computed by adding depreciation and amortization expense, interest expense, net of interest income, income tax expense, distributions from equity method affiliates, non-cash equity based compensation and other non-cash losses to net income attributable to common and subordinated units while subtracting other non-cash gains and equity in earnings of equity method affiliates from net income attributable to common and subordinated units Distributable Cash Flow is computed by subtracting adjustment for Series A Preferred Unit distribution, net, adjusted interest expense, net, maintenance capital expenditures and current income taxes from Adjusted EBITDA 3
Enable Midstream Highlights High-Quality Assets In Strategic Locations With Strong Customer Relationships Assets are located in some of most prominent natural gas and crude oil plays in the country High degree of interconnectivity between assets and end markets with long-term demand growth Long-term relationships with large-cap producers and utilities, many of whom are investment grade Strong Financial Position Favorable contract structure with significant fee-based and demand-fee gross margin Lower leverage than many peers $1.03 billion of available revolving credit facility and no near-term debt maturities 1 Continue to prioritize leverage and coverage ratios while remaining financially disciplined Bradley Processing Complex 4 1. As of March 31, 2016
Interconnected and Diverse Assets Strategically Located in Ten States Enable s Gathering and Processing (G&P) and Transportation and Storage (T&S) Assets Enable provides operating reach and scale with complementary capabilities managing gas gathering and processing services, intrastate and interstate transmission and storage for customers in the Mid- Continent region and crude oil gathering services in the Bakken Enable s assets are wellpositioned to support the long-term supply and demand dynamics in the Mid-Continent and Southeast regions 5 Note: Map as of May 18, 2016
Producers Remain Active on Enable s Anadarko Basin Footprint Total of 22 rigs are currently drilling wells that are contractually dedicated to Enable in the Anadarko basin 1 8 rigs in the SCOOP 14 rigs in the Cana Woodford / STACK Rig count on Enable s SCOOP and STACK footprint has remained stable during a challenged commodity environment The SCOOP and STACK plays have been recognized as two of the top plays in the country by producers, analysts and investors Active Rigs on Enable s SCOOP/STACK Footprint 2 Top 5 Producer IRRs by Play 3,4 26 21 16 22 24 19.5% 18.5% 15.3% 14.6% 13.7% 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 Permian Delaware STACK Bakken Eagle Ford Oil SCOOP 6 1. As of May 24, 2016 2. Rig count in graph is as of the end of each reporting quarter; as of May 24, 2016 there were 22 active rigs contractually dedicated to Enable s gathering and processing system in the SCOOP and STACK plays 3. Source: Bentek Energy: Oil & Gas Production Monitor - May 2016 4. IRR s based on half cycle economics and assume 12-month forward average WTI of $36.52-$48.56/Bbl, natural gas of $1.77-$2.69/Mcf and Mt. Belvieu NGLs of $18.98-$22.75/Bbl
Strategically Positioned to Capitalize on Producer Growth in the Anadarko Basin Enable s Super-Header Processing System Enable s super-header processing system interconnects 8 of Enable s 10 natural gas processing plants serving the Anadarko basin and has over 1.45 Bcf/d of inlet processing capacity 1 The super-header processing system is uniquely positioned to serve the prominent SCOOP and STACK plays and allows Enable to: Optimize economics of its natural gas processing Be highly-responsive to customer needs Efficiently phase in new production Bradley II, a 200 MMcf/d cryogenic processing plant, will be fully operational in Q2-16 and will provide additional capacity on the super-header processing system to support the growth out of the SCOOP and STACK plays 7 Note: Rig data per Drillinginfo as of May 12, 2016 and Enable assets on map are as of May 18, 2016 1. As of December 31, 2015
Ark-La-Tex and Arkoma G&P Assets Provide Stable Gross Margin and Can Support Additional Growth Ark-La-Tex System Map Arkoma System Map System Highlights Enable s Ark-La-Tex and Arkoma gathering and processing contracts are primarily fee-based contracts supported by minimum volume commitment and guaranteed return features The Haynesville Shale is well-positioned to serve demand growth from LNG exports and power generation markets Four rigs are currently drilling wells that are contractually dedicated to Enable in the Ark-La-Tex basin 1 8 Note: Maps as of May 18, 2016 1. As of May 24, 2016
Crude Gathering Systems in the Williston Basin System Map System Highlights Enable s first crude gathering system, the Bear Den system, was fully operational in the first quarter of 2015 and has recently operated in excess of its contracted commitments The Nesson system commenced operations in the second quarter of 2015, where volumes continue to grow across the system and additional infrastructure is expected to be placed into service as activity warrants Enable continues to connect new wells onto its crude gathering systems, driving five consecutive quarters of increased crude gathered volumes In the first quarter of 2016, Enable averaged 28.85 MBbl/d on its crude gathering systems 1 9 Note: Map as May 18, 2016 1. As of March 31, 2016
Interconnectivity of T&S Pipelines Provides Supply Optionality and Flexibility for Expansions Enable s Interstate and Intrastate Pipeline System EOIT Enable Oklahoma Intrastate Transmission (EOIT), Mississippi River Transmission (MRT) and Southeast Supply Header (SESH) all have significant interconnectivity with Enable Gas Transmission (EGT) EGT Perryville Hub Shippers have the ability to access almost every major consuming market east of the Mississippi River through Perryville Hub and associated trading points Intrastate EOIT 2,200 miles 2.1 Bcf/d peak throughput 24.0 Bcf storage capacity EGT 5,900 miles 6.5 Bcf/d capacity 29.5 Bcf storage capacity MRT 1,700 miles 1.9 Bcf/d capacity 31.5 Bcf storage capacity SESH 50% JV with Spectra Energy Partners, LP 290 miles 1.0 Bcf/d capacity Well-situated to facilitate natural gas demand growth in the Mid-Continent and Southeast regions 10 Note: EOIT, EGT and SESH pipeline miles as of March 31, 2016; all other pipeline miles, pipeline and storage capacity and pipeline throughput as of December 31, 2015; map as of May 18, 2016
EOIT Pipeline System Connects Supply and Demand in Oklahoma EOIT Pipeline Map Pipeline Highlights Interconnects natural gas supply from the Anadarko and Arkoma basins to Enable s EGT system and 12 other third-party natural gas pipelines for a total of 67 interconnect points 1 Connected to significant end-user customers, including 14 natural gas-fired electric generation facilities 1 Major customers include OG&E, Enable s affiliate, and Public Service Company of Oklahoma (PSO), an affiliate of AEP Functions as a delivery system for Enable s super-header processing system and is well-positioned to serve new transportation needs for producers in the SCOOP, STACK, Cana Woodford, Mississippi Lime and Greater Granite Wash plays Complementary to interstate growth projects into Texas 11 Note: Map as of May 18, 2016 1. As of December 31, 2015
Haynesville Natural Gas Supply and Demand Outlook Enable s assets are strategically located in basins with over 10 Bcf/d of natural gas supply growth and are positioned well to serve markets with over 10 Bcf/d of natural gas demand growth Bcf/d Supply Forecast 1 Anadarko 6.1 8.1 2.9 2015 2020 2025 2 Marcellus/Utica Bcf/d Demand Forecast 4 Gulf Coast LNG Exports 6.4 9.2 0.0 2015 2020 2025 4.6 Haynesville 8.8 10.3 Anadarko Texas & South 5 Central 19.2 17.8 18.2 2015 2020 2025 All Other Basins 65.4 78.2 39.5 3 Mexico +3.4 Bcf/d Texas & South Central +1.4 Bcf/d Eagle Ford LNG Exports +9.2 Bcf/d 2015 2020 2025 Exports to Mexico 5.0 6.0 2.6 2015 2020 2025 2015 2020 2025 12 Note: Enable assets on map are as of May 18, 2016 1. Source: Wood Mackenzie North American gas markets long-term outlook (Fall 2015) 2. Anadarko computations include Cana Woodford, Granite Wash, SCOOP, STACK and Other Mid-Con horizontal plays 3. All Other Basins computations include all North American basins less the Anadarko and Haynesville basins 4. Source: ICF International April 2016 5. Texas & South Central represents ICF s West South Central region which corresponds to the natural gas demand in Texas, Oklahoma, Arkansas and Louisiana, excluding LNG Exports and Mexico Exports
Favorable Contract Structures and Credit Profile Commentary Enable s 2016 gross margin profile is expected to be approximately 96% fee-based or hedged 1 2016 Fee-Based Gross Margin Profile 1,3 11% 4% Certain gathering and processing contracts have provisions to protect against low commodity price environments and volume decreases Enable has a strong leverage profile supported by a low leverage ratio, $1.03 billion of available liquidity 2 and no near-term debt maturities 24% Firm/MVC Fee-based Commodity-based Hedged 61% Other Fee-based Commodity-based Unhedged $ in millions Term Loan Facility* EOIT Sr. Unsecured Notes ENBL Sr. Unsecured Notes Revolving Credit Facility No nearterm debt maturities through 2017 Debt Maturity Schedule Leverage Ratio 4,5 $450 $500 $1,750 $250 $600 $550 2016 2017 2018 2019 2020 2024 2044 Improved leverage ratio as a result of: Equity credit assigned to the Series A Preferred units issued in first quarter of 2016 Higher quarterly Adjusted EBITDA results 4.10x 3.81x Dec. 31, 2015 Mar. 31, 2016 * Term Loan includes option to request two, one-year extensions which could move the maturity to 2020 1. Gross margin profile represents Q2-16 through Q4-16 2. As of March 31, 2016; available liquidity calculated as Revolving Credit Facility of $1.75B less principal advances of $715MM less $3MM in letters of credit 3. Percentages in pie charts based on Gross Margin contribution 13 4. Calculated as Debt/LTM Adj. EBITDA; Enable s LTM Adj. EBITDA is $809 million 5. In Q4-15, the calculation of Adjusted EBITDA was changed to account for non-cash equity based compensation expense to be consistent with industry peers; historical Adjusted EBITDA reflects the calculation change 6. Assumes 100% equity credit for the Series A Preferred Units 6
Well-Positioned For Current and Future Markets Enable continues to prioritize leverage and coverage ratios and does not need to access the capital markets to meet its 2016 objectives Enable remains financially disciplined, focusing on managing costs and deploying capital efficiently Enable is anchored by interconnected and diverse assets that are strategically positioned to support the long-term supply and demand dynamics in and around its footprint Enable s super-header processing system is uniquely positioned to capture supply growth out of the prominent SCOOP and STACK plays and interconnects with Enable s intrastate and interstate pipelines to meet enduser demand 2016 gross margin profile is expected to be approximately 96% fee-based or hedged 1, with a significant portion of gross margin from the firm, fee-based contracts in the Transportation and Storage segment 1. Gross margin profile represents Q2-16 through Q4-16 14
15 Question and Answer Questions
16 Question and Answer Appendix
2016 Financial, Operational and Capital Outlook Enable Midstream s 2016 outlook as of May 4, 2016, is shown in the tables below: $ in millions 2016 Financial and Operational Outlook Natural Gas Gathered Volumes (TBtu/d) 3.1 3.5 Natural Gas Processed Volumes (TBtu/d) 1.9 2.1 Crude Oil Gathered Volumes (MBbl/d) 26.0 30.0 Net Income Attributable to Common and Subordinated Unit Holders $240 $310 Adjusted EBITDA $780 $840 Preferred Equity Distributions 1 $32 Adjusted Interest Expense, net 2 $110 $120 Maintenance Capital $105 $125 Distributable Cash Flow $535 $565 Targeted Coverage Ratio 1.0x or greater Interest Expense (GAAP) $100 $110 $ in millions 2016 Capital Outlook Gathering Pipeline, Compression and Related Capital ~$300 Processing Plants ~$50 Transportation and Storage Organic Growth, incl. EGT Expansion Project ~$25 Total Capital ~$375 17 1. Outlook includes the fourth quarter 2016 distribution that will be paid in first quarter 2017 2. The difference between Interest expense and Adjusted interest expense, net is due to adjustments for the premium amortization on EOIT s Fixed Rate Senior notes, amortization of deferred charges and adjustments for Capitalized Interest on Expansion Capital
Commodity Assumptions Enable Midstream s 2016 outlook as of May 4, 2016 is based on the following price assumptions: 2016 Outlook Natural Gas Henry Hub ($/MMBtu) $2.05 $2.35 NGLs - Mont Belvieu, Texas ($/gal)* $0.30 $0.34 NGLs - Conway, Kansas ($/gal)* $0.28 $0.32 Crude Oil WTI ($/Bbl) $33.00 $37.00 Commodity sensitivities, including the impact of hedges: A 10% increase or decrease in natural gas and ethane prices together from forecasted levels would have a minimal impact to Adjusted EBITDA for 2016 due to Enable s hedged positions and processing contracts with fee-based floors A 10% increase or decrease in NGL (excluding ethane) and condensate prices from forecasted levels would result in an increase or decrease of approximately $3 million in Adjusted EBITDA for 2016 18 *Natural gas liquids composite based on assumed composition of 45%, 30%, 10%, 5%, and 10% for ethane, propane, normal butane, isobutane and natural gasoline, respectively
Hedging Summary 1 Commodity Natural Gas 2 2016 4 2017 Exposure Hedged (%) 79% 38% Average Hedge Price ($/MMBtu) $ 2.64 $ 2.58 Crude 3 Exposure Hedged (%) 78% 29% Average Hedge Price ($/Bbl) $ 57.70 $ 45.66 Propane Exposure Hedged (%) 74% 27% Average Hedge Price ($/gal) $ 0.45 $ 0.44 1. Percentage hedged includes hedges executed through April 22, 2016 2. Excludes basis not matched with NYMEX and natural gas shrink associated with ethane spread positions 3. Enable hedges net condensate/natural gasoline exposure with crude 4. Percentage hedged for 2016 reflects April-December hedges only Note: Table includes hedges and commodity exposures associated with equity volumes resulting from Enable's Gathering, Processing and Transportation businesses. 19