AMP reports financial results for Q3 2014

Access Midstream Partners, L.P. has announced financial results for the 2014 third quarter. The Partnership’s adjusted EBITDA for the 2014 third quarter totalled US$ 318.8 million, an increase of US$ 91.8 million, or 40.4%, from 2013 third quarter adjusted EBITDA of US$ 227 million. 

Net income attributable to the Partnership totalled US$ 41.2 million in the 2014 third quarter, a decrease of US$ 37 million, or 47.3%, from 2013 third quarter net income of US$ 78.2 million. Distributable cash flow (DCF) for the 2014 third quarter totalled US$ 120 million, a decrease of US$ 51.5 million, or 30%, from 2013 third quarter DCF of US$ 171.5 million and resulted in a distribution coverage ratio of 0.82. After excluding the impact of one-time Williams transaction related costs, adjusted DCF for the 2014 third quarter totalled US$ 243.8 million, an increase of US$ 72.3 million, or 42.2%, from 2013 third quarter DCF and resulted in an adjusted distribution coverage ratio of 1.67. Financial terms are defined on pages two through four of this release.

Throughput for the 2014 third quarter totalled 380.2 billion ft³ of natural gas, or 4.13 billion ft³/d, an increase of 8.7% from 2013 third quarter throughput of 3.80 billion ft³/d. Throughput increased in the Partnership’s Marcellus, Utica, Eagle Ford, Niobrara and Haynesville Shale regions. Partnership revenues for the 2014 third quarter totalled US$ 313.8 million, an increase of US$ 52.9 million, or 20.3%, compared to 2013 third quarter revenues of US$ 260.9 million. Revenues in both periods exclude revenues attributable to the Partnership’s equity investments as those revenues are accounted for as part of the Partnership’s investments in unconsolidated affiliates. If the Partnership’s proportional share of revenue from equity investments was included, revenue for the 2014 third quarter would have totalled US$ 405.6 million, an increase of US$ 78.1 million, or 23.8%, compared to the 2013 third quarter.

Capital expenditures during the 2014 third quarter totalled US$ 271.7 million, including maintenance capital expenditures of US$ 32.5 million. These capital expenditures included US$ 83.8 million for the Partnership’s share of capital expenditures in entities accounted for as equity investments. Capital expenditures during the nine months ended 30^th September, 2014, totalled US$ 911.5 million, including maintenance capital expenditures of US$ 97.5 million. These capital expenditures included US$ 306.6 million for the Partnership’s share of capital expenditures in entities accounted for as equity investments.

Partnership increases cash distribution

On 23rd October, 2014, the Board of Directors of the Partnership’s general partner declared a quarterly cash distribution of US$ 0.615 per unit for the 2014 third quarter, a US$ 0.08, or 15%, per unit increase over the 2013 third quarter distribution and a US$ 0.02, or 3.4%, per unit increase over the 2014 second quarter distribution. The distribution will be paid on 14 November, 2014, to unitholders of record at the close of business on 7 November, 2014. DCF of US$ 120 million for the 2014 third quarter provided distribution coverage of 0.82 times the amount required for the Partnership to fund the distribution to the general partner and the limited partners. Adjusted DCF of US$ 243.8 million for the 2014 third quarter provided adjusted distribution coverage of 1.67 times the amount required for the Partnership to fund the distribution to the general partner and the limited partners.

Management comments

J. Mike Stice, Access Midstream Partners’ Chief Executive Officer, commented, “The business continues to execute at a very high level in 2014 resulting in continued record volume performance and very strong financial results. During four consecutive weeks in September, we achieved average gross daily gathering volumes in excess of 6 billion ft³/d thanks to the terrific work by our operating teams across all regions. We will continue to focus on delivering best-in-class gathering and processing services to our customers so together we can achieve additional significant milestones in the future.”

Williams Transaction

On 1 July, 2014, The Williams Companies, Inc. acquired all of the interests in ACMP and ACMP’s general partner that were previously held by entities affiliated with Global Infrastructure Partners. Williams now owns 100% of and controls ACMP’s general partner. On 15 June, 2014, Williams proposed the merger of Williams Partners L.P. with and into a subsidiary of ACMP. On 26 October, 2014, the Partnership, Williams and WPZ announced that WPZ and the Partnership have entered into a merger agreement. Williams owns controlling interests in the two master limited partnerships (MLP). Upon completion of the merger, expected to occur by early 2015, the merged MLP is anticipated to be one of the largest and fastest growing MLPs with expected 2015 adjusted EBITDA of approximately US$ 5 billion, industry-leading 10% to 12% annual limited partner unit distribution growth rate through the 2017 guidance period and with expected strong growth beyond. Full financial guidance for the merged MLP is expected to be announced following completion of the merger.

Adapted from press release by Hannah Priestley-Eaton

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