ACCESS MIDSTREAM PARTNERS, L.P. REPORTS FINANCIAL

RESULTS FOR THE 2013 FOURTH QUARTER AND FULL YEAR

Partnership Reports 2013 Fourth Quarter Adjusted EBITDA of $241 Million, Distributable Cash Flow of $180 Million and Net Income of $129 Million

2013 Full Year Adjusted EBITDA of $859 Million,

Distributable Cash Flow of $635 Million and Net Income of $336 Million

Partnership Increases Quarterly Distribution to $0.555 per Unit

OKLAHOMA CITY, OKLAHOMA, February 18, 2014 – Access Midstream Partners, L.P. (NYSE:ACMP) today announced financial results for the 2013 fourth quarter and full year.  The Partnership’s adjusted EBITDA for the 2013 fourth quarter totaled $240.6 million, an increase of $121.6 million, or 102.2%, from 2012 fourth quarter adjusted EBITDA of $119.0 million.  Net income attributable to the Partnership totaled $129.1 million in the 2013 fourth quarter, an increase of $104.8 million from 2012 fourth quarter net income of $24.3 million.  Distributable cash flow (DCF) for the 2013 fourth quarter totaled $180.3 million, an increase of $98.2 million, or 119.6%, from 2012 fourth quarter DCF of $82.1 million and resulted in a distribution coverage ratio of 1.48.

The Partnership’s 2013 full year adjusted EBITDA was $858.6 million, an increase of $380.7 million, or 79.7%, compared to 2012 full year adjusted EBITDA of $477.9 million.  Net income attributable to the Partnership for the 2013 full year was $336.0 million, up $157.5 million, or 88.2%, compared to 2012 full year net income of $178.5 million.  DCF for the 2013 full year was $635.1 million, an increase of 86.7% over the 2012 full year, and resulted in a full year coverage ratio of 1.49.  Financial terms are defined on pages three and four of this release.

Capital expenditures for the 2013 fourth quarter totaled $345.5 million, including maintenance capital expenditures of $27.5 million.  These capital expenditures included $135.4 million for the Partnership’s share of capital expenditures in entities accounted for as equity investments. Capital expenditures for the 2013 full year totaled $1.6 billion, including maintenance capital expenditures of $110.0 million. These capital expenditures included $671.4 million for the Partnership’s share of capital expenditures in entities accounted for as equity investments.

Throughput for the 2013 fourth quarter totaled 348.3 billion cubic feet (bcf) of natural gas, or 3.79 bcf per day, an increase of 31.1% from 2012 fourth quarter throughput of 2.89 bcf per day.  The increase was driven primarily by well connect activity in the Marcellus Shale and throughput from the Eagle Ford assets acquired in 2012. Partnership revenue for the 2013 fourth quarter totaled $328.1 million, an increase of $179.8 million, or 121.2%, compared to 2012 fourth quarter revenue of $148.3 million.  The 2013 fourth quarter results include $64.9 million of revenue associated with minimum volume commitments (MVC). No revenue associated with MVC was included in the 2012 fourth quarter.  After excluding revenue attributable to MVC, 2013 fourth quarter revenue was up 77.5%.  Revenue for the 2013 fourth quarter excludes revenue 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 2013 fourth quarter would have totaled $401.8 million, an increase of $211.4 million, or 111.0%, compared to the 2012 fourth quarter.

 

Partnership Increases Cash Distribution

 

On January 24, 2014, the Board of Directors of the Partnership’s general partner declared a quarterly cash distribution of $0.555 per unit for the 2013 fourth quarter, an increase of $0.105, or 23.3%, per unit over the 2012 fourth quarter distribution and an increase of $0.02, or 3.7%, per unit over the 2013 third quarter distribution.  The distribution was paid on February 14, 2014 to unitholders of record at the close of business on February 7, 2014.  DCF of $180.3 million for the 2013 fourth quarter provided distribution coverage of 1.48 times the amount required for the Partnership to fund the distribution to the limited partners and the general partner.

Management Comments

 

J. Mike Stice, Access Midstream Partners’ Chief Executive Officer, commented, “Access Midstream had a tremendous year in 2013.  We delivered strong returns for our investors as we exceeded the consensus EBITDA estimate in each quarter of 2013.  That financial success was driven by our operations teams which executed a capital program of $1.6 billion in 2013 that will contribute to our continued growth for many years to come.  We also completed the enormous task of creating our own back office infrastructure over the last 18 months.  In just three and a half years since our IPO in 2010, we have increased our enterprise value from $2.6 billion to $14.8 billion and I’m excited about continuing that growth profile as we execute on our many opportunities in 2014 and beyond.  Our growth story is just beginning as our anchor positions in the most prolific unconventional plays in America will continue to be the source of long-term, predictable growth.”

Outlook for 2014 and 2015 Updated

 

Based on 2013 year end results and analysis, the Partnership has made two updates to its previously published financial outlook.  First, the Partnership’s outlook for growth capital expenditures in 2014 has increased by $100 million to a range of $1.1 billion to $1.2 billion due to the cash impact of 2013 construction activity being pushed to 2014.  In addition, the Partnership’s outlook for maintenance capital expenditures in 2014 has increased from $110 million to $130 million based on the Partnership's annual review of long range capital requirements.  All other aspects of the Partnership's financial outlook for 2014 and 2015 remain unchanged.

Conference Call Information

 

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Use of Non-GAAP Financial Measures

This press release and accompanying schedules include the non-GAAP financial measures of adjusted EBITDA and DCF.  The accompanying schedules provide reconciliations of these non-GAAP financial measures to their most directly comparable financial measures calculated and presented in accordance with GAAP.  Non-GAAP financial measures should not be considered as an alternative to GAAP measures such as net income, net cash provided by operating activities or any other measure of liquidity or financial performance calculated and presented in accordance with GAAP.  Investors should not consider adjusted EBITDA or DCF in isolation or as a substitute for analysis of the Partnership’s results as reported under GAAP.  Because these non-GAAP financial measures may be defined differently by other companies in our industry, the Partnership’s definition of adjusted EBITDA and DCF may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

Adjusted EBITDA.  The Partnership agreement defines adjusted EBITDA as net income (loss) before income tax expense, interest expense, depreciation and amortization expense and certain other items management believes affect the comparability of operating results.  Adjusted EBITDA is a non-GAAP financial measure that management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess:

·	The Partnership’s operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to capital structure, historical cost basis or financing methods;

·	The Partnership’s ability to incur and service debt and fund capital expenditures;

·	The ability of the Partnership’s assets to generate sufficient cash flow to make distributions to unitholders; and

·	The viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.

Management believes it is appropriate to exclude certain items from EBITDA because management believes these items affect the comparability of operating results.  The Partnership believes that the presentation of adjusted EBITDA in this press release provides information useful to investors in assessing its financial condition and results of operations.  The GAAP measure most directly comparable to adjusted EBITDA is net income.

Distributable Cash Flow.  The Partnership agreement defines DCF as adjusted EBITDA attributable to the Partnership adjusted for:

·	Addition of interest income;

·	Subtraction of net cash paid for interest expense;

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·	Subtraction of maintenance capital expenditures; and

·	Subtraction of income taxes.

Management compares the DCF the Partnership generates to the cash distributions it expects to pay its partners.  Using this metric, management computes a distribution coverage ratio.  DCF is an important non-GAAP financial measure for our limited partners since it serves as an indicator of our success in providing a cash return on investment.  Specifically, this financial measure indicates to investors whether or not the Partnership is generating cash flows at a level that can sustain or support an increase in its quarterly cash distributions.  DCF is also a quantitative standard used by the investment community with respect to publicly traded partnerships because the value of a partnership unit is in part measured by its yield, which is based on the amount of cash distributions a partnership can pay to a unitholder.  The GAAP measure most directly comparable to DCF is net cash provided by operating activities.

Access Midstream Partners, L.P. (NYSE:ACMP) is the industry’s largest gathering and processing master limited partnership as measured by throughput volume.  The Partnership owns, operates, develops and acquires natural gas gathering and processing systems and other midstream energy assets.  Headquartered in Oklahoma City, the Partnership's operations are focused on the Barnett, Eagle Ford, Haynesville, Marcellus, Niobrara and Utica Shales and Mid-Continent region of the U.S.  The Partnership’s common units are listed on the New York Stock Exchange under the symbol ACMP.  Further information is available at www.accessmidstream.com where the Partnership routinely posts announcements, updates, events, investor information and presentations and all recent press releases.

This press release includes forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. They include but are not limited to our business strategy and plans and objectives for future operations. We caution you not to place undue reliance on our forward-looking statements, which speak only as of the date of this release, and we undertake no obligations to update this information. Although we believe the expectations and forecasts reflected in these and other forward-looking statements are reasonable, we can give no assurance they will prove to be correct. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Factors that could cause actual results to differ materially from expected results are described under “Risk Factors” in our 2012 Annual Report on Form 10-K and our other SEC filings.

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Access Midstream Partners, L.P.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

($ in thousands)

(unaudited)

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SEGMENT INFORMATION AND OPERATING STATISTICS

 

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