An investor’s must-know guide to Access Midstream Partners (ACMP) (Part 3 of 5)
4Q13 earnings review
ACMP recently announced its financial results for 4Q13 and full-year 2013. Adjusted EBITDA for 4Q13 totaled $241 million, up 6% compared to 3Q13 EBITDA of $227 million and compared to 4Q13 consensus estimates of $232 million.
Distributable cash flow (or DCF) for 4Q13 totaled $180 million, compared to 3Q13 DCF of $171 million. For 4Q13, the distribution coverage ratio of was 1.48x (DCF divided by actual cash distributions paid out).
ACMP’s 2013 full-year adjusted EBITDA was $859 million, up 79.7%, compared to 2012, and compared to consensus estimates of $853 million.
DCF for full-year 2013 was $635.1 million, an increase of 86.7% over full-year 2012, resulting in a full-year coverage ratio of 1.49x. For the years 2012, 2011, and 2010, ACMP’s DCF coverage ratio was 1.23x, 1.23x, and 1.15x, respectively.
The key drivers for 2013 EBITDA growth over 2012 were capital investments in 2013 in the Utica ($598 million), Eagle Ford ($316 million), and Marcellus ($292 million). Together, these regions accounted for 44% of the revenues generated from ACMP’s fixed-fee agreements with Chesapeake (CHK), Total (TOT), Statoil (STO), Anadarko (APC), and other producers. ACMP is a constituent of the Alerian MLP ETF (AMLP). Investments in these liquids-rich regions generated approximately 50% of the company’s EBITDA. Apart from these factors, other drivers for EBITDA growth include contractual growth and cost advantage (in many basins, cost overruns are borne by the producer, so ACMP is protected).
This EBITDA growth led to distribution cash flow growth in 4Q13. On January 24, 2014, ACMP declared a quarterly cash distribution of $0.555 per unit for 4Q13—an increase of 23.3% per unit over 4Q12 distribution and an increase of 3.7%, per unit over 4Q13 distribution.
Plus, both dividends per share and earnings per share, excluding extraordinary items, growth increased year-over-year to 13.30% and 47.67%, respectively.
For reference, we also show Access Midstream’s key statistics (financials as of December 31, 2013, and market data as of March 24, 2014) against some other MLPs that also engage in natural gas gathering and processing—MarkWest Energy (MWE), Targa Resources (NGLS), Regency Energy (RGP), and Atlas Pipeline Partners (APL)—most of which are components of the Alerian MLP ETF (AMLP).
To learn more about ACMP’s growth outlook and forward guidance as well as the outlook for 2014, read on to Part 4 of this series.
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